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2008 DIGILAW 1694 (ALL)

SUSHIL KUMAR MASI. v. LIFE INSURANCE CORPORATION OF INDIA, MORADABAD

2008-08-20

ARUN TANDON, ASHOK BHUSHAN

body2008
JUDGMENT By the Court.—Heard Sri Siddhartha Srivastava, learned counsel for the appellants, Sri Sanjeev Singh and Sri Prakash Padia, learned counsel for respondent No. 1 and Sri Govind Saran, learned counsel for respondent Nos. 2 and 3. 2. This intra Court appeal has been filed by five appellants against the order passed by the learned Single Judge dated 8th January, 2008, whereby a bunch of writ petitions (154 in all) have been decided under a common Judgment. 3. Facts in brief relevant for deciding the present special appeal, which arises out of Civil Misc. Writ Petition No. 56438 of 2007; Sushil Kumar Masi and others v. Life Insurance Corporation of India and others, decided under the same common judgment are as follows : 4. The writ petitioners-appellants are employees of Indian Railways at present working under the Divisional Railway Manager, Moradabad Division, Northern Railway, Moradabad. The writ petitioners approached this Court by means of the aforesaid writ petition stating therein that they have individually opted for ‘Salary Saving Scheme’ launched by the Life Insurance Corporation of lndia (hereinafter referred to as the ‘LIC’). The scheme is applicable particularly to the salaried class of employees working in Government or Semi Government Organization. The scheme was optional, however, in respect of employees like the petitioners who had exercised the option a definite advantage of rebate of 5% on payment of the premium on the policy amount has been provided for. In terms of the authorization made by the petitioners-appellants and similarly situate other employees, deductions towards payment of the premium from the salary payable qua the aforesaid ‘Salary Saving Scheme’ was being made by the Railways with specific reference to the provisions of Section 7 (d) of the Payment of Wages Act, 1936. The premium so deducted from the salary was transmitted by the Railways to the LIC. 5. Because of such deductions petitioners-appellants were availing the benefit of rebate of 5% on the premium. By means of the order dated 30th April, 2007 followed by the consequential order dated 2/3rd July, 2007, the Railways decided to not to make such deductions from the salary of the employees towards premium payable to the LIC qua Salary Saving Scheme. The net result of such decision of the Railways by which the petitioners feel aggrieved is that petitioners have been dis-entitled to the benefit of 5% rebate on the premium amount. The net result of such decision of the Railways by which the petitioners feel aggrieved is that petitioners have been dis-entitled to the benefit of 5% rebate on the premium amount. Therefore, they approached this Court for quashing of the aforesaid orders and for a writ of mandamus commanding the Railways to continue the making of deductions from salary towards premium in respect of Salary Saving Scheme of LIC. 6. The learned Single Judge after hearing the learned counsel for the parties, has held that the issue subject matter of dispute in the present writ petition answers the description of a service matter covered by Section 3 (q) of the Administrative Tribunal Act, 1985, in view of Section 14 (d) has to be adjudicated by the Central Administrative Tribunal at the first instance. For arriving at the said conclusion, the learned Single Judge has referred to the law laid down by the Hon’ble Supreme Court of India in the case of L. Chandra Kumar v. Union of India and others, AIR 1997 SC 1125 , wherein it has been held that an employee covered by the Act, 1985, in respect of service matter, should first approach the Central Administrative Tribunal before invoking the jurisdiction of the High Court under Article 226 of the Constitution of India. The writ petition has accordingly been dismissed by the learned Single Judge after granting liberty to the petitioners to approach the Central Administrative Tribunal. It is against this judgment and order of the learned Single Judge dated 8th January, 2008 that the present special appeal has been filed. 7. The impugned judgment and order is being questioned basically on two grounds, (a) the learned Single Judge was not justified in recording that the writ petitions were not maintainable, and (b) deductions towards insurance premium is not a service matter therefore, not covered by Section 3 (q) of the Central Administrative Tribunal in respect of which Central Administrative Tribunal could have the jurisdiction. 8. We have heard learned counsel for the parties and have examined the records in detail. 9. So far as the first issue canvassed by the appellant is concerned, this Court may record that the operative portion of the judgment and order of the learned Single Judge may not be strictly correct to the extent, it records that the writ petition is not maintainable. 9. So far as the first issue canvassed by the appellant is concerned, this Court may record that the operative portion of the judgment and order of the learned Single Judge may not be strictly correct to the extent, it records that the writ petition is not maintainable. As a matter of fact from the judgment and order of the learned Single Judge, it is apparent that the learned Single Judge was of the opinion that in view of the judgment of the Hon’ble Supreme Court of India in the case of L. Chandra Kumar (supra), the petitioner must first approach the Central Administrative Tribunal before invoking the jurisdiction of this Court under Article 226 of the Constitution of India and it is in this background that liberty has been granted to the petitioners to approach the Central Administrative Tribunal qua the dispute raised. 10. Learned counsel for the petitioner-appellants could not dispute that in view of the judgment of the Hon’ble Supreme Court in the case of L. Chandra Kumar (supra) as also in view of the judgment of Hon’ble Supreme Court in the case of Kendriya Vidyalaya and another v. Subhash Sharma, 2002 (4) SCC 145 , specifically pr. 12, Writ Court has to insist upon a writ petitioner to approach the Central Administrative Tribunal in respect of matters covered by the said Act at the first instance before invoking the jurisdiction of this Court under Article 226 of the Constitution of India. The Constitution Bench Judgment of the Hon’ble Supreme Court in the case of L. Chandra Kumar (supra) is the law of the land and has to be followed by the Hon’ble High Court. We therefore, record that first objection raised on behalf of the petitioners being hyper technical in nature is rejected. 11. So far as the second objection raised on behalf of the petitioners to the effect that the dispute raised by means of writ petition did not answer the description of service matter within the meaning of Section 3 (d) of the Administrative Tribunal Act, 1985, as the said deductions were being made at the option of the employees concerned with reference to Section 7 (k) of the Payment of Wages Act, 1936. It would be appropriate that the statutory provisions applicable may be noticed by this Court. 12. It would be appropriate that the statutory provisions applicable may be noticed by this Court. 12. For ready reference Section 3 (q) of Administrative Tribunal Act, 1985 reads as follows : "3. Definitions.—............. (q) “service matters”, in relation to a person, means all matters relating to the conditions of his service in connection with the affairs of the Union or of any State or of any local or other authority within the territory of India or under the control of the Government of India, or, as the case may be, of any corporation [or society] owned or controlled by the Government, as respects— (i) remuneration (including allowances), pension and other retirement benefits; (ii) tenure including confirmation, seniority, promotion, reversion, premature retirement and superannuation; (iii) leave of any kind; (iv) disciplinary matters; or (v) any other matter whatsoever;” 12-A. Section 7 of the Payment of Wages Act reads as follows : “7. Deductions which may be made from wages—(1).......................... (2) ………...................................... …………................................... (k) deductions, made with the written authorisation of the person employed for payment of any premium on his life insurance policy to the Life Insurance Corporation Act, 1956 (31 of 1956), or for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such Government;]” 13. Having noticed the aforesaid statutory provisions, it would be worthwhile to reproduce paragraph-20 of the judgement of the Hon’ble Supreme Court in the case of L. Chandra Kumar (Supra). The Hon’ble Supreme Court while considering the scope of the Act, 1985 has held as follows : “20. The Act and its provisions will be analysed in the course of this judgment. However, a preliminary appraisal of the framework of the Act would indicate that it was intended to provide a self-contained, almost wholly exclusive (the exceptions being specified in Section 28) forum for adjudication of all service-related matters. The Tribunals created under the Act were intended to perform a substitutional role as opposed to—and this distinction is of crucial significance—a supplemental role with regard to the High Courts.” 14. From the aforesaid, it is apparently clear that the Central Administrative Tribunals have been held to provide a self-contained, almost wholly exclusive forum for adjudication of all service-related matters (Exceptions being specified in Section 28 of the Act). From the aforesaid, it is apparently clear that the Central Administrative Tribunals have been held to provide a self-contained, almost wholly exclusive forum for adjudication of all service-related matters (Exceptions being specified in Section 28 of the Act). The Central Administrative Tribunals are to provide a supplemental role with regard to the High Courts. 15. Viewed in the aforesaid prospective, it will be seen that the words “any other matter whatsoever” contained in Section 3 (q) of the Administrative Tribunal Act, 1985, which has been quoted herein above, would include all matters which are relateable to the service of an employee, engaged with the affairs of the Union or State or any other Local Authority, under the control of the Government of India, as the case may be. 16. It is not in dispute that the employees of the Railways are within the jurisdiction of the Tribunal with reference to Section 14 of Chapter-lll of the Administrative Tribunal Act and that payment of wages of an employee by the Railways is necessarily a condition of service, in any case a service related matter, under which employee become entitled for his wages for discharging duties with the Railways. 17. So far as the Payment of Wages Act, 1936 is concerned, it may be noticed that the Act has been promulgated to ensure that the wages payable to the employees covered by the Act are disbursed by the employers within the prescribed time limit and no deductions other than those authorised by law are made by the employers. Thus it will be seen that the Payment of Wages Act itself has been incorporated for the purposes of ensuring that the employees are paid their wages within the time specified without any unlawful deductions. Payment of wages for the duties discharged is a necessary corollary to the terms and conditions of service, in any case a service related matter and such payment is dependant upon the relationship of employee and employer. 18. Payment of wages for the duties discharged is a necessary corollary to the terms and conditions of service, in any case a service related matter and such payment is dependant upon the relationship of employee and employer. 18. In view of the aforesaid, this Court has no hesitation to hold that the provisions of Payment of Wages Act apply to the cases, only where they exists a relationship of employee and employer and therefore, payment of wages without any unlawful deductions and with deductions as contemplated under Section 7 of the Payment of Wages Act is only a service related matter totally is dependant upon the relationship of employee and employer. 19. Reference may also be had to the definition of wages under Section 2 (vi) of the Payment of Wages Act, which reads as follows : “2. Definitions—..... 19. Reference may also be had to the definition of wages under Section 2 (vi) of the Payment of Wages Act, which reads as follows : “2. Definitions—..... (vi) “wages" means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes— (a) any remuneration payable under any award or settlement between the parties or order of a Court; (b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period; (c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); (d) any sum which by reason of termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions but does not provide for the time within which the payment is to be made; any sum to which the person employed is entitled under any scheme framed under any law for the time being in force; but does not include-— (1) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award of settlement between the parties or order of a Court; (2) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government ; (3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon; (4) any travelling allowance or the value of any travelling concession; (5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or (6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).” 20. Viewed in the aforesaid prospective, it is clear that wages are remuneration expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of working in such employment. 21. It is, therefore, apparently clear that payment of wages is part and partial of the terms and conditions of employment and Payment of Wages Act only regulates such payment to be made within the time specified without any unlawful deductions and, with such deduction as permissible under law, the petitioners-appellants claim that deduction be made from their salary towards the contribution of the scheme floated by the Life Insurance Corporation, such a claim is necessarily referable as a service matter within the jurisdiction of the Central Administrative Tribunal, as per Section 3 (q) (v) of the Administrative Tribunal Act, which is wide enough to include such disputes also. 22. We may now deal with the plea raised on behalf of the petitioner-appellant to the extent that a dispute qua deduction towards payment of the premium for the ‘Salary Saving Scheme’ was being made by the Railways at the option of the employees concerned under Section 7 (2) (k) of the Payment of Wages Act, 1936, and therefore, not a service matter. 23. In our opinion the contention so raised on behalf of appellant is totally misconceived. The rights flowing from the Payment of Wages Act are dependant upon the relationship of employee and employer. 24. On behalf of the appellants it has been vehemently contended that the relief prayed in the writ petition was for a direction upon the Railways to make the deductions from the wages payable to the writ petitioners towards payment of insurance premium, with reference to Section 7 (2) (k) of the Payment of Wages Act. While making such deductions, the Railway was to act as an agent of Life India Corporation and that such deductions from the wages towards the premium cannot be termed to be a condition of service and outside Section 3 (q) (v) i.e. ‘any other matter whatsoever’, inasmuch as said clause has to be read as ejusdem generis with the main Section. 25. Learned counsel for the appellants has placed reliance upon the judgments of the Hon’ble Supreme Court in the case of Babli v. Government of NCT, 2002 Lab. 25. Learned counsel for the appellants has placed reliance upon the judgments of the Hon’ble Supreme Court in the case of Babli v. Government of NCT, 2002 Lab. I.C. 4, in the case of Grasim Industries Ltd. v. Collector of Customs, (2002) 4 SCC 7, and in the case of Delhi Electricity Supply Undertaking v. Basanti Devi, AIR 2000 SC 43 . 26. To elaborate, it is contended that the deductions made from the wages towards insurance premium is only a facility provided by the employers under authorisation by the employees, such providing of facility would not constitute a service matter. Reliance in that regard has been placed upon the judgment of the Hon’ble Supreme Court in the case of Union of India v. R.K. Pathania, 2003 Lab. I.C.1043, in the case of Secretary Central Board of Direct Taxes v. B. Shyam Sunder, (2001) 9 SCC 87 , in the case of Kendriya Vidyalaya Sangathana v. Ram Kumar, 2003 Lab. I.C. 3840, in the case of H. Mukherji v. Swadesh Kumar Bhargava, 1994 Mh. L.J. 1212, and in the case of Shivabai v. State of Karnataka, 1996 Lab. I.C. 745. 27. We are unable to accept the contention so raised on behalf of the appellants. We may record that the words ‘any other matter whatsoever as used in Section 3 (q) (v) of the Act, 1985 are wide enough to include within its ambit, all disputes which may be referable to the terms of employment dependant upon the relationship between employees-petitioners and the employers-Railways. 28. As already noticed above, payment of wages for duties discharged is a terms and condition of service. Payment of wages is for the service rendered by the employee to the employer. Payment of Wages Act regulates the timely payment of full wages without any unlawful deductions. Relationship of employee and employer is a condition precedent for any of the provisions of the Payment of Wages Act being applied. 29. The words ‘any other matter whatsoever’ would therefore, cover the dispute which has been raised by the writ petitioners in the writ petition giving rise to the present special appeal, inasmuch as if the petitioners are not employees of the Railways, there can be no claim for invocation of Section 7 (2) (k) of Payment of Wages Act. 29. The words ‘any other matter whatsoever’ would therefore, cover the dispute which has been raised by the writ petitioners in the writ petition giving rise to the present special appeal, inasmuch as if the petitioners are not employees of the Railways, there can be no claim for invocation of Section 7 (2) (k) of Payment of Wages Act. The words ‘any other matter whatsoever are wide enough to include all matters relating to service between employer and employee, and the Central Administrative Tribunal will have the initial jurisdiction to enter into such disputes. 30. The judgments relied upon by the learned counsel for the appellants are clearly distinguishable in the facts of the present case for the following reasons : (a) (i) Babli v. Government of NCT (supra) : in a case where action for eviction was undertaken qua unauthorised occupation of the Government Premises. Unauthorised occupation was held as not covered by Service Matter in absence of relevant service Rules. (ii) Grasim Industries Ltd. v. Collector of Customs (supra) : explains the principles of ejusdem generis and held that if language used is clear, the intention of the legislature is to be granted from the language used. (b) Delhi Electricity Supply Undertaking v. Basanti Devi (supra): lays down that the employer while making deduction from salary/wages towards premium of insurance policy acts as an agent of the Insurance Company. The issue was as to whether non-payment of premium to LIC by the employer would frustrate the contract of insurance or not. (c) Union of India v. R.K. Pathania, Secretary Central Board of Direct Taxes v. B. Shyam Sunder, Kendriya Vidyalaya Sangathan v. Ram Kumar, H. Mukherji v. Swadesh Kumar Bhargava, and Shivabai v. State of Karnataka (supras): are cases where it has been held that any faculty provided outside terms and conditions of employment would not constitute a service matter. 31. After the arguments advanced had practically come to an end, learned counsel for the appellant submitted that the dispute as raised in the writ petition was also cognizable by Section 15 of the Payment of Wages Act by an authority constituted thereunder and such powers of the Payment of Wages Act are saved by Section 28 of the Administrative Tribunals Act and therefore, according to him, the Central Administrative Tribunal will have no jurisdiction in the matter. For ready reference Section 28 reads as follows : “28. For ready reference Section 28 reads as follows : “28. Exclusion of jurisdiction of Courts except the Supreme Court under Article 136 of the Constitution.—On and from the date from which any jurisdiction, powers and authority becomes exercisable under this Act by a Tribunal in relation to recruitment and matters concerning recruitment to any Service or post or service matters concerning members of any Service or persons appointed to any Service or post, [no Court except— (a) the Supreme Court; or (b) any Industrial Tribunal, Labour Court or authority constituted under the industrial Disputes Act, 1947 (14 of 1947) or any other corresponding law for the time being in force, shall have], or be entitled to exercise any jurisdiction, powers or authority in relation to such recruitment or matters concerning such recruitment or such service matters.” 32. As already noticed above, the Hon’ble Supreme Court in the case of L. Chandra Kumar (supra) has clarified that all authorities except those excluded under Section 28 will have no jurisdiction to try the dispute pertaining to the service matter of the employees covered by the Central Administrative Tribunal Act. 33. We do not think it necessary to enter into the said aspect of the matter any further, inasmuch as if petitioner-appellant feels that the controversy raised in the writ petition can be examined under Section 15 of the Payment of Wages Act, they are at liberty to approach the Authority under the Payment of Wages Act also. We have serious doubts as to whether the relief prayer in the writ petition can be entertained and granted under Section 15 of the Payment of Wages Act. Further, no such plea was raised before the Hon’ble Single Judge nor has been examined under the impugned judgment. 34. In view of the aforesaid, we see no reason to interfere with the impugned judgment and order of the learned Single Judge dated 8th January, 2008. However, it is provided that if the petitioners are so advised, they may seek their remedy under Section 15 of the Payment of Wages Act, as may be permissible under law. 35. The special appeal is dismissed subject to the observations made above. —————