Municipal Corporation of Greater Bombay Vs. N.L. Abhyankar and ors. - Court Judgment

1. This is a petition under Art. 226 of the Constitution of India for setting aside certain orders passed by the Labour Court and the Industrial Court on 17th December, 1970 and 3rd May, 1971, respectively.

2. The 1st petitioner is the Municipal Corporation of Greater Bombay. The 2nd petitioner is the General Manager of the B.E.S.T. Undertaking set up by the 1st petitioner under the provisions of the Bombay Municipal Corporation Act, 1888. The affairs of the B.E.S.T. Undertaking are managed by a Committee the 1st petitioner, called the B.E.S.T. Committee, in accordance with the provisions contained in the said Act. The 1st respondent is the President of the Industrial Court, the 2nd respondent is a Member of the Labour Court. The 3rd respondent is a Trade Union of the workers of the B.E.S.T. Undertaking and the 4th respondent is the General Secretary of the 3rd respondent-union.

3. On 6th December, 1968, the then General Secretary of the 3rd respondent-union sent a letter to the B.E.S.T. Undertaking, desiring a change in respect of an industrial matter specified in Schedule III of the Bombay Industrial Relations Act, 1946, viz., that the B.E.S.T. Undertaking should deduct from the wages of its workmen the 'levies' payable by such workmen to the 3rd respondent-union. This letter constituted a request under the proviso to S. 42(4) of the Bombay Industrial Relations Act. This request was not accepted by the B.E.S.T. Undertaking. Hence no agreement was arrived at between the B.E.S.T. Undertaking and the 3rd respondent-union. Thereafter on 8th January, 1969, the then General Secretary of the 3rd respondent-union made an application under S. 42 of the Bombay Industrial Relations Act, 1946 before the Labour Court, demanding that the B.E.S.T. Undertaking should make from the wages payable to its workmen, deductions of the levies due to the 3rd respondent-union from its members and to remit the total of the deductions to the 3rd respondent-union every month. The B.E.S.T. Undertaking filed its written statement opposing this application, inter alia, on the ground that the same was contrary to the provisions of the Bombay Industrial Relations Act, 1946 and the Payment of Wages Act, 1936 and that the same would also create legal and administrative difficulties for the B.E.S.T. Undertaking. The contentions of the B.E.S.T. Undertaking were repelled by the Labour Court which by its judgment and order dated 17th December, 1970 granted the application of the 3rd respondent-union. Against that order, the B.E.S.T. Undertaking filed an appeal before the Industrial Court which by its judgment and order dated 3rd May, 1971 dismissed the appeal of the B.E.S.T. Undertaking and confirmed the order of the Labour Court, subject to certain modifications. Under the said order, the 1st respondent, viz., the Industrial Court, directed the 3rd respondent-union to pass a resolution permitting such 'levies' to be so deducted and also directed that letters of consent from the individual workmen concerned should be submitted to the B.E.S.T. Undertaking, authorising the latter to make such deductions. The 1st respondent also approved a draft proforma to be filled in by such individual workmen authorising such deductions. It was also provided that the cost for making the deductions presently computed at Re. 1 per year per employee would be paid by the 3rd respondent-union to the B.E.S.T. Undertaking. In these circumstances, the petitioners have filed the present petition.

4. It was urged by Mr. Setalvad, the learned counsel appearing on behalf of the petitioners that no deductions could be made from he wages of an employed person under S. 7(1) of the Payment of Wages Act, 1936 except those authorised by S. 7(2) of that Act. Accordingly Mr. Setalvad, the levies ordered to be deducted did not fall within any of the deductions mentioned in S. 7(2) and hence could not be deducted from the wages under S. 7(1). Section 7(1) states that the wages of an employed person shall be paid to him, without deductions of any kind except those authorised by or under that Act. Section 7(2) states that deductions from the wages of an employed person shall be made only in accordance with the provisions of the Act and may be only of the kinds set out thereunder, viz., fines, deductions for absence from duty and certain other deductions which are not germane for the purpose of the present controversy between the parties, except deductions set out in sub-clause (h) of S. 7(2), namely -

'Deduction required to be made by order of a Court or other authority competent to make such other.'

While Mr. Setalvad is correct to the extent that no deductions can be made from the wages of an employed person, other than those deductions which have been specifically set out in S. 7(2) of the Payment of Wages Act, 1936, sub-clause (h) of sub-s. (2) of S. 7 clearly allows deductions 'required to be made by order of a Court or other authority competent to make such order'. It cannot be said that the 1st and 2nd respondents were incompetent to make the order for deduction, notwithstanding Mr. Setalvad's contention to the contrary. Mr. Setalvad relied on Item 4 of Schedule III to the Bombay Industrial Relations Act, 1946 and S. 42 of that Act. Section 42 under Chapter VIII provides for notice of change. Sub-sections (1) and (2) for effecting a change in respect of an industrial matter specified in Schedule II and not specified in Schedule I or III. Sub-section (3) provides for the procedure to be followed when no settlement is arrive at in conciliation proceedings in regard to any industrial dispute which has arisen in consequence of a notice relating to any change given under sub-s. (1) or (2). Sub-section (4) provides, inter alia, that any employee or a representative-union desiring a change in respect of an industrial matter specified in Schedule III shall make an application to the Labour Court and as respect change desired in any industrial matter specified in item (5) of Schedule III, to the Industrial Court, Item (4) of Schedule III in terms pertains to -

'Matters relating to trade union organization, membership and levies'.

Section 25 of the Bombay Industrial Relations Act provides for the rights of officers of approved unions. It states that such officers and members of an approved union shall have a right and shall be permitted by the employed concerned to collect sums payable by members to the union, to put up a notice board on the premises of the undertaking and to do certain acts for the purpose of the presentation or settlement of an industrial dispute. It was urged by Mr. Setalvad that Item (4) of Schedule III to the Bombay Industrial Relations Act, which pertains to 'Matters relating to trade union organization, membership and levies', merely empowers the employers and employees to agree as to how employees could exercise rights conferred on them by S. 25 of the Act and the rules made thereunder. He further urged that the item could not empower the employees to compel the employer to carry out the work of the employees or the trade union or to function as an agent of a union a limb of the trade union. He further urged that the application was, therefore, outside the scope and ambit of S. 42 of the Act and the impugned orders were, therefore, passed without jurisdiction. There is no merit in this contention. Item (4) of Schedule III in no uncertain words refers to 'matters relating to trade union organisation, membership and levies'. The term 'levy' is not defined in the Act; its dictionary meaning is, a raising or collection of money by authority. Item (4) of Schedule III also refers to trade union organisation and membership. Thus the word 'levy' must be read in conjunction with trade union organisation and membership. Thus, if a representative-union wants an employer to agree to a change in respect of trade union organisation, membership or collection or raisings of sums payable to the representative union, the representative-union can follow the procedure laid down regarding changes in Chapter VIII of the Bombay Industrial Relations Act. It is not in dispute that the 3rd respondent-union did comply with the provisions of Chapter VIII, viz. S. 42 of that Act. In these circumstances, it cannot be said that respondents 1 and 2 were incompetent to make the order for deduction out of the wages of the employees.

5. It was urged by Mr. Setalvad that the effect of the impugned orders would be to enlarge and or amend the provisions of S. 25 of the Bombay Industrial Relations Act and to entrench a union, which is at a particular time a representative-union, which is not only contrary to the Act but is also manifestly unreasonable. This contention can easily be repelled. There is nothing in the impugned orders to support Mr. Setalvad's contention in the slightest.

31st August, 1978

6. Mr. Setalvad took recourse to S. 23 of the Payment of Wages Act. It provides that any contract or agreement, whether made before or after the commencement of the Act, whereby an employed person relinquishes any right conferred by the Act shall be null and void in so far as it purports to deprive him of such right. According to Mr. Setalvad, the arrangement whereby the B.E.S.T. Undertaking would have to make the deductions from the salaries of the workers, was a contractual arrangement, which was null and void by reason of the provisions of S. 23. Mr. Setalvad urged that the arrangement whereby the B.E.S.T. Undertaking was compelled to make the deductions was a contract or agreement which deprived the workmen of receiving the entire salary due to them and hence it was not permissible for the workmen to contract out of, or relinquish a right conferred to the workmen under the Payment of Wages Act. According to Mr. Setalvad, such an arrangement is void under S. 23 as it results in the employees relinquishing one of their rights, viz., the right to receive the entire amount of wages without any deduction. There is no merit in these contentions. In the order dated 17th December, 1970, it is in terms state -

'............ The Undertaking is, therefore, directed to make the collections from the salary/wages or arrears of salary/wages in accordance with the lists of the employees that will be submitted by the union to the Undertaking. The Undertaking is further directed to pay amount of deductions collected from the employees to the applicant representative-union. The applicant-union will bear the additional cost to be incurred by the Undertaking for making such collection and remitting the same to the union.'

7. The impugned order dated 3rd May, 1971 upholds the earlier order dated 17th December, 1970 after making certain modifications. On the petitioners' own showing in the petition, because the request contained in the Union's letter dated 6th December, 1968 was not accepted by the B.E.S.T. Undertaking, that no agreement was arrived at between the parties. It is difficult to see how the B.E.S.T. Undertaking, being compelled to make the deductions by virtue of the impugned orders, can be equated to having arrived at a contract or agreement with the union to do so, so as to attract the provision of S. 23.

8. It was finally contended by Mr. Setalvad that the impugned orders are unreasonable as they impose a heavy burden on the employer merely to simply or ease the work of the concerned trade union. There is also no merit in this contention. In order to effectively carry out the scheme, satisfactory safeguards and modifications have been made by the order dated 3rd May, 1971 passed by the 1st respondent which provide, inter alia, that the present cost for making the deductions at Re. 1 per year per employee would be paid by the 3rd respondent-union to the B.E.S.T. Undertaking. That would reimburse the B.E.S.T. Undertaking for the work of making the deductions and even Mr. Setalvad with his habitual fairness, did not suggest that the amount was inadequate.

9. In the result, the impugned orders dated 17th December, 1970 and 3rd May, 1971 are upheld and the petition must stand dismissed with no order as to costs. Rule discharged.