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2014 DIGILAW 1698 (RAJ)

Sharma Construction Company v. Prescribed Authority under the Payment of Wages Act, 1936

2014-10-16

MOHAMMAD RAFIQ

body2014
JUDGMENT : Hon'ble RAFIQ, J.—This writ petition has been filed by Sharma Construction Company assailing the order dated 16.06.2011 passed by the Prescribed Authority under the Payment of Wages Act, 1936. The Prescribed Authority has by aforesaid order, rejected preliminary objection raised by the petitioner as to maintainability of the claim petition filed by respondents-workmen under Section 15(2) read with Section 16 of the Payment of Wages Act, 1936 (for short, 'the Act'). 2. Brief facts giving rise to this case are that workmen-respondents no.2 to 8 filed an application under Section 15(2) read with Section 16 of the Act before the Prescribed Authority, Jaipur City, Jaipur, inter-alia pleading that the petitioner herein is a 'B-class' contractor registered with the Public Works Department of the State of Rajasthan. The respondent no.9 herein is Site Engineer of the petitioner Company. Petitioner company was awarded the contract for repair, demolition and construction of the quarters of employees of railway and railway platforms. Different work orders to that effect were issued to the petitioner Company by the Indian Railways during the period from 01.12.2008 to 04.02.2010. The respondents-workmen worked under the supervision of the aforesaid Site Engineer. The petitioner-company unlawfully deducted a sum of Rs.3,21,850/- from due wages of the respondents-workmen. Three of the respondents-workmen, namely, Gheesaram, Lali Devi and Ridhi, belong to one family. Payment of only Rs.1,01,500/- has been made towards their salary and an amount of Rs.1,42,750/- has been deducted from their wages. Similarly, an amount of Rs.73,500/- has been paid to respondent-workmen, Hansraj and Naraj after deducting the amount of Rs.96,300/-. In the same way, an amount of Rs.28,000/- has been paid to respondent-workman Sushil Sharma after deducting the amount of Rs.42,100/-. A sum of Rs.28,000/- has been paid to respondent-workman Mukesh Sharma after deducting the amount of Rs.40,700/- from the wages. The respondents-workmen also prayed that the petitioner-company be directed to pay to them ten times of the aforesaid deducted wages as compensation. The aforesaid application was accompanied by another application under Section 5 of the Limitation Act for condonation of delay. 3. The petitioner-company filed a preliminary objection as to maintainability of the claim petition before the Prescribed Authority under the Payment of Wages Act, 1936. It was stated in the application that Site Engineer H.P. Lata is none other than the real brother of Shri Babu Lal Sharma, the proprietor of the petitioner-company. 3. The petitioner-company filed a preliminary objection as to maintainability of the claim petition before the Prescribed Authority under the Payment of Wages Act, 1936. It was stated in the application that Site Engineer H.P. Lata is none other than the real brother of Shri Babu Lal Sharma, the proprietor of the petitioner-company. He was never appointed as Site Engineer by the petitioner-company. Respondents-workmen have filed the claim petition in collusion with him. Section 5 of the Limitation Act does not apply to the proceedings under the Payment of Wages Act, 1936. The petitioner-company also raised objection that since the contract was awarded for undertaking the construction work of the railways. The Central Government being “appropriate Government” for that purpose, the claim petition under Section 15(2) read with Section 16 of the Payment of Wages Act, 1936 was not maintainable before the Prescribed Authority of the State Government. Only the Regional Labour Commissioner (Central), Jaipur, is competent to hear such claim petition. 4. Shri Dharmendra Jain, learned counsel for petitioner-company, argued that the Prescribed Authority has erred in law in dismissing the objection about maintainability of the claim petition before him. The prescribed Authority has failed to correctly appreciate the import of word “appropriate Government” defined in Section 2(i) of the Payment of Wages Act, 1936, according to which “appropriate Government” means, in relation to railways, air transport services, mines and oilfields, the Central Government and, in relation to all other cases, the State Government. Since the contract for execution of different nature of civil works was awarded to the petitioner-company by the Indian Railways, the appropriate Government with regard thereto is the Central Government and only the Regional Labour Commissioner (Central), Jaipur, is competent to entertain the claim petition. 5. Learned counsel for the petitioner-company, in this connection, has referred to the findings recorded in para 13 of the impugned order, and argued that the Prescribed Authority has taken wrong approach in overruling the objection on the premise that the Central Government would be 'appropriate Government' only if the work awarded to the petitioner-company was carried out on the railway track. Petitioner-company was required to carry out the work of demolition and reconstruction of the quarters of the railway colony. The contractor was responsible for making payment of the wages. 6. Petitioner-company was required to carry out the work of demolition and reconstruction of the quarters of the railway colony. The contractor was responsible for making payment of the wages. 6. Learned counsel for the petitioner-company further argued that the Prescribed Authority has also taken erroneous view by holding the claim petition maintainable before himself on the premise that the petitioner-company was registered as class B-contractor with the Public Works Department of the State of Rajasthan. The Prescribed Authority was wholly unjustified in holding that the preliminary objection raised by the petitioner-company only as delaying tactics and injudicious practice resorted to unduly delay the adjudication of the matter. It is submitted that this objection goes to the root of the matter and could not be side tracked. This issue also cannot also be said to be a peripheral issue. 7. On the contrary, Shri Sharad Joshi, learned counsel for the respondents-workmen, has opposed the writ petition and submitted that the claim petition was very much maintainable before the Prescribed Authority of the State Government because the petitioner-company was not awarded any work of the railway track. It was a work of civil nature which involved demolition, repair and reconstruction of railway quarters and railway platforms etc., therefore the jurisdiction of the prescribed Authority was not ousted. 8. Learned counsel for the respondents-workmen argued that the delay in filing of the claim petition was explained by sufficient cause and the same was liable to be condoned. The petitioner-company has not come with clean hands before the court because it has not given even full facts regarding receipt of payment through Cheques. The petitioner-company has also not produced the attendance and payment register, which can show the details about the working of respondents and payment made to the respondents-workmen. It is further argued that the matter is ripe for final disposal and all the evidence is concluded from both the sides. At this stage, there would be no justification for dismissing the claim petition on preliminary objection. 9. It is further contended that the respondents-workmen did not work for the railways but they were engaged by the petitioner-company and therefore even if the contract was awarded to the petitioner-company for demolition, repair and construction of railway quarters, railway platforms etc. At this stage, there would be no justification for dismissing the claim petition on preliminary objection. 9. It is further contended that the respondents-workmen did not work for the railways but they were engaged by the petitioner-company and therefore even if the contract was awarded to the petitioner-company for demolition, repair and construction of railway quarters, railway platforms etc. by the railways, the workmen thereby would not become the employees of the railways and by the same logic, railways also do not become their employer. The writ petition be therefore dismissed. 10. I have given my anxious consideration to rival submissions and perused the material on record including the impugned order of the Prescribed Authority. 11. This court, while issuing notice of the writ petition on 20.07.2011, permitted the Prescribed Authority to proceed with the matter but directed that it may not pass the final order without prior permission of this court. Even if therefore during pendency of the writ petition, evidence has been produced by the parties before the Prescribed Authority, that cannot be a reason for not deciding the writ petition on merits as the question which the petitioner-company seeks to raise indeed goes to the root of the matter, whether the Prescribed Authority of the State of Rajasthan has competence to entertain the claim petition under Section 15(2) read with Section 16 of the Payment of Wages Act, 1936 in relation to construction work of the Indian Railways. 12. The appropriate Government has been defined in Section 2(i) of the Act, which means, in relation to railways, air transport services, mines and oilfields, the Central Government and in relation to all other cases, the State Government. For the facility of reference, the definition of “appropriate Government” given in Section 2(i) of the Act of 1936, reproduced as under:- “2. Definitions.- In this Act, unless there is anything repugnant in the subject or context.- (i) “appropriate Government” means, in relation to railways, air transport services, mines and oilfields, the Central Government and, in relation to all other cases, the State Government;” 13. The language used by the Parliament in defining the “appropriate Government” does not justify the kind of interpretation taken by the Prescribed Authority that the Central Government would be the “appropriate Government” in relation to railways only if any work in relation to railway track was executed and the workman was engaged therein. The language used by the Parliament in defining the “appropriate Government” does not justify the kind of interpretation taken by the Prescribed Authority that the Central Government would be the “appropriate Government” in relation to railways only if any work in relation to railway track was executed and the workman was engaged therein. There is, in my considered opinion, no justification for placing such a narrow interpretation on the language employed by the Parliament in defining the “appropriate Government”. The phraseology “in relation to railways” is wide enough to cover not only the work of railway tacks but also all kind of civil construction work carried out in relation to railways. Demolition, repair and construction of railway quarters and railway platforms etc. for the railways would very much qualify the term of “in relation to railways”. 14. Contention that since the workmen were engaged by the petitioner-company and not by the railways, therefore the railways was not the employer and only the petitioner-company was their employer and since the petitioner-company is a registered contractor with the Public Works Department of the State of Rajasthan, therefore, the prescribed Authority of the State constituted by the State Government, would be the competent authority to entertain the dispute, is noted to be rejected for the stated reasons. 15. In order to appreciate this argument, it would be apposite to reproduce sub-section (3) and (4) of Section 1 of the Act of 1936, and definition of “railway administration” as given in Section 2(v) and Section 3 of the Act of 1936, which read as under:- “1(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint. (4) It applies in the first instance to the payment of wages to persons employed in any factory and to persons employed otherwise than in a factory upon any railway by a railway administration or, either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration and to persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of Section 2.” “2(v) “railway administration” has the meaning assigned to it in clause (32) of Section 2 of the Railways Act, 1989 (24 of 1989);” “3. Responsibility for payment of wages.-(1) Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed- (a) in factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of Section 7 of the Factories Act, 1948 (63 of 1948); (b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of industrial or other establishment; (c) upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; (d) in the case of contractor, a person designated by such contractor who is directly under his charge; and (e) in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act; the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment; (2) Notwithstanding anything contained in sub-section (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment.” 16. Section 1 of the Act of 1936 deals with commencement and application of the Act and its sub-section (4) applies to persons employed in any factory and to persons employed otherwise than in a factory upon any railway by a railway administration either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration and to persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of Section 2 of the Act of 1936. 17. 17. Section 3(c) of the Act of 1936 provides that every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned, the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment. 18. This becomes further clear from sub-section (2) of Section 3 of the Act of 1936, which, inter-alia provides that notwithstanding anything contained in sub-sec. (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment. 19. Thus it is evident that the Act is applicable by virtue of sub-section (4) of Section 1 of the Act of 1936, regarding payment of wages to person employed upon any railway by railway administration either directly or through sub-contractor by person fulfilling a contract with railway administration. It would therefore not make any difference that the employee is engaged upon by railway/railway administration either directly or through contractor. I am fortified in taking that view from Section 3 of the Act, which provides that every employer shall be responsible for the payment of all wages to persons employed by him and in case of persons employed upon railways, if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; in the case of contractor, a person designated by such contractor, who is directly under his charge; and in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act; the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment. 20. 20. Sub-section (2) of Section 3 of the Act of 1936 has been given an overriding effect over sub-section (1) by providing that it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment. 21. The word “railway administration” has been defined in Section 2(v) of the Act of 1936 which has the meaning assigned to it in clause (32) of Section 2 of the Railways Act, 1989 (24 of 1989), which reads as under:- “2(v) “railway administration” has the meaning assigned to it in clause (32) of Section 2 of the Railways Act, 1989 (24 of 1989);” 22. It is thus evident that not only the contractor would be liable to make payment and the principal employer also can be held responsible for non payment of wages by the Contractor to whom it has awarded the contract. Even if therefore the workmen in the present case were engaged through the petitioner-company, work, for execution of which they were engaged, was certainly being carried out in relation to railways. 23. The Karnataka High Court in Regional Labour Commissioner, Bangalore and Others vs. T.K. Varkey and Co. and Another – ILR 1991 Karnataka 946, while considering the definition of 'appropriate Government' in Section 2(b) of the Minimum Wages Act, held that the place where scheduled employment was carried on and for whose benefit employment was carried on and under whose control work connected with employment was carried on, are deciding factors regarding 'appropriate Government'. In that case the employment had taken at the place belonging to Railways and employment or work carried on was for the purpose of construction of staff quarters for the benefit of Railways under the authority of the Railways, and the Central Government was held to be 'the appropriate Government' and the order passed by the Prescribed Authority (Regional Labour Commissioner) under the Minimum Wages Act was upheld. 24. In J.R. Jugele vs. Sitabai Atmaram, (1991-I-LLJ-233) (Bombay), decided by the Bombay High Court, certain industrial dispute between the workmen and the railway contractor was referred to the Labour Court by the State Government. 24. In J.R. Jugele vs. Sitabai Atmaram, (1991-I-LLJ-233) (Bombay), decided by the Bombay High Court, certain industrial dispute between the workmen and the railway contractor was referred to the Labour Court by the State Government. The contractor resisted the claim and one of the grounds was that the reference was not competent and that the Labour Court had no jurisdiction as the 'appropriate Government' was the Central Government. The Labour Court held the reference to be competent as there was a dispute between the workmen and the contractor, the petitioner, who was the immediate employer. When the matter, came to the High Court on a petition filed by the Contractor challenging the award the Court noticed that the workmen were working with the petitioner and the nature of the work was in the railway premises and that the Contract Labour (Regulation and Abolition) Act, 1970 was applicable in that case. The High Court upheld the argument that since the workman was working with the contractor for the work, which was awarded to him. The petitioner was railway contractor and had taken the contract of loading and unloading of ores with south and eastern railway. It was observed that the South Eastern Railway was the principal employer and the petitioner was immediate employer of the workmen. The Bombay High Court relying on the decision of the Andhra Pradesh High Court in Continental Construction (P) Ltd., Visakapatnam vs. The Government of India and Others, 1977 LIC 1199 (A.P.) held that since the work was connected with railways and the contractor was only intermediate employer and the railway was the principal employer, the appropriate Government to refer the matter would be the Central Government. 25. The upshot of the aforesaid discussion is that the Central Government has to be considered as “appropriate Government” in relation to work awarded to the petitioner-company. The Prescribed Authority constituted by the State Government therefore does not have any jurisdiction to entertain the application filed on behalf of the respondents-workmen engaged by the petitioner-company, for executing the works of the railways. 26. In view of the above discussion, the writ petition succeeds and the same is allowed. The impugned order dated 16.06.2011 passed by the Prescribed Authority is set aside and the claim petition is dismissed as not maintainable. 26. In view of the above discussion, the writ petition succeeds and the same is allowed. The impugned order dated 16.06.2011 passed by the Prescribed Authority is set aside and the claim petition is dismissed as not maintainable. It would, however, be open to the respondents-workmen to file fresh claim petition under Sections 15 and 16 of the Act, before the Prescribed Authority of the Central Government i.e. the Regional Labour Commissioner (Central), Jaipur/Ajmer. In doing so, the petitioner-company may apply for condonation of delay before that Authority on the ground that they had bona-fide filed claim petition before the prescribed Authority constituted by the State Government and thereafter the matter remained pending before this Court for last three years. 27. With that direction, the writ petition stands allowed in the aforesaid terms. This also disposes of stay application.