Citation : 2025 Latest Caselaw 5733 MP
Judgement Date : 20 March, 2025
NEUTRAL CITATION NO. 2025:MPHC-IND:7084 -1-
WP No.9401/24, 11921/24 & 12606/24
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 20th OF MARCH, 2025
WRIT PETITION No.9401 of 2024
PITHAMPUR AUDYOGIK SANGTHAN
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
WITH
WRIT PETITION No. 11921 of 2024
UJJAIN CHARITABLE TRUST HOSPITAL AND RESEARCH CEN-
TRE
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
WRIT PETITION No. 12606 of 2024
ASSOCIATION OF INDUSTRIES MADHYA PRADESH THROUGH
SECRETARY TARUN VYAS
Versus
THE STATE OF MADHYA PRADESH AND OTHERS
Appearance:
Shri Girish Patwardhan learned Senior Counsel with Shri Oshin
Upadhyay - Advocate for the petitioner in WP No.9401/2024.
Shri Kuldeep Bhargava - Learned counsel for the petitioner in WP
No.11921/2024.
Shri Vikas Jaiswal - Learned counsel for the petitioner in
Signature Not Verified
Signed by: TRILOK SINGH
SAVNER
Signing time: 03/20/2025
5:40:41 PM
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WP No.9401/24, 11921/24 & 12606/24
WP No.12606/2024.
Shri Bhuwan Gautam - Government Advocate for respondents/
State.
Shr Karpe Prakhar Mohan learned counsel for the respondent
[INT].
Shri Balveer Sharan Mudotiya, learned counsel for the
respondent [INT].
Shri Shashi Kant Chourasia, learned counsel for the
respondent [INT].
Shri Babu Lal Nagar learned counsel for the respondent [INT].
Ms. Shweta Upadhay, learned counsel for the respondent [INT].
Reserved on : 06/03/2025
Pronounced on : 20/03/2025
ORDER
Per: Justice Vivek Rusia
1. This order shall govern the disposal of W.P. No.9401/2024, W.P.11921/2024 & W.P.12606/2024. The petitioners being industrial associations and charitable institutions have approached this court under Article 226 of the Constitution of India to seek judicial intervention.
2. The petitioners are challenging the legality and validity of the impugned notifications issued by the Respondents notably the notification dated 04.03.2024 (Notification No. F 4(B)1/2014/A 16) and the subsequent notification dated 13.03.2024 issued by the State of Madhya Pradesh to revise the minimum wages applicable to various scheduled employments throughout the State under the Minimum Wages Act, 1948. The petitioners Pithampur Audyogik Sangthan representing industrial interests in Pithampur; the Association of Industries Madhya Pradesh representing various industrial
WP No.9401/24, 11921/24 & 12606/24
units across the state; and Ujjain Charitable Trust Hospital & Research Centre representing charitable institutions to which the wage revisions apply.
3. Vide the impugned notifications minimum wages for the employees/workmen working in 68 scheduled employments have been revised @ 25% ( approx.) after 10 years. The common grievance of the petitioners is that this uniform hike in wages is irrespective of the differing cost of living between establishments situated in urban and rural areas and therefore suffers from arbitrariness and unreasonableness. The petitioners have submitted that the Madhya Pradesh Minimum Wages Advisory Board recommendations were adopted after a four-year delay and the board was also improperly constituted with an imbalance in representation and violation of the statutory provisions of the Minimum Wages Act, 1948. The notifications issued by the state of Madhya Pradesh which are under challenge by the petitioners are as follows:
(i) Notification dated 18.07.2019, concerning the constitution of the Advisory Board under the Minimum Wages Act, 1948.
(ii) Notification dated 04.03.2024 (No. F-4(B) 1/2014/A-16), revising the minimum wages for various scheduled employments in the state.
(iii) Notification dated 13.03.2024, issued by the Labour Commissioner, reiterating the revised wage structure.
4. Learned Counsel appearing for the petitioners argued that the impugned notification revising the minimum wages suffers from arbitrariness and lacks a rational basis as it fails to take into account economic disparities between urban and rural areas. According to them metropolitan cities such as Indore, Bhopal, and Jabalpur have a substantially
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higher cost of living than smaller towns and villages yet the notification prescribes a uniform wage structure across the entire state. This approach disregards regional economic variations and imposes an undue financial burden on industries operating in areas with lower operational costs and limited economic activity. Such an indiscriminate uniform fixation of minimum wages is contrary to Sections 3 and 5 of the Minimum Wages Act, 1948, which require the appropriate government to consider factors such as the cost of living, prevailing wages in comparable industries, localities and local economic conditions while fixing and revising minimum wages.
5. The Learned Counsel further submitted that the composition of the Madhya Pradesh Minimum Wages Advisory Board violated the provisions of Section 9 of the Minimum Wages Act, 1948, which mandates equal representation of employers, employees, and independent members. Three of the five employer representatives on the advisory Board at that time were no longer holding valid positions in the scheduled employments which they were meant to represent, thereby rendering their appointment ineffective. Moreover, the inclusion of Ms. Shikha Joshi, Labour Commissioner, Indore, as an independent member is also in clear violation of statutory provisions, as it compromises the neutrality of the Board and creates a conflict of interest. The learned senior counsel has relied on the judgment in the case of the Federation of Okhla Industrial Association (Regd.) and Ors. Vs. Lt. Governor of Delhi and Ors reported in (2018) 3 LLJ 622 Del., where the Delhi High Court quashed a minimum wage notification on the ground that the advisory committee was improperly constituted and lacked fair representation of stakeholders. The learned senior counsel further submitted
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that the impugned wage revision is procedurally defective, as it violates the statutory mandates under Sections 3, 5, and 9 of the Minimum Wages Act, 1948 which requires the government to conduct consultations with stakeholders, form advisory committees, and publish proposals before finalizing wage revisions.
6. Shri Patwardhan, learned Senior Counsel further submitted that the State Government failed to comply with the order passed by this on 01.08.2024 whereby the respondents were directed to convene a meeting with stakeholders to consider region-wise classification of minimum wages. In compliance with this directive, the petitioners submitted their representations through letters dated 06.08.2024 and 07.08.2024 proposing a sector-wise and region-wise classification of wages to reflect local economic realities. However, the State Government did not consider them and the respondents have falsely asserted before this Court that no stakeholder suggestions were received, thereby misleading this Court. Shri Patwardhan, learned Senior Counsel highlighted that the recommendations of the Advisory Board were made in 2019, but the impugned notification was issued only in 2024, after an unexplained delay of four years, without any fresh evaluation of prevailing economic conditions.
7. Shri Patwardhan, learned Senior Counsel also argued that the revised minimum wages in Madhya Pradesh are significantly higher than those prevailing in neighbouring states such as Gujarat, Rajasthan, and Chhattisgarh, thereby placing industries in the state at a competitive disadvantage. By imposing excessive wage rates, the State Government has disregarded the financial viability of businesses, particularly small and
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medium enterprises (SMEs) and charitable institutions, which operate on limited resources and risks causing an exodus of industries from Madhya Pradesh to states with lower labour costs resulting in loss of employment and revenue for the state.
8. Learned senior counsel relied on the judgment in the case of Bhikusa Yamasa Kshatriya v. Sangamner Akola Taluka Bidi Kamgar Union reported in AIR 1963 SC 806, wherein the Hon'ble Apex Court held that minimum wage fixation must be based on a fair and rational economic assessment to avoid disrupting industrial viability. Lastly, it is contended that the wage revision fails to account for industry-specific differences, treating diverse sectors such as information technology, manufacturing, and hospitality alike despite their distinct cost structures and employment conditions. The State Government should have adopted an industry-specific approach, rather than imposing a one-size-fits-all wage structure that ignores financial realities across sectors. The petitioners relied on the judgment in the case of the Federation of Okhla Industrial Association (Supra), wherein the Delhi High Court held that minimum wages must reflect industry-specific conditions and cannot be uniformly applied without a sector-wise and regional classification. Thus, the petitioners prayed that the impugned notifications be quashed and an order be passed for reconstitution of the Advisory Board in strict conformity with the Minimum Wages Act, and the implementation of a sector-wise and zone-wise classification of minimum wages to ensure fairness and economic sustainability in the state. Shri Vikas Jaiswal, learned counsel appearing for the Association of
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Industries Madhya Pradesh in WP No.12606/2024 has adopted the aforesaid argument.
9. The respondents have filed a detailed reply. Respondent no.5 to 8 various trade unions who were impleaded as parties by order dated 03.12.2024 have also filed their written submissions.
10. Learned Government Advocate contended that the present writ petitioners are challenging the revision of minimum wages is devoid of merit, as the impugned notifications have been issued in compliance with the provisions of the Minimum Wages Act, 1948. The Government of M.P., in exercise of its statutory powers under Sections 3, 5, and 9 of the Minimum Wages Act, 1948 has revised the minimum wages based on economic considerations and after due consultation with the Advisory Board ensuring fair wages for workers and maintaining parity across establishments.
11. It is further submitted that the Labour Commissioner issued a notification dated 24.05.2024 revising the minimum wages, but not superseding the earlier notification of 04.03.2024. This notification was issued in compliance with the stay granted by this Court, though the notification does explicitly state that it is subject to the final decision in the pending writ petitions.
12. The respondents contend that the principles of natural justice were duly followed, as objections and suggestions were invited before the finalization of the notification. The respondents rely on Sections 3, 4, and 5 of the Minimum Wages Act, of 1948 which empower the State to fix or revise minimum wages. Section 5 provides two modes of revision: (i) appointing committees for inquiries or (ii) issuing a draft notification in the
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Official Gazette, inviting objections. In the present case, the draft notification dated 27.09.2023 was published on 06.10.2023, inviting representations from stakeholders. The Advisory Board was constituted under Sections 7 and 9 of the Minimum Wages Act, 1948 and was responsible for coordinating wage fixation, with representation from employers, employees and independent persons in compliance with statutory mandates.
13. It is further submitted that the Madhya Pradesh amendment to Section 9 of the Minimum Wages Act, 1948 allows government officers to be considered independent persons ensuring that the Board's recommendations were legally sound. The composition of the Advisory Board and the deliberations thereafter adhered to procedural requirements, and the recommendations of the advisory board were forwarded to the State Government leading to the issuance of the final notification on 04.03.2024 demonstrating that all due process was followed in the issuing of the notifications. The respondents further submitted that all procedural requirements under Rule 14 of the Minimum Wages (Central) Rules, 1950 including quorum for Board meetings were duly met. The relevant meeting had the prescribed one-third of the total members present, including representatives from both employers and employees, making the decision of the Board legally valid. The notification underwent wide publicity ensuring compliance with legal mandates, however since the petitioners did not file any objection in response to the draft notification, despite ample time and opportunity, their challenge is just an afterthought.
WP No.9401/24, 11921/24 & 12606/24
14. The respondents further submitted that private hospitals and educational institutions fall within Entry No. 34 of the Scheduled Industries thereby making them subject to minimum wage revisions. The revised minimum wages have been determined based on economic realities, inflation trends, and wage structures in neighbouring states, ensuring that workers receive just and equitable wages. The wage revision ensures industrial harmony, balancing the interests of employers and employees. The claim of the petitioner that the increase is arbitrary is untenable, as wage fixation is within the legislative competence of the State Government, as upheld in judicial precedents.
15. The learned counsel appearing for the Trade Union has relied on the judgment in the case of Association of Industries, Dewas vs. State of M.P reported in 2015 SCC Online MP 7543, in which the division bench of this court had confirmed that wage revisions based on the recommendations of the advisory board are legally valid. Further reliance is placed on Bijay Cotton Mills Ltd. v. State of Ajmer reported in AIR 1955 SC 33, wherein the Hon'ble Apex Court has upheld the necessity of minimum wage fixation to prevent labour exploitation. Additionally, in the case of C. B. Boarding & Lodging v. State of Mysore reported in AIR 1970 SC 2042 the Apex Court clarified and held that minimum wages must ensure a reasonable standard of living for workers.
16. The respondent/State denied any procedural irregularities and submitted that the Labour Commissioner, as Chairperson of the Advisory Board, was lawfully appointed under the Madhya Pradesh amendment to Section 9 and his role does not compromise the independence of the Board.
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The contention of petitioners that separate wage classifications should be made for different industries is misplaced, as the Act does not mandate industry-specific differentiation but categorizes workers as skilled, semi- skilled, and unskilled, ensuring fair compensation across job roles. Furthermore, the contention that the consultation process was flawed is baseless, as personal hearings are not a statutory requirement. The law mandates only notification and consideration of objections, which was duly complied with.
17. Furthermore, the government counsel submitted that the notification dated 04.08.2021 was challenged in the Madhya Pradesh Textile Association vs. State of M.P in Writ Petition No. 10772/2024 during the pendency of which the State Government issued a subsequent notification dated 15.01.2025, which amended Schedule Part I of the Act by incorporating new industries--including Textiles & Made-ups, Apparel Manufacturing (Woven, Knitted, and Technical Textiles Fabrics), and Footwear Manufacturing--into the scheduled employments. The same notification has also been adopted by the state of Madhya Pradesh and a minimum wages circular dated 28.02.2025 has been issued. This Court in the case of Madhya Pradesh Textile Association (Supra) by its order dated 10.02.2025 directed the State Government to initiate a fresh wage revision procedure in consultation with the Minimum Wages Advisory Board. Further reliance is placed by the counsels appearing for respondents on Ujjain Charitable Trust Hospital & Research Centre vs. State of Madhya Pradesh reported in 2010 (3) MPLJ 29; Bijoy Krishna Paul vs. the State of Assam reported in 1968 SCC OnLine Gau 47; U.P. Cinema Exhibitors Federation vs. State of
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WP No.9401/24, 11921/24 & 12606/24
Uttar Pradesh reported in 1977 SCC OnLine All 562; Unichoyi v. State of Kerala reported in AIR 1962 SC 12; Union Of India vs M.V. Mohanan Nair reported in AIR 2020 SC 5107 and State of M.P. vs. R.D. Sharma reported in 2022 (2) MPLJ 621.
18. In view of the above submissions, the learned government counsel respectfully submitted that the impugned notifications are issued following the due process of law and in strict compliance with the Minimum Wages Act, 1948 and are aimed at achieving economic justice and wage parity. The respondents thus pray that this Court dismisses the present petitions by upholding the validity of the revised minimum wage notification.
We have heard learned counsel for the parties at length and perused the record.
19. The Minimum Wages Act, of 1948 is an Act to provide for fixing minimum rates of wages by the appropriate government in scheduled employment. Section 2(c) of the Act defines the 'competent authority', which means the authority appointed by the appropriate Government by way of notification to ascertain from time to time the cost of living index applicable to the employees employed in the scheduled employment. Section 2(d) defines the 'cost of living index number', which is an index number ascertained and declared by the competent authority by notification in the Official Gazette applicable to employees in scheduled employment. Wages as defined in Section 2(h) means all remuneration, capable of being expressed in terms of money to an employee by an employer in respect of his employment or work, but does not include the value of any house, accommodation, supply of light, water, medical attendance etc. All types of
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skilled, unskilled, and clerical persons who are employed for hire or reward are entitled to get the minimum rates of wages fixed and revised from time to time. Section 3 authorises the appropriate Government to fix of minimum rates of wages payable to the employees employed in employment specified in Part I and Part II of the Schedule. As per Section 3(1)(b) the appropriate Government shall revise the minimum wages within the interval of five years. The Government may fix minimum rates of wages for time work and for piece work.
20. The primary grievance of the petitioners by way of these petitions is with respect to uniform revision of wages under Section 3(3)(a) of the Act for establishments at different localities of the state. According to the petitioners, while revising the minimum rates, the State Government did not consider the important fact that the industries are situated in different parts of the State, hence there cannot be a uniform wage payable to the employees employed in the industries. The employees residing in the big cities or nearby areas like Indore, Bhopal, Jabalpur, and Gwalior cannot be given similar wages to those employees who are residing in the B or C-class cities or nearby areas.
21. The Pithampur Audyogik Sangthan is the petitioner in WP No.9401/2024 which is an association of industries situated near Indore city, rather the industries situated in a small town may have gradients about uniform wage hike/revision as there cannot be a same cost of living in two different locations. Shri Patwardhan learned senior counsel argued that the Government of India, Ministry of Labour and Employment has revised the Variable Dearness Allowance for areas 'A', 'B', and 'C' on the basis of the
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average price consumer index for industrial workers and in the State like Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka and Maharashtra, where the State Government has prescribed the minimum wages for unskilled, semi-skilled, skilled, and highly skilled employees by dividing the State into 3-4 zones. This contention has no basis because the advisory board constituted by the Government of Madhya Pradesh before revising the rates of wages, considered different factors; such as basic rates of wages, special allowance, the economic climate of the locality, the general economic condition of industrial deployment in the area, adequacy of wages etc. The objections taken by the members of the petitioner before the Advisory Board were also duly considered. This court cannot sit as an expert appellate body to substitute its opinion. In the state of M.P. major industries are established in the industrial areas situated near big cities.
22. It is correct that while fixing or revising the minimum rates of wages under Section 3(3) of the Minimum Wages Act, 1948, one of the considerations is the locality of establishment apart from different factors like scheduled employment, different classes of work for adults, adolescents, children and apprentices. As per the aim and object of the Minimum Wages Act, there have to be minimum rates of wages in the scheduled employment fixed by the competent authority upon recommendation of Committee, Sub Committee and Advisory Board. The intention behind this is that there should not be exploitation of an employee by an employer in respect of payment of remuneration for his work done in the scheduled employment. As per the procedure prescribed under the Act, the Government fixed the minimum wage and revised it from time to time after an interval of five
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WP No.9401/24, 11921/24 & 12606/24
years after considering the various factors i.e. nature of employment, nature of work etc. There can be special wages for the establishment looking to its locality as a special case but it is not mandatory to fix or revise different minimum wages locality-wise. The government of M.P. has revised the minimum rates of wages, scheduled establishments wise and category of employees wise which is the mandate of the Act, no further categorisation is advisable.
23. As per Section 4 of the Act, minimum rates of wages consist of the basic rates of wages and special allowance at a rate to be adjusted, at such interval and in such manner with the variation in the cost of living index applicable to such workers and as per the definition of the wages, it includes all remuneration capable of being expressed in terms of money without adding the value of any house, accommodation, supply of light, water, medical attendance etc. The worker or employee may have a grievance about the fixation of minimum wages at different localities. The workers working in the employment situated in big cities may have a grievance that for them less minimum wages have been fixed as compared to the workers employed in small cities. But in the present case, none of the workers or Trade Union raised any such objection complaining about discrimination or disparity in the minimum wages. Apart from the minimum rates of wages fixed or revised by the Government, the establishment/employer is always free to give wages higher than the minimum wage. If the employer pays higher wages, than the rates of wages fixed by the Government, then such higher wages shall be minimum wages in such employment. There is a provision of recovery of wages from the employer if he pays less amount in scheduled
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employment, for which a notification under Section 5 is in force. Therefore, there is no bar in the Minimum Wages Act to pay higher wages by an employer to its employee, if in that particular area, the cost of living is so high and the company runs into a profit. This Minimum Wages Act only ensures payment of minimum wages to the employee for his survival and to live a dignified and comfortable life.
24. As per Section 9 of the Minimum Wages Act, the committees, sub- committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members and one of such independent persons shall be appointed the Chairman of the Board. In the State of Madhya Pradesh the word "such independent persons" has been substituted by the word "such independent persons, or such officers of Government". In the present case Labour Commissioner has been made Chairman of the Board which is an independent member of the board. Therefore, the entire board after considering the various factors like and cost of living index, nature of work dearness, cost of living and inflation, decides the minimum rate of wages payable to the employees working in different scheduled employment in different capacity.
25. The petitioners have not come up with any specific data and figures to demonstrate as what should be the difference of wages between two different localities. They did not produce any material before the Advisory Board nor before this Court in support of their contention that there should be a difference in wages for the scheduled employment in different areas of the
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State of Madhya Pradesh. The factor "different localities" in Section 3(3)(a)
(iv) is there for fixing the minimum wages can be considered for a particular industry situated in a remote locality as a special case. In the case of Bhikusa Yamasa Kahatriya (supra), the Apex Court upheld the fixation of different rates of minimum wages for different localities as it does not violate Article 14 of the Constitution of India. Therefore, the Government may consider fixing the different rates of wages for different localities if materials to that effect are made available but it is not mandatory for the Government to always fix different minimum rates for different localities. Looking at the nature of work in the scheduled employment, the State Government has prescribed the minimum wages for skilled, unskilled, and semi-skilled workers after considering the cost of living index. Therefore, there is no illegality if different minimum wages have not been prescribed locality-wise.
26. Shri Kuldeep Bhargava, learned counsel appearing for Ujjain Charitable Trust Hospital in WP No.11921/2024 submitted that the procedure as prescribed under Sections 5 to 9 has not been followed, therefore, the impugned notifications are liable to be quashed. In support of his contention, he has placed reliance on a judgment passed by the Assam and Nagaland High Court in the case of Bijoy Krishna Paul Vs. State of Assam and others reported in 1968 SCC OnLine Gau 47 and the judgment passed by the Allahabad High Court in the case of U.P. Cinema Exhibitors Federation vs. State of Uttar Pradesh reported in 1977 SCC OnLine All
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27. Learned Government Advocate as well as the counsel appearing for the Union have relied on a judgment passed by the Division of this Court in the case of Association of Industries, Dewas Vs. State of Madhya Pradesh and others reported in 2015 SCC OnLine MP 7543, in which a number of writ petitions were filed challenging the notification published in Gazette dated 4.3.2014, 7.3.2014 etc. fixing the minimum rates of wages in certain employment on various grounds. All the grounds raised in the petition were considered and decided by framing issues namely (A) the Constitution of the Advisory Board, (B) Quorum at the meeting of the Advisory Board, (C) Notice to members for the meeting, (D) Time allowed by the notification for filing of objections, (E) Personal hearing of objections, (H) Retrospective implementation of notification. After considering all the material available on record, the Division Bench dismissed the writ petitions and upheld the notifications.
28. As per the provisions of the Minimum Wages Act, there has to be a revision of wages after an interval of five years but in the State of Madhya Pradesh after 2014 the State Government revised the rates after ten years by increasing 25%, which means 12.5% per five years which cannot be said to be on the higher side, for which the petitioners-Industrial Associations are making so much hue and cry. In the last 10 years, the cost of consumable goods, petrol, diesel, LPG, foodgrains, and essential commodities have increased manifold. The Government has revised the salary of government employees by implementing the 6th and 7th Pay Commission and regularly increasing the wages by way of granting Dearness Allowance. Therefore, the increase in the minimum rates of wages for workmen @ 25% after 10 years
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cannot be said to be on the higher side warranting interference by the High Court under Art 226 of the Constitution of India. Apart from that, all the grounds raised by the petitioners have already been answered in the case of the Association of Industries, Dewas (supra).
29. Therefore, we do not find any merit in these writ petitions. Accordingly, all three writ petitions are dismissed.
30. Signed order be kept in the file of W.P. No.9401/2024 and a copy thereof be placed in the file of connected WP Nos.11921/2024 & 12606/2024.
(VIVEK RUSIA) (GAJENDRA SINGH)
JUDGE JUDGE
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