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Deen Bandhu Chaudhary Vs. the Authority Under Payment of Wages Act and ors. - Court Judgment

SooperKanoon Citation
SubjectLabour and Industrial
CourtRajasthan High Court
Decided On
Case NumberS.B. Civil Misc. Writ Petition No. 168 of 1969
Judge
Reported in1971WLN381
AppellantDeen Bandhu Chaudhary
RespondentThe Authority Under Payment of Wages Act and ors.
DispositionPetition allowed
Cases ReferredIn Payment of Wages Inspector v. B.E.S.
Excerpt:
.....deemed to be a term of employment. i am further inclined to hold under the circumstances that 4% bonus claimed by the non-petitioner no. 2 under section 10 of the payment of wages act, 1956 amounts to wages within the definition of the term in section 2(vi).;(b) payment of wages act, 1956 - section 15(3)--complicated questions of fact & law--held, authority has no jurisdiction to decide them.;it must be taken as a settled law that where complicated questions of fact or law are raised, and a prolonged inquiry becomes necessary the payment of wages authority would have no jurisdiction to decide the claim before it. the case involved complicated and controvertial question of facts and law, which could not be decided by the by the payment of wages authority by a summary procedure as..........application under section 15(3) of the payment of wages acton 26-9-1967 alleging that the minimum bonus payable to him under the payment of bonus act, 1965 at 4% of the wages earned by him during the years 1965 and 1966 had been wrongly withheld by the employer. it was prayed that the employer may be directed to pay minimum bonus for these two years amounting to rs. 96/-along with 10 times compensation amounting to rs. 960/-. a copy of this application has been placed on the record and marked ex. 1. the application was opposed by the employer, who pleaded inter alia that the. authority under the payment of wages act had no jurisdiction to entertain the employee's claim for bonus. he also denied the worker's claim to at the payment of bonus, and further pleaded that the employer was.....
Judgment:

C.M. Lodha, J.

1. This is a petition under Article 226 of the Constitution of India by Deen Bandhu Chaudhri, Manager of the Navjyoti Daily challenging the order of the Authority under the Payment of Wages Act, Jaipur dated 22-11-68 marked Ex. 13 by which the claim of the non-petitioner No. 2 Shyam Anjan for payment of minimum bonus for the years 1965 and 1966 amounting to Rs. 96/- was allowed, and further a sum of Rs. 20/- was granted as compensation for delayed payment. It is the admitted case of the parties that Shyam Anjan was employed by the petitioner a Proof-Reader and his services were terminated with effect from 12-3-1967. Shyam Anjan filed an application under Section 15(3) of the Payment of Wages Acton 26-9-1967 alleging that the minimum bonus payable to him under the Payment of Bonus Act, 1965 at 4% of the wages earned by him during the years 1965 and 1966 had been wrongly withheld by the employer. It was prayed that the employer may be directed to pay minimum bonus for these two years amounting to Rs. 96/-along with 10 times compensation amounting to Rs. 960/-. A copy of this application has been placed on the record and marked Ex. 1. The application was opposed by the employer, who pleaded inter alia that the. Authority under the Payment of Wages Act had no jurisdiction to entertain the employee's claim for bonus. He also denied the worker's claim to at the payment of bonus, and further pleaded that the employer was exempt from the operation of the provisions of the Payment of Bonus Act. The authority, however, repelled all the contentions raised on behalf of the employer arid issued a direction for payment of bonus and compensation as stated above.

2. Two contentions have been raised on behalf of the petitioner. It has been argued in the first place that bonus is not covered by the definition of the term 'wages' as contained in the Payment of Wages Act, and therefore, the application before the Authority filed by the non-petitioner No. 2 was not maintainable in as much as the Payment of Wages Act is concerned only with wages. Secondly, it was urged that the adjudication of the claim of the non-petitioner No.2 to the payment of bonus under the Bonus Act would involve or give rise to difficult and complicated questions of law and fact which the Payment of Wages Authority was not competent to decide, and, therefore, it ought to have directed the non-petitioner No. 2 to seek his remedy within the four corners of the Payment of Bonus Act.

3. In order to appreciate the contentions raised by the learned Counsel for the petitioner it would be necessary to refer to some of the relevant provisions of the Payment of Wages Act as well as the Payment of Bonus Act 'Wages' has been defined in Section 2(vi) the Payment of Wages Act, as follows:

(vi) 'Wages' means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms 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 includes:

(a) any remuneration payable under any award or settlement between the parties or order of a Court;

(b) any remuneration to which the person employed is entitled in respect of over-time work or holidays on any leave period.

(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name)

(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum whether with or without deductions, but does not provide for the time within which the payment is to be made;

(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force; but does not include.

(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not from part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;

(2) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;

(3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;

(4) any travelling allowance or the value of any travelling concession;

(5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or

(6) any gratuity payable on the termination of employment in cases other than those specified in Sub-clause (d).

Section 15(1) of this Act further provides that 'the State Government may, by notification in the official Gazette, appoint a presiding officer...to be 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.' The procedure prescribed for the trial of claims to wages is contained in Sub-section (3) of Section 15 and a bare perusal of that sub-section would show that the procedure is a very summary one and enacted to ensure speedy disposal of the employee's claim, and the prompt payment to him of his wages.

4. Section 10 of the Bonus Act makes provision for payment of minimum bonus and provides that subject to the provisions of Sections 8 and 13 every employer shall be bound to pay to every employee in an accounting year a minimum bonus which stall be four percent of the salary or wage earned by the employee during the accounting year or forty rupees whichever is higher, whether there are profits in the accounting year or not.

5. Section 21 prescribes how the recovery of bonus due from an employer is to be made. It runs as under:

21. Recovery of bonus due from an employer:

When any money is due to an employee by way of bonus from his employer under a settlement or an award or agreement, the employee himself or any other person authorised by him in writing in this behalf, or in the case of the death of the employee his assignee or heirs may, without prejudice to any other mode of recovery, make an application to the appropriate Government for the recovery of the money due to him, and if the appropriate Government or such authority as the appropriate Government may specify in this behalf is satisfied that any money is so due, it shall issue a certificate for that amount to the Collector who shall proceed to recover the same in the same manner as an arrear of land revenue:

Provided that every such application shall be made within one year, from the date on which the money became due to the employee from the employer:

Provided further that any such application may be entertained after the expiry of the said period of one year, if the appropriate Government is satisfied that the applicant had sufficient cause for not making the application within the said period.

6. Section 22 provides how the disputes under the Act are to be referred. It reads as follows:

22. Reference of disputes under the Act : Where any dispute arises between an employer and his employees with respect to bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, dispute shall be deemed to be an industrial dispute within meaning of the Industrial Disputes Act, 1947 (14 of 1947), or of any corresponding law relating to investigation and settlement of industrial disputes in force in a State and the provisions of that Act or, as the case may be, such law, shall, save as otherwise expressly provided, apply accordingly.

7. Lastly reference may be made to Section 34(1) which reads thus:

34. Effect of laws and agreement inconsistent with the Act:

(1) Save as otherwise provided in this section, the Provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in other law for the time being in force or in the terms of any award, agreement, settlement or contract or service before the 29th May, 1965.

8. Learned Counsel for the petitioner contends that 'wages' does not include bonus in as much as it is not an additional remuneration payable under the terms of employment as provided in Clause (c) of Section 2(vi). His submission is that the bonus claimed by the non-petitioner No. 2 does not form part of the remuneration payable under the terms of employment nor it is payable under any award or settlement between the parties or order of a Court. Therefore, according to the learned Counsel, the bonus claimed by the non-petitioner No. 2 squarely falls under Item I of the Heading but it does not include in Section 2(vi) of the Payment of Wages Act. It is further argued by reference to Section 22 of the Bonus Act that specific remedy is provided under that Act for reference of dispute with respect to the bonus and such a dispute shall be deemed to be an industrial dispute within the meaning of the Industrial Disputes Act, 1947. In support of his contention learned Counsel has relied upon Junior Labour Inspector (Central), Jabalpur v. Authority under the Payment of Wages Act and Ors. 1970 (2) Lab.L.J. 484, where in it was held that where the employer disputes his liability to pay bonus, the dispute relating to the same becomes an industrial dispute by virtue of the deeming provisions in Section 22 of the Payment of Bonus Act & is to be dealt with under industrial law. It was further observed that after such industrial dispute is settled either by settlement or agreement or award, the award is enforceable either under the industrial law or by the method provided under Section 21 of the Payment of Bonus Act by an application to the Government. It was further observed that a complete machinery having been provided by the Payment of Bonus Act 1965, it was held that the Payment of Wages Act has no application to the claim for bonus under the Payment of Bonus Act.

9. After having referred to the aforesaid case of the Madhya Pradesh High Court learned Counsel in all fairness placed before me a contrary view taken by the Bombay High Court in D.P. Kelkar. v. Ambadas : AIR1971Bom124 , Kotwal, C.J. speaking for the Court held that Section 8 of the Payment of Bonus Act which provides that every employee shall be entitled to be paid bonus in accordance with the provisions of the Act, clearly creates a right in the employee to be paid the bonus and since every right has a corresponding duty, Section 10 lays down the corresponding duty of the employer to pay bonus. After referring to the relevant sections dealing with the question of payment of bonus contained in the Bonus Act the learned C.J., came to the conclusion that by this legislation a term of the employment has been introduced binding on the employer and in favour of the employee. He further held, that the expression 'terms of employment' or under the 'terms of employment' used in Sub-section (iv) of Section 2 of the Payment of Wages Act cannot be read to imply merely contractual terms of employment and would in the ordinary meaning of that expression include payments which it is the duty of the employer to pay whether under a contract or a statute or an award or settlement. In view of the language of Section 10 of the Bonus Act, and the use of the phrase 'under the terms of employment' in Section 2(iv) of the Payment of Wages Act, I have no hesitation in holding that the combined effect of the relevant provisions of the Bonus Act as well as the Payment of Wages Act extracted above is to introduce a further term of employment, as regards the payment of bonus. The statutory obligation to pay the minimum bonus under Section 10 of the Bonus Act therefore must be deemed to be a term of employment. I am further inclined to hold under the circumstances that 4% bonus claimed by the non-petitioner No. 2 under Section 10 of the Payment of Bonus Act, 1965 amounts to wages, within the definition of term in Section 2(iv). I say this however, subject to that follows hereafter.

10. The next and more important question that arises is whether the Payment of Wages Authority before whom the non-petitioner No. 2 had made the application had the jurisdiction to pass the order that it did, even if the bonus claimed by him amounted to wages? In D.P. Kelkar v. Ambadas : AIR1971Bom124 it was held that 'where a dispute arises and controversial and complicated questions of law are raised, involving a prolonged inquiry as in the present case it is clear that it was not intended by the Payment of Wages Act that such questions should also continue to be tried by the Payment of Wages Authority.' It was further observed that 'the very nature of the jurisdiction conferred and the procedure prescribed preclude that being done.'

11. In the case on hand in the written statement put in by the petitioner before the Authority under the Payment of Wages Act several preliminary objections to the jurisdiction of the Authority were raised. It was further contended that the provisions of the Payment of Bonus Act were not applicable to petitioner and that a complete remedy for recovery of bonus was under Sections 21 and 22 of the Bonus Act.

12. In Payment of Wages Inspector v. B.E.S. & I. Co. (3) their Lordships of the Supreme Court, in the circumstances of the case, were pleased to hold that the claim could not be entertained by the Payment of Wages Authority and gave their reasons as follows:

In the first place, the claim made in the instant case is not a simple case of deductions having been unauthorisedly made or payment having been delayed beyond the wage periods and the time of payment fixed under Sections 4 and 5 of the Act. In the second place, in view of the defence taken by Respondent 1, the Authority would inevitably have to enter into questions arising under the proviso to Section 25FF, viz. whether there was any interruption in the employment of the the workmen, whether the conditions of service under the Board were any the less favourable than those under the company and whether the Board, as the new employer, had become liable to pay compensation to the workman if there was retrenchment in the future. Such an inquiry would necessarily be a prolonged inquiry involving question of fact and of law. Besides, the failure to pay compensation on the ground of such a plea cannot be said to be either a deduction which is unauthorised under the Act, nor can it fall under the class of delayed wages as envisaged by Sections 4 and 5 of the Act. It may be that there may conceivably be cases of claims of compensation which are either admitted or which cannot be disputed which by reason of its falling under the definition of wages the Authority may have jurisdiction to try and determine. But we do not think that a claim for compensation under Section 25FF which is denied by the employer on the ground that it was defeated by the proviso to that section, of which all the conditions were fulfilled, is one such claim which can fall within the ambit of Section 15(2). When the definition of wages was expanded to include cases of sums payable under a contract, instrument or law it could not have been intended that such a claim for compensation which is denied on grounds which inevitably would have to be inquired into and which might entail prolonged inquiry into questions of fact as well as law was one which should be summarily determined by the Authority under Section 15. Nor could the Authority have been intended to try as matters incidental to such a claim questions arising under the proviso to Section 25FF. In our view it would be the Labour Court in such cases which would be the proper forum which can determine such questions under Section 33C(2) of the Industrial Disputes Act.

13. From the aforesaid observations of their Lordships it must be taken as a settled law that where complicated questions of fact or law are raised, and a prolonged inquiry becomes necessary the Payment of Wages Authority would have no jurisdiction to decide the claim before it. From a bare perusal of the points formulated by the Authority in the present case contained in its order Ex. 13 it would be amply clear that the case involved complicated and controvertial questions of fact and law, which could not be decided by the Payment of Wages Authority by a summary procedure as provided in Section 15(3) of the Payment of Wages Act. In this view of the matter, I have no alternate but to hold that the Authority under the Payment of Wages Act had no jurisdiction to pass the imgugned order.

14. Learned Counsel for the respondent No. 2 strenuously urged that the remedy provided under the Bonus Act was not an effective remedy for the employee as it was in the discretion of the Government under Section 22 of the Bonus Act read with Section 12(5) of the Industrial Disputes Act, 1947 to refer or rot to refer the dispute to the Tribunal, and, therefore, the Authority under the Payment of Wages Act must be held to have jurisdiction to decide the dispute with respect to payment of bonus in the present case. I am, however, unable to accede to this submission. It cannot be presumed that while exercising the powers conferred upon it by the Bonus Act, the Government would not act fairly, and in any case no such consideration can be allowed to over-ride the statutory provisions. As already pointed out above the jurisdiction conferred upon the authority under the Payment of Wages Act is of a very summary nature with the result that it cannot decide the complicated questions of fact and law, as they arise in the present case.

15. The result is that I allow the writ petition, and quash the impugned order of the Authority under the Payment of Wages Act dated 2-11-1968. However, in the circumstances of the case, the parties are left to bear their own costs.


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