Nagpur Hotel-owners'' Association and Others vs State of Maharashtra and Another

Paranjpe, J.—In this petition under Art. 226 of the Constitution the petitioners have prayed that two notifications under the Minimum Wages Act, as locally amended, should be quashed.

Acting under S. 3 read with S. 5(2) of the Minimum Wages Act, the State of Maharashtra issued a notification on September 9, 1963 whereby the minimum wages for skilled, semi-skilled and unskilled labourers employed in residential hotels, restaurant or eating-house were fixed. On 1 October, 1963, the State Government issued another notification under S. 30(2)(c) of the Minimum Wages Act for determining the computation permitted to be paid in kind to these workers. Petitioner 1 is the Nagpur Hotel owners'' Association and petitioners contend that the said notifications are ultra vires of the powers vested in the Government and, therefore, they ought not to be enforced. The State of Maharashtra have contended that the notifications are perfectly valid and there is no reason or ground to interfere with them.

Before we proceed to consider the submissions of the respective advocates in this connexion, it will be useful to trace the history of the legislature, "Minimum Wages Act," so far as it concerns the employees in residential hotels, restaurants or eating-houses. The Central Act 11 of 1948 was passed to provide for fixing minimum rates of wages in certain employments. This subject of the enactment was under entry 27 in the Concurrent Legislative List (List III) in the Government of India Act, 1935. Initially, only twelve classes of employment were mentioned in the first part of the schedule. Under S. 27 of the Minimum Wages Act, the State Government were given power to include in this schedule other employments for which minimum rates of wages could be fixed. Accordingly the then State of Bombay added "employment in any residential hotels, restaurant or eating-house" as defined in the Bombay Shops and Establishments Act, 1948, as item 13 in Sch. I, Part I, on 26 August, 1954. Under the original Minimum Wages Act, S. 3(1) had three sub-clauses, (i), (ii) and (iii), with respect to the employments specified in Part I of the schedule, employments specified in Part II of the schedule and employments added subsequently under S. 27, respectively. Under the proviso to Sub- clause (ii) of S. 3(1) with respect to employments specified in Part II of the schedule (which relate mostly to agricultural employments) the State Governments were given power of fixing minimum rates of wages under that sub-clause either for the whole State or for a part of the State, but no such proviso was added to the other two sub-clauses of S. 3(1) in the original Act.

This subject of minimum wages, which falls under the heading "welfare of labour" falls under item 24 in List III (Concurrent) in Sch. VII of the Constitution. Therefore, the Parliament, as also the State Legislature, have power to make laws with respect to this subject. Accordingly the Maharashtra State Legislature passed the amending Act 10 of 1961, and after receiving the President''s assent it came into force on 15 February, 1961. By S. 2 of this amending Act, the original S. 3 in the Central Act 11 of 1948 was amended and provisos permitting the fixation of minimum wages for the whole State or for a part of the State Government was given the power to fix minimum wages for employments including employment in hotels, restaurant, etc., either for the whole State or for a part of the State. Shortly after this local amending Act was passed, the Parliament enacted Act 31 of 1961 for amending the Minimum Wages Act 11 of 1948. By this amendment, the three clauses to S. 3 were consolidated into one and the proviso permitting the fixation of wages for a part of the State was mentioned in Part II of the schedule which related mostly to agricultural employments. It is not disputed that this amending Central Act 31 of 1961 had the effect of abrogating and repealing the Maharashtra Amending Act 10 of 1961.

Thereafter the Maharashtra State Legislature again enacted Act 3 of 1963. By this new amending Act, the proviso to S. 3, as incorporated by the Central Act 31 of 1961, were substituted by the following proviso :

"Provided that the State Government may, instead of fixing minimum rates of wages under this clause for the whole State, fix such rates for a part of the State or for any specified class or classes of such employments in the whole of the State or any part thereof; and in the case of an employment under any local authority, the State Government may fix such rates for any specified local authority, or class of local authorities."

This Act 3 of 1963 was reserved for the consideration of the President and it received his assent on January 9, 1963 and came into force on January 14, 1963. It is under this Act that the impugned notifications have been issued.

According to Sri Phadke, advocate for the petitioners, the impugned notifications are unsustainable because Act 3 of 1963, under which they have been issued, is it self ultra vires of the powers of the State Legislature. He did not dispute that, under Art. 254(2) of the Constitution, the State Legislature had power to enact Act 10 of 1961. However, he contended that once the Parliament itself had virtually repealed or abrogated the Maharashtra Act 10 of 1961 by passing Act 31 of 1961 under the proviso to Art. 254(2) a legislation which was repugnant to the Central legislation and to reserve that legislation for the consideration of the Parliament came to an end and, therefore, this subsequent Act 3 of 1963, though it had received the assent of the President, was entirely beyond the powers of the State Legislature. In his opinion, once the Parliament took the field by ousting the Maharashtra Amending Act 10 of 1961, it was no longer open to the State Legislature to purport to re-enact another law, which had been superseded by the Parliament itself, and the assent of the President would not give validity to an Act which was prima facie beyond the powers of the legislature. According to Sri Mudholkar, Additional Government Pleader, on the other hand, the powers given to the State Legislature by Art. 254(2) were not intended to be exhausted on being used only once, while not disputing that the Parliament always had power under the proviso to Art. 254(2) to override an amending Act by the State Legislature, Sri Mudholkar contended that the power of the State Legislature to pass and enactment on matters in the Concurrent List in Sch. VII always remained intact subject to the President giving his assent to such an amendment.

While elucidating his argument Sri Phadke was submitting that Art. 254(1) enunciated the main provision, namely, that though both the Parliament and the State Legislature had power to enact laws with respect to matters stated in the Concurrent List, the law passed by the Parliament was to prevail and the law passed by the State Legislature was to be void to the extent to which it was repugnant to the existing law passed by the Parliament. He then submitted that Art. 254(2) of the Constitution, which authorized the State Legislature to get over the repugnancy with respect to the law passed by the Parliament by passing an amending Act with the assent of the President, was only by way of a proviso and, in that, view, he did not dispute that the Maharashtra State Legislature had acted entirely within its power under Art. 254(2) by passing the amending Act 10 of 1961 and in obtaining the assent of the President. His main contention, however, was that after the Maharashtra State Legislature had passed the amending Act 10 of 1961, the Parliament had intervened with intent to undo the provisions made by the Maharashtra Amending Act and had passed Act 31 of 1961 in accordance with the proviso to Art. 254(2) of the Constitution. Having thus ousted the law made by the amending Act passed by the State Legislature, the Parliament had taken the field, and therefore, the powers of the State Legislature to again pass second amending Act on the lines of the first Act, which had been superseded by the Parliamentary amendment, must be deemed to have come to an end and consequently, the amending Act 3 of 1963 ought to be considered illegal and ultra vires of the powers of the State Legislature.

In advancing this argument Sri Phadke was assuming that once the Parliament has exercised its power under the proviso below Art. 254(2) to amend or to override a legislation passed by the State Legislature under Art 254(2), the power of the State Legislature to pass any such legislation came to an end and it could not act for a second time to pass any legislation with respect to the matters covered by the Parliament''s legislation under the proviso to Art. 254(2). However, there did not seem to be any warrant for making any such assumption. The wordings in Art. 254(2) or the proviso thereunder do not lend to such an interpretation of the provisions. There is nothing therein to limit the powers of the State Legislature so as to preclude it from enacting on the same point again after the Parliament has once acted under the proviso to override an earlier amendment made by the State Legislature under Art.254(2). While not disputing that the wordings of the article itself do not provide such a meaning, Sri Phadke was submitting that if his interpretation were not accepted, there would be an unhealthy competition between the Parliament and the State Legislature and each one would try to override the other. We do not think that such a fear is well-founded. If a legislature and the Parliament try to enter into this sort of a competition in passing contradictory legislations, the matter will immediately be put a stop to by the President by withholding his assent or refusing to give his assent under Art. 254(2). Though the State Legislature has power to enact a legislation on a subject in a Concurrent List so far as its own area is concerned, the assent of the President is always essential and we are not prepared to subscribe to the fear of Sri Phadke that due care would not be taken while resorting to Art. 254(2). Sri Phadke was also not right in assuming that the President''s Act was only an executive act. The heading of Part XI of the Constitution in which this Art. 254 comes is "distribution of legislative powers" and consequently the act of the President in giving his assent under Art. 254(2) would not be merely an executive act but would be a part of legislative powers which ultimately made such a law valid.

The argument of Sri Phadke would also virtually amount to saying that though a State Legislature has power to enact on matters in the Concurrent List, its legislative power with respect to a particular subject would come to an end or would become exhausted the moment the Parliament passes a legislation on that subject under the proviso to Art. 254(2). We do not think that that was the intention of the framers of the Constitution. If that was the intention, there was nothing to prevent the framers of the Constitution from saying so, in so many words. The Central Act 31 of 1961 certainly does not specifically say that it has been passed for repealing the Bombay Act. However, it is beyond doubt that it is not necessary to mention specifically that a particular Act was intended to be repealed. It will be seen from Zaverbhai Amaidas Vs. The State of Bombay, , that even when the Parliamentary legislation does not expressly state that a legislation law is repealed, the State law will be void if it conflicts with a later law by the Parliament with respect to the same matter. Though the State Act 10 of 1961 has thus been repealed by the Parliamentary Act 31 of 1961, the power of the State Legislature to pass a fresh legislation, with respect to the repugnancy in accordance with the proviso to Art. 254(2) of the Constitution, still remains intact and that power has been properly exercised after reserving the Act for the consideration of the President. It is not disputed that the President has accorded his assent to the Maharashtra Act 3 of 1963, which was validly passed by the State Legislature. Consequently the impugned notifications, which were issued under Act 3 of 1963, cannot be challenged.

The next contention of Sri Phadke was with respect to the fixation of rates for skilled, semi-skilled and unskilled labourers. According to him, these rates were arbitrarily fixed ar a very high level as compared to the rates prevalent for other employments falling under the Minimum Wages Act. The learned Additional Government Pleader, however, pointed out that the rates in other employments mentioned in the petition were already revised in accordance with the procedure laid down by the Minimum Wages Act and were duly published in the gazette. In view of that statement of the learned Additional Government Pleader, Sri Phadke did not press this ground of attack.

The last contention of Sri Phadke was that the State Government had acted illegally and arbitrarily in fixing the cash value of the payments to be made to the employees in kind. According to him, rule 20 mandatorily required that the Government should take into consideration the prevailing market rates before fixing the cash value of the payments in kind. According to him, the cash value fixed by the Government in the notification on 1 October, 1963 had no relation whatsoever to the prevailing market value and, therefore, he wanted us to interfere with those rates. The contention of the petitioners that the Government had not considered the prevalent market rates did not appear to be well-founded. In Para. 12 of the return, the State Government had denied this allegation of the petitioners. It was the case of the Government that the committee duly appointed under the Act had considered all relevant factors including the prevailing market rates. We have no material before us to say that the market rates were not considered, as was the case of the petitioners. We do not think that there was any question of taking judicial notice of the prevailing market rates and to hold that the rates, as fixed by the Government, are ridiculously low as compared to those rates. After all, the prevailing rates in the market would be the rates charged to an individual consumer, whereas the rates considered by the committee were apparently on the basis of the cost to the employer. In any case, there is no material on which we could interfere with the rates as fixed by the Government.

The petition is dismissed with costs.