Madhya Pradesh Mineral Industry Association vs The Regional Labour Commissioner

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 7 April, 1960

Coram: K.C. Das Gupta, K.N. Wanchoo, P.B. Gajendragadkar

In this appeal, the appellant Madhya Pradesh Mineral Industry Association filed a writ petition challenging the validity of a notification issued by the Madhya Pradesh State Government on 30 March 1952. The appellant argued that the notification was made under section 5(2) of the Minimum Wages Act, 1948 (Act 11 of 1948) and that it exceeded the authority conferred by that provision. The High Court of Bombay at Nagpur dismissed the petition but, in accordance with Article 133(1)(c) of the Constitution, granted the appellant a certificate of fitness. It was on the basis of that certificate that the present appeal was brought before this Court. The appellant is described as a non‑profit company limited by guarantee, incorporated under section 26 of the Indian Companies Act, 1913. Its purpose is to protect and promote the interests of its member‑shareholders, who are engaged in the mining industry, by lawful and constitutional means. Under Article 258 of the Constitution, the President of India, by Notification No. S.R.O. 2052 dated 11 December 1951, delegated to the governments of certain states, including Madhya Pradesh, the central government’s functions under the Minimum Wages Act insofar as those functions relate to fixing minimum wages for employees employed in stone‑breaking or stone‑crushing operations carried out in mines situated within the respective states. Acting under that delegation, the Madhya Pradesh Government issued the impugned notification, purporting to act under section 5(2) of the Act. The notification prescribed minimum rates of wages for employment in stone‑breaking or stone‑crushing operations in mines, and the rates were inclusive of dearness allowance or a compensatory cost‑of‑living allowance.

The Regional Labour Commissioner (Central), Nagpur, who is respondent 1, wrote to the appellant for the first time on 20 June 1956. In that letter, the Commissioner stated that the State of Madhya Pradesh, respondent 2, had examined whether the Minimum Wages Act applied to the manganese mining industry and had concluded that it indeed did. Accordingly, the Commissioner requested that the appellant’s members implement the provisions of the Act within a fortnight of receiving the letter. The appellant subsequently made several representations to the Commissioner, urging that the Act was inapplicable to the manganese mining industry. Despite these representations, the Commissioner threatened large‑scale prosecution of the appellant’s members on the ground that the Act applied to them and that they had contravened its provisions. Feeling that there was no other speedy and effective remedy, the appellant was compelled to file the present petition, arguing that it had no alternative recourse and therefore seeking from the High Court a writ to quash the impugned notification as ultra vires. The petition also contended that the President’s notification under Article 258 could not impose on the manganese mining industry the character of employment in stone‑breaking or stone‑crushing; if that were the purpose of the notification, it would be invalid.

The appellant alleged in its petition that the notification issued by the President of India under Article 258 was ultra vires and that it could not impose upon the manganese mining industry the label of employment in stone‑breaking or stone‑crushing. The appellant further submitted that, if the purpose of the notification was to attach such a character to the industry, then the notification was invalid. The respondents contested this contention and argued that any industry in which workers performed stone‑breaking or stone‑crushing operations fell within the scope of the Act. In their written statement the respondents set out a description of the mining operations, explaining that manganese ore mining mainly involved development work, removal of over‑burden, breaking large mineral stones such as boulder ore or bed ore into manageable sizes, and dressing the ores to remove impurities. On the basis of this description the respondents maintained that, because stone‑breaking and stone‑crushing activities formed an integral part of the manganese mining process, the provisions of the Act applied to those operations.

The High Court accepted the respondents’ argument and dismissed the appellant’s request for a writ that would have barred the respondents from enforcing the Act against the appellant’s members. The Court, however, erred on two important points. First, it appeared to assume that the impugned notification added a new entry to Schedule I of the Act and that, as a result of this addition, the provisions of the Act extended to employment in stone‑breaking or stone‑crushing activities carried out in mines. The High Court constructed its analysis of the appellant’s case on this assumption and then examined the validity of the appellant’s challenge on that basis. In reality, the impugned notification did not purport to insert any new item into Schedule I, and the appellant had not made any claim that it did so. Consequently, the Court’s assumption concerning the effect of the notification on the schedule was erroneous.

Second, the High Court stated in its judgment that the validity, or vires, of the impugned notification had not been challenged before it, and therefore the only question remaining was the interpretation of the entry introduced by the notification. This observation was also inaccurate. The principal ground on which the appellant sought the writ was precisely that the notification was ultra vires of section 5(2) of the Act. Had the appellant conceded the validity of the notification, the writ petition would have become futile, because a valid notification would leave no difficulty in construing the material entry. Thus, the challenge to the vires of the notification was a central issue before the High Court, contrary to its own finding.

In this case the Court observed that the activities of stone‑breaking and stone‑crushing that were performed in the mines were expressly listed in the Schedule, and therefore the petitioner could not plausibly contend that the work carried out by its members fell outside the description. The Court noted that the High Court had explicitly stated that the validity of the impugned notification had not been contested before it, and at first the Court was reluctant to permit the petitioner’s counsel to raise that point. After hearing the counsel and reviewing the complete record, however, the Court concluded that the High Court’s statement was inaccurate. The petition filed by the petitioner challenged the validity of two separate notifications: the first notification issued by the President of India under Article 258 of the Constitution, and the second, impugned notification under which proceedings were threatened against the petitioner’s members. The record made it clear that the petitioner neither raised nor could have raised any objection to the first notification, but it did contest the second notification, a fact that was evident from the certificate of fitness granted by the High Court itself. That certificate identified the questions raised by the petitioner as relating to the applicability of the provisions of the Act to persons employed in stone‑breaking or stone‑crushing operations carried on at various manganese mines. Such a question could arise only if the petitioner sought to challenge the validity of the second notification; otherwise the issue would not be relevant. According to the petitioner, the employees in question were not employed under any of the items prescribed in the Schedule to the Act, and therefore the impugned notification should be held invalid. In that context, the questions noted in the certificate would indeed arise. If, on the other hand, the notification were valid, the Court held that the answer to the question could hardly be considered appropriate for a certificate under Article 133(1)(c) of the Constitution. Moreover, the petitioner’s challenge to the validity of the impugned notification had been set out in its application for a certificate before the High Court and was expressly reiterated in the statement of case filed before this Court. Consequently, the Court concluded that the High Court erred in assuming that the petitioner had conceded the vires of the impugned notification, and this error constituted a serious infirmity in the High Court’s judgment.

The Court further observed that because of the two identified infirmities, the approach adopted by the High Court in dealing with the matter had been substantially affected. The High Court had indeed examined the meanings of the words “employment” and “stone” in connection with the expressions “stone‑breaking” and “stone‑crushing.” However, even that part of the discussion appeared to assume that the impugned notification had actually added a new item to the Schedule. The Court noted that the High Court had seemingly failed to recognise that if the present notification purported to amend the Schedule by adding an item, the controversy between the parties would have been different. This oversight, the Court indicated, influenced the High Court’s analysis of the terms and the overall conclusions drawn in its judgment.

The Court observed that, had the impugned notification merely added a new entry to the Schedule, the parties would not have been in dispute. The High Court, however, interpreted the term “employment” in a broad sense, defining it as “the action of employing or the state of being employed.” It also construed the word “stone” to mean “a piece of rock or hard mineral substance (others than metal) of a small and moderate size.” These meanings were taken from the Shorter Oxford Dictionary, and on that basis the High Court concluded that stone‑breaking and stone‑crushing operations carried out in mines fell within the provisions of the Act. Before addressing the validity of the notification, the Court found it necessary to examine the relevant provisions of the Act, which was enacted to establish minimum wage rates for certain employments. Section 2(b) defines “appropriate government” as, inter alia, the Central Government for any scheduled employment conducted by or under its authority, or for a mine, and the State Government for any other scheduled employment. This suggests that the Legislature intended the Act’s provisions to eventually extend to mines, with the Central Government designated as the appropriate authority in such cases. Section 2(e) defines “employer” as any person who employs one or more employees in any scheduled employment for which minimum wages have been fixed, whether directly, through another person, or on behalf of himself or another. Section 2(g) defines “scheduled employment” as an employment listed in the Schedule or any process or branch of work that forms part of such employment. Section 3 authorises the appropriate government to fix minimum wage rates for employments specified in Parts I and II of the Schedule and sets out the procedure for doing so. Section 5 outlines the procedure for fixing and revising minimum wages, and subsection 5(2) provides that after following the prescribed procedure, the appropriate government shall, by notification in the official Gazette, fix or revise the minimum rates of wages for each scheduled employment, with the notification taking effect three months after issuance unless otherwise provided. The only other provision of relevance is section 27, which empowers the appropriate government to add any employment to either part of the Schedule, if it is of the opinion that minimum wages should be fixed for that employment, after following the prescribed procedure.

The provision stipulates that once a notification is issued, the Schedule shall, as it applies to the State, be deemed to have been amended accordingly. It follows that the entire framework of the Act is designed to operate with respect to the employments listed in Part I and Part II of the Schedule. The legislature deliberately entrusted the appropriate government with the discretion to determine the scope of the Act’s extension and the specific areas to which it should apply. Section 5(2) grants the appropriate government authority to fix or revise the minimum wages for any employment that appears in the Schedule and to which the Act is applicable. This authority may be exercised only when the particular employment is expressly mentioned in the Schedule, thereby bringing the Act into operation for that employment. By contrast, Section 27 provides a broader power, permitting the appropriate government to add a new employment to the Schedule. The two powers under Sections 5(2) and 27 are therefore distinct and separate; actions that may be undertaken by the appropriate government under the power conferred by Section 27 cannot be performed under the power conferred by Section 5(2). It is noteworthy that the contested notification was issued by the Government of Madhya Pradesh pursuant to the authority under Section 5(2) of the Act, a power that had been delegated to the State Government by the President in accordance with the authority vested in him by Article 258 of the Constitution.

Counsel for the petitioner contended that the notification is beyond the limits of Section 5(2) because stone‑breaking and stone‑crushing activities carried out in manganese mines are not covered by any of the items enumerated in Part I of the Schedule. Consequently, the dispute is narrowly framed: does the employment of stone‑breaking or stone‑crushing performed in the mines identified in the notification correspond to the employment described as “stone‑breaking or stone‑crushing” in item 8 of Part I of the Schedule? Both parties agreed that the employment in question does not fall under any other item in Part I. The Court acknowledged that the purpose of the Minimum Wages Act is to promote social justice for workers engaged in the scheduled employments by prescribing minimum wage rates, and therefore, in interpreting the provisions, the Court should apply a beneficent rule of construction. Where the language admits two plausible constructions, the Court may prefer the construction that sustains the validity of the notification, but such a preference is justified only when both constructions are reasonably possible. The remaining question, therefore, is whether the stone‑breaking or stone‑crushing activities specified in Part I of the Schedule can, on a reasonable construction, be understood to include the stone‑breaking or stone‑crushing operations that occur within the mining industry.

In order to determine whether the phrase “stone‑breaking or stone‑crushing operations in a mining industry” falls within the scope of the scheduled employment, the Court first examined the language of section 2(g) of the Act, which provides that a scheduled employment includes not only the specific work listed in the Schedule but also any process or branch of work that forms part of such employment. Both parties agreed that the provisions of the Act extend to all branches of work that may be incidental to the principal scheduled employments. By contrast, the notification that is being challenged applies solely to stone‑breaking or stone‑crushing activities that are carried out inside mines and does not extend to other operations that are connected with manganese mining. This limitation creates a mismatch with the overall scheme of the Schedule, a circumstance that, on its face, supports the appellant’s argument that the notification is inconsistent with the legislative design.

Mr Umrigar, appearing for the respondents, contended that the word “employment” as well as the term “stone” in item 8 of the Schedule should be given their broadest possible meanings, which, according to him, would bring stone‑breaking or stone‑crushing work conducted within mines within the ambit of the item. The parties did acknowledge that stone‑breaking and stone‑crushing are indeed performed in relation to manganese mining, where rocks are reduced to smaller pieces with a hammer, washed and screened through sieves of varying mesh sizes before manganese is extracted. The Court therefore considered whether the Schedule’s reference to “employment of stone‑breaking or stone‑crushing” was intended to cover such incidental work associated with manganese operations. While some dictionaries, such as the Shorter Oxford Dictionary, list “manganese” as a possible meaning of “stone” in a chemical or geological sense, the ordinary understanding of the term, especially when paired with “breaking” or “crushing,” denotes a piece of rock and would ordinarily exclude manganese. Consequently, the proper meaning of “stone” – whether broad or narrow – must be ascertained from the contextual usage in the Schedule. The intention that can be reasonably inferred from the surrounding context will determine which definition is appropriate, and the same contextual analysis applies to the term “employment.” After a careful review of all items in the Schedule and mindful of the Act’s benevolent policy, the Court was unable to accept that item 8 was meant to encompass the breaking or crushing of stones incidental to manganese mining. The context indicated that the broader definition of “stone” should not be applied in item 8. Therefore, our conclusion is that

In the matter before it, the Court observed that the phrase “stone‑breaking or stone‑crushing operations” mentioned in item 8 of the Schedule was intended to refer only to activities carried out in quarries and not to similar activities performed within mines. Consequently, the Court held that any operation of stone‑breaking or stone‑crushing that was conducted as part of mining activities did not fall within the scope of item 8. Because the impugned notification issued by the State Government was made under section 5(2) of the Act and purports to regulate employment that is outside the ambit of item 8, the Court concluded that the notification was beyond the powers of the State Government and therefore ultra vires. The Court further noted that the High Court had emphasized the fact that certain items in Part I of the Schedule use the word “any,” whereas item 8 does not contain that word. For example, item 1 speaks of “employment in any woollen carpet making or shawl weaving establishment,” while item 8 simply mentions “employment in stone‑breaking and stone‑crushing.” The High Court interpreted the absence of “any” to mean that the terms “stone” and “employment” were meant in their broad sense. The Court disagreed with that interpretation, observing that the insertion of the word “any” in item 8 would have expanded its reach, for instance by reading it as “employment in any stone‑breaking or any stone‑crushing operations.” In the Court’s view, because the word “any” is not present, the entry must be confined to stone‑breaking and stone‑crushing employment in quarries and not to similar work carried out in mines. The Court reiterated that a notification issued under section 5(2) can be validly made only with respect to employments that fall within the Schedule, and it emphasized that the appropriate government retains the power under section 27 of the Act to add new items to the Schedule. Thus, if the legislature wishes to bring mining‑related stone‑breaking or stone‑crushing under the Act’s purview, it may do so by exercising the authority granted by section 27, which allows the appropriate government to amend the Schedule to achieve the objective that the impugned notification sought to address.

The Court also addressed the argument raised by counsel for the appellant, who contended that the appellant could not challenge the validity of the impugned notification without simultaneously challenging the validity of the delegation of authority conferred by the President’s notification issued under article 258 of the Constitution. The contention was that, if the President’s notification were valid, the State Government’s action would merely be an exercise of delegated power and therefore could not be questioned in isolation from the parent notification. The Court observed that this line of argument had not been raised before the High Court. Moreover, the Court held that even if the State Government acted on the basis of the impugned notification, the appellant could still resist the proposed action on the ground that the notification itself was invalid. In such circumstances, no enforcement action could be taken against the appellant for alleged contravention of the provisions of the Act, because the underlying regulatory instrument would be ultra vires and therefore of no legal effect.

In this case, the Court referred to its earlier observation in A. Thangal Kunju Musaliar v. M. Venkitachalam Potti, stating that agency cannot be invoked to excuse the commission of a wrongful act. The Court quoted, “there can be no agency in the matter of a commission of a wrong. The wrong‑doer would certainly be liable to be dealt with as a party directly responsible for his wrongful action.” The Court added that, “on the analogy of a civil wrong the tortfeasor could certainly not protect himself against the liability on the ground of having committed the tort under the directions of his principal, and so the agent could in no event exculpate himself from the liability for the wrongful act done by him and if he is amenable to the jurisdiction of the High Court the High Court could certainly issue an appropriate writ against him under Art. 226.” By the same reasoning, the Court concluded that if the notification issued by the State Government is ultra vires, it cannot rely on the President’s notification to justify the action it seeks to take against the appellant. Consequently, the Court held that the appellant is entitled to seek a writ against the respondents even without challenging the validity of the Presidential notification. In its final determination, the Court declared that the impugned notification issued by respondent 2 is invalid and cannot be enforced. Accordingly, the appeal was allowed, the order of the High Court was set aside, and the appellant’s application for a writ was granted with costs awarded throughout. The appeal was thus allowed.