# JA YDIP INDUSTRIES, TRANA v. THE WORKMEN

- **Citation:** [1972] 2 S.C.R. 920
- **Court:** Supreme Court of India
- **Decided:** 1971-12-16
- **Case number:** CIVIL APPELLATE JURl@ICTION : Civil App~al No. 912 of 1967
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ja-ydip-industries-trana-v-the-workmen-5581
- **Pages:** 7

## Headnote

920
JA YDIP INDUSTRIES, TRANA
v.
THE WORKMEN
December 16, 1971
[C~ A. VAIDIALINGAM AND K. K. MATHEW, JI.]
Industrial Tribunal-Jurisdiction to fix minimum wages at rates higher
than those f.xed by government during pendency of industrial disputeMlnimul?I Wages
Act 1948 S, 3(2A). Industrial
dispute-Minimum
wages, what is.
During the penilency of an industrial dispute betw~en the appellant
and its workmen, arising out of the demand of the workmen for higb;,r
scales bf pay, the appropriate government fixed under section 3 of
the
Minimum Wages Act, 1948, the minimum rates of wages for the employees employed in sched_uled employments including the appellant's
industry.. The tribunal found that the appellant-concern was not financially stable.
It fixed the minimum wages at rates higher than the rate
fix.ed by the government. In its award the tribunal referred to the minimum rates of wages fixed in the several awards passed by it from 1962
onwards and also considered the rist in the cost of living.
It also took
into account the consumer price index for the month of December, 1966,
.an<! that for the month of January, 1967, for coming to the conclusion
that rates ·higher than those specified in the notification published
by
government should be fixed as minimum wages. On the questiins whether
the tribunal was right in fixing wages at rates higher than· the rates fixed
by the go~ernment under s. 3 of the Act and whether what was fixed by
the tribunal were minimum wages,
HELD : (i) Sub-section (2A) of section 3 makes it clear that even
after the fixation of minimum rates of wages by the appropriate government under s. 3 of the Act, it is open to an Industrial Tribunal adjudicating an industrial dispute relating to wages payable to the employees in a
scb;,duled employment to fix minimum wages at higher or lower rates,
if the dispute was pending at the time of fixation of minimum wages under
s. 3. [924 Gl
.
(ii) Minimum wages can provide not only for the sustenance of life,
but also for the preservation of the efficiency of the worker.
The rates
of wages fixed by the tribunal ,were neither fair wages nor wages bordering on fair wages.
They were minimum \vag25 as explained by
this
Court.
As such the capacity of the industry to pay was not a r\!levant
consideration. [925 Fl
[), Unichovi v. State of Kera/c. f.1962] 1 S.C.R. at p. 957, applied.
B
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The tribunal' \Vas not \Nrong in taking into '3.Ccount the rates of minimum wages fixed in the several awards for the workmen employed in
the city of Bombay as affording criteria for fixing minimum rates of 'wages
with suitable modification for !\le workmen employed under the appellant
~~
H
CIVIL APPELLATE JURl@ICTION : Civil App~al No. 912 of
1967.
-
A
JAYDIP INDUSTRIES v. WORKMEN (Mathew, J.)
921
Appeal by Special Leave from the Award dated March 3,
1967 of the Industrial Tribunal, Maharashtra, Bombay in Reference (IT) No. 1 of 1968.
I. N. Shroff, for the appellant.
B

## Text

920
JA YDIP INDUSTRIES, TRANA
v.
THE WORKMEN
December 16, 1971
[C~ A. VAIDIALINGAM AND K. K. MATHEW, JI.]
Industrial Tribunal-Jurisdiction to fix minimum wages at rates higher
than those f.xed by government during pendency of industrial disputeMlnimul?I Wages
Act 1948 S, 3(2A). Industrial
dispute-Minimum
wages, what is.
During the penilency of an industrial dispute betw~en the appellant
and its workmen, arising out of the demand of the workmen for higb;,r
scales bf pay, the appropriate government fixed under section 3 of
the
Minimum Wages Act, 1948, the minimum rates of wages for the employees employed in sched_uled employments including the appellant's
industry.. The tribunal found that the appellant-concern was not financially stable.
It fixed the minimum wages at rates higher than the rate
fix.ed by the government. In its award the tribunal referred to the minimum rates of wages fixed in the several awards passed by it from 1962
onwards and also considered the rist in the cost of living.
It also took
into account the consumer price index for the month of December, 1966,
.an<! that for the month of January, 1967, for coming to the conclusion
that rates ·higher than those specified in the notification published
by
government should be fixed as minimum wages. On the questiins whether
the tribunal was right in fixing wages at rates higher than· the rates fixed
by the go~ernment under s. 3 of the Act and whether what was fixed by
the tribunal were minimum wages,
HELD : (i) Sub-section (2A) of section 3 makes it clear that even
after the fixation of minimum rates of wages by the appropriate government under s. 3 of the Act, it is open to an Industrial Tribunal adjudicating an industrial dispute relating to wages payable to the employees in a
scb;,duled employment to fix minimum wages at higher or lower rates,
if the dispute was pending at the time of fixation of minimum wages under
s. 3. [924 Gl
.
(ii) Minimum wages can provide not only for the sustenance of life,
but also for the preservation of the efficiency of the worker.
The rates
of wages fixed by the tribunal ,were neither fair wages nor wages bordering on fair wages.
They were minimum \vag25 as explained by
this
Court.
As such the capacity of the industry to pay was not a r\!levant
consideration. [925 Fl
[), Unichovi v. State of Kera/c. f.1962] 1 S.C.R. at p. 957, applied.
B
c
D
E
F
G
The tribunal' \Vas not \Nrong in taking into '3.Ccount the rates of minimum wages fixed in the several awards for the workmen employed in
the city of Bombay as affording criteria for fixing minimum rates of 'wages
with suitable modification for !\le workmen employed under the appellant
~~
H
CIVIL APPELLATE JURl@ICTION : Civil App~al No. 912 of
1967.
-
A
JAYDIP INDUSTRIES v. WORKMEN (Mathew, J.)
921
Appeal by Special Leave from the Award dated March 3,
1967 of the Industrial Tribunal, Maharashtra, Bombay in Reference (IT) No. 1 of 1968.
I. N. Shroff, for the appellant.
B
The Judgment of the Court was delivered by
c
Mathew, J.
This appeal, by special leave. is from an award
passed by the Industrial Tribunal, Maharashtra,
Bombay, on
March 3, 1967.
The Government of Maharashtra referred to the Tribunal
on December 31, 1965, under section lO(i) (d) of the Industrial
Disputes Act, 1947, the industrial dispute between M/s. Jaydip
Industries, Thana, and the workmen employed under them, ansing
eut of the following demands macle by the workmen :-
(A) Following monthly scales of pay should be introD
duced for all categories of workmen :
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Unskilled
Semi-skilled
Skilled
Highly skilled
Rs.
150-5.00-200.00
175-· 7.50-250.00
225-10.00-325.00
350-25 .00-600.00
(B) The above scales of pay are consolidated and are
on the basis of Bombay Working Class Cost of
Living Index Number 480.
In case
if
index
number move above 480 for every point rise i:n
Index Number, workmen should be paid ten paise
per day as dearness allowance.
(C) The above rates of pay should be made effective
from 1st February 1965.
(D) For the conversion of present
daily
rates
into
monthly rates. the present rate should be multiphed by thirty. The amount should then be fitted
In. the above grades. If the amount fells short of
rnm1rnum of Grades demanded the same should be
ht·ought up to the minimum.
H
(E) 0fter mak_ing adjustment in the above manner ad-
.1ustment mcrem~nts at ·the rate of one for every
o.ne year of service or Pf(ft thereo,f in excess
of
six months should be added to the pay.
922
SUPREME COURT REPORTS
(1972] 2 S.C.R.
The employer is a partnership concern consisting of five
partners and is carrying on the business of manufactur.ing "paper~
board" at its factory srtuated in Majiwada within the hmits of the
panchdyat of that village. The partnership was started in the year
1959, on a capital of Rs. 1,50,000/-. The capital has since then
b~n increased al).d it was Rs. 2 lakhs in 1965. The number of
workmen ~mployed in the concern, at the time of the reference,
was about 150.
The workmen were being paid fixed consolidated wages.
The employer contended before the Tribunal, . by its written
statement dated February 8, 1966, that it has no financial capachy to pay any additional wages, as it has been suffering heavy
losse~ year after year.
During the pendency of the disputes before the Tribunal, the
Government of Maharashtra fixed the minimum rates of wages
for the· employees employed in scheduled employments including
the paper and paper-board manufacturing industry under section
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3 of the Minimum Wages Act, 1948, hereinafter called the Act, b!Y
n
notification published in the Maharashtra Government Gazette
dated August 4, 1966. In implementation of the notification, the
wages of the workmen concerned were raised with. effect from
October, 1966. The workmen were being paid wages at the following rates, before the date of the award, in pursuance of the
E
notification :-
Unskilled
Rs.
90 per month
Semi-skilled
Rs. 100 per month
Skilled-B
Rs. 115 per month
Skilled-A
Rs. 130 per month
The Tribunal considered in detail the financial
capacity of
the employer on the basis of the balance sheets and profit and
loss accounts of the employer for the years 1960 to 1965 and
found that its total loss for those years amounted to Rs. 78,000/ -,
and on that basis its annual average loss worked out to Rs. 13,000
and so the concern was not financialiy stable. The Tribunal
then came to the conclusion, on the basis of the minimum rates
of wages fixed by it in the awards in the case bf Ml s. Kondivitta:
Paper and Board Mills (Private) Limited, Bombay, published in
Maharashtra Government Gazette, dated November
14,
1963,
page 3 750), in the case of Bombay Metal Factory, published in
the Maharashtra Government Gazette dated May 27, 1965 (page
1963), and in the case of Ratan Industries. Bombay, published
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II
JAYDIP INDUSTRIES v. WORKMEN (Mathew, l.)
923
in Maharashtra Government Gazette dated June 23, 1966 (page
1974), that the rates of wages for the workmen employed
in
question should be fixed at the following rates:-
Daily-rated
Mon:hly-ratt?d
Unskilled
Rs. 4 ·50
Un-skilled
R;. 117 ·00
Semi-skilled
Rs. 6 ·00
Semi-skilled
Rs. 156 ·00
Skilled
Rs. 7 ·50
Skilled
Rs. 195 ·00
Highly-skilled
Rs. 9 ·50
Highly-skilled
Rs. 247 ·00
and said that
"The above wage rates shall be deemed to be fixed
as at Bombay Consumer Price Lndex figure 660.
For
a rise of every ten points in the Index Figure the workmen shall be given an increase in the wages at foe rate
of seven paise per day. And for a fall of every ten points
in the Index Figure there shall be a reduction in the
wages at the rate of seven paise per day."
The Tribunal also held that wages it fixed were the minimum
rates of wages for t"e workmen in question and, therefore, the
capacity of the employer to pay was irrelevant.
It was argued for the appellant that the Tribunal was wrong
in fixing minimum wages at higher rates than those fixed by the
Government under section 3 of the Act without taking into account
the financial capacity of the employer to pay. In other words,
the argument was that when once the appropriate Government has
fixed minimum rates of wages in the employment under section 3
of the Act, it was not open to the Tribunal to fix higher rates of
wages as minimum wages and, therefore, the rates of wages fixed
by the Tribunal were not minimum wages,
but fair wages,
or at any rate wages bordering on fair wages, and so, the financial capacity of the employer to bear the additional ourden should
have been taken into account.
The short question for consideration, therefore, is whether the
Tribunal was right in fixing wages at rates higher than the rates
fixed by the Gover·nment under section 3 of the Act, and whether
what was fixed by the Tribunal were minimum wages.
Section 3 ( I) of the Act provides that the appropriate
Government may fix the minimum rates of wages payable to employees employed in employments specified in Part I or Part II
of the Schedule thereof and in any employment added to either
924
SUPREME COURT REPORTS
[1972] 2 S.C.R.
part by notification under section 27. By clause (b) of section
3 ( 1), the appropriate Government is given power to review at
such intervals as it may thLnk fit, such intervals not exceeding five
years, the minimum rates of wages so fixed and revise the minimum
rates, if necessary. Sub-section (2A) of section 3 provides :
"(2A) -Where in respect of an industrial dispute
relating to the rates of wages payable to any of the employees employed. in a scheduled employment, any proceeding is pending . before a Tribunal or National
Tribunal under the Industrial Disputes Act, 194 7, or
before any like authority under any other law for the
time being in force, or an award made by a!Jy Tribunal,
National Tribunal or such authority is in operation, and
a notification fixing or revising 'the minimum rates of
wages in respect of the scheduled employment is issued
during the pendency of such proceeding or the operation
of the award, then, notwithstanding anything contained in this Ac't, the minimum rates of wages so fixed or
so revised shall not apply to those employees during
the period in which the proceeding is pending and the
award made therein is in operation, or, as the case may
be, where the notification is issued during the period
of operation of an award, during that period; and
where such proceeding or awafd relates to the rates of
wages payable to all the employees in the scheduted employment, no minimum rates of wages shall be fixed or
revised in respect. oi that employment during the said
period."
It is, therefore, clear that the minimum wage can provide
ceedings before the Tribunal that the notification by the Maharashtra Government fixing minimum rates of wages came into
operation.
The sub-section would make it clear that even after
the fixation of minimum rates of wages by the appropriate Government under section 3 of the Act, it is open to an Industrial
Tribunal adjudicating an industrial dispute relating to wages payable to the employees in a scheduied employment to fix minimum
wages at higher or lower rates, if the dispute was pending at the
tirne of fixation of minimum wages under section 3 of the Act. So
it was open to the Tritiunal to fix rates of minimum wages at rates
higher than the rates fixed b{y 'the Government under section 3 of
the Act. In other words the Tribunal was not bound by the fixation of the minimum rates of wa~es by the Government under the
provisions of section 3 of the Act and could fix higher rates as
minimum wages in its award.
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JAYDIP INDUSTRIES v. WORKMEN (MO!thew, J.)
925
In considering the question what are the component elements
of minimum wages, this Court observed as follows in U. Unichoyi
v. State of Kera/a(') :-
"Sometimes the minimum wage is described as a
bare minimum wage in order to distinguish it from the
wage structure which is 'subsistence plus' or fair wage,
but too much emphasis on the adjective 'bare' in rc:lation
to the minimum wage is apt to lead to the erroneous
assumption that the maintenance wage is a wage which
enables the worker to cover his bare physical needs and
keep himself just above starvation. That clearly is not
intended by the concep't of minimum wage. On the other
hand, since the capacity of the employer to pay is treated as irrelevant, it is bμt right that no addition should
be made to the cdmponents of the minimum wage which
wol!ld take the minimum wage near the lower level
of the fair wage, but the contents of this concept
must ensure for the employee not only his subsistence and that of his family but must also preserve
his efficiency as a worker. The Act contemplates that
minimum wage rates should be fixed in the scheduled
industrial with the dual object of providing sustenance
and maintenance of the worker and his family and
preserving his efficiency as a worker."
It is, therefore, clear that the minimum wage can provide
1101 only for the bare sustenance of li(e but also for the preservation of the efficiency of the worker. We do not think that the
rates of wages fixed by the Tribunal were fair wages or wages
bordering on fair wages.
The Tribunal has referred to the minimum rates of wages fixed in the several awards passed by it from
1962 onwards. and also considered the rise in the cost of living.
In particular, the Tribunal was earful to take into account the
Consumer Price Index for the month of December,
1966. and
that for the month of January, 1967, for coming to the conclusion
that rates higher than those specified in the notification published
by Government should be fixed as minimum wages.
As the rates
~xed by the Tribunal were minimum rates of wages as explained
m the case of U. Unichoy v. State of Kera/a('), we do not think
that the capacity of the industry to pay was a relevant consideration.
There was also no material before the Tribunal to come to the
conclusion that the Government in fixing the miriimum rates of
wages, took into consideration all the components in the fixation
(!) [196') l S.C.R. 957.
Q26
SUPREME COURT REPORTS
[1972] 2 S.C.R.
of minimum wages as explained by this Court in U. Unichoyi v.
State of Kera/a( 1).
In the light of the provisions of section 3 ( 2A) of the Act, we
hold that the Tribunal was not bound by the rates uf minimum
wages fixed by the Government under section 3 of the Act. and
that i_t was open to the Tribunal to fix rates of minimum wages
to be paid to the workmen concerned in the disputes at figures
higher than those fixed by the Government.
It was contended on behalf of the appellant that the employer
has his place of business outside the city of Bombay and that in
the city of Bombay, the. wages for workmen are generally higher
than those outside the city, and therefore, the Tribunal went
wrong in taking the minimum rates of wages fixed in the various
awards for workmen in the city of Bombay as criteria for fixing
the minimum wages for workmen outside the city. The Tribunal
considered this question and held that the rates of minimum wages
fixed by the Government for the city of Bombay, the town of
Thana and also for the village of Majiwada, wher<!::the appellant's
factory is situate, are the same and so, the rates of wages at Majiwada are not lower than the wage rates obtaining in the city of
Bombav and Thana.
We do not, therefore, think that the Tribunal \vent wrong in taking into account the rates of minimum
wages fixed in the several awards for the workmen employed in
the city of Bombay as affording criteria for fixing minimum rates
of wages with suitable modification for the workmen employed
under the appellant.
We dismiss the appeal but, since there is no appearance for the
respondent, we make no· order as to costs.
K.B.N.
Appeai dismissed.
(I) [1962] IS.CR. 957
A
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