# BIJAY COTTON MILLS LTD v. THE STATE OF AJMER

- **Citation:** [1955] 1 S.C.R. 752
- **Court:** Supreme Court of India
- **Decided:** 1953-04-01
- **Case number:** Civil Appeal No. 139 of 1954
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bijay-cotton-mills-ltd-v-the-state-of-ajmer-391
- **Pages:** 5

## Headnote

1954
75:2
SUPREME COURT REPORTS
BIJAY COTTON MILLS LTD.
v.
THE STATE OF AJMER.
[MEHR CHAND MAHAJAN C. J., MuKHERJEA,
VIVIAN BosE, JAGANNADHADAS and
VENKATARAMA
AYYAR JJ.)
[1955]
Constitution of India, A1"ts. 19(1)(g), 19(6)-Minimum Wages
Act (XI of 1948) ss 3, 4 and 5-Appropriate Government-Fixing
minimum rate of wages-Whether
offends
fundamental rights
guaranteed under Art. 19(1)(g).
The provisions of ss. 3, 4 and 5 of the
Minimum Wages Act
(XI of
1948) empower
the appropriate
Government to fix the
minimum rate of
wages in an
industrial dispute
between
the
employer and the employed and it is a criminal offence not to pay
the wages thus fixed under the Act.
~
Held, that the restrictions imposed upon the freedom of contract by the fixation of minimum rates of wages though
they
interfere to some extent with the freedo1n of trade or business
guaranteed under Art. 19(1 )(g) of the Constitution are not unreasonable and being imposed in the interest of general public and with a
view to carry out one of the Directive Principles of State
Policy
as embodied in Art. 43 of the
Constitution _are protected by the
terms of cl. ( 6) of Art. 19.
S. I. Est. etc. v.
The Stat< of Madras, (1954) 1 M.L.J. 518
;----
referred to.
ORIGINAL
JuRISDICTION : Petitions Nos.
188
and
189 of 1954.
Under article 32 of the
Constitution of India for
the enforcement of Fundamental Rights.
H. M.
Seervai, f.
B.
Dadachanji and
Rajinder
Narain for petitioners.
C. K. Daphtary,
Solicitor-General for India (M. M.
Kaul and P. G. Gokhale, with him) for respondent.
1954.
October 14. The Judgment of the Court
was delivered by
MuKHERJEA J.-We now take up the two connected
petitions under article 32 of the Constitution. In one
.of these petitions, to wit Petition No. 188,
Shri Bijay
Cotton Mills Ltd. (hereinafter called 'the
company'),
the appellant in Civil Appeal No. 139 of 1954, figures
as the
petitioner, while
the other petition, to wit,
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S.C.R.
SUPREME COURT REPORTS
753
Petition No. 189, has been filed by a number of employees
working under it. To appreciate the
contentions of
Mr. Seervai, who
appears in
support of both these
petitions,
it will be
necessary
to
narrate a few
antecedent facts :
It appears that sometime in
1950 there was an
industrial
dispute
between
the
company and its
labourers regarding enhancement
of
wages and the
dispute was referred by the Government of Ajmer to
an Industrial Tribunal, by a notification dated the 1st
December, 1950. The tribunal made its award on the
27th November, 1951, and held that "the present earning capacity of the mill precludes the award of higher
rates of wages and higher dearness allowance." The
employees took an appeal against this award to
the
Appellate
Tribunal.
While this
appeal was pending,
the
Chief
Cwnmissioner, Ajmer, took steps for the
fixation of minimum wages of labourers in the textile
industry within the State, under the provisions of the
Minimum Wages Act. A committee was
formed, as
has already been stated, on the 17th of January, 1952,
which submitted its report on the 4th
of October,
following and on the 7th of October, 1952, the notification was issued
fixing the
minimum rates of wages,
against which writ
petitions were filed by several
textile companies
including the
petitioner company.
In the
meantime however the appeal
filed
by the
labourers of the company proceeded, in the usual way,
before the Appellate Tribunal. The Appellate Tribunal
sent
the
case back to the Industrial Tribunal for
further
investigation and
the latter
made its final
award on the 8th of September, 1953, by which it
rejected the basis upon which minimum wages of Rs. 56
were fixed by the Chief
Commissioner and fixed the
minimum wages includes the dearness allowance at
Rs. 35 only. The company states in its petition that
the minimum wages fixed by the State Government of
Ajmer is altogether prohibitory and it is not at all
possible for the company to carry on its business on
payment of such wages. Accordingly the company

## Text

1954
75:2
SUPREME COURT REPORTS
BIJAY COTTON MILLS LTD.
v.
THE STATE OF AJMER.
[MEHR CHAND MAHAJAN C. J., MuKHERJEA,
VIVIAN BosE, JAGANNADHADAS and
VENKATARAMA
AYYAR JJ.)
[1955]
Constitution of India, A1"ts. 19(1)(g), 19(6)-Minimum Wages
Act (XI of 1948) ss 3, 4 and 5-Appropriate Government-Fixing
minimum rate of wages-Whether
offends
fundamental rights
guaranteed under Art. 19(1)(g).
The provisions of ss. 3, 4 and 5 of the
Minimum Wages Act
(XI of
1948) empower
the appropriate
Government to fix the
minimum rate of
wages in an
industrial dispute
between
the
employer and the employed and it is a criminal offence not to pay
the wages thus fixed under the Act.
~
Held, that the restrictions imposed upon the freedom of contract by the fixation of minimum rates of wages though
they
interfere to some extent with the freedo1n of trade or business
guaranteed under Art. 19(1 )(g) of the Constitution are not unreasonable and being imposed in the interest of general public and with a
view to carry out one of the Directive Principles of State
Policy
as embodied in Art. 43 of the
Constitution _are protected by the
terms of cl. ( 6) of Art. 19.
S. I. Est. etc. v.
The Stat< of Madras, (1954) 1 M.L.J. 518
;----
referred to.
ORIGINAL
JuRISDICTION : Petitions Nos.
188
and
189 of 1954.
Under article 32 of the
Constitution of India for
the enforcement of Fundamental Rights.
H. M.
Seervai, f.
B.
Dadachanji and
Rajinder
Narain for petitioners.
C. K. Daphtary,
Solicitor-General for India (M. M.
Kaul and P. G. Gokhale, with him) for respondent.
1954.
October 14. The Judgment of the Court
was delivered by
MuKHERJEA J.-We now take up the two connected
petitions under article 32 of the Constitution. In one
.of these petitions, to wit Petition No. 188,
Shri Bijay
Cotton Mills Ltd. (hereinafter called 'the
company'),
the appellant in Civil Appeal No. 139 of 1954, figures
as the
petitioner, while
the other petition, to wit,
•
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•
S.C.R.
SUPREME COURT REPORTS
753
Petition No. 189, has been filed by a number of employees
working under it. To appreciate the
contentions of
Mr. Seervai, who
appears in
support of both these
petitions,
it will be
necessary
to
narrate a few
antecedent facts :
It appears that sometime in
1950 there was an
industrial
dispute
between
the
company and its
labourers regarding enhancement
of
wages and the
dispute was referred by the Government of Ajmer to
an Industrial Tribunal, by a notification dated the 1st
December, 1950. The tribunal made its award on the
27th November, 1951, and held that "the present earning capacity of the mill precludes the award of higher
rates of wages and higher dearness allowance." The
employees took an appeal against this award to
the
Appellate
Tribunal.
While this
appeal was pending,
the
Chief
Cwnmissioner, Ajmer, took steps for the
fixation of minimum wages of labourers in the textile
industry within the State, under the provisions of the
Minimum Wages Act. A committee was
formed, as
has already been stated, on the 17th of January, 1952,
which submitted its report on the 4th
of October,
following and on the 7th of October, 1952, the notification was issued
fixing the
minimum rates of wages,
against which writ
petitions were filed by several
textile companies
including the
petitioner company.
In the
meantime however the appeal
filed
by the
labourers of the company proceeded, in the usual way,
before the Appellate Tribunal. The Appellate Tribunal
sent
the
case back to the Industrial Tribunal for
further
investigation and
the latter
made its final
award on the 8th of September, 1953, by which it
rejected the basis upon which minimum wages of Rs. 56
were fixed by the Chief
Commissioner and fixed the
minimum wages includes the dearness allowance at
Rs. 35 only. The company states in its petition that
the minimum wages fixed by the State Government of
Ajmer is altogether prohibitory and it is not at all
possible for the company to carry on its business on
payment of such wages. Accordingly the company
closed its mills on and from the 1st April, 1953. There
were about 1500 labourers working in the mills of the
company and since January, 1954, several hundreds of
1954
Bijay C•tl1n
Mills lJd.
v.
The State ef
Ajmu.
MukherjeaJ.
1954
Bijay Cotton
Mills Ud.
v.
The State of
~finer.
· Mukh~rjui J.
754
SUPREME COURT REPORTS
[1955]
them, it
is said,
approached the managing authorities
and requested them to open the mills expressing their
willingness to work at Rs. 35 as wages as fixed by the
Industrial
Tribunal. Though the majority of workers
were agreeable to
work on the wages fixed qy the
Industrial Tribunal, the company is unable to open the
mills by reason of the fact that the
Minimum
Wages
Act makes it a criminal offence not to pay the wages
fixed under the Act. This being the position and as the
Minimum 'V' ages Act stands in the way of the company's carrying on its business,
on terms agreed
to
between itself and its workers, Petition No. 188 of 1954
has been filed by the company challenging the constitutional
validfry of the
material
provisions
of the
Minimum Wages Act itself. The
workmen who are
willing to work at less than the minimum wages fixed by
the
State
Government have filed
the
other petition
supporting
all
the
allegations
of
the
company.
Mr. Seervai, who appears
in support
of both these
petitions, has invited us to hold that the material provisions of the Minimum Wages Act are illegal and ultra
vires by reason of their conflicting with the fundamental
rights of the employers
and the
employed guaranteed
under article 19(1) (g) of the Constitution and that they
are not protected by clause ( 6) of that article.
It is contended bv the learned counsel that the
Minimum
Wages
Act puts unreasonable
restnct10ns
upon the rights of the employer in the sense that he is
prevented from carrying on trade or business unless
he
is prepared to pay minimum wages. The rights of the
employees are also
restricted, inasmuch as
they
are
disabled from working in any trade
or industry on the
terms agreed to between them and their employers. It
is pointed
out
that
the provisions relating to the
fixation of
mmrmum
wages are
unreasonable
and
arbitrary. The whole thing
has
been left to the
unfettered discretion
of the "appropriate Government"
and even when a committee is appointed, the report
or advice of such
committee is not binding on the
Government. The decision of the committee is final
and is not open to further review or challenge in any
Court of law. The learned counsel further says that the
restrictions put by the Act are altogether unreasonable
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S.C.R.
SUPREME COURT REPORTS
755
and even oppressive with
regard
to one class of
employers, who for purely economIC reasons
are not
able to pay the minimum wages but
who
have no
intention to exploit labour at· all. In such cases the
provisions of the
Act have no reasonable relation to
the object which it has in view. We will examine these
contentions in their proper order.
It can scarcely be disputed that securing of living
wages to labourers which msure not only bare physical
subsistence but also the maintenance of health and
decency, is conducive to the general interest of the
public. This is one of the Directive Principles of State
Policy embodied in article 43 of our
Constitution.
It
is well known that in 1928 there was a Minimum Wages
Fixing Machinery Convention held at Geneva and the
resolutions passed in that convention were embodied
in the
International Labour Code.
The Minimum
Wages Act is said to have been passed with a view to
give effect to these resolutions, (vide S. I. Est., etc. v.
The State of Madras) ( 1). If the labourers are to be
secured in the enjoyment of minimum wages and they
;;re
to
be
protected against
exploitation
by
their
employers. it is
absolutely
necessary
that restraints·
should be imposed upon their freedom of contract and
such restrictions cannot in anv sense
be
said
to be
unreasonable.
On the other
!~and, the employers
cannot be heard to complain if they
are compelled to pay
minimum wages
to their labourers even though the
labourers. on account of their poverty and helplessness.
are willing to work on lesser wages.
·
We could not really appreciate
the argument
of
Mr. Seervai that the provisions of the Act are bound
to affect
harshly and
even
oppressively a particular
class of employers who for purely economic reasons are
unable
to
pay the
minimum wages
fixed
by the
authorities but have absolutely no dishonest intention
of exploiting their labourers. If it is in the interest of
the general public that the labourers should be secured
adequate living wages, the intentions of the employers
whether good or bad are really irrelevant.
Individual
employers might find it difficult to carry on the business
on the basis of the minimum wages fixed under the
{') (1954) IM. L.J. 518, 521,
1954 -
Bijay Cotton
Mills Ltd.
v ••
The Stat; qf
Ajmer.
Mukherjea J.
•9~±
Bijay Cotton
Mills Lid.
...
The Sta" of
Aj,.,,,,.
MUfWrj,d J.
756
SUPREME COURT REPORTS
[19551
Act but this must be due entirely to the economic
conditions of these particular employers. That cannot
be a reason for the striking down the law itself as
unreasonable.
A, regards the procedure for the fixing of minimum
wages, the "appropriate Government" has undoubtedly
been given very large powers. But it has to take into
consideration, before fixing wages, the advice of
the
committee if one is appointed, or the
representations
on his proposals made by persons who are likely to be
affected
thereby.
Consultation
with advisory
bodies
has been made obligatory on all occasions of revision
of minimum wages, and section 8 of the Act provides
for the appointment of a Central Advisory Board for
the purpose of advising the Central as well as the State
Government both in the matter of fixing
and revision
of minimum wages. Such Central
Advisory body is to
act also as a co-ordinating agent for co-ordinating the
work of the different advisorv bodies. In the. committees or the advisory bodies ·the employers and the
employees have
an equal number
of
representatives
and there are
certain independent members
besides
them who are expected to take a fair and impartial
view of the matter.
These provisions, in our opinion,
constitute an adequate safeguard against any hasty or
capricious
decision by the "appropriate
Government."
In suitable cases
the "appropriate
Government" has
also been given the power of granting exemptions from
the operation of the provisions of this Act. There is
no provision undoubtedly for a further review of the
decision of the "appropriate
Government", but we do
not think that by itself
would make the provisions of
the
Act unreasonable. In our opinion, the restrictions,
though they interfere to some extent with the freedom
of trade or business guaranteed under article 19(1) (g)
of the
Constitution, are reasonable and being imposed
in the interest of the general public are protected by
the terms of clause ( 6) of article 19. The result is that
the petitions are
dismissed.
We make no order as
to costs.
Petitions dismissed.
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