Holding

Tube‑well operators, though state government servants, are employees in scheduled employment under the Panchayats and are therefore entitled to minimum wages and overtime under the Minimum Wages Act, 1948.

Summary

The Minimum Wages Inspector filed applications before the Minimum Wages Authority seeking overtime wages for four tube‑well operators employed by Taluka and District Panchayats in Gujarat, alleging that they worked beyond the hours prescribed under the Minimum Wages Act, 1948. The Authority dismissed the applications, holding that although the employment fell under "scheduled employment" under s.2(g), the operators were government servants and therefore not covered by the Act. The High Court affirmed this view. On appeal, the Supreme Court examined whether government servants employed in scheduled employment under a local authority are entitled to the benefits of the Minimum Wages Act. It held that the Panchayats are "employers" under the Act and that the tube‑well operators, despite being state government servants, are employees in scheduled employment and thus eligible for minimum wages and overtime. Consequently, the Supreme Court allowed the appeals and directed that the applications be granted as prayed for.

Issues considered

Whether government servants employed in scheduled employment under a local authority (Panchayat) are covered by the Minimum Wages Act, 1948.
Whether the Panchayat can be deemed an "employer" under the Act for purposes of extending minimum wage benefits to its employees.

Legislation cited

Gujarat Panchayat Act, 1961s. 102(2), s. 102(3)
Minimum Wages Act, 1948s. 20, s. 27, s. 2(e), s. 2(g), s. 2(i), s. 3

Subjects

Minimum Wages Actscheduled employmentgovernment servantPanchayatovertime wagesemployee definitionemployer definitionlocal authority

Judgment

..

322
A
PATEL ISHWERBHAI PRAHLADBHAI ETC. ETC.

v.
TALUKA DEVELOPMENT OFFICER & OTHERS
8
January 28, 1983

[Y.V. CHANDRACHUD, C.J., S. MURTAZA FAZAL ALI,
V.D. TuLZAPURKAR, 0. CHINNAPPA REDDY AND
A. VARADARAJAN, JJ.J
c
Minimum Wages Act, 1948-Government servants employed in 'scheduled
6mployment' under local authorities - Whether entitled to benefits under the
.4ct?

The Minimum Wages Inspector of Mehsana District in Gujarat fifed
applications before the Minimu;n Wages Authority praying for directions for
D payment of overtime wages to (01:.ir tubewell operators working in Taluka and
District Panc~ayats on the ground that they had been made to work for more
hours -than what was prescribed under the Minimum Wages Act, 1948. The
said Authority dismissed the applications holding that though employment in
any District Panchayat or Taluka Pancbayat was •scheduled employment' as
per s. 2 (g) of the Act, the tubewell operators concerned being Government
servants in Panchayat Service w1~re not entit1ed to claim minimum wages
under the Act. The revisions filed against the orders of the Authority wer~
dismissed by the High Court.

Allowing the appeals,

HELD : Section 3 of the Act provides for the appropriate government I
fixing minimum rates of wages payable to employees employed in an employment
F specified in Parts I and II of the Schedule. Section 2 (i) defines •employee' as
meaning any person' who is employed for hire or reward to do any work in a
'scheduled employment'. Section 2(g) defines 'Scheduled employment' as im:aning
an emplo)'rncnt specified in the Schedule and "Employment under any local
authority" is included as item 6 of the schedule. [326 B·G]

'Employer' under s. 2 (eJ1 being "any person who employs whether
G directly or through another person, or whether on behalf of himself or any
other person, one or more employees in any scheduled employruent in respect
of which minimum wages have been fixed under the Act" the Panchayats
under which the tubcweII operators concerned are employed in scheduled
employment wouJd be 'employers' under the Act even though the tubeweJI ,_.._
operators are Government servanls, for, under sub-s. (2) of s. 102 of the Gujarat
H Panchayat Act, 1961, a Secretary of a Gram Panchayat or Nagar Panchayat
shall, subject to the control of the Sarpanch or Chairman, as the case may
Jle, perform th~ <Jyti~~ me!'ti~ned in els. (a), (_b), (c) and (d) thereof and, '' 1
P>,TEL ISHWERBHAf v. DEVELOPMENT OFFICER (Varadarajan, J.) 323.

under sub-s. (3) of that section, the other servants of the Panchayats shaU. A
perform such functions and duties and exercise such powers under the Act ·
~ as may be imposed or conferred on them by the Pancbayat"subject to rules,
if any, made in that behalf. Therefore, there can be no doubt that the
tubewell operators concerned in these appeals, even tbou.gh State Government
servants, are employed in 'scheduled employment' under the local authority
or authorities and are consequently entitled to minimum wages and'other benefits
under the Act. [326 H, 327 A-DJ B

· CIVIL APPELLATE JURISDICTION: Civil Appeals No. 127-130.
of 1975.

Appeal by Special leave from the Judgment and Order dated
15th October, 1974 of the Gujarat High Court in Civil Revision C
Appln. Nos.,1434-1437 of 1973.

V.M. Tarkunde, Naresh Kumar Sharma and Vineet Kumar for
the Appellant.

D.V. Patel, C.V. Subba Rao, Dy. Govt. Advocate, M.N. I)
Shroff; G.N. Desai, · R.N. Poddar and R.H. Dheoar for the
Respondent (State).

P.H. Parekh for Respodents I and 2.

The Judgment of the Court was delivered by
E
VARADARAJAN, J. These appeals by special leave are dir.ected,
against tbe judgment of the learned Chief Justice (B.1. Diwan) of
the Gujarat High Court in Civil Revision Application Nos. 1434 to
1437 of 1973. Those Civil Revision Applications (hereinafter
referred to as 'Revisions') were preferred against the judgment .of
the Civil Judge, (Junior Division) Vijapur as the authority appointed
under s. 20(i) of the Minimum Wages Act, 1948 for Yijapur Taluka
in Civil Misc. Applications Nos. I and 2 of 1970 and 1 and ~of
1971 (hereinafter referred to as 'applicatio!ls'). The four Revisions
raised a common question of law and were disposed of by a
. common judgment. G
The applicatious before the Minimum Wages Authority were
filed by the Gujarat Government Labour Officer and Minimum
Wages Inspector for Mehsana district against the Taluka D~velop-
ment Officer, Yijapur Taluka and District Development Officer H
(Pancbayat) Mehsana. The Minimum Wages Inspector contended
in those applicatio!ls. that the four employees, lshw~rbhai
324 SUPREME COURT REPORTS [1983] 2 s.c.a.

Prahladbhai, Dayabbai Umeddass, Kanjibhai Shankarbhai and
Nathalal Maganlal, working in the Taluka Panchayat and District
Panchayat as Tube-well Operators at Delva da and Vihar villages,
fall within the Minimum Wages Act, 1948 (hereinafter referred to
as the 'Act') and had been made to work for more hours than what
is prescribed under the Act and they were entitled to over-time
8 wages of Rs. 3018.40 and Rs. 3769.0S in respect of Ishwerbhai
Prahladbhai and Dayabhai Umeddass respectively for the period
from September 1969 to February 1970, and Rs. 3082/- for the
period from October 1970 to March 1971 and Rs. 1178.25 for the
transitional period of April and May 1971 in respect of Kanjibhai
Shankarbhai and Rs. 3962.40 and Rs. 1237.80 for those identical
periods in respect of Nathalal Maganlal. Directions under s. 20
of Act for payment of those amounts together with further sums
for the period during which the applications were pending were
prayed for in the applications. The respondents in the applications
denied that the four employc~es .are working under any District
D Panchayat and contended that they were work-charged employees
in the State service and that on the introduction of Panchayat Raj
in the State of Gujarat with effect from 1.4.1963 as per the Gujarat
Panchayats Act, 1961, the maintenance of tube-wells and further
extension of tube-wells and their;maintenance and the work-charged
establishment relating to the tube-wells were transferred to the
E District Panchayats by Government's Circular No. MNS/41162/V
dated 27.3.1963 and the employees were continued as work-charged
employees by the District Panchayat and were transferred to and
continued as such in the Panchayats. The respondents in the
applications thus contended that the four employees concerned
were employees of the State of Gujarat, whose terms and conditions
F of employment arc subject to orders of the State Government and
that they are paid out of the 100 per cent grant made by the State
Government. The respondents in the applications further contended
that the terms and conditions of service of the work-charged
employees of the State Government are governed by the P.W.D.
Manual and that the four employees concerned are not entitled to
G the over-time wages claimed in the applications.

The Minimum Wages Authority. found on the evidence
adduced by the parties that the Tube-well Operators concerned
H were State Government servants and not the servants of the
Panchayats, that Panchayats exercised supervisory control over
them and that it was not· controverted by the applicant, before him
PATEL ISHWBRBHAI v. DBVBLOPMBNT OFFICER (Varadarajan, J.) 325

that the Tube-well Operators were employed by the State Govern- A
ment before 1.4.1963. Following the decision in G.L. Shukla v.
State of Gujarat,(') the found that Panchayat service is, like any

.. other branch of service, service under the State, and he held that
though employment in any~District Panchayat or Taluka Panchayat
is scheduled employment as per s. 2(g) of the Act, the Tube-well
Operators concerned being Government servants in Panchayat 8
service are not entitled to claim minimum wages under the Act. In
that view he dismissed the applications.

The Minimnm Wages Inspector took the matter in revision
before the High Court. Diwan, C. J.: who heard these Revisions c
followed the decision of the Full Bench of the Gujarat High Court
in Criminal Appeal No. 361 of 1972, disposed of on 2.5.1974, in
which the ratio of the decision in Shukla's case was approved and
..... held that Panchayat service was part of the service of the State and
the Tube.well Operators concerned are State Government servants
holding civ.il posts. In that view the learned Chief Justice agreed 0
with the Minimum Wages Authority that as State Government
servants the Tube-well Operators concerned are not entitled to the
benefit of the Act and he dismissed the Revisions.

The point arising for consideration in these civil appeals is
simple. The Minimum Wages Authority and the learned Chief E
Justice have found that the Tube-well Operators are Gujarat State
,.. Government servants. That is the contention of the contesting
1. respondents I and 2., viz. Ta.l_uka Development Officer Vijapur,
Taluka Panchayat and District Development Officer, Mehsana
District Panchayat, in these' appeals. The contention of the State
of Gujarat before tis in Civil Appeal No. 359 of 1974 was that the F
employees in the District Panchayats and Taluka Panchayats
constituted under the Gujarat Panchayat Act, 1961 and Talatis and
Kotwals working in Gram and Nagar Panchayats in the local cadre
of Panchayats constituted under that Act are Government servants
and that the other employees in the local cadre are Panchayat G
employees and not State Government employees. In that appeal
we have repelled the contention that employees of the local cadre,
namely, Gram and Nagar Panchayat servants barring Talatis and
Kotwals are Panchayat servants and not Government servants and
held that they also are State Government servants like the District

'1) 8 G.L.R. 833.
326 SUPilP,MB COURT RBiloitTS (19831 ~ s.c.a

Panchayat and Taluka Panchayat employees and Talatis a{ld
Kotwals working in the Gram and Nagar Panchayats. ~

Section 3 of the Minimum Wages Act, 1948 provides for the
appropriate government, in the manner provided in the Act, fixing
·minimum rates of wages payable to employees employed in an
B employment specified in Part I and Part II of the Sehedule and in
any other emploment added to either Part by notification under s.27
of the Act subject to the proviso to s. 3(1) (al_ and has power to
review at such intervals as it thinks fit, such intervals not exceeding
5 years, the minimum rates of wages so fixed and revise the
minimum rates, if necessary, subject to the proviso to clause (b) of
c sub·section (1) of s. 3. Section 2(i) of the Act defines "employee"
as meaning "any person who is employed for hire or reward to do
any work, skilled or unskilled, manual or clerical, in a scheduled
employment in respect of which minimum rates of wages have been
fixed and includes an out·worker ......... " "Employer" is defined in
D s. 2 (e) of the Act as "any person who employs, whether directly
or through another person, or whether on behalf of himself or
any other person, one or more employees in any scheduled employ·
ment in respect of which minimum wages have been fixed under
the Act and includes, except in sub-section (3) of s. 26". (i) .........
(ii) ................................... (iii) in any scheduled employment
E under any local authority in respect of which minimum rates
of. wages have been fixed! under the Act, the person appointed
by such authority for the supervision and control of the employees
or where no employee is so appointed, the Chief Executive
Officer of the local authority; and (iv) in any other case where
there is carried on any scheduled employment in respect of
F which minimum rates of wages have been fixed under the Act, any
person responsible to the owner for the supervision and control of
the employees or for the payment of wages ............... ". We are
not concerned in these appeals with s. 26 (3) of the Act.
Section 2 (g) defines "ncheduled employment" as meaning "an
employment specified in the Schedule or any process or branch of
G work forming part of such employment". "Employment under any
local authority" is item 6 in the Schedule of the Act. Therefore, there
can be no doubt that the Tube-well Operators concerned in these
appeals are in scheduled employment under the Panchayats. The
question is whether, being Government servants, employed under
the local authority, they are not entitled to minimum wages and
other benefits under the Act. "Employer" under the Act being
"any person who employs whether directly or through another

T
·•

l'ATBL IS!lWBRBHAI v. QBVBLOPMBNT OFFICER ~flaradarajan, J.) 327

person, or whether on behalf of himself or any other person, one or A
,.. more employees in any scheduled employment in respect of which
minimum wages have been fixed under the Act", the Panchayat or
Panchayats under which the Tube-well Operators concerned are
employed in scheduled employment would be "employers" under
the Act even though they are Government servants, for under
s. 102 (2) of the Gujarat Panchayat Act, 1961 a Secretary of a Gram B
Panchayat or Nagar Panchayat shall subject to the control of the
Sarpanch or Chairman as the case may be, perform certain duties
mentioned in clauses (a), (b), (c) and (d) to that sub-section and
under sub-section (3) of that section the other servants of the
panchayats shall perform such functions and duties and exercise such
powers under the Act as may be imposed or conferred on them by
c
the Panchayat, subject to rules, if any, made in this behalf. We are;
therefore, of the opinion that the Tube-well Operators concerned in
these appeals, even thought State Government servants, are
employed in scheduled employment under the local authority or
•
authorities and are consequently entitled to mini mum wages and D
other benefits under. the Act, it not being disputed that minimum
wages have been fixed by the State Government in respect of
Tube-well Operators generally though that benefit has not been
extended to the Tube-well Operators concerned ·in these appeals.
The appeals are accordingly allowed with costs. The applications
before the Minimum Wages Authority are allowed as prayed for and E
the directions shall be issued as prayed for.

H.L.C. Appeals allowed•

T