ORDER
B.H. Marlapalle, J.
1. Heard Shri Gangadhar Gade, President of Panther PowerKamgar Sanghatana - party in person, Shri T.K. Prabhakaran, Advocate for respondent Nos. 1 and 2 and Shri A.M. Kanade, Government Pleader for respondent No. 3.
2. Rule made returnable forthwith with the consent of the parties.
3. A letter dated 19-3-1997 addressed by the present petitioner came to be converted as a writ petition and registered as Writ Petition No. 1087 of 1997 as per the directions of the learned Senior Judge of this Bench. The grievance of the petitioner-Union was that the respondent Nos. 1 and 2 employers were not paying the salary for the period from January to December 1996 as well as the balance of wages for the period from October to December 1995. It was further contended that the wages for the period from January to February 1997 were also not paid by the employers. It is the case of the petitioner - Union that inspite of intervention by the Assistant Labour Commissioner and the Deputy Labour Commissioner, Aurangabad, the employers did not pay the wages though he had agreed to pay the said wages during the meetings held in the office of the Deputy Labour Commissioner, Aurangabad on several occasions. The petitioner therefore sought intervention of this Court on the ground that inspite of efforts made by the Deputy Commissioner of Labour as well as the Assistant Commissioner of Labour, the respondents employer has been deliberately avoiding to pay wages and the said act on the part of the employer was mala fide inasmuch as some how or the other the employer is bent Upon creating situation forcing closure of the factory in the M.I.D.C. area Chikalthana, Aurangabad though the said factory is about 25 years old and is an established manufacturer of hand tools. The petitioner has thus prayed for directions against respondents-employer to pay the balance of wages for the period from October to December 1995 as well as full wages for the period from January 1996 to February 1997.
4. On hearing party-in-person we had issued notice to the Deputy Labour Commissioner, at the first instance, and called upon him to file an affidavit which he did on 27th of March 1997. In the said affidavit of the Deputy Labour Commissioner it is, inter-alia, stated that:
(a) due to non payment of the electricity bills by the management, the electric power supply of the said Jhalani Tools was disconnected;
(b) the respondents-employer did not provide sufficient raw material for manufacturing hand tools;
(c) the management failed to pay balance of 50 per cent wages for the period from October to December 1995 and full wages for the period from January 1996 to February 1997; and
(d) the tripartite meetings were scheduled on various dates right from 29-11-1995 to 3-3-1997 (on about 12 occasions) and in the said meetings the Vice President (Tech.) i.e. respondent No, 1 did not appear and in the meeting held on 17-1-1997 the respondent No- 1 appeared before the Deputy Commissioner of Labour and agreed at least one month's salary to be disbursed on or before 30-1-1997 and inspite of this assurance the respondent No. 1 failed to pay the amount of wages which is more particularly shown in the Annexure R-1 to the affidavit.
The details of unpaid wages as set out in the said annexure are reproduced hereinbelow for ready reference
Sr.No.MonthAmount
01December1995 (15 days) 02October1995 (15 days)Rs.26,45,800.0003November1995 (15 days) 04January1996Rs.17,50,000.0005February1996Rs.17.50,000.0006March1996Rs.17,50,000.0007October1996Rs.17,50,000.0008November1996RS.17,50,000.0009December1996Rs.17,50,000.0010January1997Rs.17,50,000.0011February1997
Rs.17.50,000.00 Total9 months.
5. In view of the contention of the Deputy Commissioner of Labour that inspite of his best efforts to settle the dispute regarding non payment of wages to the petitioner Union's members, who are employees of respondent Nos. 1 and 2, there was a deadlock created for the reasons solely attributable to respondent No. 1 and even the assurances given in the conciliation meetings by the respondent No. 1 were not being kept. We, therefore, decided to hear the management and at that stage we were told that the manager of the factory at Aurangabad has already submitted resignation. We, therefore, issued notice to respondent No. 1 to appear before us and in pursuance of the said notice the respondent No. 1 appeared and filed an affidavit on 24th April 1997. In the said affidavit the respondent No. 1 has raised preliminary objection regarding the maintainability of this petition and further stated that the claim made by the petitioner Union that wages have not been paid was false. The affidavit further states that the employees represented by the petitioner Union have been disbursed excess wages and the management is entitled to recover the said excess wages on the ground that the wages were paid much more than what the employees were entitled to on the basis of the actual work performed by them. When we called upon the learned Advocate appearing for the respondents employer to submit a copy of any settlement signed between the parties under the provisions of the Industrial Disputes Act, 1947 wherein it is provided that ihe wages are payable strictly on the basis of work performed by the employees or the output given by such employees and not on the basis of attendance marked, the learned Advocate conceded that such a settlement has never been executed between the parties. It was, therefore, abundantly clear that the employer was deliberately trying to mislead this Court by claiming that the petitioners/employees have been paid excess wages and that the claim of the Union was false.
6. During the course of arguments it was also brought to our attention that during the pendency of this writ petition, the management had issued a lock out notice and operations of the factory were suspended. It was revealed during the course of arguments that the said notice of lock out has been issued mainly for the reason that electricity supply to the factory has been disconnected, the management is facing financial crises and there is no raw-material to keep the factory operations, running. However, as the petitioner-Union has an alternate remedy to challenge the propriety or legality ol the lock out notice, we did not deem it proper to hear the Union's grievance regarding the action, of lock out during the pendency of this petition. The respondent No. 1 made out a strong plea that solely due to the behaviour of the employees and non cooperation from the Union the factory had become sick and inspite of best efforts made by the management to keep the factory operations running at normal levels, the management has not been successful in doing so because of the reasons attributable to the employees. He also stated that the management is --exploring the possibility of handing over the factory on lease to any third party or locate a financier. The petitioner Union contended that the respondent No. 1 was trying to make out a totally false case and that the factory became sick only for the reasons totally attributable to the management. The petitioner-Union states before us that the employees are ready and willing to not only extend their wholehearted cooperation but also sacrifice, if required, for the smooth running of the factory so long as the respondents management was determined to re-start the factory operations. The respondent No. 1 also showed his willingness to reconsider the issue of restarting the factory operations and hence we felt it desirable to give some time for a dialogue between the parties with the intervention of the conciliation machinery. But due to apprehension expressed by both the parties regarding the effectiveness of such meetings at this stage, we agreed to hold chamber meetings and accordingly four meetings were held in our chambers in which the learned Government Pleader along with the Assistant Labour Commissioner, Aurangabad, the management represented by the learned Advocate Shri T.K. Prabhakaran and the party-in-person alongwith other office bearers of the Union were present. The respondent No. 1 did not participate in the meetings and instead deputed the management of the local factory who had already reportedly resigned. As a outcome of these meeting, the Union agreed that it was ready and willing to consider the proposal to treat the balance of wages till February 1997 as frozen for the time being, extend full cooperation's to run the factory by receiving only 50 percent wages and the balance wages to be kept in abeyance for the time being (tentatively for a period of six months) and motivate about 100 to 125 employees to take the benefits of Voluntary Retirement Scheme if the employer desired to announce such a scheme at any time in future. It is pertinent to notice that the management submitted a proposal titled as 'withdrawal of lock-out and revival of the unit' in which only the demands to be met by the Union and the employees were set out and shockingly no commitment from the management regarding its willingness to bring additional finance to restart the factory was coming forth. When we called upon the Advocate representing the management to clarify the steps which the management proposed to take for restarting the unit and arranging for finance required immediately, it was contended that the management had no capacity to invest any more and the employees will have to generate such funds by despatching the work in progress. This stand of the management taken finally, was nothing short of a blow to the discussions arranged between the parties solely with an intention to restart the factory operations. And hence we were left with no alternative but to proceed with the matter on merits.
7. The respondents management filed a rejoinder to the affidavit filed by respondent No. 3 and contended that the assertion of respondent No. 3 regarding non payment of wages or arrears of wages by the respondents management was false and fabricated and the contents in Exhibit R-1 to the affidavit filed by respondent No. 3 were totally denied. However, it is pertinent to note that during the meetings held in our chambers the learned Advocate of the respondents management as well as the manager, who was present in the meetings, conceded that the statement in Exhibit R-1 to the affidavit filed by the respondent No. 3 is based on factual position and the respondents management had yet to pay 50 percent of the wages for the period from October to December 1995 and full wages for the period from January 1996 to February 1997. In the totality of the facts it was revealed that the respondents management had no intentions to pay the wages as claimed by the Union though such wages were due to the employees, the management was totally non committal for any steps on its part to restart the factory operations including arranging immediate finance and the management was not worried if the factory at Aurangabad continued to remain as a sick unit. Finally, when we called upon the learned Advocate of the respondents - management to put forward his case opposing the petition, he stated that beyond the affidavit and the re-jointer he has filed, there is nothing else to add and he submitted written points of argument mainly on the ground of alternate remedy available to the petitioners-employees to claim wages from the employer, namely, the remedy under the Payment of Wages Act, 1936. We, therefore, wish to decide the first objection raised by the management regarding the maintainability of the writ petition in view of the provisions of the Payment of Wages Act, namely, the remedy available to the employees to recover wages from the employer and the jurisdiction of this Court to issue a writ against the respondent Nos. 1 and 2, who do not fall within the ambit of Article 12 of the Constitution of India. Before we proceed further it requires to be noted at this stage that the learned advocate appearing for the respondents management did not dispute the legal position that this Court has the powers to issue a writ or any direction in the nature of the writ if it is found that the respondent Nos. 1 and 2 have acted in breach of any statutory provisions.
8. The Government of India has enacted the Payment of Wages Act, 1936 to regulate the payment of wages to the employees, inter alia, employed in a factory. Section 3 pertains to the responsibility for payment of wages, section 4 is regarding fixation of wage-periods and section 5 has prescribed the time of payment of wages. The relevant provisions of sections 3, 4 and 5 of the Payment of Wages Act are reproduced hereinbelow.
'3. Responsibility for payment of wages ---
Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act:
Provided that, in the case of persons employed (otherwise than by a contractor)-
(a) in factories, if a person has been named as the manager of the factory under Clause (1) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948):
(b) .....
(c) .....
the person so named, the person responsible to the employer, or the person so nominated, as the case may be, shall also be responsible for such payment.
4. Fixation of wage-periods ---(1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable.
(2) No wages-period shall exceed one month.
5. Time of payment of wages - The wages of every person employed uponor in-
(a) any railway, factory or industrial or other establishment upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day,
, .....
From the above provisions it is clear that the employer is made responsible for the payment of wages to his employees, the payment has to be in respect of a fixed wage periods, namely, daily, weekly or monthly and in case an industrial establishment/factory employs less than 1000 employees, the payment of wages has to be effected before the expiry of the seventh day of the next month. In the present case, admittedly there were about 600- employees on the rolls of the management and hence the management is required to pay wages before the expiry of the 7th day. It is the contention of the learned Advocate appearing for the respondents management that section 15 of the Payment of Wages Act has provided remedy which is equally efficacious by approaching the Labour Court constituted by the State Government and file an application for the recovery of unpaid wages or any illegal deductions made from the wages and hence in such a situation the present petition is not maintainable. There is no dispute that the monthly wages of all the employees of the respondents factory come to about Rs. 17.5 lakhs and based on this figure, the average amount of wages of every employee comes to about Rs. 3,000/- per month. Even otherwise, nothing has been brought before us by the management to show that all the employees are getting wages less than Rs. 1,600/- per month and in such situation the only conclusion that is to be drawn is that every employee is drawing in excess of Rs. 1,600/- per month by way of monthly wages. Section 1(4) and 1(6) of the Payment of Wages Act, 1936, which are relevant to consider the learned Advocate's contentions are reproduced hereinbelow :--
'1-(4) It applies in the first instance to the payment of wages to persons employed ir any factory, 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.'
'1.(6) Nothing in this Act shall apply to wages payable in respect of a wage period which, over such wage-period, average one thousand six hundred rupees a month or more.'
By reading the provisions of section 1(6) it is clear that the provisions of the Payment of Wages Act are not applicable to wages which average at Rs. 1,600/- or more per month. There is no dispute that there is no employee with the respondents management in its factory at Aurangabad whose average rate of wages is less than Rs. 1,600/- per month. It is thus clear that the provisions of the Payment of Wages Act are not applicable to the present case. The reliance of the learned Advocate of the respondents - management on the judgments of the Supreme Court in the cases of U.P. Jal Nigam v. N.S. Mathur, 1995 S.C.C.209 and Surendra Prasad Khugsal v. Chairman M.M.T. Corporation, 1993 L. I.C. 2433 is without any merits in the facts and circumstances of the present case. The learned advocate also relied upon the Full Bench judgment of the Rajasthan High Court in Gopi Lal Teli v. State of Rajasthan, 1995 L. I.C. 1105 and contended that even for the violations of statutory provisions, the petition is not maintainable unless alternative remedy as provided in such statute is exhausted by the aggrieved person. It was the contention of the learned Advocate of the respondents that even if there is violation of the Payment of Wages Act, 1936 by the management by not paying the wages before seventh day of every month, the Union cannot approach this Court by way of writ petition unless the remedy provided under the Payment of Wages Act is exhausted. This submission of the learned Advocate is also without any foundation when in the present case the Payment of Wages Act is not applicable. Lastly, the learned Advocate also took a plea that as some cases filed by the Government Labour Officer against the management regarding payment of wages to the employees are pending before the Labour Court at Aurangabad, the present petition is not maintainable. The learned Advocate once again seems to be conveniently ignoring the fact that as per section 1(6) of the Payment of Wages Act, the provisions of the said Act are not applicable to the present case.
9. The second ground challenge regarding the maintainability of this petition is that the respondent Nos. 1 and 2 are not a State or a State instrumentality as defined under Article 12 of the Constitution of India and hence no writ or a direction in the nature of writ can be issued against the said respondents. It is not necessary for us to dwell upon the issue whether the respondent Nos. 1 and 2 are a State as defined in Article 12 of the Constitution of India and even if it is for the time being accepted that they are not a State as defined under the said Article, the present petition is even otherwise maintainable. Undoubtedly the factory at Aurangabad is covered under the Industrial Employment (Standing Orders) Act, 1946 and the said Act is to provide for defining with sufficient precision certain conditions of employment in industrial establishments and for certain other matters. In section 2(g) of the said Act the term 'standing orders' has been defined to mean the rules relating to matters set out in the Schedule and item 2 of the said Schedule to the Act of 1946 pertains to the manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates. It is thus clear that the employer is required to make a provision in the Standing Orders providing for wage rates and pay days etc. amongst other things. The respondent management has framed the standing orders in respect of Aurangabad factory and the said standing orders have been certified by the Certifying Officer as per provisions of section 5 of the Act of 1946 way back on 9th February 1978. Standing Order No. 7(c) and Standing Order No. 8, which are relevant for the present purpose are reproduced :
'7(c) the days on which wages are to be paid, shall be displayed on the notice board at the time office or at or near the main entrance of the establishment.'
'8) Wages Notice :
i) Notice specifying rates of wages showing separately the allowances, if any, payable to each class of workman and each class of work shall be displayed in conspicuous position in the departments in which the workmen concerned are working or at/or near the main entrance of establishment.
ii) An unclaimed wage pay day for each week (i.e. a day on which wages due to workman but not paid on the usual day on account of their being unclaimed, are to be paid) shall be notified on the notice board along with notices to be displayed under Standing Order No. 7.
iii) The unclaimed amount of wages due to a workman shall be paid on the days notified under this Standing orders and on the unclaimed wages pay day following the date on which a substantiated claims was presented by workman, or on his behalf, by his legal representative.'
It has been held by a catena of decisions that the Standing Orders framed and certified under the Act of 1946 have statutory force and such Standing Orders create a statutory provision regulating the employer and employee relation and terms of employment of the employees. If there is any breach by an employer of a provision incorporated in such certified Standing Orders based on the requirement stipulated in the Act of 1946 and inspite of all efforts made by the employees as well as the Conciliation Officer, the employer is consistently refusing to comply with such obligations cast on it, we are of the considered view that a writ or a direction in the nature of writ is liable to be issued against such an employer for enforcing the right of an employee emanated from the provisions of the Act of 1946.
10. On perusal of the affidavit filed by the Deputy Labour Commissioner, who is also a Conciliation Officer under the Industrial Disputes Act, 1947, it is clear that inspite of the conciliation proceedings having been arranged, respondent No. 1 did not attend the conciliation meetings and though he attended such a conciliation meeting on 17-1-1997 and agreed to disburse some wages, failed to maintain this commitment. The Act of 1946 creates an obligation on and mandates the employer to pay the wages to the employees on a particular date and such a provision is incorporated in the certified Standing Orders as reproduced hereinabove. The failure on the part of the respondents management in respect of the payment of wages or the payment of balance of wages for the period from October 1995 to February 1997 amounts to breach of the statutory provisions on the part of the employer management and hence writ petition in such a situation is certainly maintainable, against a body corporate.
11. In the case of Senior Regional Manager Food Corporation of India, Calcutta v. Tulsi Das Bauri : (1997)IILLJ747SC a Division Bench of Calcutta High Court called upon the Food Corporation of India to pay wages/balance of wages to the employees of the contractor as the contractor had failed to pay such wages/balance of wages and in terms of section 21 of the Contract Labour (Regulation and Abolition) Act, 1970, it was the responsibility of the Food Corporation of India as principal employer to pay wages to the contract labours in case the contractor failed to do so. The decision of the Calcutta High Court came to be challenged before the Supreme Court and while confirming the decision of the Calcutta High Court, the Apex Court held that on reading the scheme of section 21 of the Contract Labour (Regulation and Abolition) Act, 1970, the principal employer is statutory responsible to ensure payment of the wages as per law and in case the contractor commits default in the payment of wages, the principal employer is made responsible for due payment. It was further held that the term 'wages' includes the balance of wages or arrears thereof. We are, therefore, fortified in our view that a direction can be issued under Article 226 of the Constitution of India against the respondent Nos. 1 and 2 to pay balance of wages or unpaid wages to which the employees are entitled to and to further direct the employer to disburse such amounts within a specified period.
12. Coming to the merits of the case, as observed hereinabove, during the meetings held in our chambers the amount of unpaid wages as set out in the affidavit of the Deputy Commissioner of Labour was not disputed by the respondents employer and in the absence of any settlement binding the parties and providing for wages to be directly linked with the performance rather than the attendance, the plea of the employer that the employees are not entitled to receive any more wages cannot be accepted as has been conceded by the learned advocate appearing for the respondents management. However, on the basis of the arguments advanced by the learned Advocate for the respondents management, there appears to be a case that the management is facing financial crisis and it does not appear to have immediate resources to arrange for disbursement of such a huge amount of Rs. 136.5 lakhs in one instalment. We are, therefore, impressed with the request of the learned Advocate for the respondents management on this count and his prayer for disbursement of wages spread over in instalments deserves to be considered. In the result, we pass the following orders.
13. Management of Zalani Tools (India) through its Managing Director, Mr. Y.C. Zalani, is directed to pay the arrears of wages for the period from October to December 1995 (Balance of 50 per cent) before the end of June 1997.
So far as the payment for the period from January 1996 to February 1997 is concerned, the said management is directed to pay the unpaid salary/wages by eight equal monthly instalments commencing from July 1997 e.g. the salary/wages payable for January 1996 shall be paid on or before 31st July 1997 and the same mode of payment is followed for the remaining period.
For the balance amount of unpaid wages, the amount indicated in the affidavit filed by the Deputy Labour Commissioner will be treated as the correct amount.
We appoint Mr. Munje, Assistant Labour Commissioner as a Officer to monitor implementation of this order and submit the report from time to time to this Court.
14. Rule is made absolute in terms of the above order with costs quantified at Rs.2,500/.
15. Petition allowed.