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Modi Industries Ltd. Vs. State of U.P. and ors. - Court Judgment

SooperKanoon Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Case NumberC.M.W.P. No. 13001 of 1991
Judge
Reported in(1995)IIILLJ320All
ActsUttar Pradesh Industrial Peace (Timely Payment of Wages) Act, 1970 - Sections 3
AppellantModi Industries Ltd.
RespondentState of U.P. and ors.
Appellant AdvocateBharati Sapru and ;Sudhir Chandra, Advs.
Respondent AdvocateS.N. Singh, Adv.
DispositionPetition dismissed
Excerpt:
.....3. recovery of wages in certain industrial establishments as arrear of land revenue (1) where the labour commissioner is satisfied that the occupier of an industrial establishment is in default of payment of wages and that the wage bill in respect of which such occupier is in default exceeds fifty thousand rupees, he may, without prejudice to the provisions of section 5 and 6, forward to the collector, a certificate under his signature specifying the amount of wages due from the industrial establishment concerned. 4. powers of labour commissioner for the purposes of ascertaining the wages bill of an establishment in respect of which default has been committed the labour commissioner shall have all the powers of a civil court, while trying a suit, under the code of civil procedure, 1908..........8.2.1991 a meeting was held in the presence of the additional district magistrate and the deputy labour commissioner in which the representatives of the management of the company and the leaders of the trade unions were present. before the aforesaid authorities a grievance was made on behalf of the trade unions that in the absence of the technical person, it is not possible to run the company, although the workers are always ready to discharge their duties. in view of this position the additional district magistrate suggested that out of the suspended workmen all those persons against whom there are no serious charges be reinstated and the inquiry may be continued against them also so that work can be carried in the company. but the representatives of the management did not agree with.....
Judgment:

R.A. Sharma, J.

1. Petitioner is a Company incorporated under the Indian Companies Act and runs various industries including the Modi Banaspati Manufacturing Co. (hereinafter referred to as the Company) at Modinagar, District Ghaziabad. On 19.12.1990 there was some dispute between the management of the Company and the Trade Union Leaders, which resulted in lodging of two first information reports by the management and the trade union leaders against each other and suspension of 30 workmen of the Company by its management. From 21.12.1990, according to the Company, the workmen came to the Company s premises but did not discharge their duties on account of which there was complete halt in production; but according to the respondents trade unions although the workmen were coming to the Company's premises regularly but the production could not be carried on as 30 workmen, who were suspended, were technicians and in their absence it was not possible to operate the machines. However, on 27.12.1990 an agreement was arrived at between the management of the Company and the trade unions in which it was provided that excepting the employees, who have been suspended, the management of the Company will permit the other workmen to work and those workmen will go to the Company for discharging their duties. It appears that in spite of this agreement the work could not be carried on in the Company. According to the management of the Company the work could not be carried on due to non-cooperation by the workmen; but according to the trade unions management did not permit the workmen to work. Under these circumstances, the District Administration and the Labour Department started making efforts so as to enable the workmen to work in the Company. On 8.2.1991 a meeting was held in the presence of the Additional District Magistrate and the Deputy Labour Commissioner in which the representatives of the management of the Company and the leaders of the trade unions were present. Before the aforesaid authorities a grievance was made on behalf of the trade unions that in the absence of the technical person, it is not possible to run the Company, although the workers are always ready to discharge their duties. In view of this position the Additional District Magistrate suggested that out of the suspended workmen all those persons against whom there are no serious charges be reinstated and the inquiry may be continued against them also so that work can be carried in the Company. But the representatives of the management did not agree with the aforesaid suggestion and requested for the postponement so as to enable them to consult the higher officials of the management. In view of this position 11.1. 1991 was fixed as the next date. It appears that no positive reply was received from the management on account of which work could not be carried on in the Company upto 3.3.1991 and it was only on 4.3.1991 that the Company started the production. The management of the Company did not pay the wages to the workmen from 21.12.1990 to 3.3.1991. The Additional Labour Commissioner issued a notice dated 27.2.1991 under Section 3 of the U.P. Industrial Peace (Timely Payment of Wages) Act, 1978 (hereinafter referred to as the Act), whereby the petitioner was called upon to show cause as to why order for payment of wages under Section-3 of the Act be not made against it and in that connection 10.3.1991 was fixed for appearance of the representatives of the petitioner The petitioner submitted its representation as well as the supplementary representation. They were also given opportunity of personal hearing. After considering the material placed by the petitioner the Additional Labour Commissioner passed an order dated 29.4.1991 (Annexure-V to the writ petition) under Section 3 of the Act directing for recovery of Rs. 3,67,474/- from the petitioner for payment of wages to the workmen for the month of January, 1991. It is against this order that the petitioner has filed this writ petition before this Court.

2. The respondents have filed counter-affidavit and the petitioner has filed rejoinder affidavit in reply thereto. We have heard the learned counsel for the petitioner, learned counsel for the trade unions respondents and the learned Standing Counsel.

3. Learned Counsel for the petitioner has made three submissions, namely, (i) authorities can act under Section 3 of the Act only when there is default on the part of the employer in payment of wages to the workmen and unless such a default is admitted or established by adjudication by appropriate authorities/Court no order can be passed under Section 3, (ii) 'no work no wages' principle is applicable to industrial establishment and as the workmen have not worked in January, 1991 they are not entitled to any wages for the said month and in these circumstances, the Labour Commissioner has no jurisdiction to take action under Section 3 of the Act; and (iii) the impugned order is a non-speaking order. Learned counsel for the respondents apart from disputing the aforesaid submissions of the learned counsel for the petitioner, have raised a preliminary objection to the effect that the petitioner has alternative remedy before the Industrial Tribunal under the Industrial Disputes Act and this writ petition is, as such, liable to be dismissed on the ground of alternative remedy.

4. The payment of Wages Act, 1936 was enacted to ensure that wages payable to the workmen are disbursed by the employer expeditiously. The provision of this Act however, was found to be inadequate to ensure the timely payment of, wages. The State of U.P. accordingly passed the Act so as to ensure the timely payment of wages to the workmen in order to prevent simmering discontent among them and to avoid the grave threat to law and order. The statement of the Objects and reasons of the Act are reproduced below:

'1. Prefatory Note-Statement of Objects and Reasons-Delays in payment of wages of workmen lead to simmering discontent among them. Sometimes a grave threat to law and order is also posed on this account.

2. The provisions of the Payment of Wages Act, 1936 have been found tobe inadequate to ensure timely payment of wages. The incidence of disturbance of Industrial peace being greater in comparatively bigger establishments, it was considered necessary to provide that if the wage bill in default exceeds fifty thousand rupees the amount should be recoverable as arrears of land revenue. Further, in order to curb the tendency of the employees to keep large amounts of wages in arrears. It was also considered necessary to make it a penal offence to be in default of a wage bill exceeding rupees one lakh.'

The Act gives the 'wages' the same meaning, which has been assigned to it in the Payment of Wages Act, 1936. 'Wage bill' has been defined as follows:

'2(d). 'Wages-bill' means the total amount of wages payable by an industrial establishment to its workmen;

Sections 3 and 4, which provide for recovery of wages as arrears of land revenue and the powers of the Labour Commissioner, being relevant are reproduced below:

'3. Recovery of wages in certain industrial establishments as arrear of land revenue (1) Where the Labour Commissioner is satisfied that the occupier of an industrial establishment is in default of payment of wages and that the wage bill in respect of which such occupier is in default exceeds fifty thousand rupees, he may, without prejudice to the provisions of Section 5 and 6, forward to the Collector, a certificate under his signature specifying the amount of wages due from the industrial establishment concerned.

(2) Upon receipt of the certificate referred to Sub-section (1) the Collector shall proceed to realise, from the industrial establishment, the amount specified therein, besides recovery charges at the rate of ten per cent, as if such amount were an arrear of land revenue.

(3) The amount realised under Sub-section (2) shall after deducting the recovery charges, be placed at the disposal of the Labour Commissioner who shall disburse the same or cause it to be disbursed among the workmen entitled thereto.

(4) Where the amount so realised falls short of the wages-bill in respect of which the occupier has been in default, the Labour Commissioner may arrange for disbursement of such proportion or respective proportions of the wages due to various categories of workmen as he may think fit.

(5) The liability of the occupier towards each workmen in respect of payment of wages, shall, to extent of the amount paid to such workman under this section stand discharged.4. Powers of Labour Commissioner for the purposes of ascertaining the wages bill of an establishment in respect of which default has been committed the Labour Commissioner shall have all the powers of a Civil Court, while trying a suit, under the Code of Civil Procedure, 1908 in respect of enforcing the attendance of witnesses and examining them on oath compelling the production of documents and shall be deemed to be a Civil Court for the purpose of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.'

5. Section 3 of the Act empowers the Labour Commissioner to issue certificate to the Collector for realising the wages so specified by him from the industrial establishment, if he is satisfied that the occupier of the industrial establishment is in default of payment of wages, which exceeds fifty thousand rupees and after such a certificate is issued by the Labour Commissioner, the Collector is required to recover the same as arrears of land revenue Act, though satisfaction of the Labour Commissioner about the default in payment of wages by industrial establishment is condition precedent for exercising the power under Section 3, but heis not supposed to adjudicate finally on the question as to whether there has been any default in payment of wages on the part of any industrial establishment. What is required is the satisfaction of the Labour Com-missioner in regard to existence of the objective fact, namely, that the industrial establishment has committed default in payment of wages to its workmen. For his satisfaction, the Labour Commissioner is not required to adjudicate on the question like a Court or an Industrial Tribunal, although the satisfaction has to be based on some relevant material and the order under Section 3 has to be passed in accordance with the principles of natural justice. As the Act has been passed to provide for timely payment of wages in bigger industrial establishment in the interest of the maintenance of industrial peace and for preventing a grave threat to law and order, the powers given to the Labour Commissioner under Section 3 of the Act are like the emergency powers, which are to be exercised on his satisfaction about the default in payment of wages by industrial establishment. The final adjudication on the question as to whether there has been a default on the part of the industrial establishment in payment of wages has to be made by the Industrial Tribunal under the Industrial Disputes Act. The order of the Labour Commissioner under Section 3 cannot be regarded as final.

6. In State of U.P. v. Basti Sugar Mills 1961 (1) LLJ 220 (SC) the order of the Government of U.P. issued under Clause (b) of Section 3 of the U.P., Industrial Disputes Act requiring the Sugar Mills to make payment of bonus to the workers was challenged. Section 3(b) of the U.P. Industrial Disputes Act under which U.P. Government passed the order referred to above for payment of bonus is as follows:

'If, in the opinion of the State Government, it is necessary or expedient so to do for securing the public safety or convenience, or the maintenance of public order or supplies and services essential to the life or the community, or for main-taining employment, it may, by general or special order, make provision.

(b) for requiring employers, workmen or both to observe for such period as may be specified in the order, such terms and conditions of employment as may be determined in accordance with the order

7. The Supreme Court upheld the order of the State Government on the ground that the provisions of Section 3(b) of U.P. Industrial Disputes Act were enacted to enable the Government to act promptly for securing public safety etc. and the order under such a provision would be in the nature of temporary or an interim order, which would be subject to the adjudication under the Industrial Disputes Act by an Industrial Tribunal. It was thus laid own that after an order under Section 3(b) of the U.P. Industrial Disputes Act is passed, it is open to the aggrieved party to move the Government to refer the industrial disputes for adjudication. The relevant extract from this judgment is reproduced below.

'The opening words of Section 3 themselves indicate that the provisions thereof are to be availed of in an emergency. It is true that even a reference to an arbitrator or a conciliator could be made only if there is an emergency. But then an emergency may be acute. Such an emergency necessitates the exercise of powers under Clause(b) and a mere resort to those under Clause (d) may be inadequate to meet this situation. Whether to resort to one provision, or other must depend upon the subjective satisfactipn or the State Government upon which powers to act under Section 3 have been conferred by the Legislature'.

*******

In our view, therefore, the provisions of Clause (b) of Section 3 are not in any sense alternative to those of Clause (d) and that the former could be availed of by the State Government only in an emergency and as a temporary measure. The right of the employer or the employee to require the dispute to be referred for conciliation or adjudication would still be there and could be exercised by them by taking appropriate steps.'

Following the aforesaid decision in the case of State of U.P. v. Basti Sugar Mills and Anr. order of the State Government under Section 3 (d) of the U.P. Industrial Disputes Act directing for payment of bonus to the workers was upheld by the Supreme Court in the case of Basti Sugar Mills v. State of U.P. : 1978 (2) LLJ 412. In this case the argument to the effect that Section 3(b) of the U.P. Act and the order passed thereunder for payment of bonus to the workmen are inconsistent with the provisions of the Bonus Act, was rejected by the Supreme Court on the ground that under Section 3(b) of the U.P. Act the Government exercises the emergency power. The relevant extract from the judgment is reproduced below:

The Bonus Act is a long-range remedy to produce peace; the U.P. Act provides a distress solution to produce truce. The Bonus Act adjudicates rights of parties; the U.P. provision meets an emergency situation on an administrative basis. These social projections and operational limitations of the two statutory provisions must be grasped to resolve the legal conundrum. When the sequestered value of life, is in imminent peril of disruption immediate tranquilizers are the desidera-tumes. The escalating danger to law and order, by the safety to maintenance of supplies essential to the life of the community the break-down of production and employment these anti-social consequences of 'the madding crowds' ignoble strike' are sought to be controlled by a quick shot in the arm by use of Section 3(b). It is a balm for the time, not a quasi judicial determination. We may easily visualise other explosive occasions which traumatise society and so attract Section 3(b).'

The first submission of the learned counsel for the petitioner for the reasons mentioned above has got to be rejected.

8. The second submission of the learned counsel for the petitioner also lacks force. It is true that if the workmen did not work, although the work was offered to them, they are not entitled to wages. But if the workmen are willing to work and the work is not offered to them by the employer, the position will be different. The decision of the Supreme Court in the case of Bank of India v. T.S. Kelawala : 1990 (2) LLJ 39 (SC) cited by the learned counsel for the petitioner in support of his submission cannot help the petitioner, as in that case the workmen have in spite of the notice by the employer, gone on strike and on that basis the Supreme Court upheld the right of the employer to deduct the wages of the date on which the workmen had gone on strike. The question, which was required to be decided by the Supreme Court, has been referred to paragraph 4 of the judgment, which is reproduced below:

'The Principal question involved in the case, according to us, is notwithstanding the absence of a term in the contract of employment or of a provision in the service rules or regulations, whether an employer is entitled to deduct wages for the period that the employees refuse to work although the work is offered to them.'''

9. In the case of Bank of India v. T.S. Kelawala (supra), the employer was willing to offer the work but the workers did not work as they had gone on strike. If the work is offered but the workman does not work, the employer is fully justified to deduct the wages. Same position was reiterated by the Hon'ble Supreme Court in the case of Union of India v. K. Jankiraman 1991 (2) LLJ 570 relevant extract from which is reproduced below:

'The normal rule of 'no work no pay' is not applicable to cases such as the present one where the employee althoughhe is willing to work is kept away from work by the authorities for no fault of his. This is not a case where the employee remains away from work for his own reasons, although the work is offered to him.'

The provisions of Payment of wages Act, such as Section 7, which authorises the deduction from the wages and Section 9, which provides for deduction from the wages for absence from duty cannot be attracted if the employer had not offered the work to the workmen. The principles laid down in the case of T.S. Kelawala (supra) and the provisions of the Payment of Wages Act cannot help the petitioner.

10. In the instant case both the parties have taken conflicting stand on the question as to whether the employer was willing to offer the work. The case set up by the petitioner is that it was ready to offer the work but the workmen were not willing to discharge their duties. On the other hand the stand of the workmen is that they were always wiling to work but the work was not offered to them by the employer and in fact they were prevented from working by the petitioner. Although from the perusal of the minutes of the meeting dated 8.1.1991 and the correspondence, which have been brought on the record by the parties, prima facie it appears that the workmen were willing to work but the work was not offered to them but no conclusive finding can be recorded by the Court on the basis of the material placed on the record of this case by the parties. Apart from the fact that the parties in the instant case have taken contradictory stand and have disputed each other's assertion, the material already on record is not sufficient to record a finding on the question in issue. The proper forum for adjudication of such a dispute is the Industrial Tribunal where the parties can lead evidence both oral and documentary and the Tribunal if finds necessary sum on the record. In case it is ultimately found that there was no defauh on the part of the Industrial establishment, the order under Section 3 of the Act will become ineffectiveand the amount of wages paid to the workmen in pursuance thereof shall be liable to be adjusted in future, as was observed in the second case of Basti Sugar Mills(supra).

11. As regards the third submission made by the learned counsel for the petitioner, it may be mentioned that power under Section 3 of the Act is administrative in nature and an authority which exercises the administrative power is not required to pass a speaking order unless required by Statute. Reference in this connection may be made to the case of Mahabir Jute Mills v. State of U.P. 1991 (63) FLR 478 relevant extract of which is reproduced below:

'It is well settled that while the rules of natural justice would apply to administrative proceedings, it is not necessary that the administrative orders should be speaking orders unless the statute specifically enjoins such a requirement.'

12. For the reasons given above, we have not expressed any final opinion on the controversy in dispute. The petitioner has an alternative remedy before the Industrial Tribunal. A full Bench of this Court in the case of Chandrama Singh v. Managing Director 1991 (63) FLR 478 has laid down that this Court should not interfere under Article 226 of the Constitution of India if the petitioner has an alternative remedy before the Labour Court unless it is pleaded and proved that the alternative remedy is inadequate or inefficacious. Petitioner has not proved before us that the remedy before the Industrial Tribunal is inadequate or inefficacious. The only averments in this regard made by the petitioner are in paragraph 28 of the writ petition, which is reproduced below:

'28. That in these circumstances, the petitioner has no other equally efficacious and speedy remedy available to it except to invoke the extraordinary jurisdiction of this Hon'ble Court under Article 226 of the Constitution of India, inter aliaon the following amongst other grounds.'

The allegations made in the aforesaid paragraph are absolutely vague and it has not been pleaded and proved by the petitioner as to why and how the remedy before the Industrial Tribunal is inadequate or inefficacious. In this connection learned counsel for the petitioner has, however, argued that if the petitioner is relegated to the alternative remedy that will be violative of Article 19(1)(g) of the Constitution of India, as it amounts to payment of wages without determination of liability. It is not possible to agree with the learned counsel. The adjudication of the liability has not been shut down by the Act. As mentioned hereinbefore the adjudication has to be made by the Labour Court/Industrial Tribunal and for that purpose the aggrieved party has to approach the Government for making reference to Labour Court-Industrial Tribunal under Industrial Disputes Act. The orders under Section 3 of the Act are of temporary in nature. In case the Labour Court finds that the order under Section 3 is not justified and cannot be sustained, the amount already paid to the workmen in pursuance of the said order is liable to be adjusted by the petitioner in future.

13. When order is passed under Section 3 of the Act for recovery of wages and the aggrieved party approaches the Government to refer the dispute under the Industrial Dispute Act, the Government hashardly an option in view of the reasons given above. The Government, if required By any party to refer the dispute to the Industrial Tribunal, it has to pass an appropriate order in connection therewith.

14. The writ petition is accordingly dismissed. There shall be no order as to costs. In case the petitioner approaches the Government for reference under the Industrial Disputes Act to the Industrial Tribunal/Labour Court, the State Government shall pass appropriate order within six weeks from the date of presentation of the application for reference along with the certified copy of this order. After reference is made, the Industrial Tribunal/Labour Court will decide the dispute expeditiously in accordance with law.

15. Learned counsel appearing for the petitioner has made an oral prayer under Article 134A of the Constitution for granting of a certificate under Article 133 of the Constitution for taking the matter to the Supreme Court in appeal.

16. After hearing learned counsel for the petitioner we are of the opinion that the case does not involve such a substantial question of law of general importance which in our opinion needs to be decided by the Supreme Court. The oral prayer is therefore rejected.

Petition dismissed.


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