Shakumbari Sugar and Allied Industrial Limited, District Saharanpur v. Deputy Labour Commissioner, U. P. , Saharanpur Region, Saharanpur and Others
2013-05-30
TARUN AGARWALA
body2013
DigiLaw.ai
Tarun Agarwala, J.;— An application for payment of wages for the month of April and May, 2010 amounting to Rs.2,40,000/- was filed by 16 workers against the contractor and the principal employer under Section 3 of the U.P. Industrial Peace (Timely Payment of Wages) Act, 1978 (hereinafter referred to as the Act of 1978). It was alleged that the workers, who were working as Malis, Sweepers and Cooks in the Guest House were not paid their wages and that the employers had committed a default. Notices were issued by the Prescribed Authority to the contractor as well as to the principal employer. The principal employer filed his objections contending that there is no master and servant relationship between the principal employer and the workers in question and that these workers were engaged by a contractor who was licensed under the Contract Labour (Regulation and Abolition) Act, 1970 (hereinafter referred as the Act of 1970). The contractor also appeared and filed his objections admitting that the workers in question were engaged by him and also contended that these workers never came forward to collect their cheques, which are still lying with him and, consequently, there was no wilful default in the payment of wages. The contractor also contended that these workers went on an illegal strike. The contractor, accordingly, produced the wage bill and deposited the cheques of each individual workers and requested the authority to disburse the wages to its workers. The matter should have ended there but the authority in his over exuberance found that the wages paid by the contractor to its workers was not in accordance with the notification issued by the State Government under the Minimum Wages Act and accordingly held that the contractor was liable to pay the wages to its workers as per the notification and was liable to pay the difference of the amount. The Prescribed Authority by the impugned order issued a recovery certificate for recovery of Rs.1,26,993/- being the difference of the wages paid by the contractor and the amount as per the notification issued under the Minimum Wages Act. The Prescribed Authority also held that since the principal employer was responsible for the payment of wages under Section 21 of the Act of 1970, the authority directed that the recovery be made from the principal employer.
The Prescribed Authority also held that since the principal employer was responsible for the payment of wages under Section 21 of the Act of 1970, the authority directed that the recovery be made from the principal employer. The principal employer, being aggrieved by the said order, has filed the present writ petition. Heard Sri Shakti Swarup Nigam, the learned counsel for the petitioner and Sri Gopal Narain, the learned counsel for the worker-respondent no.3. The learned counsel for the petitioner contended that the Act is applicable to the industrial establishment as a whole and that the default in the wage bill is for all the workers in the establishment. It was contended that the Act was not applicable for an individual worker. In the instant case, only the workers of the contractor have filed the claim application, whereas, the petitioner, being a sugar factory, employs a large number of workers and, consequently, the application under Section 3 of the Act of 1978 was not maintainable. In support of his submission the learned counsel for the petitioner placed reliance upon the decision of the Supreme Court in Modi Industries Ltd. Vs. State of U.P. and others, 1994 (1) SCC 159 wherein the Supreme Court held in paragraph 7 that the Act deals with defaults in payment of the wage bill of all the workmen in the establishment and that it was not meant to provide a remedy for the default in payment of wages of an individual workman. The Supreme Court further held that the object of the Act was not so much to seek payment of wages to an individual workman but to prevent industrial unrest and disturbance of industrial peace on account of the default on the part of the workman in making payment of wages to their work force as a whole. On the other hand, the learned counsel for the respondent contended that substantial justice has been done and that the wages as per law has been paid, which requires no interference in a writ jurisdiction. In support of his submission, the learned counsel for the respondent has placed reliance upon a decision in Mohd. Sohail and others Vs.
On the other hand, the learned counsel for the respondent contended that substantial justice has been done and that the wages as per law has been paid, which requires no interference in a writ jurisdiction. In support of his submission, the learned counsel for the respondent has placed reliance upon a decision in Mohd. Sohail and others Vs. IIIrd Additional District Judge and another, AIR 1988 SC 95 in which it was held that even though no appeal lay to the District Judge against the order of the Prescribed Authority, the High Court declined to interfere on the ground that even though the order of the Prescribed Authority was illegal, the same was rightly set aside by the District Judge. In that scenario, the Supreme Court held that since substantial justice has been done and an improper order of the Prescribed Authority has been set aside, the High Court rightly did not interfere in the matter. Having heard the learned counsel for the parties, the Court finds that the statements of Objects and Reasons given under the Act of 1978 indicates that the provisions of the Payment of Wages Act was found to be inadequate to ensure timely payment of wages and that the incidence of disturbance of industrial peace was greater in establishment and, therefore, it was considered necessary to provide that if the wage bill in default exceeded Rs.50,000/-, the amount would be recoverable as arrears of land revenue. This became essential because it was found that there was a tendency of the employers to keep large amount of wages in arrears. The Supreme Court analysed the provisions of the Act of 1978 in Modi Industries Ltd. Vs. State of U.P. and others, 1994 SCC (L & S) 286 in which the Supreme Court held : "8. The inquiry under Section 3 being thus limited in its scope, the Labour Commissioner's powers extend only to finding out whether the workmen who have put in the work were paid their wages as per the terms of their employment and within the time stipulated by such terms. If the Labour Commissioner is satisfied that the workmen, though they have worked and are, therefore, entitled to their wages, are not paid the same within time, he has further to satisfy himself that the arrears of wages so due exceed Rs.50,000/-.
If the Labour Commissioner is satisfied that the workmen, though they have worked and are, therefore, entitled to their wages, are not paid the same within time, he has further to satisfy himself that the arrears of wages so due exceed Rs.50,000/-. It is only if he is satisfied on both counts that he can issue the certificate in question. Under the Act, the Labour Commissioner acts to assist the workmen to recover their wages which are admittedly due to them but are withheld for no fault on their behalf. He does not act as an adjudicator if the entitlement of the workmen to the wages is disputed otherwise than on frivolous or prima facie untenable grounds. When the liability to pay the wages, as in the present case, is under dispute which involves investigation of the questions of fact and/or law, it is not the function of the Labour Commissioner to adjudicate the same. In such cases, he has to refer the parties to the appropriate forum." The Supreme Court found that the inquiry under the Act was limited only to find out whether the workman had earned their wages as per the terms of their employment or not and if the authority was satisfied that the workers had worked and were entitled to their wages and if the authority further found that the arrears of wages exceeded Rs.50,000/-, in that case he was obligated to issue a recovery certificate. The Supreme Court held that the authority was required to act as the facilitator and not as an adjudicator, namely, that if the claim of the workers was disputed, the authority could not adjudicate upon the dispute unless frivolous or prima facie untenable grounds were taken by the employers. The Supreme Court further observed that where the dispute involved investigation of questions of fact and of law, it was not the function of the authority to adjudicate the same and, in such matters, the parties were required to approach the appropriate forum. The Supreme Court in Modi Industries Ltd. (supra) clearly indicates that the claim of the workers as a whole could only be filed and that claim of individual workers was not sustainable under the Act. In the light of the aforesaid, the claim of the workers in question against the principal employer was not maintainable, though it was maintainable against the contractor.
In the light of the aforesaid, the claim of the workers in question against the principal employer was not maintainable, though it was maintainable against the contractor. The Court further finds that the question of applicability of the Minimum Wages Act vis-a-vis the notification issued therein was never an issue, which was not raised by the workers in their claim application. Their only grievance was that their wages for the month of April and May, 2010 was not disbursed by the contractor. On the other hand, the Court finds that a categorical statement was made by the contractor that the workers never came forward to collect their monthly cheques. The contractor produced the wage bill and deposited the cheques. The Act contemplates payment of the wages as per the wage bill. No dispute was raised by the workers that the cheques deposited by the contractor was incorrect or that it was not the said amount, which was paid to them for the earlier months. In the light of the aforesaid facts, which has been culled out from the pleadings, it is clear that the question of applicability of the Minimum Wages Act or the issue as to whether the wages as per the notification was to be paid or not was never an issue inter se between the parties. The Prescribed Authority, therefore, committed a manifest error in directing the principal employer to pay this amount without affording them an opportunity either to the petitioner or to the contractor. Such disputed questions cannot be adjudicated in proceedings under Section 3 of the Act of 1978. In the light of the aforesaid, the impugned order cannot be sustained and is quashed. The writ petition is allowed. In the event, the workers are aggrieved by the non-payment of the wages as per the notification issued under the Minimum Wages Act, it would be open to the workers to move an appropriate application before the authority concerned. _____________