Gujarat High Court
Gujarat Rajya Hotel Federation vs State Of Gujarat on 11 February, 2022
Bench: A.S. Supehia
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 6185 of 2002
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE A.S. SUPEHIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy
of the judgment ?
4 Whether this case involves a substantial question
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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GUJARAT RAJYA HOTEL FEDERATION & 9 other(s)
Versus
STATE OF GUJARAT & 1 other(s)
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Appearance:
MS AISHWARYA REDDY FOR M/S TRIVEDI & GUPTA(949) for the
Petitioner(s) No. 1,10,2,3,4,5,6,7,8,9
MR ROHAN SHAH, AGP for the Respondent(s) No. 1,1.1,1.2,2
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
Date : __/02/2022
CAV JUDGMENT
1. The present writ petition has been filed inter
alia praying for quashing and setting aside the
impugned notifications dated 25/27.05.1999,
27.01.2001 and 15.12.2001 issued by the respondent
No.1. However, the prayer in the writ petition is
confined to quash and set aside the notification
dated 15.12.2001 issued by respondent No.1.
2. Learned advocate Ms.Aishwarya Reddy appearing
for the petitioners has submitted that the
petitioner No.1 is a federation representing more
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
than 500 establishments engaged in the activity of
running hotels/restaurants in the State of Gujarat,
Petitioner Nos.2 to 7 are the members and officers
of the petitioner no.1. The notifications dated
23.01.2001 and 15.12.2001 have been issued under
the Minimum Wages Act, 1948 (hereinafter referred
to as "the Act", for short). It is submitted that
vide notification dated 23.01.2001, in exercise of
the powers conferred under Section 30 of the Act,
the State Government notified the Gujarat Hotel
Workers' Wages in Kind (Computation of Cash Value)
Rules, 1998 (hereinafter referred to as 'the
Rules'). The said Rules were brought into effect on
01.02.2001, wherein at the schedule it was provided
that the cash value of a monthly wage would be
33.3% of total wages, when residential
accommodation, two meals, two teas, two nasta
(breakfast), is served daily. She has submitted
that thereafter, by way of notification dated
15.12.2001, the State Government purportedly, in
exercise of power under Section 30 of the Act,
amended the notification dated 23.01.2001 and
amongst the other amendments, the cash value of the
total wage was reduced from 33.3% to 19%.
2.1 It is submitted that initially, the State
Government had published a Draft Notification, in
the Official Gazette, as required by the Act, by
stating inter alia that the Government is proposing
to issue the said notification containing the Rules
and, therefore, the same is being published for the
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
information of all the persons likely to be
affected thereby and that notice given with the
said Draft Notification would be taken into
consideration by the Government of Gujarat on or
after the expiry of two months from the date of its
publication in the Official Gazatte. She has
submitted that the said time limit of two months
appears to have been adopted from the provisions of
Section 5(1)(b) of the Act. It is submitted that it
may be noted that the said Draft Notification
suggested for allowing the deduction at the rate of
25% of total wages towards the cash value of
benefits and/or facilities, i.e. (1) residential
accommodation, (2) two meals, (3) two teas, and (4)
two nastas (breakfast) being served daily and
ultimately, the aforesaid Draft Notification was
finalized and a final notification bearing No.KHR-
30-MWA-1097-833-M(2) was issued on 23.01.2001
effective on and from 01.02.2001, wherein deduction
was provided at the rate of 33.3% of total wages
towards the cash value of the aforesaid benefits
and/or facilities. It is further submitted that
thereafter, vide notification dated 15.12.2001, the
State Government notified an amendment, by which
deduction was allowed at the rate of 19% of total
wages towards the cash value of two meals, two teas
and one nasta (breakfast) being served daily. It is
submitted that the draft of the said notification
was never published, as required under the
provisions of the Act, and no notice was given to
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
the affected parties for providing their objections
and/or suggestions, as was done at the time of
issuing and publishing the drat notification dated
25.05.1999, which had ultimately culminated in
issuance of final notification dated 23.01.2001.
2.2 Learned advocate for the petitioners has
submitted that the Act makes it clear that in
respect of the scheduled employments mentioned in
Part-I or Part-II of the Schedule to the Act, the
appropriate Government is authorized to fix minimum
rates of wages, which can be reviewed at such
intervals as considered appropriate but not
exceeding five years and such prescribed minimum
wages would consist of (i) basic wages, and (ii)
special allowance, which may be adjusted at
intervals as per variation in cost of living index
number and for fixing or revising the rates of
minimum wages, the appropriate Government is
required to either appoint committees to advise
with respect of fixation or revision in the rates
of minimum wages or publish notification about its
proposal or to invite objections/suggestions from
persons likely to be affected within the prescribed
time.
2.3 It is further submitted that the provisions of
Section 5 of the Act permit the appropriate
Government to fix or revise the rates of minimum
wages either by following the procedure prescribed,
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
under section 5(1)(a) or by following the procedure
under the provisions of section 5(1)(b) of the Act,
while the notification dated 15.12.2001 is only in
respect of computation of the cash value of wages
in kind by effecting amendment in the earlier
notification dated 23.01.2001. She has submitted
that a change in the method of computation of the
cash value of wages in kind would ultimately relate
to revision in the rates of minimum wages and,
therefore, a notification making any change or
revision already prescribed method of computation
of cash value of wages in kind shall have to comply
with the requirements of Sections 3 to 5 and 11 and
30 of the Act and also the provisions of Rule 20 of
the Gujarat Minimum Wages Rules, 1961. It is
submitted by her that even otherwise, Section 30(1)
of the Act refers to the condition precedent of
previous publication of the notification proposing
to make rules for carrying out the purposes of the
Act. The expression "previous publication"
occurring in the said Section 30(1) of the Act
though not defined under the Act, has a special
meaning, which can be appreciated by taking
recourse of Sections 23 and 21 of General Clauses
Act, 1897.
2.4 Learned advocate Ms.Reddy has further
submitted that in the present case, prior to the
issuance of the notification dated 15.12.2001, no
draft notification was issued, no objections/
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
suggestions were invited from the persons likely to
be affected, and no recommendations were received
from the Minimum Wages Advisory Board and in view
of this, some discussion regarding the question of
deduction concerning cash value of some of the
benefits, i.e. wages in kind in the meetings held
on 17.02.2001 and 01.08.2001, as indicated in the
additional affidavit-in-reply by the State
Government, has no significance and the same cannot
substitute the mandatory requirement of previous
publication of notification as submitted herein.
2.5 Learned advocate Ms.Reddy further relies upon
the Rule 20(1) of the Gujarat Minimum Wages Rules,
1961, wherein it is provided that in order to
compute the cash value of wages in kind, the retail
prices at the nearest market shall be taken into
account in computing the cash value of wages paid
in kind. It is submitted that when the Government
had deducted the cash value of wages to 19%, it did
not consider the nearest market price as provided
for in the said Rule and the same is similar to
Rule 20 of the Minimum Wages (Central) Rules, 1950,
which also provides for the mode of computation of
the cash value of the wages. Further, it is
submitted that the petitioners also rely upon the
orders of the Bombay High Court dated 17.10.2013
and dated 12.04.2018 passed in Writ Petition
No.5542 of 2013, whereby the cash value of the
wages was fixed at 30% of the monthly wage for
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
hotel/restaurant workers in the State of
Maharashtra.
2.6 Finally, the learned advocate for the
petitioners has submitted that a statutorily
enacted mandatory requirement relating to the
publication in the Official Gazette is directory
and the State Government, by importing reasons at
this stage to justify the consideration of the
representations made etc., cannot side-step the
specific and unambiguous mandatory requirement
under the Act and in light of the abovementioned
submissions, she has requested to quash and set
aside the notification dated 15.12.2001.
3. In response to the submissions advanced by the
learned advocate for the petitioners, learned
Assistant Government Pleader Mr.Rohan Shah, while
placing reliance on the affidavits filed by the
authority has submitted that the notification
pertaining to cash value of the wages paid in kind
for the workers of Hotel Industry came to be issued
in accordance with law and provisions of the
Minimum Wages Act and Rules framed thereunder. He
has submitted that as per Section 5 of the Act, the
department was required to hear the representatives
of the employers and employees and accordingly,
both the parties were heard at length and after
scrutinizing the facts of the case and prevailing
rates of the essential commodities and food
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
articles, Minimum Wages notification is issued by
the department. He has submitted that the draft
notification/Provisional Notification, which came
to be issued by the Government on 25.05.1999,
wherein 33% deduction is shown to be appropriate.
It is submitted that after receiving the
objections/ suggestions from the societies and
recommendations of the Minimum Wages Advisory Board
vide its letter dated 14.10.1998, the Government
issued a new draft notification, in which 1/4th
deduction of Special Allowance instead of 1/3rd
Allowance was recommended and thereafter, the
Government issued a final notification and fixed
the deduction rates as 33.3% equally from the basic
pay and special allowance. He has submitted that
the Hotel Federation made a representation before
the Government and raised certain objections with
regard to computation of deductions and the same
was considered by the Government and afforded
personal hearings to the Hotel Federation on
17.02.2001 and 01.08.2001.
3.1 Learned AGP has submitted that two times the
meetings were held on 17.02.2001 and 01.08.2001 for
considering their suggestions/objections and,
therefore, the answering respondent, after
considering the representation of the Hotel
Federation, has proposed 19% deduction. It is
submitted that a contention is raised by the
petitioners that subject matter of considering
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
their objections before the amended notification
dated 15.12.2001 was for the purpose of discussion
of certain apparent anomalies in the arithmetic
calculation between the specified rates on one hand
and quantified amount on other hand is not correct
but it was for the main purpose of deduction
towards the cash values of wages in kind. It is
submitted that despite the best effort of the
authority, they are unable to find the record of
the meetings or any other documents. It is also
submitted that even otherwise the discussion of
issue with the committee will amount to disputed
question of fact, and this Court may not interfere
with the impugned notification.
3.2 Learned AGP has submitted that the
Commissioner of Labour, Gujarat State, sent a
proposal dated 14.06.2001 regarding representation
of Hotel Federation for proposed 19% deduction. He
has submitted that the said proposal was considered
and hence, the Government issued an amendment dated
15.12.2001. He has submitted that for the purpose
of determining the rates of minimum wages, the
important components are to be considered by the
Government i.e. the definition of "family". It is
submitted that the "family" consists of three units
comprising of husband, wife and two children, out
of which only worker gets facilities of meal,
nasta (breakfast) and tea and, therefore, it was
appropriate to compute deduction only for the
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
worker and not other two units, which do not get
any of these facilities and looking to the
weightage for the food, which is 57% and it is
divided into three units and hence, for the worker,
it comes to 19%. Therefore, the Government decided
to make necessary amendment and reduced this rate
to 19%, which is just and proper.
3.3 In support of the above submissions, learned
AGP has placed reliance on the judgements of the
Apex Court in the cases of State of Jharkhand and
Ors. Vs. Ashok Kumar Dangi and Ors. , (2011) 13
S.C.C. 383 and Parisons Agrotech (P) Ltd. and Anr.
Vs. Union of India and Ors., (2015) 9 S.C.C. 657.
4. Heard the learned advocates for the respective
parties and also perused the documents as pointed
out by them.
CONCLUSION
5. Since the prayer made in the writ petition is
confined to quashing and setting aside the
notification dated 15.12.2001, which was issued
after notification dated 25.05.1999, there is no
need to refer to the earlier notifications. Both,
the learned advocates appearing for the respective
parties are ad idem, that the rates specified in
the notification dated 15.12.2001 have remained
unaltered.
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
6. Initially, the State Government, in exercise
of powers under section 30 of the Act, issued a
draft Notification dated 25.05.1999 for framing of
the Gujarat Hotel Workers, Wages in Kind
(Computation of Cash Value) Rules, 1998 inviting
objections and suggestions from all persons likely
to be affected. After receiving the suggestions and
objections from the public, a final Notification
dated 23.01.2001 was issued framing the Gujarat
Hotel Workers, Wages in Kind (Computation of Cash
Value) Rules, 1998, wherein the cash value of
residential accommodation, meal nasta or tea served
during a month was fixed at 33.3% of total wages
(basic rates of wages plus special allowance). The
petitioners do not have objection to such fixation
of 33.3% of cash value.
7. Subsequent to the issuance of Notification
dated 23.01.2001, the State government issued
another Notification dated 15.12.2001 reducing the
cash value of the total wages from 33.3% to 19%.
Being aggrieved by such reduction, the petitioner-
Federation has challenged the same.
8. The kernel of issue involved in the present
writ petition, is that whether it is mandatory for
the State Government to follow the procedure
envisaged under the provisions of sections 3 to 5,
11 and 30 of the Act, or in the alternative the
same procedure, which was followed before issuing
the Notification dated 23.01.2001.
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
9. For appreciating the controversy raised in the
present writ petition, it will be apposite to
incorporate the afore-noted provision of the Act:
"SECTION 5 : Procedure for fixing and revising minimum wages
(1) In fixing minimum rates of wages in respect of any sched-
uled employment for the first time under this Act or in revis-
ing minimum rates of wages so fixed, the appropriate Govern-
ment shall either-
(a) appoint as many committees and sub-committees as it
considers necessary to hold enquiries and advise it in
respect of such fixation or revision, as the case may
be, or
(b) by notification in the Official Gazette, publish its
proposals for the information of persons likely to be
affected thereby and specify a date, not less than two
months from the date of the notification, on which the
proposals will be taken into consideration.
(2) After considering the advice of the committee or commit-
tees appointed under clause (a) of sub-section (1), or as the
case may be, all representations received by it before the
date specified in the notification under clause (b) of that
sub-section, the appropriate Government shall, by notification
in the Official Gazette, fix, or, as the case may be, revise
the minimum rates of wages in respect of each schedule employ-
ment, and unless such notification otherwise provides, it
shall come into force on the expiry of three months from the
date of its issue:
Provided that where the appropriate Government proposes
to revise the minimum rates of wages by the mode speci-
fied in clause (b) of sub-section (1), the appropriate
Government shall consult the Advisory Board also.
SECTION 11 : Wages in kind
(1) Minimum wages payable under this Act shall be paid in
cash.
(2) Where it has been the custom to pay wages wholly or partly
in kind, the appropriate Government being of the opinion that
it is necessary in the circumstances of the case may, by noti-
fication in the Official Gazette, authorize the payment of
minimum wages either wholly or partly in kind.
(3) If the appropriate Government is of the opinion that pro-
vision should be made for the supply of essential commodities
at concession rates, the appropriate Government may, by noti-
fication in the Official Gazette, authorize the provision of
such supplies at concession rates.
(4) The cash value of wages in kind and of concession in re-
spect of supplies of essential commodities at concession rates
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
authorized under sub-sections (2) and (3) shall be estimated
in the prescribed manner.
SECTION 30 : Power of appropriate Government to make rules
(1) The appropriate Government may, subject to the condition
of previous publication, by notification in the Official
Gazette, make rules for carrying out the purposes of this Act.
(2) Without prejudice to the generality of the foregoing
power, such rules may-
(a) xxx xxx xxx;
(b) xxx xxx xxx;
(c) prescribe the mode of computation of the cash value
of wages in kind and of concessions in respect of sup-
plies of essential commodities at concessional rates;
(d) xxx xxx xxx;
(e) xxx xxx xxx;
(f) xxx xxx xxx;
(g) xxx xxx xxx;
(h) xxx xxx xxx;
(i) xxx xxx xxx;
(j) xxx xxx xxx;
(k) xxx xxx xxx;
(l) xxx xxx xxx;
(m) xxx xxx xxx; and
(n) xxx xxx xxx."
10. The payment of fixation of cash value of wages
in kind is stipulated in section 11 of the Act.
Such fixation of cash value in kind can only be
done after following the procedure under Section 5
of the Act, which prescribes the procedure for
fixing and revising minimum wages such as formation
of Advisory Committee for undertaking necessary
inquiry, publication of notification in the
Official Gazette for its proposal and inviting
opinion of persons who are likely to be affected.
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
After the advice of the committee or committees and
the representations received by it, a final
notification in the Official Gazette is published
fixing the minimum wages. Clause(b) to the sub-
section (1) to section 5 of the Act, prescribes the
publication of the proposals for the information of
persons, who are likely to be affected by revision
or fixation of wages. It is not disputed by the
respondent authority that before publication of
final notification dated 23.01.2001 fixing the cash
value at 33.3%, the procedure prescribed under
section 5 was followed and Draft Notification dated
25.05.1999 was published.
11. Section 30 of the Act mandates "previous
publication" of the Notification for framing of
Rules for carrying out the purpose of the Act.
Clause(c) to sub-section (2) of section 30 of the
Act stipulates of framing of rules with regard to
mode of computation of the cash value of wages in
kind and of concessions in respect of supplies of
essential commodities at concessional rates. As
noted hereinabove, before publication of final
Notification in the Official Gazette, recommending
the mode of computation of the cash value of wages
in kind, it is mandatory to follow the procedure
prescribed under section 5 of the Act.
12. In the present case, though the State
Government has followed the procedure stipulated
under section 5 of the Act before issuing the final
notification dated 27.05.1999 prescribing the mode
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
of computation of the cash value in kind of 33.3%
of total wages, however, while issuing the
subsequent notification dated 15.12.2001, fixing
the reduced cash value at 19%, such procedure is
not followed. The State Government has introduced
fresh computation of the cash value by substituting
the relevant clauses/items stipulated in the former
notification dated 23.01.2001. Thus, a fresh
computation of the cash value has been stipulated
in the notification dated 15.12.2001. It is the
case of the State Government that twice the
meetings were held on 17.02.2001 and 01.08.2001 for
considering their suggestions/objections of the
petitioner-Federation, and after considering their
suggestions and considering a 'family' of three
Units, and when only the worker gets the facility
vis-a-vis the weightage of food at 57%, divided
into three Units, the cash value of 19% was fixed.
This Court was not apprised of any material with
regard to such computation. Be that as it may,
there are disputed questions with regard to the
subject and the issue on which the petitioner-
Federation was heard in the aforesaid meetings. The
Court need not delve into such disputed questions
of fact, however, the State Government is unable to
dispute the fact that before issuing the
notification dated 15.12.2001 reducing the cash
value from 33.3% to 19%, there was no prior
publication of such proposal through a Notification
in the Official Gazette, or in other words no draft
notification was published.
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
13. It was mandatory for the State Government to
follow the procedure prescribed under section 5 of
the Act before issuing the Notification dated
15.12.2001, pursuant to which the cash value is
reduced to 19%. The same being a substantive
notification fixing a fresh computation of wages
under section 30 of the Act, the procedure of
publishing the proposals through a draft
notification in the Official Gazette as per section
5(1)(b) of the Act was mandatory. The State
Government, before issuing the notification dated
23.01.2001 had issued the draft notification dated
27.05.1999 before fixing the cash value at 33.3%,
hence the same recourse was required to be adopted
before issuing the notification dated 15.12.2001.
Assuming that the petitioner-Federation was heard
with regard to the fixation of cash value at 19%,
the same will not authorize the State Government to
by-pass the statutory provision of publication of
proposed cash value through publication of
notification. There may be other stake-holders, who
would have come forward raising their grievance, if
the notification was published in the Official
Gazette stipulating 19% cash value. The lacuna
occurred before the publication of the final
notification cannot be filled up through subsequent
action after publication of such notification. It
is cardinal rule of interpretation, that if a
statute explicitly mentions a particular process or
method, the same has to be stringently and
mandatorily followed, and the Courts cannot
C/SCA/6185/2002 CAV JUDGMENT DATED: 11/02/2022
interpret the same in any other manner when the
words of the statue are precise and unambiguous.
Thus, the impugned notification dated 15.12.2001
suffers from the vice of ignoring the provision of
section 5(1)(b) of the Act. Reliance placed by the
learned AGP on the decisions of the Apex Court in
the cases of Ashok Kumar Dangi and Ors. (supra)
and Parisons Agrotech (P) Ltd. and Anr. (supra)
cannot come to the rescue of the State Government
since the judgment do not in any manner deal with
the isue raised in the writ petition.
14. On the substratum of the foregoing reasons
and analysis, the impugned notification dated
15.12.2001 issued by respondent No.1 is quashed and
set aside. However, it will be open for the State
Government to issue a fresh notification, after
following the procedure prescribed under section 5
of the Act.
15. The writ petition is allowed in part. RULE
made absolute to the aforesaid extent.
Sd/- .
(A. S. SUPEHIA, J)
NVMEWADA
