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Allahabad High Court · body

2019 DIGILAW 2699 (ALL)

Alchemist Ltd. v. Dinesh Chandra Tripathi

2019-12-04

YOGENDRA KUMAR SRIVASTAVA

body2019
JUDGMENT : 1. Heard Sri S.K. Chaturvedi, learned counsel for the petitioner, Sri K.C. Tripathi, learned counsel appearing for the first respondent and Sri Shreeprakash Singh, learned Standing Counsel appearing for the second respondent in the present petition along with connected matters. 2. Challenge in Writ-C No. 21892 of 2016 is to an order dated 07.04.2016 passed by the Prescribed Authority under the Payment of Wages Act, 1936/Deputy Labour Commissioner, U.P., Jhansi Region, Jhansi in Case No. P.W.35 of 2009 (Dinesh Chandra Tripathi Vs. Director Alchemist and others) whereby certain issues were framed and the matter was posted for hearing the parties on merits. The other three writ petitions (Writ-C Nos. 21801/2016, 21847/2016 and 21891/2016) seek to challenge similar orders of the same date i.e. 07.04.2016 which had been passed by the Prescribed Authority in Case Nos. P.W. 42/2010, P.W. 16/2012 and P.W. 18/2011. 3. All the four writ petitions are based on a similar set of facts and as such with the consent of the counsel for the parties the matters are being taken up for disposal together. 4. The records of the case reflect that an application under Section 15 (2) of the Payment of the Wages Act, 1936, [the Act, 1936] was filed by the first respondent claiming wages for the period 16.01.2009 to 30.11.2009. The first respondent also filed similar applications under Section 15 (2) of the Act, 1936 claiming wages for the period 1.12.2009 to 30.10.2010, 1.11.2010 to 3.9.2011 and 1.10.2011 to 30.9.2012, registered as Case Nos. 42/2010, 16/2012 and 18/2011 respectively. 5. The aforementioned cases were contested by the petitioner by filing detailed written reply/objections dated 20.3.2010 stating that the applicant (first respondent herein) had abandoned his services and as such he was discontinued from the rolls of the petitioner-company with effect from 13.2.2008. It was accordingly submitted that the applications filed under Section 15 of the Act, 1936 were not maintainable and as such the question of jurisdiction and maintainability be decided as a preliminary issue. 6. It was accordingly submitted that the applications filed under Section 15 of the Act, 1936 were not maintainable and as such the question of jurisdiction and maintainability be decided as a preliminary issue. 6. Taking into consideration the application filed by the first respondent and also the reply/preliminary objections submitted by the petitioner as also its rejoinder the Prescribed Authority passed the order dated 07.04.2016 wherein it was stated that in the light of the facts which had been presented before it, it was necessary to decide the issues with regard to the jurisdiction of the Prescribed Authority under the Act, 1936, the question with regard to existence of employer-employee relationship during the period in question, and as to whether the applicant was entitled to the reliefs prayed for. The matter was fixed for 25.04.2016 for hearing the parties on merits. 7. Identical orders were passed on the same date i.e. 07.04.2016 in all the four cases which had been filed by the first respondent before the Prescribed Authority, and the said orders have been challenged by filing these writ petitions which are being decided together. 8. The grounds of challenge in these writ petitions are that the services of the first respondent having stood terminated on 13.02.2008, unless the order of termination was not declared illegal the applications filed under the Act, 1936 were not maintainable and that the Prescribed Authority ought to have decided the question of maintainability of the claim petitions before proceeding further with the matter. 9. The counsel for the petitioner has contended that the question of employer-employee relationship which would involve adjudicating upon complicated questions of fact and law was beyond the scope and jurisdiction of the Prescribed Authority under the Act, 1936 and accordingly the Prescribed Authority was proceeding beyond its jurisdiction. 10. Per contra, learned counsel appearing for the first respondent has submitted that the issue of employer-employee relationship was incidental to the main question involved in the claims petitions and therefore there was no error in the order passed by the Prescribed Authority and proceeding further with the matters. 11. On the basis of the rival contentions raised by the parties the question which falls for consideration is regarding the scope and jurisdiction of the Prescribed Authority under the Act, 1936 and to what extent the issue of employer-employee relationship can be considered in such proceedings. 12. 11. On the basis of the rival contentions raised by the parties the question which falls for consideration is regarding the scope and jurisdiction of the Prescribed Authority under the Act, 1936 and to what extent the issue of employer-employee relationship can be considered in such proceedings. 12. In order to appreciate the controversy involved in the present writ petitions the relevant provisions under the Act, 1936 may be adverted to. The provisions contained under Section 15 of the Act, 1936 which relate to claims arising out of deductions from wages or delay in payment of wages, are being extracted below :- “15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims-(1) The appropriate Government may, by notification in the Official Gazette, appoint – (a) any Commissioner for workmen's Compensation; or (b) any officer of the Central Government exercising functions as,-- (i) Regional Labour Commissioner; or (ii) Assistant Labour Commissioner with at least two years' experience; or (c) any officer of the State Government not below the rank of Assistant Labour Commissioner with at least two year's experience; or (d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State; or (e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate, as the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, of persons employed or paid in that area, including all matters incidental to such claims:” Provided that where the appropriate Government considers it necessary so to do, it may appoint more than one authority for any specified area and may, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act. (2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person, or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission of the authority appointed under sub-section (1), may apply to such authority for a direction under sub-section (3): Provided that every such application shall be presented within twelve months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be : Provided further that any application may be admitted after the said period of twelve months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period. (3) When any application under sub-section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under Section 3, or give them an opportunity of being heard, and, after such further enquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other person is liable under this Act, direct the refund to the employed person of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees : Provided that a claim under this Act shall be disposed of as far as practicable within a period of three months from the date of registration of the claim by the authority : Provided further that the period of three months may be extended if both parties to the dispute agree for any bona fide reason to be recorded by the authority that the said period of three months may be extended to such period as may be necessary to dispose of the application in a just manner: Provided also that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to - (a) a bona fide error or bona fide dispute as to the amount payable to the employed person; or (b) the occurrence of an emergency, or the existence of exceptional circumstances, the person responsible for the payment of the wages was unable, in spite of exercising reasonable diligence; or (c) the failure of the employed person to apply for or accept payment. (4) If the authority hearing an application under this section is satisfied- (a) that the application was either malicious, or vexatious, the authority may direct that a penalty not exceeding three hundred seventy-five rupees be paid to the employer or other responsible for the payment of wages by the person presenting the application; or (b) that in any case in which compensation is directed to be paid under sub-section (3), the applicant ought not to have been compelled to seek redress under this section, the authority may direct that a penalty not exceeding three hundred seventy five rupees be paid to Appropriate Government by the employer or other person responsible for the payment of wages. (4-A) Where there is any dispute as to the person or persons being the legal representative or representatives of the employer or of the employed person, the decision of the authority on such dispute shall be final. (4-B) Any inquiry under this section shall be deemed to be a judicial proceeding within the meaning of Sections 193, 219 and 228 of the Indian Penal Code (45 of 1860). (5) Any amount directed to be paid under this section may be recovered- (a) if the authority is a Magistrate, by the authority as if it were a fine imposed by him as Magistrate, and (b) if the authority is not a Magistrate, by any Magistrate to whom the authority makes application in this behalf, as if it were a fine imposed by such Magistrate.” 13. This Court may take note of the fact that the Payment of Wages Act, 1936 was enacted to ensure that the wages payable to employees covered by the Act are disbursed by the employers within the prescribed time limit and that no deductions other than those authorised by law are made by the employers. 14. The term wages has been defined under Section 2 (vi). Under Section 3 a general responsibility is cast upon every employer for payment to persons employed by him of all wages required to be paid under the Act. The time schedule for payment of wages is prescribed under Section 5. Section 7 enumerates the deductions which may be made from the wages. The fines which can be imposed on any employed persons are specified under Section 8. The time schedule for payment of wages is prescribed under Section 5. Section 7 enumerates the deductions which may be made from the wages. The fines which can be imposed on any employed persons are specified under Section 8. Deductions for reason of absence from duty, for damage or loss, for services rendered, for recovery of advances and for recovery of loans are provided for under Sections 9, 10, 11, 12, 12-A respectively. 15. Section 15 of the Act, 1936 provides for filing of claims arising out of deductions from wages or delay in payment of wages. This section not only provides the forum but also provides the remedy for non-payment of wages, whether by way of deductions or delay. The authority under the Act for the purposes of hearing and deciding the claims under Section 15 is appointed by the appropriate Government by notification in the Official Gazette. The authority so appointed is empowered to hear all claims arising out of deductions from wages or delay in payment of wages and all incidental matters. 16. Upon an application being filed under Section 15 (2), the authority appointed for the purpose is required to hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further inquiry, if any, as may be necessary, may, without prejudice to any other penalty to which such employer or other persons are liable under the Act, direct the refund to the employed persons of the amount deducted, or the payment of the delayed wages, together with the payment of such compensation as it may think fit, not exceeding ten times the amount deducted in the former case and not exceeding three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, it may direct the payment of such compensation, as it may think fit, not exceeding two thousand rupees. 17. The proviso to sub-section (3) lays down that a claim under the Act shall be disposed of as far as practicable within a period of three months from the date of registration of the claim by the authority. 17. The proviso to sub-section (3) lays down that a claim under the Act shall be disposed of as far as practicable within a period of three months from the date of registration of the claim by the authority. It has also been provided that no direction for payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to - (a) a bona fide error or bona fide dispute as to the amount payable to the employed person, or (b) the occurrence of an emergency, or the existence of exceptional circumstances, the person responsible for the payment of the wages was unable, in spite of exercising reasonable diligence, or (c) the failure of the employed person to apply for or accept payment. 18. The scope of jurisdiction of the authority under Section 15 of the Act, 1936 fell for consideration in the case of A.V. D'costa Vs. B.C. Patel and Ors., AIR 1955 SC 412 and it was held that the authority set up under Section 15 is a tribunal of limited jurisdiction which could decide only what actual terms of the contract between the parties were in order to determine the actual wages. The observations made in the judgment are being extracted below :- “7. The Authority set up under section 15 of the statute in question is undisputably a tribunal of limited jurisdiction. Its power to hear and determine disputes must necessarily be found in the provisions of the Act. Such a tribunal, it is undoubted, cannot determine any controversy which is not within the ambit of those provisions. On examining the relevant provisions of the Act it will be noticed that it aims at regulating the payment of wages to certain classes of persons employed in industry. It applies in the first instance to the payment of wages to persons employed in any factory or employed by a railway administration; but the State Government has the power after giving three months' notice to extend the provisions of the Act or any of them to the payment of wages to any class of persons employed in any class or group of industrial establishments. "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........... "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........... to a person employed in respect of his employment or of work done in such employment....." (omitting words not necessary for our present purpose). Section 3 lays down that every employer or his representative or nominee shall be responsible for the payment to persons employed by him of all wages. Section 3 provides for fixation of "wage-periods" which shall not exceed one month in any case. Section 5 indicates the last date within which, with reference to the particular wage-period, wages shall be paid. Section 7 lays down that the wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under the Act. Section 7(2) in cls. (a) to (k) specifies the heads under which deductions from wages may be made, namely, fines; deductions for absence from duty; deductions for damage to or loss of goods of the employer; deductions for house accommodation supplied by the employer; deductions for amenities and services supplied by the employer; deductions for recovery of advances or for adjustment of over payments of wages; deductions of income-tax payable by the employee; deductions to be made under orders of a Court or other competent authority; deductions for subscriptions to, and for repayment of advances from any provident fund; deductions for payments to co-operative societies, etc.; and finally, deductions made with the concurrence of the employed person in furtherance of certain schemes approved by Government. No other deductions are permissible. It is also laid down that every payment made by the employed person to the employer or his agent shall be deemed to be deduction from wages. Each of the several heads of deductions aforesaid is dealt with in detail in sections 8 to 13. Section 8 lays down the conditions and limits subject to which fines may be imposed and the procedure for imposing such fines. It also requires a register of such fines to be maintained by the person responsible for the payment of wages. Section 9 deals with deductions on account of absence from duty and prescribes the limits and the proportion thereof to wages. It also requires a register of such fines to be maintained by the person responsible for the payment of wages. Section 9 deals with deductions on account of absence from duty and prescribes the limits and the proportion thereof to wages. Section 10 similarly deals with deductions for damage or loss to the employer and the procedure for determining the same. Like S. 8, this section also requires a register of such deductions and realizations to be maintained by the person responsible for the payment of wages. Section 11 lays down the limits of deductions for house accommodation and other amenities or services which may have been accepted by the employee, subject to such conditions as the State Government may impose. Section 12 lays down the conditions subject to which deductions for recovery of advances may be made from wages. Finally S.13 provides that the deductions for payment to co-operative societies and insurance schemes shall be subject to such conditions as the State Government may prescribe. xxxx We then come to S.15 which makes provision for the appointment of the Authority "to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages of persons employed or paid in that area". Where the Authority finds that any deduction has been made from the wages of an employed person or the payment of any wages had been delayed, he may at the instance of the wage-earner himself or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under the Act or any other person acting with the permission of the Authority, after making such enquiry as he thinks fit and after giving an opportunity to the person responsible for the payment of wages under S.3 to show cause, direct the refund to the employed person of the amount deducted or the payment of delayed wages together with such compensation as he may determine. The section also lays down the limits and conditions of his power to direct payment of compensation to the employed person or of penalty to the employer, if he is satisfied that the application made on behalf of an employee was either malicious or vexatious. His determination is final subject to a very limited right of appeal under S.17. The section also lays down the limits and conditions of his power to direct payment of compensation to the employed person or of penalty to the employer, if he is satisfied that the application made on behalf of an employee was either malicious or vexatious. His determination is final subject to a very limited right of appeal under S.17. Section 18 vests the Authority with all the powers of a civil Court under the Code of Civil Procedure, for the purpose of taking evidence, of enforcing the attendance of witnesses and of compelling the production of documents. Section 22 lays down that no Court shall entertain any suit in respect of wages or of deduction from wages in so far as the claim forms the subject matter of a pending proceeding under the Act or has formed the subject of a direction in favour of or against the plaintiff under Section 15, or which could have been recovered by the application under that section. xxxx 10. In our opinion, the scheme of the Act as set forth above shows that if an employee were to state that his wages were, say Rs. 100 per month, and that Rs. 10 had been wrongly deducted by the authority responsible for the payment of wages, that is to say, that the deductions could not come under any one of the categories laid down in S.7(2), that would be a straight case within the purview of the Act and the authority appointed under S.15 could entertain the dispute. But it is said on behalf of the respondent that the authority has the jurisdiction not only to make directions contemplated by sub-s.(3) of S.15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were. There is no difficulty in accepting that proposition. If the parties entered into the contract of service, say by correspondence and the contract is to be determined with reference to the letters that passed between them, it may be open to the authority to decide the controversy and find out what the terms of the contract with reference to those letters were. But if an employee were to say that his wages were Rs. But if an employee were to say that his wages were Rs. 100 per month which he actually received as and when they fell due, but that he would be entitled to higher wages if his claims to be placed on the higher wages scheme had been recognized and given effect to, that would not, in our opinion, be a matter within the ambit of his jurisdiction. The authority has the jurisdiction to decide what actually the terms of the contract between the parties were, that is to say, to determine the actual wages; but the authority has no jurisdiction to determine the question of potential wages. The respondent's complaint in the present case comes within the latter illustration. If the respondent's claim to be placed on the scheme of higher wages had been unduly passed over by the appellant, if indeed he had the power to do so, the obvious remedy of the respondent was to approach the higher authorities of the railway administration by way of departmental appeal or revision; but instead of doing that, he has sought his redress by making his claim before the authority under the Act. The question is, has the authority the power to direct the appellant or his superior officers who may have been responsible for the classification, to revise the classification so as to upgrade him from the category of a daily wage-earner to that of an employee on the monthly wages scheme. If the respondent had been on the cadre of monthly wages and if the appellant had withheld his rise in wages to which he was automatically entitled, without any orders of his superior officers, he might justly have claimed the redress of his grievance from the authority under the Act, as it would have amounted to an under payment. But in the present case, on the case as made on behalf of the respondent, orders of the superior officers were necessary to upgrade him from a daily wage-earner to a higher cadre. The authority under the Act has not been empowered under S.15 to make any such direction to those superior officers. But in the present case, on the case as made on behalf of the respondent, orders of the superior officers were necessary to upgrade him from a daily wage-earner to a higher cadre. The authority under the Act has not been empowered under S.15 to make any such direction to those superior officers. The appellant is responsible to pay the respondent only such wages as are shown in the relevant register of wages presumably maintained by the department under the provisions of the Act, but he cannot be directed to pay the respondent higher wages on the determination by the authority that he should have been placed on the monthly wages scheme. xxxx 15. The jurisdiction of the Tribunal arises under S.15 of the Payment of Wages Act, 1936 (Act IV of 1936) (hereinafter referred to as the Act). The Tribunal is set up to decide "all claims arising out of deductions from the wages or delay in payment of wages". The relief which it is authorised to award is to direct "the refund of the amount deducted, or the payment of the wages delayed". Such a direction made by the Tribunal is final, under S.17 of the Act, subject to the right of appeal provided therein. Under S.22, no suit lies in any Court for the recovery of wages or of any deduction there from which could have been recovered by an application under S.15. However limited this jurisdiction of the Tribunal, and however elaborate the provisions in the Act for the preparation and display by the employer of the table of wages payable to the employees, and for the inspection thereof by the Factory Inspectors, it cannot be supposed that the jurisdiction of the Tribunal is only to enforce the wages so displayed or otherwise admitted. Such a narrow construction would rob the machinery of the Act of a great deal of its utility and would confine its application to cases which are not likely to arise often, in a well-ordered administration like the Railways. Indeed, I do not gather that such a construction was pressed for, before us, in the arguments. Even a Tribunal of limited jurisdiction, like the one under consideration, must necessarily have the jurisdiction to decide, for itself, the preliminary facts on which the claim or dispute before it depends. Indeed, I do not gather that such a construction was pressed for, before us, in the arguments. Even a Tribunal of limited jurisdiction, like the one under consideration, must necessarily have the jurisdiction to decide, for itself, the preliminary facts on which the claim or dispute before it depends. In the instant case, it must have jurisdiction to decide what the wages payable are and, for that purpose, what the contract of employment and the terms thereof are. The judgment of my learned brothers in this case apparently recognizes the jurisdiction of the Tribunal as above stated, when it said that the Tribunal has the power "to find out what the terms of the contract were to determine what the wages of the employed person were". Whether the Tribunal's decision in this behalf is conclusive or not is a matter that does not arise for decision in this case. 16. But, it is said that the Tribunal has no authority to determine the question of "potential wages". Undoubtedly a claim to a higher potential wage cannot be brought in under the category of "claims arising out of deduction from the wages or delay in payment of the wages" if that wage depended on the determination by a superior departmental or other authority as to whether or not a particular employee is entitled to the higher wage-a determination which involves the exercise of administrative judgment or discretion or certification, and which would, in such a situation, be a condition of the payability of the wage. But where the higher wage does not depend upon such determination but depends on the application of, and giving effect to, certain rules and orders which, for this purpose, must be deemed to be incorporated in the contract of employment, such a wage is, in my view, not a prospective wage, merely because the paying authority concerned makes default or commits error in working out the application of the rules. In this context it is relevant to notice that the definition of "wages" in the Act is "all remuneration which would if the terms of the contract, express or implied, 'were' fulfilled, be payable". In this context it is relevant to notice that the definition of "wages" in the Act is "all remuneration which would if the terms of the contract, express or implied, 'were' fulfilled, be payable". The word "were" in this definition which I have underlined, seems to indicate that even a "prospective wage" which would be payable on the proper 'application' of the rules in the sense which I have explained above may well fall within its scope. The wage under the Act is not, necessarily, the immediately pre-existing wage but the presently-payable wage.” 19. The scope of jurisdiction of the authority under Section 15 again came to be considered in the case of Shri Ambica Mills Co. Ltd. Vs. Shri S.B. Bhatt and another, AIR 1961 S.C. 970 and it was held that the only claims which can be entertained by the authority are claims arising out of deductions made in payment of wages. It was stated in the judgment as follows :- “11. The scheme of the Act is clear. The Act was intended to regulate the payment of wages to certain classes of persons employed in industry, and its object is to provide for a speedy and effective remedy to the employees in respect of their claims arising out of illegal deductions or unjustified delay made in paying wages to them. With that object S. 2(vi) of the Act has defined wages. Section 4 fixes the wage period. Section 5 prescribes the time of payment of wages; and S. 7 allows certain specified deductions to be made. Section 15 confers jurisdiction on the authority appointed under the said section to hear and decide for any specified area claims arising out of deductions from wages, or delay in payment of wages, of persons employed or paid in that area. It is thus clear that the only claims which can be entertained by the authority are claims arising out of deductions or delay made in payment of wages. The jurisdiction thus conferred on the authority to deal with these two categories of claims is exclusive; for S. 22 of the Act provides that matters which lie within the jurisdiction of the authority are excluded from the jurisdiction of ordinary civil courts. Thus in one sense the jurisdiction conferred on the authority is limited by S. 15, and in another sense it is exclusive as prescribed by S. 22.” 20. Thus in one sense the jurisdiction conferred on the authority is limited by S. 15, and in another sense it is exclusive as prescribed by S. 22.” 20. While considering the ambit and scope of the expression “claims arising out of deductions or delay made in payment of wages” it was held that in dealing with claims arising out of deductions or delay made in payment of wages the authority inevitably would have to consider questions incidental to the said matters. In determining the scope of these incidental questions care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction is not unreasonably or unduly extended. Care must also be taken to see that the scope of these incidental questions is not unduly limited so as to affect or impair the limited jurisdiction conferred on the authority. The observations made in the judgment are as follows:- “12. In dealing with claims arising out of deductions or delay made in payment of wages the authority inevitably would have to consider questions incidental to the said matters. In determining the scope of these incidental questions care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction is not unreasonably or unduly extended. Care must also be taken to see that the scope of these incidental questions is not unduly limited so as to affect or impair the limited jurisdiction conferred on the authority. While considering the question as to what could be reasonably regarded as incidental questions let us revert to the definition of wages prescribed by S. 2(vi). Section 2(vi) as it then stood provided, inter alia, that '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 to a person employed in respect of his employment or of work done in such employment, and it includes any bonus 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. It also provided that the word "wages" did not include five kinds of payments specified in clauses (a) to (e). It also provided that the word "wages" did not include five kinds of payments specified in clauses (a) to (e). Now, if a claim is made by an employee on the ground of alleged illegal deduction or alleged delay in payment of wages several relevant facts would fall to be considered. Is the applicant an employee of the opponent?; and that refers to the subsistence of the relation between the employer and the employee. If the said fact is admitted, then the next question would be: what are the terms of employment? Is there any contract of employment in writing or is the contract oral? If that is not a point of dispute between the parties then it would be necessary to enquire what are the terms of the admitted contract. In some cases a question may arise whether the contract which was subsisting at one time had ceased to subsist and the relationship of employer and employee had come to an end at the relevant period. In regard to an illegal deduction a question may arise whether the lock-out declared by the employer is legal or illegal. In regard to contracts of service some times parties may be at variance and may set up rival contracts, and in such a case it may be necessary to enquire which contract was in existence at the relevant time....” 21. While considering the question as to what could be reasonably regarded as incidental questions, it was stated in the aforementioned case of Shri Ambica Mills that it would be inexpedient to lay down any hard and fast or general rule which would afford a determining test to demarcate the field of incidental facts which can be legitimately considered by the authority and those which cannot be so considered. The observations made in this regard in the judgment are as follows :- “....we do not propose to consider these possible questions in the present appeal, because, in our opinion, it would be inexpedient to lay down any hard and fast or general rule which would afford a determining test to demarcate the field of incidental facts which can be legitimately considered by the authority and those which cannot be so considered...” 22. The provisions under sub-section (1) of Section 15 may again be referred to at this stage and the same are being extracted below :- “15. The provisions under sub-section (1) of Section 15 may again be referred to at this stage and the same are being extracted below :- “15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims- (1) The appropriate Government may, by notification in the Official Gazette, appoint – (a) any Commissioner for workmen's Compensation; or (b) any officer of the Central Government exercising functions as,-- (i) Regional Labour Commissioner; or (ii) Assistant Labour Commissioner with at least two years' experience; or (c) any officer of the State Government not below the rank of Assistant Labour Commissioner with at least two year's experience; or (d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State; or (e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate, as the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, of persons employed or paid in that area, including all matters incidental to such claims:” (emphasis supplied) 23. The expression “including all matters incidental to such claims” was introduced by the Payment of Wages (Amendment) Act, 1964 [Act No. 53 of 1964], and it appears to have been introduced for the purposes of clarifying the position of law which had already been laid down in terms of the judgment in the case of Shri Ambica Mills. 24. In the case at hand the petitioner while filing his written reply/objections had contended that the applications filed under Section 15 of the Act, 1936 were not maintainable and as such the question of jurisdiction and maintainability be decided as a preliminary issue and the Prescribed Authority passed an order dated 07.04.2016 wherein it was stated that it was necessary to decide the issues with regard to the jurisdiction of the authority under the Act, 1936, and the question with regard to existence of employer-employee relationship during the period in question and the matter was fixed for 25.04.2016 for hearing the parties on merits. It is against the aforesaid order that the present writ petition has been filed. 25. It is against the aforesaid order that the present writ petition has been filed. 25. The scope of Section 15 again came up for consideration in the case of Payment of Wages Inspector Vs. Surajmal Mehta and Ors., (1969) 2 SCR 1051 and it was held that as per the terms of sub-section (2) the authority appointed under sub-section (1) has jurisdiction to entertain applications only in two classes of cases, namely, of deductions and fines not authorised under Sections 7 to 13 and of delay in payment of wages beyond the wage periods fixed under Section 4 and the time of payment laid down in Section 5 and further that incidental questions could be considered without unduly expanding or curtailing the jurisdiction of the authority. The relevant observations made in the judgment are as follows :- “8. It is explicit from the terms of Section 15(2) that the Authority appointed under sub-section (1) has jurisdiction to entertain applications only in two classes of cases, namely, of deductions and fines not authorised under Sections 7 to 13 and of delay in payment of wages beyond the wage periods fixed under Section 4 and the time of payment laid down in Section 5. This is clear from the opening words of sub-section (2) of Section 15, namely, "where contrary to the provisions of this Act" any deduction has been made or any payment of wages has been delayed. These being the governing words in the sub-Section the only applications which the Authority can entertain are those where deductions unauthorised under the Act are made from wages or there has been delay in payment beyond the wage period and the time of payment of wages fixed or prescribed under Sections 4 and 5 of the Act. Section 15(2) postulates that the wages payable by the person responsible for payment under Section 3 are certain and such that they cannot be disputed. 9. Section 15(2) postulates that the wages payable by the person responsible for payment under Section 3 are certain and such that they cannot be disputed. 9. In D'Costa v. B.C. Patel, AIR 1955 SC 412 this Court held after considering the scheme of the Act that the jurisdiction of the Authority under Section 15 was confined to deductions and delay in payment of the actual wages to which the workman was entitled and that the Authority under the Act had no jurisdiction to enter into a question of potential wages, i.e., where the workman pleads that he ought to have been up-graded as persons junior to him were up-graded and that he ought to have been paid wages on a scale paid to those so up-graded. This Court held that the Authority had jurisdiction to interpret the terms of a contract of employment to find out the actual wages payable to the workmen where deduction from or delay in payment of such wages is alleged, but not to enter into the question whether the workman should have been up-graded from being a daily rated worker to a monthly rated workman. In Shri Ambica Mills Co. Ltd. v. S.B. Bhatt, AIR 1961 S.C. 970 this Court again examined the scheme of the Act and held that the only claims which could be entertained by the Authority were claims arising out of deductions or delay made in the payment of wages. The Court, however, observed that in dealing with claims arising out of deductions or delay made in payment of wages the Authority inevitably would have to consider questions incidental to these matters, but in determining the scope of these incidental matters care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction was not unreasonably or unduly expanded. Equally, care must also be taken to see that the scope of these incidental matters was not unduly curtailed so as to affect or impair the limited jurisdiction conferred on the Authority. The Court declined to lay down any hard and fast rule which would afford a determining test to demarcate the field of incidental facts which could be legitimately considered by the Authority and those which could not be so considered. 10. It is true, as stated above, that the Authority has the jurisdiction to try matters which are incidental to the claim in question. 10. It is true, as stated above, that the Authority has the jurisdiction to try matters which are incidental to the claim in question. Indeed Section 15(1) itself provides that the Authority has the power to determine all matters incidental to the claim arising from deductions from or delay in payment of wages. It is also true that while deciding whether a particular matter is incidental to claim or not care should be taken neither to unduly expand nor curtail the jurisdiction of the Authority. But it has at the same time to be kept in mind that the jurisdiction under Section 15 is a special jurisdiction. The Authority is conferred with the power to award compensation over and above the liability for penalty of fine which an employer is liable to incur under Section 20.” 26. The question as to whether a dispute regarding existence of relationship of employer and employee between the contending parties is a matter incidental to the claim arising out of deductions from the wages or delay in payment of the wages in a proceeding under Section 15 of the Act, 1936 was taken up for consideration before a Division Bench of this Court in the case of M/s E. Hill & Company (P) Ltd., Mirzapur Vs. City Magistrate Mirzapur & Anr., 1980 (40) FLR 362 and it was held that the matters incidental to claims arising out of deductions from the wages or delay in payment of the wages must be matters which follow these claims or are subordinate or attendant in position or significance to such claims and only such matters can be gone into by the authority while trying the claim made by the employee relating to deductions from his wages or delay in payment of his wages. 27. It was also stated that a mere denial of existence of the relationship of employer and employee may not oust the jurisdiction of the authority but where a serious controversy is raised about the existence, continuance or emergence of a fresh contract of employment the authority would have no jurisdiction to entertain and try the claim as the dispute may involve decisions on complicated questions of law and fact. The relevant observations made in the judgment are as follows. The relevant observations made in the judgment are as follows. “It is thus obvious that matters incidental to claims arising out of deductions from the wages or delay in payment of the wages must be matters which follow these claims or are subordinate or attendant in position or significance to such claims. It is only such matters that can be gone into by the Authority while trying the claim made by the employee relating to deductions from his wages or delay in payment of his wages. xxxx A mere denial of existence of the relationship of employer and employee may not oust the jurisdiction of the Authority under the Payment of Wages Act but where a serious controversy is raised about the existence, continuance or emergence of a fresh contract of employment, the Authority would have no jurisdiction to entertain and try the claim as the dispute may involve decisions of complicated questions of law and fact...” 28. The issue as to whether Section 15 of the Act, 1936 would cover the question of relationship of employer-employee between the claimant and the opposite party to the claim was taken up before this Court in the case of D.C.M. Limited, New Delhi Vs. Prescribed Authority, Meerut and others, (1996) 4 UPLBEC 2458 and following the judgments in the case of Suraj Mal Mehta and Ambica Mill Company Ltd. (supra), it was held that the said question cannot be decided in summary proceedings under Section 15. The observations made in the judgment are as follows :- “7. A perusal of the provisions of Section 15 of the Payment of Wages Act would go to show that it confers jurisdiction on the prescribed authority to hear and decide the claims arising out of deduction from wages or delay in payment of wages, including all matters incidental to such claims. In its very nature exercise of jurisdiction under Section 15 envisages the existence of relationship of employer and employees between the parties and consequent entitlement to the wages claimed having been deducted from the same, or delayed payment thereof by the employer. xxxx 11. In the instant case as already settled above there is a serious dispute between the parties as to whether the respondents are employees of the petitioner of the contractor. xxxx 11. In the instant case as already settled above there is a serious dispute between the parties as to whether the respondents are employees of the petitioner of the contractor. The prescribed authority, the respondent No. 1 has decided the question of existence of relationship of employer and employee in the affirmative in favour of respondents by referring to the evidence led before him, but since it was not merely an incidental question rather went to the very root of the matter, and required in depth enquiry and consideration of questions of law and facts, the same could not be decided in summary proceedings under Section 15 of the Payment of Wages Act, rather could validly be a subject of reference to a Labour Court under the provisions of the Industrial Dispute Act, such Court possessing wider powers for deciding the contentious question of the nature raised in this case.” 29. The limited scope of adjudication under Section 15 was reiterated in M/s. Upper Doab Sugar Mills Muzaffarnagar Vs. Prescribed Authority and others, 2012 (8) ADJ 149 wherein it was held that in order to attract the provisions under Section 15 (2) two things must exist namely a person 'employee' and another person who had employed such person namely 'employer' and that in a case where the issue of relationship of employer-employee is under a serious cloud the matter would be beyond the jurisdiction of the authority under Section 15. The observations made in the judgment in this regard are as follows:- “9. This definition of 'wages' is pari materia with the similar definition of "wages" in Section 2(h) of the Contract Labour (Regulation and Abolition) Act, 1970. Section 3 of Act 1936 provides that, every employer is under an obligation for payment of all wages to persons employed by him. Section 15(2) of Act 1936 entitles a person employed but not paid his wages or when there is any unauthorized deduction or delay in payment, to make an application before the Prescribed Authority i.e. authority notified under sub section (1) of Section 15 for claiming such wages. A reading of sub-sections (2) and (3) of Section 15 makes it clear that the application can be moved not only against the employer but if there is any other person responsible for payment of wages of such employed person, application can be filed under Section 15(2) against such person also. A reading of sub-sections (2) and (3) of Section 15 makes it clear that the application can be moved not only against the employer but if there is any other person responsible for payment of wages of such employed person, application can be filed under Section 15(2) against such person also. To attract Section 15(2) of Act 1936, two things therefore must exist namely a person 'employee' and another person who had employed such person, namely the "employer" or other person responsible for payment of wages under Section 3 i.e. to whom the employer has authorized. 10. The limited scope of adjudication under Section 15 is regarding the claim arising out of deduction or delayed payment and not any other issue namely, the very existence of relationship of employer and employee or the question whether the claimant was a person employed or not or that the person against whom such a claim is raised whether he is an employer or the person authorized for payment or not. If in a given case an issue other than that of alleged deduction or delay in payment arises and the competent authority finds that such an issue has been raised only to defeat an otherwise bona fide claim and in its view the incidental issue raised is bogus, fictitious, superfluous or fanciful, it can continue to proceed to decide the matter but where a serious, bona fide, genuine dispute of relationship arises, this Court is also of the view that such an issue cannot be adjudicated by the authorities under Sections 15(1) and (2) of the Act, 1936, lacking inherent jurisdiction to entertain such a dispute. xxxx 16. Tomy mind, this issue is not incidental to the question of deduction or delayed payment but a condition precedent to attract the very provisions of Act 1936. Therefore, in a case where the very relationship is under a serious cloud, and needs a detailed but exclusive discussion, it is beyond the jurisdiction of Prescribed Authority under Section 15(1) and (2) of the Act 1936 and has to be adjudicated in appropriate regular proceedings by raising an industrial dispute. It could not have been decided by an authority under Sections 15(1) while entering a claim under Section 15(2) and assuming jurisdiction upon itself to decide the said issue. It is infact not an incidental but a substantial jurisdictional issue relating to very applicability of Act 1936. It could not have been decided by an authority under Sections 15(1) while entering a claim under Section 15(2) and assuming jurisdiction upon itself to decide the said issue. It is infact not an incidental but a substantial jurisdictional issue relating to very applicability of Act 1936. Hence this could not have been decided by Prescribed Authority under Section 15 of Act 1936. The impugned orders passed in both the writ petitions are thus wholly without jurisdiction.” 30. From the foregoing discussions it follows that the authority under Section 15 of the Act, 1936 is a tribunal of limited jurisdiction. Its power to hear and determine the disputes must necessarily be found in terms of the provisions of the Act, and it cannot determine any controversy which is not within the ambit of those provisions. 31. The jurisdiction of the authority can be invoked in respect of claims arising out of deductions from wages or delay in payment of wages. In order to exercise the aforesaid jurisdiction dealing with claims arising out of deductions or delay in payment of wages the authority may have to consider questions incidental to such matters including the issue as to whether there existed or exists, during the relevant period, any relationship of employer or employee between the parties. 32. In determining the scope of the incidental questions which may arise out of the claims in respect of deductions or delay in payment of wages the authority would have no jurisdiction to enter into and decide complicated questions of fact and law. Due care is required to be exercised to see that while dealing with incidental matters the limited jurisdiction is not unreasonably extended so as to travel beyond the scope of its jurisdiction nor is unduly limited so as to affect or impair the powers and jurisdiction conferred upon the authority. It may not be desirable to lay down any hard and fast rule as to what questions can be decided or provide a test so as to demarcate the field of the incidental factors which can be considered while entertaining claims under Section 15 of the Act, 1936. 33. It may not be desirable to lay down any hard and fast rule as to what questions can be decided or provide a test so as to demarcate the field of the incidental factors which can be considered while entertaining claims under Section 15 of the Act, 1936. 33. It may be however stated that a mere denial of existence of relationship of employer and employee may not be sufficient to oust the jurisdiction of the authority under the Act, 1936 and it would only be in a case where a serious dispute is raised with regard to the existence of the contract of employment that the authority would cease to have jurisdiction to entertain the claim as the same may involve adjudication upon complicated questions of law and fact. 34. As regards the orders passed by the Prescribed Authority dated 07.04.2016 whereunder the matters were directed to be posted for decision on certain preliminary issues, this Court may take notice of the fact that the practice of raising preliminary issues in labour and industrial disputes and the situation created by raising such preliminary issues which take long years to settle was viewed with concern in the case of D.P. Maheshwari Vs. Delhi Administration and others, (1983) 4 SCC 293 wherein it was observed as follows:- “1. It was just the other day that we were bemoaning the unbecoming devices adopted by certain employers to avoid decision of industrial disputes on merits. We noticed how they would raise various preliminary objections, invite decision on those objections in the first instance, carry the matter to the High Court under Article 226 of the Constitution and to this Court under Article 136 of the Constitution and delay a decision of the real dispute for years, sometimes for over a decade. Industrial peace, one presumes, hangs in the balance in the meanwhile. We have now before us a case where a dispute originating in 1969 and referred for adjudication by the Government to the Labour Court in 1970 is still at the stage of decision on a preliminary objection. There was a time when it was thought prudent and wise policy to decide preliminary issues first. But the time appears to have arrived for a reversal of that policy. There was a time when it was thought prudent and wise policy to decide preliminary issues first. But the time appears to have arrived for a reversal of that policy. We think it is better that tribunals, particularly those entrusted with the task of adjudicating labour disputes where delay may lead to misery and jeopardise industrial peace, should decide all issues in dispute at the same time without trying some of them as preliminary issues. Nor should High Courts in the exercise of their jurisdiction under Article 226 of the Constitution stop proceedings before a tribunal so that a preliminary issue may be decided by them. Neither the jurisdiction of the High Court under Article 226 of the Constitution nor the jurisdiction of this Court under Article 136 may be allowed to be exploited by those who can well afford to wait to the detriment of those who can ill afford to wait by dragging the latter from court to court for adjudication of peripheral issues, avoiding decision on issues more vital to them. Article 226 and Article 136 are not meant to be used to break the resistance of workmen in this fashion. Tribunals and courts who are requested to decide preliminary questions must therefore ask themselves whether such threshold part-adjudication is really necessary and whether it will not lead to other woeful consequences. After all tribunals like industrial tribunals are constituted to decide expeditiously special kinds of disputes and their jurisdiction to so decide is not to be stifled by all manner of preliminary objections journeyings up and down. It is also worth while remembering that the nature of the jurisdiction under Article 226 is supervisory and not appellate while that under Article 136 is primarily supervisory but the court may exercise all necessary appellate powers to do substantial justice. In the exercise of such jurisdiction neither the High Court nor this Court is required to be too astute to interfere with the exercise of jurisdiction by special tribunals at interlocutory stages and on preliminary issues.” 35. The delay in decision of industrial disputes due to raising preliminary issues was again noticed in the case of National Council for Cement & Building Materials Vs. The delay in decision of industrial disputes due to raising preliminary issues was again noticed in the case of National Council for Cement & Building Materials Vs. State of Haryana and others, (1996) 3 SCC 206 and the decision of the High Court refusing to interfere with the order passed by the Industrial Tribunal to hear the preliminary issue with other issues on merits, was upheld by the Supreme Court. Referring to the earlier judgments in Cooper Engineering Ltd. Vs. P.P. Mundhe, (1975) 2 SCC 661 , S.K. Verma Vs. Mahesh Chandra, (1983) 4 SCC 214 , D.P. Maheshwari Vs. Delhi Administration, (1983) 4 SCC 293 (supra) and Workmen Vs. Hindustan Lever Ltd., (1984) 4 SCC 392 the following observations were made:- “12. We, however, cannot shut our eyes to the appalling situation created by such preliminary issues which take long years to settle as the decision of the Tribunal on the preliminary issue is immediately challenged in one or the other forum including the High Court and proceedings in the reference are stayed which continue to lie dormant till, the matter relating to the preliminary issue is finally disposed of. 13. This Court in Cooper Engineering Ltd. v. P.P. Mundhe, in order to obviate undue delay in the adjudication of the real dispute, observed that the Industrial Tribunals should decide the preliminary issues as also the main issues on merits altogether so that there may not be any further litigation at the interlocutory stage. It was further observed that there was no justification for a party to the proceedings to stall the final adjudication of the dispute referred to the Tribunal by questioning the decision of the Tribunal on the preliminary issue before the High Court. 14. Again in S.K. Verma v. Mahesh Chandra, this Court strongly disapproved the practice of raising frivolous preliminary objections at the instance of the employer to delay and defeat the purpose of adjudication on merits. 15. In D.P. Maheshwari v. Delhi Administration, this Court speaking through O. Chinnappa Reddy, J. observed that the policy to decide the preliminary issue required a reversal in view of the "unhealthy and injudicious practices resorted to for unduly delaying the adjudication of industrial disputes for the resolution of which an informal forum and simple procedure were devised with avowed object of keeping them from the dilatory practices of civil courts". The Court observed that all issues whether preliminary or otherwise, should be decided together so as to rule out the possibility of any litigation at the interlocutory stage. To the same effect is the decision in Workmen v. Hindustan Lever Ltd. 16. The facts in the instant case indicate that the appellant adopted the old tactics of raising a preliminary dispute so as to prolong the adjudication of industrial dispute on merits. It raised the question whether its activities constituted an 'Industry' within the meaning of the Industrial Disputes Act and succeeded in getting a preliminary issue framed on that question. The Tribunal was wiser. It first passed an order that it would be heard as a preliminary issue, but subsequently, by change of mind, and we think rightly, it decided to hear the issue along with other issues on merits at a later stage of the proceedings. It was at this stage that the High Court was approached by the appellant with the grievance that the Industrial Tribunal, having once decided to hear the matter as a preliminary issue, could not change its mind and decide to hear that issue along with other issues on merits. The High Court rightly refused to intervene in the proceedings pending before the Industrial Tribunal at an interlocutory stage and dismissed the petition filed under Article 226 of the Constitution. The decision of the High Court is fully in consonance with the law laid down by this Court in its various decisions referred to above and we do not see any occasion to interfere with the order passed by the High Court. The appeal is dismissed, but without any order as to costs.” 36. It is therefore seen that the Industrial Tribunals while deciding matters relating to labour disputes in proceedings which are summary in nature are to dispose of the issues, whether preliminary or otherwise, at the same. This would be all the more necessary in the present case where the claim had been made under Section 15 of the Act, 1936 raising a grievance with regard to delay in payment of wages and as per terms of the first proviso to sub-section (3) of Section 15 the authority under the Act, 1936 is enjoined to dispose of the claim as far as applicable within a period of three months from the date of registration of the claim by authority. The second proviso to sub-section (3) mandates that the period of three months may be extended if both parties to the dispute agree for any bonafide reason to be recorded by the authority that the said period of three month may be extended to such period as may be necessary to dispose of the application in a just manner. 37. It may therefore be inferred that in a claim filed under Section 15 of the Act, 1936 arising out of deductions from wages or delay in payment of wages time is of essence and the matter cannot be lingered on the pretext of deciding preliminary issues. 38. In view of the aforestated reasons the orders dated 07.04.2016 passed by the Prescribed Authority in Case Nos. P.W. 35/2009, 42/2010, 16/2012 and 18/2011 which are subject matter of challenge in these writ petitions, are held to be legally unsustainable and are therefore set aside. 39. Having regard to the facts of the case, and in particular, that the claims filed by the workman was registered before the authority under the Act, 1936 more than a decade ago, this Court deems it appropriate while setting aside the orders dated 07.04.2016 passed by respondent no.2/Prescribed Authority under the Act, 1936, to remit the matters to the Prescribed Authority under the Act, 1936 with a direction to endeavour to decide the claims, including all the issues raised by the parties, preliminary or otherwise, together and make an endeavour to pass final orders expeditiously, preferably within a period of three months from the date of presentation of a certified copy of this order before the authority. Parties are directed to appear before the authority under the Act, 1936 and not to seek any unnecessary adjournments. 40. The writ petitions are allowed to the extent indicated above.