Narayan Hari Kumbhare Vs. Porwal (P.K.) and ors. - Court Judgment

Abhyankar, J.

1. This petition under Art. 227 of the Constitution challenges the order of the authority constituted under the Minimum Wages Act holding that it has no jurisdiction to hear and decide the application made by certain persons claiming to be the employees of respondent 1, Who is a bidi-manufacturer.

2. Several applications were filed before the authority appointed under the Minimum Wages Act, 1948, at Gondia, claiming certain amounts from respondent 1. At p. 13 of the paper book is one specimen of such application. In their application the claimants averred that they have been employees in the establishment of respondent 1, that is, P. K. Porwal, bidi manufacturer, as bidi-rollers. To their application they impleaded one Zibal Tukaram Meshran as opponent 2. This Zibal is respondent 2 in this petition. They stated that Zibal, respondent 2, is a person who supervises the work of the establishment of bidi-manufacturer. They claimed that the opposite party had rejected out of the bidis rolled by them to the extent of 250 to 300 bidis per thousand, for which no wages were paid, during the period for which the claim was made, that is, from 5 November 1965 to 4 May 1966 and it was alleged that each of the applicants on an average has not been paid for 45,000 rejected bidis during the above period. The bidis were rejected on the ground that they were sub-standard. The petitioners also claimed that they have not been paid wages because of the cut effected called 'patta katni' and 'tobacco katni' on account of the defect in tendu leaves and deficiency in the tobacco contents of the bidis. On this account also they put up a claim. Rupees 990 were claimed on account of chhat or rejection and Rs. 396 were claimed as illegally deducted amount on account of patta katni and tobacco katni.

3. Respondent 1, that is, the bidi-manufacturer, filed a detailed written statement in answer to the claim. In Para. 1 of the written statement, respondent 1 denied that the applicants were ever employed in the establishment of the bidi-manufacturer. He also denied that Zibal was employed to supervise the work in the establishment. His specific case was that opponent 1, that is, P. K. Porwal, bidi-manufacturer, was not the employer of the applicants within the meaning of S. 2E of the Minimum Wages Act. This position was reiterated in Para. 4 of the written statement saying that since opponent 1 had no concern or dealing with any of the applicants, there is no question of rejection of bidis, nor making any direction for payment to them. Opponent 1 stated that the applicants did not supply any bidi to the non-applicant 1. In Para. 11, which is styled as a specific plea, non-applicant 1 raised another contention, namely, that inasmuch as the applicants were working on gharkhata basis, the application was untenable because bidi-making on gharkhata basis is not a scheduled industry within the meaning of the Minimum Wages Act. In Para. 13 of the written statement opponent 1 pleaded that Zibal was an independent contractor of opponent 1, that he had executed an agreement in favour of opponent 1, and that it was he who was supplying rolled bidis to opponent 1, according to the terms and conditions laid down in the contract. He also alleged that Zibal is not the employee of opponent 1, and if persons like the applicants, who are bidi-rollers of the contractor, cannot become employees of opponent 1, in fact, or in law. It is categorically stated in Para. 13 that the relationship of 'employer' and 'employee' never existed between the contractor; that is, Zibal, and the applicants and much less there could be any question of the applicants being employees of opponent 1. In para. 16 of his written statement, opponent 1 has stated as follows :

'... It is respectfully submitted that the claim for chhat involves complicated questions of facts and law and, as such, it cannot be summarily adjudicated upon under S. 20 of the Minimum Wages Act for which there is no provision for appeal or revision and that the decision is to be final. It is respectfully submitted that this Court has no jurisdiction to entertain such a claim of a complicated nature.'

4. It will thus be seen that the specific objection that was raised to the jurisdiction of the authority under the Minimum Wages Act was in respect of adjudication of complicated questions of facts and law, which would be required to be decided in view of the contentions of the claimants about chhat, that is, rejected bidis, and other deductions made on account of patta katni and tobacco katni.

5. Opponent 2, Zibal, also filed a written statement. He admitted that he was working for opponent 1 and his work consisted of distribution of raw material to the applicants, supervise the work of bidi-making, keep the accounts of bidis, and disburse the wages after the same were received from opponent 1. He has also stated that he has to work under the direction of opponent 1 and his status is that of an employee of opponent 1. He also categorically averred that he had no business of bidi-making and is not an employer within the definition of the Minimum Wages Act. The presiding officer and the authority, which is Civil Judge (Junior Division), treated the question of jurisdiction of the authority as a preliminary issue. It is unfortunate that the issues were not drawn up on the basis of the pleadings of the parties in this case. On a perusal of pleadings, it will be seen that opponent 1 had not specifically raised an issue about the jurisdiction of the authority to determine the nature of relationship between the claimants and opponent 1. An objection to jurisdiction seems to have been taken as specifically pleaded in Para. 16 only to adjudication of complicated questions of facts and law. But during the arguments, in disposing of the preliminary issue, the learned Judge considered that objection to jurisdiction was in the matter of adjudication in the nature of relationship between the claimants and the persons who were alleged to be employers of the claimants, and on that basis has disposed of the objection. The learned Judge purports to follow the principle of the recent decision in this Court in Ramkrishna Ramnath v. Payment of Wages Authority [Special Civil Application No. 376 of 1966, decided on 20 August 1966 (Unrep.) by Patel and Deshmukh, JJ.], to hold that, what has to be decided on the pleadings of the parties before him is the issue as to which of the rival contracts set up by the parties holds the field, and considering that that was the nature of the dispute between the parties, the authority has come to the conclusion that it had no jurisdiction to decide any such issue. Observing that provisions of the Payment of Wages Act, under which the case referred to arose, and the provisions of the Minimum Wages Act, under which the claim before him was made, the learned Judge considered that the same principles would be attracted in determining the ambit of jurisdiction of the authority under the Minimum Wages Act. It is this decision declining to exercise jurisdiction by the authority under the Minimum Wage Act, under these circumstances, which is challenged before us. We may mention at the outset that the question whether the provisions of the Payment of Wages Act, 1936, and the Minimum Wages Act, 1948, are or and not in pari materia has not been canvassed before us and we do not propose to decide this petition on that basis.

6. In support of the order impugned in this petition, it is urged on behalf of the contesting respondent 1, that the view taken regarding the issue arising out of the pleadings is supportable because of the claim of the applicant, that is, the petitioner, that he was an employee of opponent 1 having been employed through the agency of opponent 2, Zibal. In considering this question, therefore, the argument proceeds, it would have been necessary to determine the nature of relationship between opponent 1 and opponent 2 inter se, and if that issue is required to be decided, the authority will necessarily be required to adjudicate in respect of the two contracts, on being the contract or its absence as to the relationship between the claimants on the one hand and opponent 1 on the other, and the other contract as to the relationship or the nature of contract between opponents 1 and 2.

7. Inasmuch as the decision of this Court in Ramkrishna Ramnath case [Special Civil Application No. 376 of 1966, decided on 20 August 1966 (Unrep.) by Patel and Deshmukh, JJ.] (vide supra) has been heavily relied upon both before the authority and also in the Court, it is necessary to find out what the exact decision in that case is. The petitioner before the High Court in that writ petition was the bidi-manufacturer, called Ramkrishna Ramnath (Private), Ltd. Respondent 1 was the authority under the Payment of Wages Act and respondent 2, opponent 2, was the worker, or the person, who claimed to be a worker in the bidi factory of the petitioner. No other party was impleaded to that petition. While respondent 2 in that petition claimed that he was an employee of the petitioner Ramkrishna Ramnath, the petitioner resisted the claim on the ground that the application was not maintainable under the Payment of Wages Act and one of the ground of the petition was that respondent 2, that is, there claimant, was an independent contractor and not an employee, in that he was paid by the out-turn of the work as so much per thousand, and therefore, he was not a worker or an employee of the petitioner Ramkrishna Ramnath. The decision makes a reference to several judicial pronouncements hearing on the question of jurisdiction of the authority under the Payment of Wages Act and the three decisions of this Court, namely, A. R. Sarin v. B. C. Patil 1951 II L.L.J. 188; Anthony Sabastin Almeda v. R. M. T. Taylor : (1957)ILLJ452Bom and Full Bench decision in Vishwanath Tukaram v. General Manager, Central Railway, and others : (1957)IILLJ250Bom as well as the decision of the Supreme Court in Sri Ambica Mills Company v. S. B. Bhatt and another : (1961)ILLJ1SC have been referred to. With advertence to the decision in Almeda case : (1957)ILLJ452Bom (vide supra), the Division Bench in Ramkrishna Ramnath v. Payment of Wages Authority [Special Civil application No. 376 of 1966, decided on 20 August 1966 (Unrep.) of Patel and Deshmukh, JJ.] (vide supra) observed as follows :

'In Anthony Sabastin Almeda v. R. M. T. Taylor : (1957)ILLJ452Bom (vide supra) the question was which contract of employment-the one alleged by the employee, or the one alleged by the employer-governed the relationship of the parties. The authority had to decide whether there had been deduction or non-payment of wages and for that purpose to decide what were the wages to which the employee was entitled and what the contract between the employer and the employee was, what the employee was entitled to under the terms of the contract and not what the terms or conditions of service of the employee were. The Court held that when the very basis of the relationship is in dispute and in controversy, the legislature did not intend that a Court of summary jurisdiction should decide that important question.'

8. We have deliberately reproduced this passage from the judgment of the Division Bench because of the interpretation sought to be placed on the observation.

'the Court held that when the very basis of the relationship is in dispute and in controversy, the legislature did not intend that a Court of summary jurisdiction should decide that important question.'

to mean that whenever there is any dispute of any kind as to the relationship between the parties alleged by one party and denied by the other, such a question is outside the pale of jurisdiction. In subsequent paragraph, the Division Bench observed that though an employer cannot deprive the authority of its jurisdiction by a mere denial of the relationship, if there are two different kinds of relationships alleged by either of the parties, then the question cannot be regarded as merely incidental to the only dispute between the parties which is whether wages are delayed and there is deduction in the wages, where there are two contracts in the field. Then the Division Bench observed as follows :

'In the present case the contention of the petitioner is that having regard to the nature of the work done, the method of payment and other matters connected with the work, the respondent is an independent contractor, while the respondent says that he is an employee.'

9. In our opinion, the facts of the case before the Division Bench and the observations which we have quoted in some detail leave no manner of doubt that that case was decided on the footing that two different kinds of contracts were pleaded in competition with each other as to the relationship between the employer and the employee, whereas the claimant urged that he was an employee of the bidi-manufacturer, the bidi-manufacturer, in his turn, contended that the claimant was employed as an independent contractor. We do not see how this principle can be reasonably called in aid in determining the ambit of jurisdiction of the authority in the present case. Here the question is a straight and simple one. The claimant on the one hand, like the petitioner, says that he is employed as a bidi-roller by opponent 1. Though undoubtedly he says that the employment was through the agency of opponent 2, that further averment will not be detrimental to the adjudication of the question as to what is the true relationship between the claimant and opponent 1. Opponent 1 on his part does not say that there is any kind of jural relationship between opponent 1 and the claimant. So this is a case where there is assertion of the relationship of an employer and an employee between the claimant and the person against whom the claim is made, and the denial on the part of such a person against whom the claim is made that the claimant was an employee. In our opinion, the case squarely falls within the ratio of the Full Bench decision of this Court in Vishwanath Tukaram v. General Manager, Central Railway : (1957)IILLJ250Bom (vide supra). The summary of the decision of the Full Bench on the basis of the observations at pp. 252 and 263 of the judgment would be as follows :

'The nature and ambit of the jurisdiction of the authority acting under the Payment of Wages Act are : (1) the authority has no jurisdiction to decide whether the services of an employee have been rightly or wrongly terminated or whether the dismissal is lawful or unlawful;

(2) the primary function of the authority is to determine what the wages of the employee are and whether there has been a delay in the payment of those wages or a deduction from those wages;

(3) in order to determine the wages it may be necessary to determine what the terms of the contract were under which the employee was employed and under which he was claiming his wages;

(4) in order to determine what the contract was, what the terms of the contract were, what were the wages due under the contract, it might become necessary for the authority to determine whether in the first place there was an employment or not;

(5) when there is a dispute as to which is the contract that governs the relationship of the parties and if two rival contracts are in the field, then the authority under the Payment of Wages Act has no jurisdiction to decide which of the contracts should regulate the rights of the parties.'

10. It will thus be seen that the forth item. Namely, the necessity to determine what the contract was, necessarily postulates necessity to find out the terms of the contract, because the authority has to find what were the wages due under the contract, and to find all this it might be necessary to determine in the first place whether there was an employment or not. We, therefore, fail to see how to could be said that the authority even under the Payment of Wages Act lacks jurisdiction to determine when an issue is joined as to whether there was or was not an employment, or a relationship of employer and employee between the claimant and the person against whom payment is claimed. We are unable to interpret the Division Bench decision of this Court in Ramkrishna Ramnath v. Payment Act Wages Authority [Special Civil Application No. 376 of 1966, decided on 20 August 1966] (Unrep.) by Patel and Deshmukh, JJ. (vide supra) tantamounts (sic) to a view that the authority under the Payment of Wages Act lacks jurisdiction to decide the question of existence or otherwise of a relationship of employer and employee between the claimant and the person against whom the claim is made.

11. Here we may consider another argument urged on behalf of the contesting respondents, namely, that the pleadings of the parties in the case before us had raised a question of more than the contract. The contention is that the claimant claims to have been employed through Zibal, who is alleged to be an agent of employee of opponent 1, whereas opponent 1 says that opponent No. 2 Zibal, is an independent contractor, and therefore, in that sense, the authority will have to determine the nature of relationship between the claimant and opponent 1 and also between opponents 1 and 2 inter se. That may be so, but we fail to see how merely because the authority is required to determine who had employed the claimant and on whose behalf, that becomes the question of adjudication of rival contracts or competing contracts. The issue thus raised does not involve adjudication of any competing contract, but whether the contract pleaded or relationship claimed has been brought about through the agency of some other person, or in the circumstances alleged. Such as inquiry when necessary will be included as a part of the inquiry into ancillary matter required to be decided to determine. That basic question of relationship between the claimant and the person from whom the payment is claimed.

12. The Full Bench decision of this Court was before the Supreme Court in Sri Ambica Mills Company, Ltd. v. S. B. Bhatt : (1961)ILLJ1SC , the Supreme Court observed as follows :

'... 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 lockout declared by the employer is legal or illegal. In regard to contracts of service sometimes 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 ...'

13. There is, therefore, no doubt that one of the crucial questions that must arise for decision if a claim is made, whether under the Payment of Wages Act or under the Minimum Wages Act, is to determine the nature of relationship between the claimant and the person from whom the payment is claimed. In this connexion it is worthwhile to note that the provisions of the Minimum Wages Act provide for a definition of both 'employee' and 'employer.' The object of the legislature in providing these definitions must necessarily be to indicate the rights of persons who are employees and which claims can be made against the employers or exemployers. The legislature having provided its own dictionary for the words used by it, it is difficult to accept the contention that the authority created under the statue for administering the statute and for adjudicating the claims under the statute is debarred from considering the adjudication whether a person who claims to be an employee of a person against whom a claim is made is or is not an employer. The learned counsel for the petitioner contended that the existence of this kind of jural relationship of employee and employer is a jurisdictional fact, which alone gives jurisdiction to the authority created under the Act. In our opinion, this submission is well-founded and must be accepted. It will be seen that S. 24 of the Minimum Wages Act bars suits in respect of claims which could have been recovered by claimants under S. 20 of the Minimum Wages Act. We are unable to find, therefore, any provision either in this Act or in other law which could be said reasonably to provide a forum for adjudication of the dispute when the dispute is about the nature of relationship of employer and employee between the claimant and the person against whom the claim is made.

14. It is true that the authority created under the Act for adjudication of the claims and giving directions has to exercise its jurisdiction in the limited field. At the same time, this authority is given exclusive jurisdiction to determine the questions, which it is called upon to adjudicate and decide. It has to operate within these two limits, and therefore, the power to adjudicate all the necessary questions for effective administration of law and effective adjudication of claims must be found within the four corners of the Act.

15. The learned counsel for the contesting respondent also made a reference to a decision of the Punjab High Court in Sher Singh Verma v. Rup Chandra and another . That was a case in respect of a claim under S. 33C(2) of the Industrial Disputes Act. We do not think that the provisions of the Industrial Disputes Act and the provisions of the Minimum Wages Act are in pari materia. It is not, therefore, necessary to consider the principle of which that case was decided.

16. Considering, therefore, the matter from all aspects, we have come to the conclusion that the view taken by the authority under the Minimum Wages Act in this case that it lacks jurisdiction to determine the question whether the claimant was or was not the employee of opponent 1 cannot be sustained. We hold that the authority has jurisdiction to decide the question of the nature of relationship between the claimant and the person against whom the claim is made and to that extent the failure to exercise jurisdiction cannot be sustained.

17. It may be noted here that any other objection to the jurisdiction of the authority under the Minimum Wages Act is not considered by us an disposing of this petition. If any such objection is raised, that would be considered on its merits is disposing of the application.

18. The result is the order dated 3 November 1966, passed by the authority under the Minimum Wages Act is set aside and cases are remanded for fresh disposal, according to law. This order will also govern other applications which were disposed of on the same basis. The petitioner is entitled to the costs from respondent 1.