Statutory Processes Have To Be Followed Stringently; Strict Rule Of Interpretation For Unambiguous Provisions: Gujarat High Court

Background

The Petitioner No. 1 was a federation representing 500 establishments engaged in the activity of running hotels/restaurants in Gujarat. Meanwhile Petition 2-7 were the members and officers of the federation. It was the Petitioner's case that vide the notification, the Government in exercise of power under Section 30 of the Minimum Wages Act, 1948 ('Act') reduced the cash value of the total wage from 33.3% to 19%. Per contra, under the Gujarat Hotel Worker's Wages in Kind Rules 1998 ('Rules"), the cash value of monthly wage was fixed at 33.3% and included residential accommodation, two meals, two teas and two breakfasts vide a notification dated 23.01.2001.

The Petitioner contended that the Draft Notification reducing the wages towards the cash value was not published as required by the Act and no notice was given to the affected parties for providing their objections/suggestions. Additionally, under the provisions of Section 5 of the Act, the Government had to follow certain procedure to fix or revise rates of minimum wages. In the instant case, the notification made a change in the method of computation of cash value of wages which ultimately resulted in change in rates of minimum wage. Therefore, the Government ought to have followed the requirements envisaged in Sections 3-5 of the Act and the Rules. A further averment was that the Government did not compute the cash value of wages by considering the nearest market price as provided in Rule 20 of the Minimum Wages (Central Rules), 1950.

Per contra, the Respondent contested that the Government had heard the representatives of the employees and employers, as under Section 5 of the Act, while drawing the notification. Accordingly, the final notification after revision in 2001. The objections of the Hotel Federation were also duly heard by the Government and 19% deduction was proposed. A further averment was that in determining the definition of 'family'(comprising of husband, wife and two children of which only worker gets facilities of meal and tea), it was appropriate to compute deduction only for the worker and not other two units which do not get any of these facilities. The weightage of food was 57% and it was divided into three units and hence, for the worker, the calculation came to 19%. This contention was bolstered by the State of Jharkhand and Ors. Vs. Ashok Kumar Dangi and Ors., [(2011) 13 S.C.C. 383] judgement.

Judgement

The Bench recognised the "kernel of issue" as whether it is mandatory for the State Government to follow the procedure envisaged under provisions of Sections 3-5, 11, and 30 of the Act. Justice Supehia noted that the payment of fixation of cash value of wages was stipulated in Section 11 of the Act and the procedure (under Section 5) stipulated the formation of an Advisory Committee for undertaking inquiries, publishing the notification in the Official Gazette and inviting opinion of affected parties.

In the instant case, the earlier notification fixing the rate at 33.3% had followed the due procedure but the subsequent notification which reduced the rate to 19% did not. Clearly, no draft notification was published. Further, no material regarding the change in computation was presented to the Court by the Respondent.

Keeping in view these facts and provisions, the Bench opined that it was mandatory for the State Government to follow the procedure prescribed under Section 5 of the Act before issuing the impugned notification wherein cash value was reduced. Even assuming that the Hotel Federation had been heard regarding the change in cash value, the Government could not "by-pass the statutory provision of publication of proposed cash value through publication of notification."

The High Court termed it a "cardinal rule of interpretation" that Courts cannot interpret the particular processes mentioned in any statute in any other manner when the words of the statute are precise and unambiguous. The Court rejected the reliance placed on the Ashok Kumari and other judgements which did not deal with the issue at hand.

Accordingly, Justice Supehia quashed the notification but granted liberty to the Government to issue a fresh notification in accordance with Section 5 procedure.

Case Title: GUJARAT RAJYA HOTEL FEDERATION & 9 other(s) Versus STATE OF GUJARAT & 1 other(s)

Citation: 2022 LiveLaw (Guj) 57

Case No.: C/SCA/6185/2002

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