Holding

The Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990 is a valid exercise of legislative power and does not violate Article 19(1)(g) or Article 14; the appeal is dismissed.

Summary

The Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990 increased compulsory paid holidays for industrial establishments from seven to thirteen. M.R.F. Ltd. challenged the amendment, alleging it infringed its right to carry on trade and business under Article 19(1)(g) of the Constitution, violated the equality clause of Article 14 as arbitrary, and denied a hearing in violation of natural justice. The High Court upheld the amendment, and the Supreme Court dismissed the appeal, holding that the increase in holidays is a reasonable restriction permissible under clause (6) of Article 19, is not arbitrary in view of relevant material and the Directive Principles, and that principles of natural justice cannot be invoked against legislative enactments. Consequently, the amendment was declared constitutionally valid and the appeal dismissed.

Issues considered

The amendment increasing national and festival holidays infringes the right to carry on trade or business under Article 19(1)(g).
The amendment violates the equality clause of Article 14 as being arbitrary.
The principle of natural justice, specifically the right to a hearing, applies to the legislative amendment.

Subjects

Constitutional lawArticle 19(1)(g)Article 14Industrial holidaysReasonable restrictionNatural justiceLegislative competenceDirective Principles of State PolicyKerala Industrial Establishments Act

Judgment

A M.R.F. LTD.
v.
INSPECTOR KERALA GOVT. AND ORS.

B
NOVEMBER 11, 1998
c
[S. SAGHIR AHMAD AND B.N. KIRPAL, JJ.]

Kera/a Industrial Establishments (National and Festival Holidays)
(Amendment) Act, 1990-National and Festival Holidays of Industrial
concerns- Increased from seven to thirteen-Challenged on the ground that
c it in.fringes the right to carry on trade and business-High Court held the
Amendment valid-On appeal, held, no infringement of right to carry on
trade or business-Hence not violative of Article 14 and 19(/)(g) of the
Constitution.

Constitution of India, 1950-Article 14 and 19(/)(g)-Kerala Industrial
D Establishments (National and Festival Holidays) (Amendment) Act, 1990-
validity of-Held, not violative ofArticle 14 and 19(/)(g) of the Constitution.

By the Kerala Industrial Establishments (National and Festival Holidays)
(Amendment) Act, 1990 National and Festival Holidays oflndustrial concerns
in the State were increased from seven to thirteen. This was unsucessfully
E challenged by the appellants before the High Court on the ground that it was
violative of Articles 19(l)(g) and 14 of the Constitution. The Division Bench
of the High Court also upheld the amendments. Hence the present appeal.

The contention of the appellant was that by altering the number of
national and festival holidays and raising its total number to thirteen the
F right to carry on trade and business on six additional days has been taken
away causing serious loss of production and heavy financial liability of
making payment of wages to the employees for the closed days; Thus it was
in contravention of the rights guaranteed under Article 19(l)(g) and Article
14 of the Constitution. It was also contented that before raising the national
G and festival holidays the industries or their representatives should have been
given an opportunity of hearing.

Dismissing the appeal, the Court

HELD : 1. The Kerala Industrial Establishments (National and Festival
t
Holidays) (Amendment) Act, 1990 by which the national and festival holidays
H 632
M.R.F. LTD. v. INSPECTOR KERALA GOVT. AND ORS. 633
have been increased is fully constitutional and does not, in any way, infringe A
the right of the appellants to carry on their trade or business under Article
19(l)(g). The compulsory closure orthe industrial concerns on national and

- festival holidays cannot be treated as unreasonable. It is protected by Clause
(6) of Article 19 and, therefore, cannot be treated to be violative of the
Fundamental Right under Article 19(l)(g). [641-C)
B
2. The decision by legislative amendment to raise the national and
festival holidays is based upon relevant material considered by the
Government, including the fact that the holidays allowed by the Central
Government and other public sector undertakings were far greater in number
than those prescribed under the Act. The Act is a social legislation to give C
effect to the Directive Principles of State Policy contained in Article 43 of
the Constitution. The law so made cannot be said to be arbitrary nor could
it be struck down as being violative of Article 14 of the Constitution.
[641-D-E]

State of Madras v. V.G. Row, [1952] SCR S97=AIR (1952) SC 196, D
relied on.

Mineral Deve/pomrmt Ltd. v. State of Bihar, [1960) 2 SCR 609 =Am
(1960) SC 468; Collector of Customs, Madras v. Nathe/la Sampathu Chetty,
[1962) 3 SCR 786 =AIR (1962) SC 316; Mis Laxmi Khandsari v. State of
U.P. & Ors., AIR (1981) SC 873 = (1981) 2 SCC 600. Saghir Ahmadv. State E
of UP., AIR (1954) SC 728 = (1955) 1 SCR 707; Mohd. HanifQureshi v.
State of Bihar, [1959) SCR 629 = AIR (1958) SC 731; State of U.P. v.
Kaushai/iya, (1964) 4 SCR 1002 = AIR (1964) SC 416; Kava/appara
Kottarathil Kochuni @ Moopil Nayar v. States of Madras and Kera/a,
(1960) 3 SCR 887 =AIR (1960) SC 1080; O.K. Ghosh v. E.X. Joseph, [1963)
Supp. 1 SCR 789 = AIR (1963) SC 812; Manohar Lal v. State of Punjab, F
(1961) 2 SCR 343 =AIR (1961) SC 418; Ramdhandas v. State of Punjab,
(1962) 1 SCR 852 = AIR (1961) SC 1559; Niemla Textile Finishing Mills
Ltd v. 2nd Punjab Tribunal, AIR (1957) SC 329 =(1957) SCR 335; U.
Unichoyi v. State of Kera/a, [1962) 1 SCR 946 =AIR (1962) SC 12; Ja/an
Trading Co. Pvt. Ltd v. D.M Aney, AIR (1979) SC 233 = (1979) 3 SCC 220; G
State ofBombay v. V.M Jawadekar, 62 Bombay Law Report 183; Matrumal
Sharma and Anr. v. The Chief Inspector! Shops and Commercial
Establishments, V.P. Kanpur, AIR (1952) Allahabad 773; Babajan Mir.
Zahiruddin v. State of Mysore and Anr., AIR (1957) Mysore 64; Bhawarlal
and Ors. v. State ofRajasthan and Ors., AIR (1959) Rajasthan 257; Sadasivam
v. State of Madras, AIR (1957) Madras 144; Grandhi Mangaraju, Manager, H
634 SUPREME COURT REPORTS (1998] SUPP. 2 S.C.R.

A Brothers Shop and Branches, Rajam, Srikakulam District v. Assistant Labour
Inspector, Srikakulam and Anr., AIR (1959) A.P. 604 and Ram Chander Baru
Ram v. The State, AIR (1963) Punjab 148, referred to.

3. The Principle of Natural Justice, including right of hearing, cannot
be invoked in the making of law either by the Parliament or by the State '- --
B Legislature. If the Legislature, in exercise of its plenary power under Article
245 of the Constitution, proceeds to enact a law, those who would be affected
by that law cannot legally raise a grievance that before the law was made,
they should have been given an opportunity of hearing. (642-A; 641-G]

c 1993. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5585 of
From the Judgment and Order dated 6.11.1992 of the Kerala High Court
in W.A. No. 1399 of 1991.

V.A. Bobde and K.R. Nambiar for the Appellant.
D
P. Krishnamoorty, Ms. Beena Prakash, G. Pradash, B.V. Deepak and Dilip
Pillai and R. Sasipurabhu for the Respondents.

The Judgment of the Court was delivered by ·-
E S. SAGHIR AHMAD, J. The classic Judgment of Patanjali Sastri, C.J.
in State ofMadras v. V. G. Row., [1952] SCR 597 =AIR 1952 SC 196, has again
to be referred to and relied upon in this case to settle the controversy
regarding the constitutional validity of the Kerala Industrial Establishments
(National and Festival Holidays) (Amendment) Act, 1990 (for short, 'the
Amending Act') which has already been upheld by a Single Judge, and in
F appeal, by the Division Bench of the Kerala High Court.

By the Amending Act, national and festival holidays, fixed under the
Principal Act, namely, the Kerala Industrial Establishments (National and
Festival Holidays) Act, 1958 (for short, 'the Parent Act') were altered. The
national holidays were increased from three to four (with the addition of 2nd
G 4"
of October as Mahatma Gandhi's Birthday) and festival holidays were increased
from four to nine. The total number of compulsory paid holidays were thus
raised from seven to thirteen. This alteration was challenged by the appellants
on the ground that the holidays, national and festival, so increased were
violative of the Fundamental Right guaranteed to them under Article 19(1)(g)
H to carry on their trade, business or profession. It was also challenged on the
M.R.F. LTD. v. INSPECTORKERALA GOVT. AND ORS. [S. SAGH!RAHMAD,J.] 635
ground of arbitrariness as the contention was that the increase in the number A
of national and festival holidays was wholly arbitrary, without there being any
reasonable basis for such increase which has compelled the appellants to pay
to their labour and other employees salary even for closed days on which
they do not work.

Article 19(1 )(g) provides as under: B
"19. Protection of certain rights regarding freedom of speech, etc. -(I)
All citizens shall have the right-

(a) .................................. .

(b) ...................................
c
(c) .................................. .

(d) ...................................

(e) .................................. . D
(f) .................................. .

(g) to practice any profession, or to carry on any occupation, trade
or business."

Sub-clause (6) of this Article provides as under:- E
"(6). Nothing in sub-clause (g) of the said clause shall affect the
operation of any existing law in so far as it imposes, or prevent the
State from making any Jaw imposing, in the interests of the general
public, reasonable restrictions on the exercise of the right conferred
by the said sub-clause, and, in particular, nothing in the said sub- F
cla:ise shall affect the operation of any existing Jaw in so far as it
relates to, or prevent the State from making any Jaw relating to

(i) the 9rofessional or technical qualifications necessary for
practising any profession or carrying on any occupation, trade or
business, or G
(ii) the carrying on by the State, or by a corporation owned or
controlled by the State, of any trade, business, industry or service,
whether to the exclusion, complete or partial, of citizens or otherwise."

Fundamental Rights guaranteed by Article 19 are the basic and natural H
636 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A Rights inherent in the citizen of a free country but none of the seven Rights,
guaranteed by Article 19( I), is an absolute Right as each of the Rights is liable
to be controlled, curtailed and regulated by laws made by the State to the
extent set out in Clauses (2) to (6) of the Article. This is based on the old
principle enunciated by this Court that "LIBERTY has to be limited in order
B to be effectively possessed". Article 19, therefore, while guaranteeing some
of the most valued elements of LIBERTY to every citizen, as Fundamental
Rights, provides for their regulation for the common good by the State
imposing certain restrictions on their exercise.

Article 19(1 )(g) protects the freedom of each individual citizen to practice
C any profession or carry on any occupation, trade or business. This is a right
distinct from Article 301 which relates to trade, commerce or intercourse both
with and within the State.

As pointed out earlier, the Right under Article 19( 1)(g) is not absolute
in terms but is subject to reasonable restrictions contemplated by Clause (6)
D thereof. The test of reasonableness of restrictions was considered by this
Court on several occasions but all the decisions are not being referred to and
only a few are mentioned to make out the focal point on the basis of which
we intend to dispose of this case.

We begin with an extract from, what is known as, the locus classicus,
E written down by Patanjali Sastri, C.J., in the State of Madras v. V. G. Row,
[1952] SCR 597 =AIR 1952 SC 196 :-

"It is important in this context to bear in mind that the test of
reasonableness, wherever prescribed, should be applied to each
individual statute impugned, and no abstract standard, or general
F pattern, ofreasonableness can be laid down as applicable to all cases.
The nature of the right alleged to have been infringed, the underlying
purpose of the restrictions imposed, the extent and urgency of the
evil sought to be remedied thereby, the disproportion of the imposition,
the prevailing conditions at the time should all enter into the judicial
verdict. In evaluating such elusive factors and forming their own
G
conception of what is reasonable in all the circumstances of a given
case, it is inevitable that the social philosophy and the scale of values
of the judges participating in the decision should play an important
part, and the limit to their interference with legislative judgment in
such cases can only be dictated by their sense of responsibility and
H self-restraint and the sobering reflection that the Constitution is meant
M.R.F. LTD. v. INSPECTOR KERALA GOVT. AND ORS. [S. SAGHIR AHMAD, J.] 637

not only for people of their way of thinking but for all, and that the A
majority of the elected representatives of the people have, in
authorising the imposition of the restrictions, considered them to be
reasonable. "

This decision was followed in Mineral Development Ltd. v. State of
Bihar, [1960] 2 SCR 609 =AIR 1960 SC 468, and it was laid down that the B
principles set out by Patanjali Sastri, C.J., have to be considered and kept in
view by the Courts in deciding whether a particular Statute satisfies the
objective !est of reasonableness.

The observations of Patanjali Sastri, C.J., were again approved in
Collector ofCustoms, Madras v. Nathe/la Sampathu Chetty, [1962] 3 SCR 786 C
=AIR 1962 SC 316 Ayyangar, J. who wrote the Judgment observed that
though there were several decisions of this Court in which the relative criteria
were laid down to test the reasonableness of the restrictions imposed under
Clause (6) of Article 19, the passage from the Judgment of Patanjali Sastri, C.J.
in State of Madras v. V.G. Row, (supra), which we have already extracted D
above, was held sufficient for the purpose of reference.

These decisions were considered, discussed and followed in Mis Laxmi
Khandsari v. State of UP. & Ors., AIR (1981) SC 873 = [1981) 2 SCC 600.

In examining the reasonableness of a statutory provision, whether it is
violative of the Fundamental Right guaranteed under Article 19, one cannot E
lose sight of the Directive Principles of State Policy contained in Chapter IV
of the Constitution as was laid down by this Court in Saghir Ahmadv. State
of UP., AIR (1954) SC 728 = [1955] 1 SCR 707 as also in Mohd HanifQureshi
v. State ofBihar, [1959] SCR 629 =AIR (1958) SC 731.

This principle was also followed in Laxmi Khandsari's, case (supra) in F
which the reasonableness of restrictions imposed upon the Fundamental
Rights available under Article 19 was examined on the grounds, amongst
others, that they were not violative of the Directive Principles of State Policy.

On a conspectus of various decisions of this Court, the following G
principles are clearly discernible :

(!) While considering the reasonableness of the restrictions, the
Court has to keep in mind the Directive Principles of State Policy.
(2) Restrictions must not be arbitrary or of an excessive nature so
as to go beyond the requirement of the interest of the general H
638 SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.

A public.
(3) In order to judge the reasonableness of the restrictions, no
abstract or general pattern or a fixed principle can be laid down
so as to be of universal application and the same will vary from
case to case as also with regard to changing conditions, values
B of human life, social philosophy of the Constitution, prevailing
conditions and the surrounding circumstances.

(4) A just balance has to be struck between the restrictions imposed
and the social control envisaged by Clause (6) of Article 19.

(5) Prevailing social values as also social needs which are intended
c to be satisfied by restrictions have to be borne in mind. (See:
State of U.P. v. Kaushai/iya, [1964] 4 SCR 1002 =AIR 1964 SC
416)

(6) There must be a direct and proximate nexus or a reasonable
connection between the restrictions imposed and the object
D sought to be achieved. If there is a direct nexus between the
restrictions, and the object of the Act, then a strong presumption
in favour of the constitutionality of the Act will naturally arise.
(See: Kavalappara Kottarathil Kochuni @ Moopil Nayar v.
States of Madras and Kerala, [ 1960] 3 SCR 887 = AIR 1960 SC
E 1080 and O.K. Ghosh v. E.X Joseph, [1963] Supp. 1 SCR 789 =
AIR 1963 SC 812)

Having regard to what has been set out above, we may now proceed
to consider the reasonableness of the restrictions imposed in the instant case
on the right of the appellants to carry on their trade or business.
F
It may be mentioned that the appellants do not challenge the legislative
competence in enacting the law by which the Parent Act was amended. What
is contended is that in altering the number of national and festival holidays
and raising its total number to thirteen from seven, the right to carry on trade
G and business on six additional days has been taken away causing serious
loss of production apart from heavy financial liability of making payment of
salary or wages to the employees and labour for the closed days. The
restriction placed on this right for keeping their industries closed on national
and festival holidays cannot be treated as reasonable within the meaning of
Clause (6) of Article 19. This, it is contended, is in contravention of the right
H guaranteed to them under Article 19(l)(g).
M.R.F. LTD. v. INSPECTOR KERALA GOVT. AND ORS. [S. SAGHIR AHMAD, J.] 639

The Directive Principles of State Policy are not enforceable but are A
nevertheless fundamental in the governance of the country and have to be
,., applied by the State in making the laws. They are essential articles of faith
of the country and as such the Legislature, the Executive and the Judiciary
have to follow tht:m unless there is likely to be an infringement of any express
provision of the Constitution. They have to be regarded as the "Wisdom" of
the Nation manifested in the "paramount" law of the country.
B

Article 43 of the Constitution provides as under :

"43. Living wage, etc., for workers.-'The state shall endeavour to
secure, by suitable legislation or economic organisation or in any
other way, to all workers, agricultural, industrial or otherwise, work, a c
living wage, conditions of work ensuring a decent standard of life and
full enjoyment of leisure and social and cultural opportunities and, in
particular, the State shall endeavour to promote cottage industries on
an individual or co-operative basis in rural areas."

This Article enjoins the State to endeavour to secure to all workers, be D
they agricultural, industrial or otherwise, a living wage and proper conditions
of work so as to assure to them a decent standard of life and full enjoyment
of leisure and social and cultural opportunities. The idea, therefore, is that
the workers would not be compelled to work on all days. While other employees
may enjoy national and festival holidays, the workers in an industry or an
E
agricultural farm must work throughout and should not avail of any holiday
is not the philosophy of Article 43. As human beings, they are entitled to a
"" period of rest which would enable them to fully enjoy their leisure and
participate in social and cultural activities. It was for this reason that this
Court in Manohar Lal v. State ofPunjab, [1961] 2 SCR 343 =AIR (1961) SC
418, upheld tfie compulsory closure of shop on one day. This decision was F
followed in Ramdhandas v. State of Punjab, [1962] l SCR 852 =AIR (1961)
SC 1559 upholding the restriction placed on the opening and closing hours
of the shop. Both these decisions were followed in Collector of Customs,
. y
Madras v. Nathe/la Sampathu Chetty, AIR (1962) SC 316 = (1962) 3 SCR 786 .
These decisions were treated as social and industrial welfare legislation. On
G
the principles of this philosophy, this Court has already upheld the provisions
of the Industrial Disputes Act in Niemla Textile Finishing Mills Ltd. v. 2nd
Punjab Tribunal, AIR (1957) SC 329 = [1957] SCR 335; Minimum Wages Act
in U. Unichoyi v. State of Kera/a., [1962] 1 SCR 946 =AIR (1962) SC 12;
Payment of Bonus Act in Jalan Trading Co. Pvt. Ltd. v. D.M Aney, AIR
(1979) SC 233 = [1979] 3 SCC 220 whereunder compulsory payment of minimum H
640 SUPREME COURT REPORTS [1998) SUPP. 2 S.C.R.

A statutory bonus even in the years of loss was held to be valid and reasonable
under Article 19(6) of the Constitution.

Coming now to some decisions of the High Courts, we may mention
that the Bombay High Court in State of Bombay v. V.M Jawadekar, 62
Bombay Law Report 183, has already upheld the provisions of Section 9( I)
B of the C.P. & Berar Shops and E3tablishments Act, 1947 (as amended in 1955)
which provided for compulsory holidays for the employees and closing of
shop. The Allahabad High Court in Matrumal Sharma and Anr. v. The Chief
Inspectors ofShops and Commercial Establishments, V.P. Kanpur, AIR (1952)
Allahabad 773, has upheld the validity of the U.P. Shops and Commercial
C Establishments Act. The provisions of Mysore Shops and Establishments
Act were upheld in Babajan Mir Zahiruddin v. State ofMysore and Anr., AIR
(1957) Mysore 64; the provisions of Ajmer Shops and Establishments Act
were upheld in Bhanwarlal and others v. State of Rajasthan and Ors., AIR
(1959) Rajasthan 257; the restrictions placed under Madras Shops and
Establishments Act, 194 7 were held to be reasonable in Sadasivam v. State
D of Madras, AIR (1957) Madras 144. So also the Andhra Pradesh High Court
in Gra11dhi Mangaraju, Manager, Brothers Shop and Branches, Rajam,
Srikakulam District v. Assistant Labour Inspector, Srikakulam and Anr., AIR
(1959) A.P. 604 and a Full Bench of the Punjab and Haryana High Court in
Ram Chander Baru Ram v. The State, AIR (1963) Punjab 148 have upheld
E their local laws dealing with shops and commercial establishments.

It may be pointed out that the State of Kerala in its counter-affidavit
pleaded that in order to introduce the amendments in the Parent Act by which
the number of the national and festival holidays were increased, the Government
took into consideration the change in social conditions, the development:; in
F the State and the number of holidays enjoyed by other sectors. It was pleaded
that the outlook towards labour has undergone a drastic change since the
enactment of the Parent Act in 1958. The contention of the appellants that
the increase in holidays would result in the loss of production was refuted .,.
by the State on the ground that the power to Increase production required
G healthy labour force. Some recreation and rest would make the labour more
fit and capable of doing their work more efficiently and satisfactorily which
would result in more production. The Kerala Institute of Labour and
Employment had already mi\de a study of paid holidays available to industrial
workers in Kerala State in 1982 and after studying the conditions prevailing
in about one hundred and eighty public and private industrial establishments
H as to the national and festival holidays available to their workers had published
M.R.F. LTD. v. INSP~TOR KERALA GOVT. AND ORS. [S. SAGHIR AHMAD, J.] 641
a report. As per the analysis made in that report, it was noticed that the A
number of paid holidays available to industrial workers in the public sector
in Kerala ranged from seven to twenty one days and in private sector, from
seven to seventeen days. It was also noticed that the Government of India
had declared sixteen holidays while Government of Kerala had declared
eighteen holidays for the year 1990 which were repeated in 1991.
B
Having regard to the factors enumerated in the counter-affidavit as also
to the Directive Principles of State Policy contained in Article 43, we are of
the opinion that the Act by which the national and festival holidays have
been increased is fully constitutional and does not, in any way, infringe the
right of the <ippellants to carry on their trade or business under Article 19( 1) C
(g ). The compulsory closure of the ind4strial concern on national and festival
holidays cannot be treated as unreasonable. It is protected by Clause (6) of
Article 19 and, therefore, cannot be treated to be violative of the Fundamental
Right under Article 19( 1)(g).

The plea under Article 14 also cannot be entertained. The decision by D
legislative amendment to raise the national and festival holidays is based
upon relevant material considered by the Government, including the fact that
the holidays allowed by the Central Government and other public sector
undertakings were far greater in number than those prescribed under the Act.
As pointed out earlier, the Act is a social legislation to give effect to the
Directive Principles of State Policy contained in Article 43 of the Constitution. E
The law so made cannot be said to be arbitrary nor can it be struck down
for being violative of Article 14 of the Constitution.

Learned counsel for the appellants contended that before raising the
national and festival holidays from their original number under the Parent Act, F
to the number of days contemplated by the Amending Act, the industries or
their representatives should have been given an opportunity of hearing. This
argument is wholly untenable. Principles of natural justice cannot be imported
in the matter -0f legislative action. If the Legislature, in exercise of its plenary
power under Article 245 of the Constitution, proceeds to enact a law, those
who would be affected by that law cannot legally raise a grievance that before G
the law was made, they should have been given an opportunity of hearing.

This principle may, in limited cases, be invoked in the case of sub-
ordinate legislation specially where the main legislation itself lays down that
before the sub-ordinate legislation is made, a public notice shall be given and
objections shall be invited as is usually the case, for example, in the making H
642 SUPREME COURT REPORTS (1998] SUPP. 2 S.C.R.

A of municipal bye laws. But the Principle of Natural Justice, including right of
hearing, cannot be invoked in the making of law either by the Parliament or
by the State Legislature.

No other point was pressed before us. We, consequently, find no merit • -
in this appeal which is dismissed but without any order as to costs.
B
S.V.K.L Appeal dismissed.