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Madras High Court · body

1955 DIGILAW 103 (MAD)

A. C. Arumugham v. Manager, Jawahar Mills Ltd. Salem Junction

1955-03-29

RAMASWAMI

body1955
Judgement ORDER :- This is a batch of Civil Revision petitions filed against the orders made by the learned District Judge of Salem in Appeals Nos. 186 and 279 to 283 of 1953, reversing the orders of the Additional Commissioner for Workmens compensation, Madras. 2. The facts are : In the first half-year of 1953 a cut in the supply of electricity was introduced under the orders of the Government of Madras. During that period when this cut was introduced the employer of the Jawahar Mills, Ltd. and the Mettur Industrials Limited, laid these employees and though they were available for work, work was not given to them as there was no work to be given and consequently wages were not paid. These employees therefore preferred applications before the Additional Commissioner for Workmens Compensation for payment of wages during this period under S. 15(3), Payment of Wages Act 4 of 1936 praying that the necessary directions may be given to their employers to pay them the delayed wages. The Additional Commissioner passed orders to the effect that the withholding of any portion of wages due for the wage period could not be brought under any of the permissible kinds of deductions mentioned in S. 7(2), Payment of Wages Act and that since the Standing Orders did not apply to the applicants, they being only monthly paid employees, the employees were entitled to the payments asked for and gave directions to the employers to that effect. The employers filed appeals therefrom and contended that the Payment of Wages Act was not applicable to this case and that in case it was even considered applicable, these applicants were workmen within the meaning of that Act and that the Standing Orders applied to them and that if the Standing Orders applied to them they were not entitled to wages for the period during which they had not worked and that no question of Relayed wages arose. In addition, during the course of the enquiry, two further contentions were raised by the employees that the appeals were not maintainable and further stood barred by limitation. The employers contended that the appeals were maintainable under the provisions of S. 17(1)(a) of the Act and that in the circumstances of this case the appeals were not preferred beyond the period of limitation prescribed under S. 17. The employers contended that the appeals were maintainable under the provisions of S. 17(1)(a) of the Act and that in the circumstances of this case the appeals were not preferred beyond the period of limitation prescribed under S. 17. The learned District Judge upheld the contentions of the employers and negatived the contentions of the employees and set aside the orders of the Additional Commissioner for Workmens Compensation and hence these Revision Petitions by the defeated employees. 3. The points that arise for consideration in these Revision Petitions are fourfold viz., 1. The scope of the Payment of Wages Act and its applicability to the circumstances of this case. 2. The scope of the Standing Orders certified under the Industrial Employment Act, 1946, and their applicability to the employees under consideration. 3. Scope of S. 17(1)(a), Payment of Wages Act and the maintainability of the appeals in the lower Court. 4. The principles of limitation applicable to appeals under S. 17(1), Payment of Wages Act. 4. In order to decide these four points I must now consider the relevant sections of the Payment of Wages Act, 1936. 5. The preamble which is the key-note to the Act whose short title is "An Act to regulate the payment of wages to certain class of persons employed in industry" is "Whereas it is expedient to regulate the payment of wages to certain classes of persons employed in industry; it is hereby enacted etc." The statement of Objects and Reasons mentioned is : "In 1926 the Government of India addressed Local Governments with a view to ascertain the position with regard to the delays which occurred in the payment of wages to persons employed in industry, and the practice of imposing fines upon them. The investigations revealed the existence of abuses in both directions and the material collected was placed before the Royal Commission on Labour which was appointed in 1929. The Commission collected further evidence on the subject and the result of their examination, with their recommendations, will be found on pages 211-221 and 236-241 of their report. The Government of India re-examined the subject in the light of the Commissions report and in February 1933 a Bill embodying the conclusions then reached was introduced and circulated for the purpose of eliciting opinion. The Government of India re-examined the subject in the light of the Commissions report and in February 1933 a Bill embodying the conclusions then reached was introduced and circulated for the purpose of eliciting opinion. A motion for the reference of the Bill to a Select committee was tabled during the Delhi Session of 1933-34, but was not reached, and the bill lapsed. The present Bill is based upon the same principles as the original but has been revised throughout in the light of the criticisms received when the original Bill was circulated" (Gazette of India, 1935, Part V p. 20,). 6. The object of the Act has been construed by a Bench of the Bombay High Court in - Arvind Mills Ltd. v. K.R. Gadgil, AIR 1941 Bom 26 (A). The Bench laid down that the general purpose of the Act is to provide that the employed persons shall be paid their wages in a particular form and at regular intervals and without any unauthorised deductions : (See also - F.W. Heligers and Co. v. Nageshchandra, AIR 1949 FC 142 (B) for an exposition of the, scheme of the Act and - A.R. Sarin v. B.C. Patil AIR 1951 Bom 423 (C) ) on those matters which fall exclusively within the purview of the tribunal appointed under the Act the exclusion of the jurisdiction of the civil Court is absolute: - Simpalax Manufacturing Co. Ltd. v. Allauddin, AIR 1945 Lah 1951 (D); Shammugger Jute Factory Ltd. (North) v. S.N. Modak, AIR 1949 FC 150 (E); Electro-Mechanical Industries Ltd. Madras v. Industrial Tribunal No. 2, AIR 1950 Mad 839 (F); Bhagwat Bai v. Union of India, AIR 1953 Nag 136 (G). 7. This Act applies to the payment of wages to four categories of persons of whom we are concerned here only with the first category viz., persons employed in any factory. The definition of "factory" under the Payment of Wages Act under S. 2(i) is the same as defined in Cl. (j) of S. 2, Factories Act 1934 (Act 25 of 1934). But the Payment of Wages Act does not define who are the persons to be considered as workers employed in these industrial establishments. For that purpose we have to turn to the Industrial Employment Standing Orders Act 20 of 1946. (j) of S. 2, Factories Act 1934 (Act 25 of 1934). But the Payment of Wages Act does not define who are the persons to be considered as workers employed in these industrial establishments. For that purpose we have to turn to the Industrial Employment Standing Orders Act 20 of 1946. This Act was enacted to require employers in industrial establishments to define the conditions of employment under them and the statement of objects and reasons runs as follows : "Experience has shown that standing orders defining the conditions of recruitment, discharge, disciplinary action, holidays, leave etc., go a long way towards minimising friction between the management and workers in industrial undertaking. Discussion on the subject at the tripartite Indian Labour conference revealed a consensus of opinion in favour of legislation. The Bill accordingly seeks to provide for the framing of standing orders in all industrial establishments employing one hundred or more workers. In the first instance the Act will apply to the categories of industrial establishments specified In Cl. 2(e), which include, besides factories and railways, mines, quarries and oilfields, tramway or motor, omnibus services, docks, wharves and jetties, inland steam vessels, plantations and workshops. Government will be competent to extend the Act to other classes of industrial establishments or to grant exemptions where necessary, by notification. Within six months from the date on which the Act becomes applicable to an industrial establishment the employer is required to frame draft standing orders and submit them to the certifying officer for certification. The draft should cover all the matters specified in the schedule to the Act and any other matters that Government may prescribe by rules. The certifying officer will be empowered to modify or add to the draft Standing Orders so as to render them certifiable under the Act. It will not be his function (nor of the appellate authority) to adjudicate upon their fairness or reasonableness. There will be a right of appeal against the decisions of the certifying officers. (Gazette of India, Part V, pp. 179-180 dated 13-4-1946). 8. The term workman is defined therein as any person employed in any industrial establishment to do any skilled or unskilled manual or clerical work for hire or reward but does not include any member of the armed forces of the Union. For the Madras Industrial Employment (Standing Orders) Rules, 1947, see Fort St. 179-180 dated 13-4-1946). 8. The term workman is defined therein as any person employed in any industrial establishment to do any skilled or unskilled manual or clerical work for hire or reward but does not include any member of the armed forces of the Union. For the Madras Industrial Employment (Standing Orders) Rules, 1947, see Fort St. George Gazette, 1947, Part I, R.S., elated 9-12-1947. The Standing Orders certified under the Industrial Employment Standing Orders Act, 1946, for the factories under consideration have been filed. (Reference : See the up-to-date and exhaustive commentary with case law, Rules and Regulations of all labour laws of the Central Government compiled by Sri R. Mathrubhutham and Srinivasan. The Indian Factories and Labour-Manual 2nd Edn (1952) M.L.J. publication). 9. The term "wages" payable to these persons employed in the factory is defined in S. 2(6) as follows : "Wages means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment express or implied, were fulfilled be payable whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise, to a person employed in respect of his employment or of work-done in such employment, and includes any bonus and/or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment, but does not include........" Regarding this clause the Select Committee in its report observed as follows : "We have also revised the definition of Wages. It seemed to us that in its original form it would have made it possible for an employer to circumvent the provisions relating to deduction by attaching conditions to payment of wages in whole or part, and forfeiting substantial sums for non-fulfilment of such conditions. Our revised definition is designed to include in wages everything, which the workman would receive if he fulfilled all the conditions, while S. 7 ensures that deductions for non-fulfilment of the conditions or for other reasons are limited to those permitted by the Bill". (For a definition of wages as including monthly paid wage earners see AIR 1951 Bom 423 (C) and as not including monthly paid workers see in - K.V.V. Sarma, In re, AIR 1953 Mad 269 (H) ). (For a definition of wages as including monthly paid wage earners see AIR 1951 Bom 423 (C) and as not including monthly paid workers see in - K.V.V. Sarma, In re, AIR 1953 Mad 269 (H) ). The term wages as used in most, at any rate, of the sections of the Act, plainly does not mean potential wages, but wages earned. The expression "remuneration which would if the terms of the contract were fulfilled be payable" in this section means no more than "remuneration payable on the fulfilment of the contract": AIR 1941 Bom 26 (A). 10. Section 7 provides for deductions that can lawfully be made from wages payable to employees. Thus except the deductions enumerated in Sub-S. (2) no other deduction can be legally made, and the provisions contained in S. 47(2), Railways Act, 1890 a would not affect the provisions of this section. Should an employer terminate his existing-contract with a servant, but offers to re-employ him on a lower rate of pay, there is nothing in this Act against it, and no question of deduction under the Act would arise : - Mahomed Haji Umar v. Divisional Superintendent, N.W. Rly., AIR 1941 Sind 191 (I). A reduction of certain amount per month from future pay of an employee as a penalty or punishment for the delinquencies committed by him amounts, in the absence of a fresh contract of service at a reduced rate of wages, to deduction within the meaning of S. 15 of the Act and as such deduction is not covered by Ss. 7 and 8, the employee is entitled to the refund of the deduction. (Ibid). Where an employer refuses to pay to an ex-employee the bonus to which he is entitled in pursuance of an award of an Industrial Court under the Bombay Industrial Relations Act, it is open to the Authority under the Payment of Wages Act to construe the award in order to determine under S. 15 whether the refusal was an authorised deduction or not. If after interpreting the award the authority decides that the claim of the employee was made within time as fixed by the award and orders the employer to pay the bonus, he acts within his jurisdiction and a writ of certiorari to quash the order cannot be issued against him : - Modern Mills Ltd. v. R. Mangalvedhekar, AIR 1950 Bom 342 (J). 11. The list of deductions given in S. 7(2) is exhaustive - (Padmakant Motilal v. Ahmedabad Municipal Borough, AIR 1943 Bom 9 (K) Dist. and doubted in - K.P. Mushran v. B.C. Patil, AIR 1952 Bom 235 ; (L), Chagla, C.J. and Bhagwati, J.) No other deduction from wages is legally permissible. Again, even the deductions provided by this section must be made in accordance with the provisions of Ss. 8 to 13 of the Act. Thus, it is not open to an employer in cases where an employed person leaves service without notice to forfeit wages in lieu of notice and deduct the amount of forfeiture from wages due, nor would it be open to the employer to recover cost of cloth damages by the operator on account of his negligence as was the practice before the Act came into force, for those deductions are not authorised by the Act : See H.P. Modys Minute of Dissent to the Select Committee Report. Any agreement or contract by which the employee agrees to any deduction other than those authorised under this Act would be null and void by S. 23. The words "In accordance with the provisions of this Act" in S. 7(2) refer to Ss. 8 to 13 of the Act. 12. Section 15 provides the procedure for hearing claims arising out of (a) deduction from wages; or (b) delay in payment of the wages i.e. wages which are admittedly due but the payment of which has been postponed on some excuse or another AIR 1945 Lah 195 (D). It also empowers the authority hearing the claim to direct (a) payment of compensation by the employer (or other person responsible for the payment of wages) to the employee for unauthorised deduction or delay; or (b) payment of penalty by the employee (to the employer or other person responsible for payment of wages) for malicious or vexatious claim. This Act furnishes a summary remedy for wages earned in an office and not paid, but it does not provide a remedy for investigation of quarrels which concern the office itself, in other words, whether a man should be retained in one job or should be reverted to another job; - Kishan Chand v. Divisional Supt. Lahore Divin. North West Rly., AIR 1948 Lah 202 (M). Lahore Divin. North West Rly., AIR 1948 Lah 202 (M). Cases of unjustifiable reversion cannot be decided by the authority appointed under the Act exercising jurisdiction : under Sub-S. (3) of this section (ibid). Section 15 itself clearly limits the jurisdiction (conferred upon the Special Tribunal set up under this Act) only to two points viz. (1) all claims arising from deductions from wages, and (2) delay in payment of the wages. Therefore, if an employer makes deductions from the wages or if he delays in the payment of wages beyond the time prescribed by S. 5 the employee is entitled to go to the Authority under this section and apply for an order in his favour. It is certainly competent to the authority under the Act to construe the terms of the contract of service in order to determine what wages are to be paid and even if the contract of employment has been terminated, it is open to the Authority to construe its terms in order to determine whether any sums are payable by reason of determination. It is also open to him to decide whether a person has been employed or not and the mere denial of the factum of employment cannot oust the jurisdiction of the authority. The jurisdiction of the Authority really is to determine the terms of the contract in so far as they relate to the payment of wages and in so far as he has to decide the liability of the employer to pay wages under the terms of the contract. But that jurisdiction does not extend to determining the question as to whether the contract has terminated as alleged by the employer or the contract still subsists as alleged by the servant AIR 1951 Bom 423 (C). The expression "delayed wages" in Sub-S. (3) can only mean wages which are admittedly due but the payment of which has been postponed on some excuse or the other : AIR 1945 Lah 195 (D). 13. Section 17 provides that an appeal shall lie from every direction of the Authority made under S. 15(3) or S. 15(4) except that no appeal from a direction made under S. 15(3) shall be maintainable. (a) by the employer (or other person responsible for the payment of wages), if the total sum directed to be paid by way of wages and compensation does not exceed Rs. (a) by the employer (or other person responsible for the payment of wages), if the total sum directed to be paid by way of wages and compensation does not exceed Rs. 300; or (b) by the employed person, if the total amount of wages withheld from him or from the unpaid group (to which he belonged) does not exceed Rs. 50. In case, however, of penalty imposed under S. 15(4), an appeal shall lie irrespective of the amount involved. An appeal under this section shall be (a) in a Presidency Town, to a Court of Small Causes; and (b) elsewhere, to the District Court. Subject to the result of an appeal under this section, an order of the Authority, made under S. 15(3) or S. 15(4) shall be final and cannot be called in question in any Court : see Sub-S. (2). The word final prohibits an appeal and not an application for revision : Shrinivas Laxman Rao v. Supdt. Govt. Printing Press Nagpur, AIR 1945 Nag 94 (N) and - Jogendrai Nath Chatterjee and Sons v. Chandreshwar Singh AIR 1951 Cal 29 (O). But the High Court may revise an order passed by the District Court in appeal under this section, for a District Court or a Court of Small Causes decides a case within the meaning of S. 115. C.P.C. when it decides the appeal : Debidutt Dube v. Central India Electric Supply Co. Ltd. Lahore, AIR 1945 Nag 244 (P) and AIR 1951 Cal 29 (O). (The Revisional Jurisdiction of the High Court under S. 115, C.P.C. on the ground that the Authority appointed under the Act is not a civil Court has been held not exercisable in - Sawatram Ram Prasad Mills Co. Ltd. v. Vishnu Pandurang AIR 1950 Nag 14 (Q) - Triloki Nath v. Krishan Sugar Mills Ltd. Baharanpur AIR 1946 All 276 (R) - Question - Article 227 of the Constitution of India ?) 14. The limits in regard to preferment of appeal from directions or orders are as follows. An order rejecting a claim in toto is also appealable, for the ward direction in Sub-S. (1) must be construed as including a refusal to make a direction : AIR 1941 Sind 191 (I)- Percontia Rajendranath v. Manager French Motor Car Co. Ltd., AIR 1952 Cal 928 (S); P. Kumar v. Running Shed Foreman E.I. Ry. An order rejecting a claim in toto is also appealable, for the ward direction in Sub-S. (1) must be construed as including a refusal to make a direction : AIR 1941 Sind 191 (I)- Percontia Rajendranath v. Manager French Motor Car Co. Ltd., AIR 1952 Cal 928 (S); P. Kumar v. Running Shed Foreman E.I. Ry. AIR 1946 Oudh 148 (T); Khemanand v. E. Ry., AIR 1943 All 243(U); Clause (a) of Sub-S. (1) provides for an appeal only of the total sum directed to be paid by way of wages as well as compensation exceeding Rs. 300/-. When no amount of wages is ordered to be paid, an order for compensation alone which does not exceed Rs. 300/- is not appealable under this clause. Under Cl. (a) of Sub-S. (1) an appeal lies if the sum directed to be paid exceeds Rs. 300/- and it is net necessary that such a sum should include the amount payable on account of compensation. The words "by way of wages and compensation" in this clause are by way of a description and not a condition precedent for the maintainability of an appeal : AIR 1951 Cal. 29 (O). Under this clause the right of appeal depends on monetary value of the claim made by the applicant and not on any finding of the trial Court. The meaning of the clause is clear, and there is no jurisdiction for holding otherwise on the ground that the section lends itself to be exaggeration of claims for the purpose of making any orders passed thereon appealable : AIR 1941 Sind 191 (1). (For a lucid exposition see Encyclopaedia of Labour Laws and Industrial Disputes, a unique and most welcome venture of the Federal Law Depot Delhi, under the general Editorship of A.N. Aiyer Vol. 1, P. 368). 15. In this connection, two decisions of the Allahabad High Court and this High Court may be usefully considered. In Chief Inspector of Factories v. V.K. Modi, AIR 1952 All 804 (V) it was held : "There is nothing in S. 17 to suggest that before an order can be appealable, both wages and compensation should be ordered to be paid. All that is necessary is that the total sum ordered to be paid should exceed Rs. 300/-. It may be composed of wages alone or of compensation alone or of wages and compensation both. All that is necessary is that the total sum ordered to be paid should exceed Rs. 300/-. It may be composed of wages alone or of compensation alone or of wages and compensation both. The Magistrate is not bound to award compensation even when he directs payment of delayed wages he has a discretion not to order any compensation while directing payment of delayed wages. Just as the amount ordered, in order to make the order appealable, may consist entirely of wages, so also it may consist entirely of compensation for the purposes of S. 17. Such an order is illegal is besides the point". (See Chimanlal Ishwarlal v. Junior Inspector of Factories AIR 1942 Bom 273 (W) for the position no wages directed, order being for mere compensation, no appeal lies.) 15a. In -Union of India v. Nataraja Sastrigal, AIR 1952 Mad 808 (X) Subba Rao J. has elaborately explained that a single application can be filed on behalf of a number of employees belonging to the same unpaid group under Ss. 15 and 16 Payment of Wages Act and that if the amount directed to be paid in such application exceeds Rs. 300/- there is a right of appeal to the Court of Small Causes (or District in the mofussil) given to the employer. 16. An appeal under this section must be preferred within 30 days from the date of the direction sought to be appealed against. This period cannot be extended for any sufficient cause under the provisions of S. 5, Limitation Act (the Act ?) having been not made applicable to such an appeal. The provision of Ss. 6 to 8, 19 to 21 Limitation Act will also not apply while the provisions contained in Ss. 4, 9 to 18 and 22 will apply, to such appeals : S. 29(2), Limitation Act. Thus, the time spent in obtaining a copy of the direction sought to be appealed against shall be excluded under S. 12 Limitation Act. The term made has to be liberally construed as the date on which the order is communicated to the concerned parties and reaches them. Thus, the time spent in obtaining a copy of the direction sought to be appealed against shall be excluded under S. 12 Limitation Act. The term made has to be liberally construed as the date on which the order is communicated to the concerned parties and reaches them. It would be tantamount to the signing and dating and pronouncing and thereby making it in their presence because the Additional Commissioner for Workmans Compensation does not pronounce his orders as enjoined under the Codes of Civil and Criminal Procedure, in the presence of the parties or Advocates on notified dates. On the other hand, the procedure for him is to pass orders wherever he is and which seems to be a movable affair also, and a copy of the order signed and dated is forwarded "By Orders" by the Office Assistant with, in case where an appeal lies, a separate sheet embodying the substance of the evidence. In short, the appeal being the sole remedy, justice demands that Courts should carefully protect it and a proper construction should be placed upon the word "made" in order to give full effect to the period of time granted for filing the appeal and Courts must not be astute to defeat the right of appeal of parties by putting a narrow construction. Procedure is a machinery of law after all channels and means by which the law is administered and justice reached. It strangely departs from its proper office if in plate of facilitating it, it is permitted to obstruct and even to extinguish legal rights and is thus made to govern where it ought to subserve : Per Lord Penzance in - Kendall v. P. Hamilton (1879) 4 SC 504 at p. 525 (Y), cited with approval in the Civil Justice Committee Report 1924-25, page xxvii. 17. Bearing these principles in mind if we examine the facts of this case, we have to hold that the learned District Judge has decided rightly all the four points. It will be seen, how on the facts of this case the applications of the employees are for potential wages and not for delayed wages. 17. Bearing these principles in mind if we examine the facts of this case, we have to hold that the learned District Judge has decided rightly all the four points. It will be seen, how on the facts of this case the applications of the employees are for potential wages and not for delayed wages. In such a case the remedy of the, employees was to claim compensation under the Industrial Disputes Act, the tribunals set up thereunder having a much wider jurisdiction, as pointed out in AIR 1949 FC 150 (E) and AIR 1951 Cal 29 (O). In fact these very employees have secured such compensation. The dispute of these employees for compensation from their employers on account of the fact that they were denied employment by reason of reduction in the supply of electrical energy by the Government was disposed of by the Special Industrial Tribunal in Industrial Dispute No. 1 of 1953, relating to the dispute between the Textile Mills and the Workers employed in them, in G.O. No. Ms. No. 2310, Development, dated 16-5-1953 and published in the Fort St. George Gazette dated 10-2-1954. The Tribunal gave an award in favour of these employees corning to the conclusion that the workers were entitled to compensation for such involuntary unemployment. Therefore these applications for relief under the Payment of Wages Act were totally incompetent. 18. Standing Orders governing these employees and which have been filed show that they are workmen and the learned District Judge rightly field that the mere fact that these employees are paid monthly salaries which did not exceed Rs. 200/- would not take them from the category of workmen. Once we come to the conclusion that the Standing Orders applied to these workmen, these Standing Orders definitely state that any workman paid off under other paragraphs due to stoppage or closure during working hours shall not be considered as dismissed, from service but as temporarily unemployed and shall not be entitled to wages except to the extent mentioned in the preceding paragraphs of those approved Standing Orders. Consequently these employees would not be entitled to wages for the period of their involuntary unemployment. 19. In view of the decisions cited above, point (3) is without any substance. 20. In regard to these C.R.Ps. it is common ground that in regard to one appeal filed by Mr. Consequently these employees would not be entitled to wages for the period of their involuntary unemployment. 19. In view of the decisions cited above, point (3) is without any substance. 20. In regard to these C.R.Ps. it is common ground that in regard to one appeal filed by Mr. M.R. Narayanaswami Ayyar, it was preferred within 30 days of the order being signed and dated by the Additions Commissioner for Workmens Compensation. In regard to the other appeals filed by Mr. O.T.G. Nambiar they have been preferred within 30 days of the communication of the orders to them by the Additional Commissioner. I have already discussed how the term "made" should be construed. 21. In the result, there are no grounds to interfere with the appellate orders made by the learned District Judge. So these C.R. Ps. are dismissed with costs. One fee for Mr. M.R. Karayanaswami Ayyar and another fee for Mr. O.T.G. Nambiar. Petitions dismissed.