B.R.D Finance Limited; Sangeeth Nidhi Limited; Surabhi Corporation; Citizen Moneyline (India) Ltd. v State of Kerala and Addl. Non-Banking and Private Finance Employees Association (CITU) / Kerala Non-Banking Finance Companies Welfare Association v State of Kerala and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ## **`THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN`** ## **`TUESDAY, THE 9[TH] DAY OF APRIL 2024 / 20TH CHAITHRA, 1946`** ## **`WP(C) NO. 7300 OF 2020`** ## **`PETITIONERS:`** - **`1 B.R.D FINANCE LIMITED BETHANY COMPLEX, KUNNAMKULAM, THRISSUR-680503, REPRESENTED BY ITS MANAGING DIRECTOR APPUMON C.K.`** - **`2 SANGEETH NIDHI LIMITED, 26/437, SML BUILDING, EDAPPALLY TOLL JUNCTION, ERNAKULAM – 682 024, REPRESENTED BY ITS DIRECTOR GREGOR CHERRY WILLIAMS.`** - **`3 SURABHI CORPORATION, BAIJU THEATRE ROAD, KUNNAMKULAM, REPRESENTED BY ITS MANAGING PARTNER K.M.VARGHESE.`** - **`4 CITIZEN MONEYLINE (INDIA) LTD., HOLY ANGELS BUILDING, OLD N.H.ROAD, KALAMASSERY P.O., REPRESENTED BY ITS MANAGING DIRECTOR GEORGE ALEXANDER.`** ``` BY ADVS. SRI. P.RAMAKRISHNAN SMT. PREETHI RAMAKRISHNAN SRI. T.C.KRISHNA SRI. C.ANIL KUMAR SMT. ASHA K.SHENOY SRI. PRATAP ABRAHAM VARGHESE ``` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA REPRESENTED BY THE SECRETARY, LABOUR AND SKILLS DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN – 695 001. ``` - **`*ADDL. NON-BANKING AND PRIVATE FINANCE EMPLOYEES`** - **`R2 ASSOCIATION(CITU), EMS SMARAKA MANDIRAM, KALABHAVAN ROAD, ERNAKULAM NORTH, KOCHI – 682 018, REPRESENTED BY ITS SECRETARY.`** ``` *ADDITIONAL R2 IS IMPLEADED AS PER ORDER DATED 31-08- 2022 IN IA NO. 1/2020. ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 2 ``` ``` BY ADVS. SRI. K.V.SOHAN - STATE ATTORNEY SRI. S.KRISHNA MOORTHY SRI. ASHOK M.CHERIAN - ADDL. ADVOCATE GENERAL SRI. BALAGOPALAN B. SRI. V.KRISHNAN KUTTY ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.04.2024, ALONG WITH WP(C).9184/2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 3 ``` ## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** ## **`PRESENT`** ``` THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN TUESDAY, THE 9[TH] DAY OF APRIL 2024 / 20TH CHAITHRA, 1946 ``` ``` WP(C) NO. 9184 OF 2021 ``` ## **`PETITIONER:`** ``` KERALA NON-BANKING FINANCE COMPANIES WELFARE ASSOCIATION, 6TH FLOOR, MUTHOOT TOWERS, OPP. ABAD PLAZA, M.G. ROAD, KOCHI - 682 013, REPRESENTED BY ITS AUTHORIZED SIGNATORY K.V.SUBRAMANIAN. ``` ``` BY ADVS. SRI. P.RAMAKRISHNAN SMT. PREETHI RAMAKRISHNAN SRI. T.C.KRISHNA SRI. C.ANIL KUMAR SMT. ASHA K.SHENOY SRI. PRATAP ABRAHAM VARGHESE ``` ## **`RESPONDENTS:`** ``` 1STATE OF KERALA REPRESENTED BY THE SECRETARY, LABOUR AND SKILLS DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695 001 ``` - **`ADDL. NON BANKING AND PRIVATE FINANCE EMPLOYEES R2 ASSOCIATION(CITU), EMS SMARAKA MANDIRAM, KALABHAVAN ROAD, ERNAKULAM NORTH, KOCHI - 682 018,`** ``` REPRESENTED BY ITS SECRETARY. ``` ``` *IS SUO MOTU IMPLEADED AS ADDL.R2 AS PER ORDER DATED 31/8/2022 IN WP(C)9184/2021. ``` ``` BY ADVS. SRI. S.KRISHNA MOORTHY SRI. S.KRISHNA MENON ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 4 ``` ``` SRI. BALAGOPALAN B. SRI. V.KRISHNAN KUTTY SRI. ASHOK M. CHERIYAN - ADDL. ADVOCATE GENERAL SMT. SABEENA P. ISMAIL - GP ``` ``` THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.04.2024, ALONG WITH WP(C).7300/2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 5 ``` ## **`JUDGMENT`** Since common issues arise for consideration in these writ petitions, they are disposed of by this common judgment. The exhibits referred to in this judgment will be as obtaining in W.P.(C) No.9184 of 2021. 2. The petitioners in W.P.(C) No.7300 of 2020 are Non Banking Private Financial Institutions. The petitioner in W.P.(C) No.9184 of 2021 is an association of Non Banking Financial Institutions in the State. The 1[st] respondent in these writ petitions is the State of Kerala and the additional 2[nd ] respondent is the Non-Banking and Private Finance Employees Association (CITU). 3. The establishments of the petitioners are shops and commercial establishments as defined in the Kerala Shops and Commercial Establishments Act, 1961 (for short, 'the Shops Act'). The Government of Kerala, in exercise of powers under Section 3(1)(a) read with Section 5(2) of the Minimum Wages Act, 1948 issued ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 6 ``` Ext.P2 notification dated 23.07.2009 fixing minimum wages payable to the employees in shops and commercial establishments in the State with effect from 01.04.2009. Later, the Government, in exercise of the powers under Section 27 of the Minimum Wages Act, issued Ext.P3 notification dated 31.12.2012 adding 'employment in private financial institutions' in Part I of the schedule to the Minimum Wages Act. Thus, the establishments of the petitioners have been brought under the purview of the Minimum Wages Act. 4. The Government, thereafter, constituted a committee under Section 5 (1)(a) of the Minimum Wages Act for fixing minimum wages of employees employed in relation to certain employments including **'** employment in private financial institutions'. The committee so constituted, by Ext.P4 recommended the scales of pay in private financial institutions. Later, the Government issued Ext.P5 notification publishing its proposal to fix minimum wages of employees in private financial ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 7 ``` institutions. Ext.P6 is the consequential notification issued by the Government revising the minimum rates of wages of employees in shops and commercial establishments in the State. 5. The petitioner Association challenged Ext.P5 notification fixing minimum rates of wages of employees in private financial institutions before this Court in W.P. (C) No.26803 of 2017 contending, inter alia, that the constitution of the committee under Section 5(1) of the Minimum Wages Act is bad in law as none of the members of the committee had any nexus with the employment in private financial institutions and that the provisions made for annual increment, service weightage, special allowance for extra duty and risk allowance are not permissible under the Act and managers and supervisors cannot be termed to be employees under the Minimum Wages Act. It was also contended that though the notification was purported to be under Section 5(1)(b), the Government had accepted ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 8 ``` the reports of the committee. The Division Bench of this Court, by Ext.R1(b) judgment (reported in **Kerala Non** v. **Banking Finance Companies Welfare Association State of Kerala and others [2019 (5) KHC 934: 2019 (4) KLT 977)** , struck down the prescription of service weightage, allowance for extra duty and risk allowance by the State Government in Ext.P5 notification for reason of it being beyond the competence of the State Government acting under the Minimum Wages Act. The Division Bench sustained the notification on all other aspects. 6. The petitioner Association has filed SLP No.8548 of 2020 before the Hon’ble Supreme Court against the said judgment to the extent of sustaining the notification after having found that the constitution of the committee is bad. The State has also filed SLP No.14133 of 2020 challenging the aforesaid judgment to the extent it struck down the prescription of service weightage, allowance for extra duty and risk allowance. ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 9 ``` 7. While so, the Government issued Ext.P7 notification invoking Section 3(1) (b) and Section 5(2) of the Minimum Wages act, fixing minimum rates of wages payable to employees employed in private financial institutions, confirming the scales of pay prescribed in Ext.P5. However, it is stated therein that granting of service weightage, special allowance and risk allowance will be subject to final orders of the Hon'ble Supreme Court in the pending SLP. It is contended by the petitioners that, by virtue of Ext.P7, there has been nearly 100% increase in the wages of various categories of employees in private financial institutions vis a vis the existing minimum wages prescribed in Ext.P6. It is also contended that there is huge disparity in minimum wages payable to employees of private financial institutions in the State of Kerala and private financial institutions in other States. It is stated that, based on Ext.P7 notification, coercive steps are initiated against the petitioners alleging failure to pay minimum wages. It is ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 10 ``` contended that coercive steps initiated to implement Ext.P7 while the preliminary notification itself is under challenge before the Hon'ble Supreme Court are illegal and arbitrary. The petitioners in W.P.(C) No.7300 of 2020 have challenged Ext.P3 notification (Ext.P6 therein) adding 'employment in private financial institutions' in Part I of the schedule to the Minimum Wages Act and Ext.P7 notification (Ext.P10 therein) fixing minimum rates of wages payable to employees employed in private financial institutions and the petitioner in W.P.(C) No.9184 of 2021 has challenged Ext.P2 notification fixing minimum rates of wages for shops and commercial establishments and Ext.P7 notification fixing minimum rates of wages payable to employees employed in private financial institutions, contending that the same are issued not in consonance with Section 27 of the Minimum Wages Act. It is also contended that there was no effective consultation by the Government with the Advisory Body as mandated under Section 5(1)(b) and ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 11 ``` had blindly endorsed the recommendations of the committee. Accordingly, they have sought for direction to quash Exts.P2 and P7 and to hold that the coercive steps taken for implementation of Ext.P7 notification are illegal and arbitrary. 8. A counter affidavit is filed on behalf of the Government in W.P.(C) No.9184 of 2021 and adopted in W.P.(C) No.7300 of 2020, wherein it is stated that the writ petitions are not maintainable since the prayers therein are already considered by the Division Bench of this Court in Ext.R1 (b) judgment. It is stated that, pursuant to Ext.P3 notification adding 'employment in private financial institutions' in Part I of the schedule to the Minimum Wages Act, though the Government could have straight away brought out a notification under Section 5(2), the Government appointed a committee as envisaged in Section 5 (1) (a) of the Minimum Wages Act for fixing minimum wages of employees employed in Non-Banking Financial Institutions. The committee ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 12 ``` forwarded its recommendations to the Government as per Ext.R1(a). On receipt of recommendations, the Government issued Ext. P5 notification under Section 5 (1) (b) of the Minimum Wages Act, independently and not pursuant to the advice rendered by the Committee. It is stated that Ext.P7 final notification was issued following Ext.R1(b) judgment of the Division Bench of this Court, excluding service weightage, allowances for extra duty and risk allowance prescribed in the preliminary notification, subject to the condition that granting of the above allowances will be subject to the result of final verdict of the Hon'ble Supreme Court in the SLP. Though Ext.P5 preliminary notification was issued in 2016, Ext.P7 final notification could be issued only in 2020 due to the pendency of the writ petition against Ext. P5 preliminary notification. Denying the averments in the writ petition that by virtue of Ext.P7, there has been nearly 100% increase in the wages of various categories of employees in non-banking financial institutions, it is stated that all ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 13 ``` the factors were considered and the legitimate practices were followed while proposing the wages in the field of private financial institutions. It is contended that it is not imperative to fix wages considering the size and capacity of the industry or entrepreneur, since what is prescribed is the least minimum wages for a worker and for an enterprise which is having a better turnover, the wages can be higher than the minimum rate of wages suggested as per the bargains of workmen, collectively or otherwise. With regard to the notifications issued under the Act in respect of hospitals, it is stated that the classification in the field of hospitals or hotel industry is made after ensuring comparatively feasible minimum wages for the employees belonging to the lowest category in each sector. As regards the contention of the petitioners that there is huge disparity in minimum wages payable to employees of non-banking financial institutions in the Kerala as per Ext.P7 and the minimum wages payable to employees of non-banking financial ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 14 ``` institutions in other States, it is stated that the living conditions of wage class in Kerala and their general standard of living are much better compared to other States and hence the wages in Kerala may be comparatively higher and the wages of employees of private financial institutions are much less compared to scheduled banks. It is also stated that since there was no stay of operation of Ext.P7, the officials were right in initiating prosecution steps against those establishments who failed to pay the minimum wages. Exts.P2 and P7 notifications were issued after following all legal and procedural formalities. Preliminary notification was published in the official gazette after giving sufficient time for furnishing objections. The Minimum Wages Advisory Board heard the objections as directed by the Government and formulated its recommendations and forwarded them to the Government to issue final notification without changes from the preliminary notification. Accordingly, the 1[st] respondent prays for ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`15`** dismissal of the writ petitions. 9. Heard Sri.P. Ramakrishnan, the learned counsel for the petitioners, Sri.Ashok M. Cheriyan, the learned Additional Advocate General for the State and Sri.S.Krishnamoorthy the learned counsel for the respondent Employees' Association. 10. The object of the Minimum Wages Act is to provide for fixing minimum rates of wages to workmen employed in scheduled employments. Section 2 (g) of the Minimum Wages Act defines 'scheduled employment' to mean an employment specified in the schedule, or any process or branch of work forming part of such employment. Section 27 of the Act deals with the power of the State Government to add to the schedule any employment in respect of which it is of the opinion that minimum rates of wages should be fixed under the Minimum Wages Act. Section 3 empowers the appropriate Government to fix minimum rates of wages payable to employees in any employment, specified in ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 16 ``` Part I or II of the Schedule and in any employment added by notification issued under Section 27. Section 5 deals with procedure for fixing minimum wages. 11. The Government, in exercise of the powers under Section 27 of the Minimum Wages Act, issued Ext.P3 notification adding 'employment in private financial institutions' in Part I of the schedule to the Minimum Wages Act, bringing the establishments of the petitioners under the purview of Minimum Wages Act. The Government thereafter constituted a committee under Section 5 (1)(a) of the Minimum Wages Act for fixing minimum wages of employees employed in relation to certain employments including 'employment in private financial institutions'. The committee so constituted, by Ext.P4 recommended the scales of pay in private financial institutions. Later, the Government issued Ext.P5 notification in terms of Section 5 (1) (b) of the Minimum Wages Act publishing its proposal to fix minimum wages of employees in private financial ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 17 ``` institutions and inviting objections from persons likely to be affected thereby. Aggrieved by Ext.P5 notification, the petitioner Association filed W.P.(C) No. 12473/2017 and this Court, by judgment dated 07.04.2017, directed the Government to consider the objections of the petitioner Association to Ext.P5 notification. Pursuant thereto, the objections of the petitioner Association were heard and rejected by the Government by order dated 20.07.2017. The said order and Ext.P5 were impugned in W.P. (C) No. 26803 of 2017 resulting in the decision in **Kerala Non Banking Finance Companies Welfare Association** (supra) (Ext. R1(b)). Special Leave Petitions have been filed by both sides against the judgment to the extent they are aggrieved. While so, the Government, after considering the objections and suggestions to Ext.P5 draft proposal, issued Ext.P7 notification, fixing minimum rates of wages payable to employees employed in private financial institutions, confirming the scales of pay prescribed in Ext.P5. Exts.P2, P3 and P7 notifications are ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`18`** impugned in these writ petitions. 12. It is contended by the learned Additional Advocate General that the writ petitions are not maintainable since the prayers therein were already considered by the Division Bench of this Court in Ext.R1 (b) judgment and are hit by the principles of res judicata and constructive res judicata. To consider the said contention, it would be appropriate to refer to paragraph 1 of Ext.R1(b) judgment which reads as follows: “The writ petition impugn Ext.P7 order, rejecting the objections filed by the petitioner against the proposal made by Ext.P3 notification dated 28.07.2016, fixing the minimum wages of employees in private financial institutions, whom the petitioner Association represents. Though a fnal notifcation under Section 5(2) of the Minimum Wages Act, 1948 [for brevity, 'the M.W. Act'] has not been issued, it would be automatic, if the order of rejection is upheld by this Court. We observe so to make it clear that there could be no further challenge against the notifcation as such, ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`19`** especially since the Government, by the rejection, decided to accept the proposal brought out by Ext.P3 notifcation; the challenge against which is considered by us here. Ordinarily after consideration of representations, the final notification is brought out. Here an order was necessitated since a consideration of the objections was directed by this Court.” (underlining supplied by this Court) As directed by this Court in the judgment in W.P.(C) No. 12473/2017, the Government considered the objections of the petitioner Association to Ext.P5 proposal and rejected the same. This Court, in Ext.R1(b) judgment, observed that, ordinarily, after consideration of objections to the proposal, a final notification is brought out. However, here an order was necessitated since a consideration of the objections was directed by this Court. This Court held that once the order of rejection is upheld, the final notification is automatic and there could be no further challenge against the notification. This Court upheld the rejection of the objection except to the ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 20 ``` extent of prescription of service weightage, allowance for extra duty and risk allowance and sustained the notification on all other aspects. The petitioner Association has challenged Ext.R1(b) judgment before the Hon'ble Supreme Court to the extent of sustaining the notification after having found that the constitution of the committee is bad. The State has also filed SLP challenging the judgment to the extent it struck down the prescription of service weightage, allowance for extra duty and risk allowance. Ext. P7 final notification was issued excluding service weightage, allowances for extra duty and risk allowance prescribed in the preliminary notification, subject to the condition that granting of the same will be subject to the result of the SLP pending before the Hon'ble Supreme Court. Going by Ext.R1(b) judgment, I am of the view that there can be no further challenge before this Court to Ext.P7 final notification issued pursuant to Ext.P5 proposal, to the extent this Court sustained Ext.P5. Subject to the above, this Court ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 21 ``` shall examine whether the petitioners have made any substantial grounds to interfere with Ext.P7 notification. 13. It is contended by Sri.Ramakrishnan, the learned counsel for the petitioners that, before adding any employment to either part of the schedule by notification under Section 27 of the Minimum wages Act, notice of not less than 3 months shall be given and the said mandate is not followed while issuing Ext.P2 notification. Ext.P2 is the notification issued by the Government under Section 3(1) (a) read with Section 5(2) of the Minimum Wages Act fixing minimum wages payable to the employees in shops and commercial establishments in the State with effect from 01.04.2009. Ext.P3 is the notification issued by the Government under Section 27 of the Minimum Wages Act adding 'employment in private financial institutions' in Part I of the schedule to the Minimum Wages Act. Ext.P2, and not Ext.P3, is sought to be quashed in W.P.(C) No.9184 of 2021. However, in W.P.(C) No.7300 of 2020, Ext.P6 ## **`WP(C) Nos.7300 of 2020 & 9184 of 2021`** ``` 22 ``` notification (Ext.P3 in W.P.(C) No.9184 of 2021) issued under Section 27 is sought to be quashed. Ext.P3 notification itself recites that the said notification was issued after giving notice of intention to add the employment in financial institution to Part I of the Schedule to the Act. The counter affidavit filed on behalf of the Government also states that the requirements of Section 27 have been complied with. Further, as rightly contended by the learned Additional Advocate General, these are matters ought to have been raised in the earlier writ petition itself and cannot be permitted to be agitated in the present writ petitions. It is trite that the principles of res judicata and constructive res judicata apply to writ petitions under Article 226 of the Constitution of India as well. There is no violation of the mandate under Section 27. Accordingly, the said contention is rejected. 14. It is contended by Sri.Ramakrishnan that there was no consultation with Advisory Board before the ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 23 ``` issuance of Ext.P7 notification as provided under the proviso to Section 5(2). When the appropriate Government proposes to revise the minimum rates of wages as per Section 5(1) (b), it shall consult the Advisory Board also. Sri.Ramakrishnan relied on the decisions of this Court in **Vasudevan and others** v. **State of Kerala [1959 KLT 904]** and **The** v. **Vadakkekara Karshaka Samajom and others State of Kerala [1971 II L.L.J 252]** to contend that compliance of the requirement under Section 5(1) (b) is mandatory and its non compliance would vitiate the fixation of rates of minimum wages. The decision of the **v.** Hon'ble Supreme Court in **A.K. Roy and another State of Punjab and others [(1986) 4 SCC 326]** was cited to contend that where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all. The decision of this Court in **Sahadevan** v. **Padmanabhan [2004 (1) KLT 192]** is relied on to contend that the consultation shall be ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 24 ``` effective. It is to be noted that Ext.P7 notification itself states that the same has been issued after consultation with the Minimum Wages Advisory Board constituted under Section 7 of the Minimum Wages Act. The same is the stand taken in the counter affidavit filed on behalf of the Government which is not controverted by any reply affidavit. Accordingly, the contention that there was no consultation with Advisory Board cannot be sustained. 15. It is contended that Ext.P7 notification is bad as the Government had blindly endorsed the recommendations of the Committee constituted under Section 5 (1) (a) as regards scales of pay and thus there is non application of mind. This Court, in Ext.R1(b) judgment, has found that Ext.P5 has been brought out by the Government under Section 5(1)(b) of the Minimum Wages Act and that the committee appointed by the Government conducted enquiries and the stake-holders were also heard. Thus, the contention that the Government had blindly endorsed the recommendations ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 25 ``` of the Committee cannot hold good. 16. The further contentions raised by the petitioners are that the Government ought to have fixed the minimum wages taking into account the number of branches, profitability and net worth of different establishments and Ext.P7 which fixes the wages payable in respect of private non-banking financial institution as a whole is illegal and arbitrary. It is also contended that fixation of minimum wages as per Ext.P7, ignoring the essential factor of the capacity of the industry to pay and reckoning unacceptable factors amounts to unreasonable restriction on the petitioners' right to carry out trade and business and violates Article 19 (1) (g) of the Constitution of India. The petitioners also contend that in Ext.P7, the Government have fixed uniform rate of wages for a single branch non- banking financial company and a company with multiple branches without reference to their turn over and the same is discriminatory and violative of Article 14 of the Constitution. All these contentions can ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 26 ``` be considered together. Going by the decision of the v. Hon'ble Supreme Court in **U.Unichoyi and others State of Kerala [1961 KHC 337: 1961 KLT 40: AIR 1962 SC 12]** , the question of financial capacity of the employer is no longer relevant. The Hon'ble Supreme Court held that in fixing the minimum wage rates as contemplated by the Act, the hardship caused to individual employers or their inability to meet the burden has no relevance. The Court also held that, the fact that lower wages are paid in other industries or in some other places may not necessarily show that the rates prescribed by the notification are unduly high. Following the decision in **Unichoyi** (supra), the Hon'ble Supreme Court in **Chandra Bhawan Boarding and Lodging,** v. **Bangalore State of Mysore and Another [1969 KHC 593: 1969 (3) SCC 84: AIR 1970 SC 2042]** , held as follows: “9. We have earlier noticed the circumstances under which the Act came to be enacted. Its main object is to prevent sweated labour as well as exploitation of ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 27 ``` unorganised labour. It proceeds on the basis that it is the duty of the State to see that at least minimum wages are paid to the employees irrespective of the capacity of the industry or unit to pay the same. The mandate of Art.43 of the Constitution is that the State should endeavour to secure by suitable legislation or economic organisation or in any other way, to all workers agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. The fixing of minimum wages is just the first step in that direction. In course of time the State has to take many more steps to implement that mandate. As seen earlier that resolution of the Geneva Convention of 1928 which had been accepted by this country called upon the covenanting States to fix minimum wages for the employees in employments where the labour is unorganized or where the wages paid are low. Minimum wage does not mean wage just sufficient for bare sustenance. At present the conception of a minimum wage is a wage which is somewhat intermediate to a wage which is just ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`28`** sufficient for bare sustenance and a fair wage. That concept includes not only the wage sufficient to meet the bare sustenance of an employee and his family. It also includes expenses necessary for his other primary needs such as medical expenses, expenses to meet some education for his children, and in some cases transport charges etc. - see U. Unnichoyi v. State of Kerala, (1962 (1) SCR 946 : AIR 1962 SC 12). The concept of minimum wage is likely to undergo a change with the growth of our economy and with the change in the standard of living. It is not a static concept. Its concomitants must necessarily increase with the progress of the society. It is likely to differ from place to place and from industry to industry. That is clear from the provisions of the Act itself and is inherent in the very concept. That being the case it is absolutely impossible for the legislature to undertake the task of fixing minimum wages in respect of any industry much less in respect of an employment. That process must necessarily be left to the Government.” Following the decision in **Unichoyi** (supra), the Hon'ble Supreme Court in **Jaydip Paper Industries** v. ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 29 ``` **Workmen [1972 KHC 580: 1972 (3) SCC 302: AIR 1972 SC 605]** , held that under the Minimum Wages Act, the capacity of the industry to pay is not a relevant consideration. In **Malayalam Plantation Ltd and others** v. **State of Kerala and others [1975 KHC 347: 1975 KLT 296]** , the Full Bench of this Court observed that the industry cannot complain that in fixing or revising the minimum wages, the appropriate Government has failed to take into reckoning the capacity of the industry to pay and the consequence to the economy of the industry. The same position has been reiterated by the Hon'ble Supreme Court in **Sangam Press Ltd** v. **The workmen [1975 KHC 799: 1975 (4) SCC 357: AIR 1975 SC 2035]** and by this Court in **Kerala Hotel and Restaurant Association** v. **State of Kerala [1988 KHC 448: 1988 (2) KLT 344]** . Thus, going by the dictum laid down by the Hon'ble Supreme Court and this Court in the above decisions, the financial capacity of the employer, the number of branches, ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 30 ``` nature of industry, profitability, net worth and place of business cannot have any relevance in fixing the minimum rates of wages. Therefore, the above contentions of the petitioners also cannot be sustained and are, therefore, rejected. 17. No case has been made out by the petitioners for interference with Ext.P7. 18. The Hon'ble Supreme Court in **Ministry of Labour and Rehabilitation and Another** v. **Tiffin's Barytes Asbestos and Paints Ltd. and Another** **[1985 KHC 671: 1985 (3) SCC 594: AIR 1985 SC 1391]** has held that a notification fixing minimum wages shall not be interfered with under Article 226 except on the most substantial grounds. The Court held as follows: "The notifications fixing minimum wages are not to be lightly interfered with under Art.226 on the ground of some irregularities in the constitution of the committee or in the procedure adopted by the committee. A notification fixing minimum wages, in a country where wages are already minimal, should not be interfered with under Art.226 except on the most substantial grounds. The legislation is a social welfare legislation ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` **==> picture [15 x 10] intentionally omitted <==** undertaken to further the Directive Principles of State Policy and action taken pursuant to it cannot be struck down on mere technicalities". This Court finds that no substantial grounds have been raised in the writ petitions to interfere with Exts.P2 P3 and P7. The writ petitions are, accordingly, dismissed. Sd/- **MURALI PURUSHOTHAMAN JUDGE** SPR ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`32`** ## **`APPENDIX OF WP(C) 7300/2020`** ## **`PETITIONER'S EXHIBITS:-`** - **`EXHIBIT P1 TRUE COPY OF RELEVANT EXTRACT FROM THE AUDITED BALANCE SHEET OF THE 1ST PETITIONER COMPANY FOR THE PERIOD 2018-19.`** - **`EXHIBIT P2 TRUE COPY OF RELEVANT EXTRACT FROM THE AUDITED BALANCE SHEET OF THE 2ND PETITIONER COMPANY FOR THE PERIOD 2018-19.`** - **`EXHIBIT P3 TRUE COPY OF RELEVANT EXTRACT FROM THE AUDITED BALANCE SHEET OF THE 3RD PETITIONER FIRM AS ON 31.3.2019.`** - **`EXHIBIT P4 TRUE COPY OF RELEVANT EXTRACT FROM THE AUDITED BALANCE SHEET OF THE 4TH PETITIONER COMPANY FOR THE YEAR ENDED 31.3.2019.`** - **`EXHIBIT P5 TRUE COPY OF NOTIFICATION ISSUED AS SRO NO.643/2009 BY THE RESPONDENT FIXING MINIMUM RATES OF WAGES FOR SHOPS AND COMMERCIAL ESTABLISHMENTS W.E.F. 1.4.2009.`** - **`EXHIBIT P6 TRUE COPY OF NOTIFICATION DATED 31.12.2012 ISSUED BY THE RESPONDENT.`** - **`EXHIBIT P7 TRUE COPY OF RECOMMENDATIONS FORWARDED BY THE COMMITTEE AS PER LETTER DATED 7.10.2015.`** - **`EXHIBIT P8 TRUE COPY OF NOTIFICATION DATED 28.7.2016, PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 9.8.2016.`** - **`EXHIBIT P9 TRUE COPY OF NOTIFICATION SRO NO.785/2016 DATED 21.12.2016 ISSUED BY THE RESPONDENT.`** - **`EXHIBIT P10 TRUE COPY OF NOTIFICATION DATED 16.1.2020, PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 20.2.2020.`** - **`EXHIBIT P11 TRUE COPY OF NOTIFICATION DATED 23.4.2018 FIXING MINIMUM WAGES FOR EMPLOYEES IN PRIVATE HOSPITAL SECTOR.`** - **`EXHIBIT P12 TRUE COPY OF MINIMUM WAGES PAYABLE TO EMPLOYEES IN NON-BANKING FINANCIAL INSTITUTIONS IN THE STATES OF MAHARASHTRA, BIHAR ETC.`** ## **`RESPONDENTS EXHIBITS:-`** ``` EXHIBIT R1(a)TRUE COPY OF THE LETTER DATED 7.10.2015. EXHIBIT R1(b)TRUE COPY OF JUDGMENT DATED 14.11.2019 IN W.P.C NO.26803/2017. ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ## **`33`** ## **`APPENDIX OF WP(C) 9184/2021`** ## **`PETITIONER'S EXHIBITS:-`** ``` EXHIBIT P1TRUE COPY OF LIST OF MEMBERS OF THE PETITIONER ASSOCIATION. ``` ``` EXHIBIT P2TRUE COPY OF NOTIFICATION ISSUED AS SRO NO. 643/2009 BY THE RESPONDENT FIXING MINIMUM RATES OF WAGES FOR SHOPS AND COMMERCIAL ESTABLISHMENTS W.E.F 1/4/2009 ``` ``` EXHIBIT P3TRUE COPY OF NOTIFICATION DATED 31.12.2012 ISSUED BY THE RESPONDENT. ``` ``` EXHIBIT P4TRUE COPY OF THE SCALES OF PAY RECOMMENDED BY THE COMMITTEE CONSTITUTED BY THE GOVERNMENT FOR FIXING MINIMUM WAGES OF EMPLOYEES EMPLOYEDINNONBANKINGFINANCIAL INSTITUTIONS WITH ENGLISH TRANSLATION. EXHIBIT P5TRUE COPY OF THE NOTIFICATION NO. 20549/E1/2015/LAB DATED 28.7.2016, PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 9.8.2016. EXHIBIT P6TRUE COPY OF NOTIFICATION SRO NO. 785/2016 DATED 21.12.2016 ISSUED BY THE RESPONDENT. EXHIBIT P7TRUE COPY OF THE NOTIFICATION SRO NO. 44/2020 DATED 16.1.2020, PUBLISHED IN KERALA GAZETTE EXTRAORDINARY DATED 20.01.2020. EXHIBIT P8TRUE COPY OF NOTIFICATION NO. SRO 245/2018 DATED 23.4.2018 FIXING MINIMUM WAGES FOR EMPLOYEES IN PRIVATE HOSPITAL SECTOR. EXHIBIT P9TRUE COPY OF MINIMUM WAGES PAYABLE TO EMPLOYEESINNONBANKINGFINANCIAL INSTITUTIONS IN THE STATES OF MAHARASHTRA, BIHAR ETC. EXHIBIT P10TRUE COPY OF THE NOTICE NO. 253/2020 DATED 2/11/2020 ISSUED BY THE ASST. LABOUR OFFICER, KOTTAYAM TO MUTHOOT FINANCE LIMITED, (A MEMBER OF PETITIONER ASSOCIATION) WITH ENGLISH TRANSLATION. EXHIBIT P11TRUE COPY OF TRUE COPY OF NOTICE NO. 309/2020 DATED 25.1.2021 ISSUED BY THE ASST. LABOUR OFFICER, ALUVA TO YOGAKSHEMAM LOANS LIMITED (A MEMBER OF PETITIONER ASSOCIATION) WITH ENGLISH TRANSLATION. ``` ``` WP(C) Nos.7300 of 2020 & 9184 of 2021 ``` ``` 34 ``` ``` EXHIBIT P12A TRUE COPY OF THE SHOW CAUSE NOTICE NO. 234/2020 DATED 01.02.2021 ISSUED BY THE ASST. LABOUR OFFICER, VAIKOM TO MUTHOOT FIN. CORP LIMITED (A MEMBER OF PETITIONER ASSOCIATION). ``` ## **`RESPONDENTS EXHIBITS :-`** ``` EXHIBIT R1(a)TRUE COPY OF THE LETTER DATED 7.10.2015 EXHIBIT R1(b)TRUE COPY OF JUDGMENT DATED 14.11.2019 IN W.P.C NO.26803/2017 ```