Madhya Pradesh Mineral Industry Association vs The Regional Labour Commissioner, Jabalpur and Others

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

Court: Supreme Court of India

Case Number: Civil Appeal No. 389 of 1959

Decision Date: 7 April, 1960

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

In this case, the Supreme Court of India rendered a judgment on 7 April 1960 concerning the dispute between the Madhya Pradesh Mineral Industry Association as petitioner and the Regional Labour Commissioner, Jabalpur together with other respondents. The opinion was authored by Justice P B Gajendragadkar, with Justices K N Wanchoo and K C Das Gupta forming the bench. The citation of the decision appears as 1960 AIR 1068 and 1960 SCR (3) 476, and it is recorded in subsequent reports such as 1966 SC 189 and 1972 SC 1177. The matter arose under the Minimum Wages Act, 1948 (Act No 11 of 1948). The State Government of Madhya Pradesh had issued a notification made under section 5(2) of that Act. The notification prescribed minimum rates of wages for persons employed in stone‑breaking and stone‑crushing operations carried out in mines. The State Government claimed authority to issue the notification by virtue of a delegation of power from the President of India through a constitutional notification issued under Article 258. The petitioner, a company engaged in the manganese mining industry, challenged the validity of the State notification by filing a writ petition in the High Court. The petitioner contended that the notification exceeded the powers granted by section 5(2) of the Minimum Wages Act. The High Court dismissed the petition and held the notification to be valid. The appeal before this Court therefore required determination of whether item 8 in Part 1 of the Schedule to the Minimum Wages Act, when properly interpreted, encompasses stone‑breaking and stone‑crushing activities that are incidental to mining operations. The Court held that item 8 in Part 1 of the Schedule was intended only for stone‑breaking and stone‑crushing work performed in quarries and did not include similar work incidental to mining. Consequently, the State notification was found to be ultra vires section 5(2) of the Act and could not be enforced. The Court observed that the Government could achieve the same objective by adding a suitable entry to the Schedule under the power conferred by section 27 of the Act. The Court also clarified that it was not necessary for the petitioner to first challenge the constitutional validity of the President’s delegation before assailing the State notification. The judgment referred to the earlier decision in A Thangal Kunju Musaliar v M Venkitachalam Potti, reported in 1955 2 S C R 1196. The appeal, numbered 389 of 1959, arose from a decision of the Bombay High Court at Nagpur dated 25 October 1957 in Miscellaneous Petition 476 of 1956. Counsel for the petitioner and respondents were listed, and the judgment was delivered by Justice Gajendragadkar.

In this case 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 under section 5(2) of the Minimum Wages Act, 1948 (hereinafter referred to as the Act). The High Court of Bombay at Nagpur dismissed the petitioner’s writ but subsequently granted a certificate of fitness under article 133(1)(c) of the Constitution, and on the basis of that certificate the present appeal was taken to the Supreme Court. The appellant is a non‑profit company limited by guarantee and registered under section 26 of the Indian Companies Act, 1913, having been formed 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 S.R.O. 2052 dated 11 December 1951, authorised the governments of certain states, including Madhya Pradesh, with the consent of those states, to exercise the central government’s functions under the Act insofar as those functions relate to fixing minimum rates of wages for employees employed in stone‑breaking or stone‑crushing operations carried on in mines situated within the respective states. Acting upon that delegated authority the Madhya Pradesh Government issued the impugned notification, purportedly under section 5(2) of the Act, which prescribed minimum rates of wages for employment in stone‑breaking or stone‑crushing operations in mines and incorporated dearness allowance or compensatory cost‑of‑living allowance within those rates. On 20 June 1956 the Regional Labour Commissioner (Central), Nagpur, identified as Respondent 1, wrote to the appellant for the first time indicating that the State of Madhya Pradesh, Respondent 2, had examined whether the Act applied to the manganese mining industry, concluded that it did, and therefore directed the appellant’s members to implement the Act within fourteen days of receipt of the letter. The appellant subsequently made several representations to Respondent 1 urging that the Act was inapplicable to the manganese mining industry, yet Respondent 1 responded by threatening large‑scale prosecution of the appellant’s members on the ground that the Act applied to them and that its provisions had been violated by those members. Consequently the appellant filed the present petition, alleging that it possessed no alternative remedy that was equally swift and effective, and consequently prayed that the High Court should issue a writ quashing the impugned notification on the ground that it was ultra vires. In addition, the appellant contended in its petition that the President’s notification under article 258 cannot impose upon the manganese mining industry the character of employment in stone‑breaking or stone‑crushing, and that if that was the intended purpose of the notification, the notification was invalid.

The respondents contested the appellant’s claim that the challenged notification was invalid, arguing that the notification fell within the scope of the applicable legislation. They maintained that any industry in which workers performed stone‑breaking or stone‑crushing operations was subject to the Act. In their written statement they detailed the nature of manganese mining, describing activities such as development work, removal of over‑burden, breaking of large mineral stones into manageable sizes, and dressing of ore to eliminate impurities. According to the respondents, given the character of manganese mining, the Act necessarily applied to the stone‑breaking and stone‑crushing operations associated with such mining. The High Court accepted this argument and dismissed the appellant’s request that a writ be issued to prevent the respondents from enforcing the Act against the appellant’s members. However, the Court erred on two important points, first by assuming that the challenged notification added a new entry to the Schedule of the Act. The Court further concluded that because of this alleged addition, the provisions of the Act automatically applied to employment in stone‑breaking or stone‑crushing activities carried out within mines. In fact, the challenged notification did not seek to insert any item into Schedule I, and the appellant never argued that it did so. Consequently, both of the High Court’s assumptions regarding the addition to the Schedule and the consequent application of the Act were found to be incorrect.

The High Court also stated that the validity of the challenged notification had not been contested before it, leaving only the matter of interpreting the entry introduced by the notification for decision. This observation was inaccurate because the primary ground of the appellant’s writ petition was that the challenged notification was ultra vires of section 5(2) of the Act. Had the appellant accepted the notification’s validity, its petition would have become ineffective, since a valid notification eliminated any difficulty in construing the material entry. The stone‑breaking and stone‑crushing operations performed in mines were expressly listed in the Act, and the appellant could not plausibly argue that its members’ activities fell outside that description. Moreover, the High Court’s declaration that the vires of the notification had not been raised before it contradicted the record, which showed that the appellant had indeed challenged the ultra vires nature of the second notification. The Court’s mischaracterisation of the issues therefore affected its legal analysis and the scope of the relief it considered. Consequently, the judgment required a thorough re‑examination in order to correct the factual and legal misunderstandings that had been identified by the parties. The appellate bench thus needed to assess whether the notification fell within the statutory definition of employment covered by the Act, independent of any supposed schedule amendment. This assessment would ultimately determine whether the enforcement actions contemplated against the appellant’s members were legitimate under the provisions of the Act.

Initially the Court was not inclined to allow the counsel for the appellant, identified as Mr Bobde, to raise that particular argument before it; however, after hearing his submissions and after reviewing the remaining material on record, the Court concluded that the statement made in the lower court’s judgment was not accurate. The appellant’s petition challenged the validity of two separate notifications. The first notification was issued by the President of India pursuant to Article 258 of the Constitution. The second notification, which is the subject of the present dispute, is the impugned notification under which proceedings were threatened against certain members of the appellant. The record makes it clear that the appellant neither contested nor could have contested the validity of the first notification, but it did expressly object to the validity of the second notification. This position of the appellant is evident from the certificate of fitness that was granted by the High Court itself. The certificate states that the questions raised by the appellant concern 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 can arise only if the appellant seeks to challenge the validity of the impugned notification and not otherwise. According to the appellant, the employees involved are not employed under any of the items listed in the Schedule to the Act; therefore, the appellant argues that the impugned notification is invalid. In that context, the questions set out in the certificate would arise. If the notification were valid, the answer to the question would not qualify as a basis for granting a certificate under Article 133(1)(c) of the Constitution. Moreover, the appellant’s objection to the validity of the impugned notification was set out in its application for a certificate before the High Court and was expressly repeated in the statement of case filed before this Court.

Consequently, the Court must hold that the High Court erred in assuming that the appellant had conceded the vires of the impugned notification before it. This error represents a serious infirmity in the judgment of the High Court. Because of the two identified infirmities, the approach adopted by the High Court in dealing with the matter was significantly affected. The High Court certainly examined the meaning of the word “employment” and the word “stone” in relation to the expressions “stone‑breaking” and “stone‑crushing”. Even that portion of the discussion appears to assume that the impugned notification actually added a new item to the Schedule. The High Court apparently failed to realise that, had the present notification truly sought to add an item to the Schedule, there would have been no controversy between the parties. The High Court further held that “employment” should be given a wider sense, defining it as “the action of employing or the state of being employed”.

In this case, the Court observed that the High Court had concluded that the term “stone” should be understood to mean “a piece of rock or hard mineral substance, other than metal, of a small or moderate size.” The High Court derived this definition from the Shorter Oxford Dictionary and, having assigned that meaning to the word, held that operations of stone‑breaking and stone‑crushing carried out in mines would therefore fall within the scope of the Act. Before examining the validity of the impugned notification, the Court found it necessary to consider the relevant provisions of the Act itself. The Act was enacted to establish minimum rates of wages in certain employments. Section 2(b) defines the “appropriate government” as, inter alia, (1) the Central Government when the scheduled employment is carried on by or under the authority of the Central Government or when it relates to a mine, and (2) the State Government for any other scheduled employment. This definition indicates that the Legislature intended the Act’s provisions could, in due course, be extended to mining activities, and consequently prescribed that the Central Government would be the appropriate authority for such matters. Section 2(e) defines an “employer” as any person who employs, whether directly or through another person, or on his own behalf or that of another, one or more employees in any scheduled employment for which minimum rates of wages have been fixed under the Act. Section 2(g) defines “scheduled employment” as an employment specified in the Schedule or any process or branch of work forming part of such employment. Section 3 authorises the appropriate government to fix minimum rates of wages for the employments listed in Parts I and II of the Schedule and sets out the procedure to be followed. Section 5 prescribes the procedure for fixing and revising minimum wages. Under clause 5(2), after the prescribed procedure has been complied with, the appropriate government must, by a notification in the official gazette, fix or, as the case may be, revise the minimum rates of wages for each scheduled employment, and unless the notification provides otherwise, the rates shall become operative three months after the date of issuance. The only other provision necessary to mention is Section 27, which empowers the appropriate government to add any employment to either part of the Schedule when it is of the opinion that minimum rates of wages should be fixed for that employment, subject to the prescribed procedure; once such a notification is issued, the Schedule is deemed, as applied to the State, to have been amended accordingly. Consequently, the Court concluded that the entire scheme of the Act is designed to operate with respect to the employments enumerated in Parts I and II of the Schedule, leaving it to the appropriate government to determine the scope of the Act’s application.

In this case, the Court observed that the enactment dealt with the employments listed in Part I and Part II of the Schedule and that the Legislature deliberately left it to the appropriate government to determine to which employments the Act should be applied and in which geographic areas. Section 5(2) conferred upon the appropriate government the authority to fix or revise the minimum rates of wages for any employment that was already specified in the Schedule and to which the Act applied. This authority could be exercised only when the particular employment was mentioned in the Schedule, thereby making the Act applicable to that employment. By contrast, Section 27 granted a broader power to the appropriate government, allowing it to add a new employment to the Schedule. The Court stressed that the nature and the scope of the two powers were separate and distinct, and that an action permissible under Section 27 could not be undertaken under the authority of Section 5(2). The Court further noted that the impugned notification had been issued by the Madhya Pradesh Government under the powers granted by Section 5(2) of the Act, which in turn had been delegated to the State by the President exercising his authority under Article 258 of the Constitution. The principal argument advanced by counsel for the petitioner, Mr Bobde, was that the notification was ultra vires Section 5(2) because the stone‑breaking and stone‑crushing operations carried out in manganese mines did not fall within any of the items enumerated in Part I of the Schedule. Consequently, the dispute was confined to a very narrow question: whether employment in stone‑breaking or stone‑crushing activities performed in the mines mentioned in the notification could be regarded as employment in the stone‑breaking category covered by the Act. Both parties agreed that the employment in question did not correspond to any other item in Part I. The Court recognized that the purpose of the Minimum Wages Act was to achieve social justice for workers employed in the scheduled employments by prescribing minimum rates of wages, and therefore the statute should be interpreted using a beneficent rule of construction. Under this rule, if the words of the provision were capable of two reasonable meanings, the meaning that sustained the validity of the notification should be preferred, but only when both constructions were genuinely plausible. The Court then posed the question of whether, on a reasonable construction, the stone‑breaking or stone‑crushing employment described in Part I of the Schedule encompassed stone‑breaking or stone‑crushing activities carried out in a mining industry. To answer this, the Court observed that Section 2(g) defined a scheduled employment as the employment specified in the Schedule or any process or branch of work forming part of that employment. Both parties conceded this definition before the Court.

The Court observed that the Act’s provisions extend to all branches of work that are incidental to the main scheduled employments. By contrast, the contested notification limits its application to stone‑breaking or stone‑crushing activities that are carried out within mines and excludes other operations that are connected with manganese mining work. The Court noted that this limitation appears to clash with the overall scheme of the Schedule, which, at first glance, supports the appellant’s argument. Nevertheless, counsel for the respondents, Mr. Umrigar, contended that the terms “employment” and “stone” in item 8 of the Schedule should be given their broadest possible meanings, thereby encompassing stone‑breaking or stone‑crushing performed in mines. Both parties agreed that stone‑breaking or stone‑crushing is indeed required in the course of work in manganese mines, where stones are reduced to small pieces with a hammer, washed and sieved through meshes of varying sizes before manganese is extracted. The Court then examined whether the Schedule’s reference to “employment of stone‑breaking or stone‑crushing” includes such incidental work associated with manganese mining. It noted that, in a chemical or geological context, the word “stone” can include manganese, as reflected in the definition given by the Shorter Oxford Dictionary. However, the Court reasoned that, in everyday language, especially when paired with “breaking” or “crushing,” the word “stone” is generally understood to mean a piece of rock, thereby excluding manganese. Consequently, the ordinary meaning of “stone‑breaking or stone‑crushing” points to quarry activities rather than mining operations. The Court held that the appropriate meaning of “stone” depends on the context in which it appears, and that the meaning reasonably deduced from the surrounding context determines whether a broad or narrow interpretation is proper. 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 concluded that it could not accept that item 8’s reference to stone‑breaking or stone‑crushing was intended to cover the incidental stone‑breaking or stone‑crushing that occurs in manganese mining. The contextual evidence suggested that the broader interpretation of “stone” was not applicable to item 8. Accordingly, the Court determined that stone‑breaking or stone‑crushing operations conducted inside mines do not fall within the scope of item 8 of the Schedule. If this conclusion is correct, the Court held that the State Government’s notification issued under section 5(2) exceeds its legal authority and is therefore ultra vires.

The High Court has referred to the fact that, in describing certain items in Part I of the Schedule, the word “any” had been employed, whereas that same word was absent from item 8. For example, item I described employment in any woollen carpet‑making or shawl‑weaving establishment, while item 8 merely spoke of employment in stone‑breaking and stone‑crushing. According to the High Court, the omission of “any” in item 8 signified that the terms “stone” and “employment” were intended to be understood in their broad sense. The Court disagreed with that inference. It observed that, if the word “any” had been inserted into item 8, the scope of the provision might have been expanded; that is, wording such as “employment in any stone‑breaking or any stone‑crushing operations” would have tended to widen its coverage. In the present wording, however, the entry was, in the Court’s opinion, limited to stone‑breaking and stone‑crushing employment occurring in quarries and not in mines. The Court reiterated that, under section 5(2), a notification may be issued only with respect to employments that fall within the Schedule.

The Court added that this conclusion merely underscored the possibility that the appropriate government could act under section 27 of the Act if it wished to bring employment in mines or in activities incidental to mining within the ambit of the legislation. Section 27 empowers the appropriate government to add items to the Schedule, and the Court noted that the government could adopt such a measure if it intended to achieve the purpose for which the impugned notification had been issued. The Court then turned to an additional point raised by counsel for the appellant. Counsel argued that the appellant could not challenge the validity of the impugned notification without also challenging the validity of the delegation of authority created by the President of India’s notification issued under Article 258 of the Constitution. The argument held that, if the President’s notification were valid, the State Government would merely be exercising delegated authority, and its validity could not be examined separately from the parent notification that conferred that authority. The Court observed that this contention had not been raised before the High Court.

Nevertheless, the Court stated that, should the State Government attempt to act on the basis of an invalid impugned notification, the appellant would be entitled to resist the proposed action on the ground that the notification itself was void, and consequently no enforcement action could lawfully be taken against the appellant for alleged violations of the Act. Citing the decision in A. Thangal Kunju Musaliar v. M. Venkitachalam Potti, the Court reiterated the principle that there can be no agency in the commission of a wrong; the wrong‑doer is directly liable. By analogy, the Court reasoned that if the State Government’s notification were ultra‑vires, the State could not rely on the President’s notification to justify the action against the appellant. Accordingly, the Court concluded that the appellant could seek a writ against the respondents without needing to challenge the validity of the Presidential notification.

The Court reiterated that a person who commits a wrongful act is to be treated as a party directly responsible for that act. It explained that, following the analogy of a civil wrong, a tortfeasor cannot shield himself from liability by claiming that he acted merely under the directions of his principal. The Court further observed that an agent cannot in any circumstance exonerate himself from liability for a wrongful act he has performed, and that, if the agent falls within the jurisdiction of the High Court, the High Court may duly issue an appropriate writ against that agent under Article 226.

Applying the same line of reasoning, the Court held that if the notification issued by the State Government is beyond the scope of its authority, that notification cannot rely on the President’s earlier notification to justify any action against the appellant. Consequently, the appellant was entitled to file a writ petition against the respondents without having to challenge the validity of the Presidential notification. The Court therefore concluded that the notification issued by respondent 2 was invalid and could not be enforced. As a result, 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. (1) [1955] 2 S.C.R. 1196, 1211.