Supreme Court Upholds State Government's Notification Fixing Minimum Wages for Hotels and Eating Houses Under Minimum Wages Act, 1948. Validity of Alternative Procedure Under Section 5(1) Upheld as Not Arbitrary.

Challenge to the validity of a government notification fixing minimum wages under the Minimum Wages Act, 1948.

The appellant and writ petitioners sought quashing of the notification on the grounds of constitutional invalidity and procedural irregularity.

The notification was alleged to be arbitrary, violative of fundamental rights, and issued without following proper procedure.

The Mysore High Court dismissed the writ petition, upholding the notification. The matter then came to the Supreme Court by way of appeal and a fresh writ petition under Article 32.

Whether Section 5(1) of the Minimum Wages Act, 1948 violates Article 14 by conferring unguided discretion to choose between two alternative procedures. Whether the Act interferes with the freedom of trade under Article 19(1)(g) by giving arbitrary power to fix minimum wages. Whether the Government was bound to appoint a committee under Section 5(1)(a) for fixation of wages. Whether the fixation of minimum wages is a quasi-judicial act and failure to observe principles of natural justice vitiates the notification. Whether the Government can fix different minimum wages for different industries and zones. Whether the division of the State into zones had a rational basis. Whether the valuation of food supplied to workers was unreasonably low and without authority of law.

The appellant/petitioners argued that Section 5(1) gives the Government an arbitrary choice between two procedures without any guidelines, violating Article 14. It was contended that the Act violates Article 19(1)(g) as it interferes with the freedom of trade by allowing unfettered fixation of wages. The Government should have appointed a committee under Section 5(1)(a) to conduct an inquiry; failure to do so led to arbitrary fixation. Since fixing minimum wages is a quasi-judicial function, the Government was required to observe principles of natural justice, which it did not. The Government had no power to prescribe different minimum wages for different industries or zones. The division of the State into various zones was irrational and not based on any valid criteria. The valuation of food supplied to employees was fixed at an unreasonably low figure without legal authority.

Section 5(1) of the Minimum Wages Act, 1948 providing alternative procedures for fixing minimum wages is not unconstitutional. The power conferred is guided by the legislative policy of preventing exploitation and ensuring decent living conditions for workers. The Government's choice between the committee method and the notification method is only for data collection and is not arbitrary. The Act does not violate Article 19(1)(g) as freedom of trade does not include the right to exploit labour; an industry that cannot pay minimum wages has no right to exist. The procedures followed were adequate and did not violate natural justice. The Government has the power to fix different rates of minimum wages for different industries and zones under Section 3(3), and such division has a rational basis when based on cost of living. The supply of food to workers is an amenity, and its valuation under Rule 22(2)(v) is valid. The Court left open the question whether the fixation of minimum wages is a quasi-judicial act.

Procedural inequality if real and substantial is within the vice of Art. 14. But if a power is given to an authority to have recourse to different procedures under different circumstances, that power cannot be considered an arbitrary power. The concept of minimum wage is likely to undergo a change with the growth of our economy and with the change in the standard of living. It is not a static concept. Its concomitants must necessarily increase with the progress of the Society. Freedom of trade does not mean freedom to exploit. The provisions of the Constitution are not erected as barriers to progress. It is a fallacy to think that in our Constitution there are only rights and no duties. There is no conflict between Part III and Part IV of the Constitution which are complementary and supplemental to each other. The principles of natural justice are not embodied rules. What particular rules of natural justice, if any, should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the tribunal or body of persons appointed for the purpose.

The Government of Mysore issued notification S.O. 1038 dated 1st June 1967 fixing minimum wages for residential hotels and eating houses under the Minimum Wages Act, 1948. The appellant and others challenged this notification by filing a writ petition in the Mysore High Court, which was dismissed on 18th September 1967. The appellant then appealed to the Supreme Court by certificate. Simultaneously, a writ petition under Article 32 of the Constitution was filed by the All Mysore Hotels Association and another raising identical issues. Both matters were heard together by the Supreme Court.

• Minimum Wages Act, 1948: Section 2(b), Section 3, Section 3(3), Section 5(1), Section 5(1)(a), Section 5(1)(b), Section 7, Section 27
• Constitution of India: Article 14, Article 19(1)(f), Article 19(1)(g), Article 43, Article 32