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Manager, General Motor Owner's Association, Washim and Anr. Vs. Mahamoodkhan Vasir Khan and Anr. (23.11.1966 - BOMHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. Nos. 511 and 630 of 1965
Judge
Reported inAIR1968Bom395; (1967)69BOMLR833; 1968MhLJ119
ActsCentral Provinces and Berar Industrial Disputes Settlement Act, 1947 - Sections 16, 31, 40, 41 and 57; Payment of Wages Act, 1936 - Sections 2 and 15; Payment of Wages (Amendment) Act, 1957 - Sections 2
AppellantManager, General Motor Owner's Association, Washim and Anr.
RespondentMahamoodkhan Vasir Khan and Anr.
Appellant AdvocateV. Mohta, Adv. and ;M.N. Chandurkar, Asst. Govt. Pleader
Respondent AdvocateS. Jain, ;N.H. Kumbhare and ;S.G. Kukday, Advs.
Excerpt:
.....15 of the payment of wages act, 1936, merely upon a declaration that his dismissal amounted to an illegal change under section 41 of the central provinces & berar industrial disputes settlement act, 1947, unless an order of reinstatement is first passed in his favour under section 16 of the central provinces & berar industrial disputes settlement act. ;namdeo v. chocks etc. ltd. (1962) 64 bom. l.r. 481 : s.c. [1962] n.l.j. 302 was incorrectly decided, in so far at it held that the payment of wages authority had jurisdiction to grant wages without an order of reinstatement in accordance with law. - - in our opinion, therefore, it is not necessary to frame questions upon each separate piece of reasoning and the controversy between the parties could well be represented by the..........illegal change and should be so declared. on 30-3-1960 the district industrial court declared the change illegal. an appeal filed by the employer to the state industrial court was dismissed. after thus obtaining the declaration that his dismissal amounted to an illegal change, he filed an application under the payment of wages act had not been made applicable to the motor industry. the payment of wages act was made applicable to the motoring trade on 31-3-1962 and then this second application under section 15 of the payment of wages act, came to be filed on 2-5-1962. it is out of that application that the present special civil application arises. the respondent no. 1 claimed his wages for the period from 1-4-1960 to 30-4-1962 amounting to rs. 3750 at the rate of rs. 150 per month. the.....
Judgment:

Kotval, C.J.

(1) The judgment in this special civil application shall also govern the disposal of Special Civil Application No. 630 of 1965, for in both the special civil applications a common point arises for decision, although under different circumstances.

(2) In Special Civil Application No. 511 of 1965 three questions as follows have been referred for our decision:

(1) Whether a person, who is illegally dismissed, is entitled to make a claim for wages for a period after his dismissal under the Payment of Wages Act?

(2) Whether a declaration that the change is illegal under Section 41 of the C. P. and Berar Industrial Disputes Settlement Act, 1947, makes any difference?

(3) Whether the Payment of Wages Authority will have the power to entertain such an application when the above Act, by Section 16, makes a special provision for the same?

(3) From a perusal of the order of reference, it is clear that the main point which the Division Bench considered was whether the case of Namdeo Shrawan v. Chocks Canning and Mining Ltd., Nagpur, : (1962)IILLJ323Bom was correctly decided, and the points mentioned in the three questions which they formulated are really points which amount to reasons for determining whether the decision in Namdeo Shrawan's case, : (1962)IILLJ323Bom was correct or not. In our opinion, therefore, it is not necessary to frame questions upon each separate piece of reasoning and the controversy between the parties could well be represented by the question: 'Whether : (1962)IILLJ323Bom was correctly decided.' Accordingly, we have reframed the question referred. Counsel for both the parties have no objection to the reframing of the questions.

(4) In Special Civil Application No. 630 of 1965 a question is referred in addition to the above questions and it is : 'Whether the four workmen in the present case who are governed by the provisions of Section 25F of the Industrial Disputes Act, 1947, can be regarded as persons employed within the meaning of Section 15, on the assumption that the discharge from employment was in contravention of the provisions of Section 25-F?' Section 15 referred to is Section 15 of the Payment of Wages Act. This will now be the 2nd question to be answered in this reference.

(5) The two references arise upon the following facts:

(6) In Special Civil Application No. 511 of 1965 Mohamoodkhan the respondent No. 1, a driver of the General Motor Owners' Association, Washim, was dismissed on 26-12-1955. He preferred an application under Section 41 of the C. P and Berar Industrial Disputes Settlement Act, 1947, claiming that his dismissal amounted to an illegal change and should be so declared. On 30-3-1960 the District Industrial Court declared the change illegal. An appeal filed by the employer to the State Industrial Court was dismissed. After thus obtaining the declaration that his dismissal amounted to an illegal change, he filed an application under the Payment of Wages Act had not been made applicable to the motor industry. The Payment of Wages Act was made applicable to the motoring trade on 31-3-1962 and then this second application under Section 15 of the Payment of Wages Act, came to be filed on 2-5-1962. It is out of that application that the present special civil application arises. The respondent No. 1 claimed his wages for the period from 1-4-1960 to 30-4-1962 amounting to Rs. 3750 at the rate of Rs. 150 per month. The Payment of Wages Authority by its order dated 30-1-1965 has allowed a sum of only Rs. 300 being his salary for the months of March and April 1962 holding that the notification applying the Act to the motor industry was not retrospective in operation.

(7) Now this order came to be challenged before the Division Bench by the employer and the ground inter alia was that, what was claimed by Mohamoodkhan was not wages at all within the meaning of the definition of 'wages' contained in S. 2(vi) of the Payment of Wages Act, and that in any case the right to claim wages was limited only to deductions from wages or delay in the payment of wages of persons employed, and for the period during which the claim was preferred Mohamoodkhan was not a person employed. Before the Divisional Bench it was also urged that a mere declaration of the change as illegal would not give rise to a right unless the amount in fact wages.

(8) In Special Civil Application No. 630 of 1965 twelve employees had also claimed under S. 41 of the C.P and Berar Industrial Disputes Act that their dismissal on 6-11-1956 amounted to an illegal change and ought to be set aside. On 31-3-1960 the District Industrial Court declared that the termination of services was illegal and the change amounted to an illegal and the change amounted to an illegal change. An appeal filed by the employer was dismissed by the State Industrial Court on 8th August 1961. The employees then applied on 24-6-60 under S. 15 of the Payment of Wages Act for payment of back wages from 7-12-1956 (the date of the termination of their services) to 21-6-1960 (the date of the signing of their application).

(9) Protracted proceedings took place. An order was passed by the Payment of Wages Authority, but in appeal its order was set aside and the case was remanded to it fresh disposal. A writ petition to this Court was filed against the appellate order and withdrawn (S.C.A 445 of 1962) and so the appellate order or remand stood. After remand the Payment of Wages Authority directed the employer to pay Rs. 17,927.48 to the 12 applicants before it, as that amount was agreed upon. In deciding the application before it the Authority rejected the employer's contention that the employees' claims did not amount to a claim for wages for the reason that 'wages' means remuneration payable in respect of work done in the employment and the employees were no longer in the employment of the employer. The Authority rejected the contention relying on the decision of this Court in : (1962)IILLJ323Bom which was binding on it. In appeal the District Judge, Nagpur, confirmed all the findings of the Authority also relying on Namdeo Shrawan's case, : (1962)IILLJ323Bom and dismissed the appeal.

(10) The present writ petition has been filed against the appellate order of the District Judge and as we have indicated the short question that arises is whether Namdeo Shrawan's case, : (1962)IILLJ323Bom was correctly decided. The contention is that unless an order of reinstatement be first passed, the Payment of Wages Authority would not have the jurisdiction to grant the wages merely upon a declaration that the dismissal amounted to an illegal change under S. 41 of the C.P. and Berar Industrial Disputes Settlement Act. It is urged that once an employee is dismissed the contract of service is put an end to and the mere declaration that the change made in industrial relationship is illegal cannot without more restore the pristine contract of service. It is urged that that is especially so when the Act gives the worker a remedy to have the contract of service restored. He can ask for reinstatement under S. 16. Therefore, it is urged that reading the provisions of the Act as a whole unless an order under Section 16 of the C. P. and Berar Industrial Disputes Settlement Act is first passed and the worker obtains an order of reinstatement, the Payment of Wages Authority would have no jurisdiction to grant the claim for wages even though the change has been declared illegal under section 41. It was also pointed out that no order of reinstatement can ever be passed in the proceedings under section 41, and under those circumstances the application for recovery of wages under section 15 of the Payment of Wages Act was infructuous. On these submissions the Division Bench entertained doubt as to the correctness of the decision in Namdeo Shrawan's case and therefore referred the questions stated for decision by a Full Bench.

(11) So far as the decision in Namdeo Shrawan's case is concerned, undoubtedly it does appear that we hold that the fact that the Industrial Court declares that an illegal change has taken place consequent upon the dismissal of an employee, would be sufficient to give jurisdiction to the Payment of Wages Authority to grant him wages for the period from his dismissal till the date of the order under S. 41.

(12) In that case we had expressed our view as follows: 'In our opinion, having regard to the provisions of Ss. 40 and 41 of the C.P. and Berar Industrial Disputes Settlement Act, if a declaration be obtained by a worker that the change effected by his dismissal was illegal, the declaration can be taken into account as being one of the terms of his employment within the amended definition (of wages) and, therefore the order of the District Industrial Court would operate to show that he continued in the employment of his master. . . . . . . . . . . . .'. The decision in Namdeo Shrawan's case was virtually given ex parte. The employee alone appeared and the employer was absent. Counsel for the employee (and he is the same counsel who now represents the worker in S.C.A. 511 of 1965) altogether failed to invite our attention to the provisions of S. 16 of the C. P. and Berar Industrial Disputes Settlement Act, and the argument proceeded only upon the provisions of Ss. 40 and 41 of that Act.

(13) Sub-sections (2), (3), (3-a) and (3-b) of Section 16 are material for consideration upon this question. They run as follows:

'(2) Any employee, working in an industry to which the notification under sub-section (1) applies, may, within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement and payment of compensation for loss of wages.

(3) On receipt of such application, if the Labour Commissioner, after such enquiry as may be prescribed, finds that the dismissal, discharge, removal or suspension was in contravention of any of the provisions of this Act or in contravention of a standing order made or sanctioned under this Act or was for a fault or misconduct committed by the employee more than six months prior to the date of such dismissal, discharge, removal or suspension, he may direct,-

(i) either that the employee shall be reinstated forth while or by a specified date and paid for the whole period from the date of dismissal discharge, removal or suspension as the case may be, to the date of the order of the Labour Commissioner: or

(ii) that the employee shall, in addition to the wages from the date of dismissal, discharge, removal or suspension to the date of the order of the Labour Commissioner be paid by the employer such sum not exceeding rupees two thousand five hundred by way of compensation having regard to the loss of employment and possibility of getting suitable employment thereafter.

(3-a) On an order being passed by the Labour Commissioner directing reinstatement, the employee shall be deemed to have reinstated on the date of the order and shall from that date be entitled to wages at the rate to which he was entitled immediately prior to his dismissal, discharge, removal or suspension, as the case may be, until his employment is lawfully terminated.

(3-b) If the employer fails to pay the employee his wages in accordance with sub-section (3-a) or the compensation awarded to him under sub-section (3), the amount shall be recovered from him in such manner as may be prescribed.'

Sub-section (2) indicates two remedies, namely reinstatement and payment of compensation for loss of wages: and in sub-section (3) clauses (i) and (ii), there are references to payment and to 'wages', references to payment and to 'wages', respectively. It seems that the draftsman of the section assumed that consequent upon reinstatement, wages would automatically become payable because the contract of service would by the order of reinstatement be restored and therefore in sub-section (3) (i) he states as one of the two reliefs which could be granted that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal, discharge, removal or suspension, as the case may be, to the date of the order of the Labour Commissioner. In clause (ii) he speaks about payment of compensation but prefaces it by the words 'in addition to the wages', thus making it clear again that the right to receive wages is always there as soon as the order of reinstatement is passed. It was a point in dispute whether the reference to wages is a reference to wages as such or to compensation in lieu of wages but we need not go into this question here. Whatever doubt there may be on the wording of clause (ii) of sub-section (2) on reading sub-section (3-a) it is clear beyond doubt that on an order of re-instatement being made two consequences flow (a) that the worker is reinstated and that the contract of service is restored and that the contract of service is restored and (b) that from that date he is entitled to wages at the rate he was entitled to prior to the date of the dismissal.

(14) It is clear from the provisions of the section that in regard to an industrial dispute arising upon the dismissal of an employee this particular piece of legislation has provided a special remedy, namely, the remedy by way of reinstatement or restoration of the contract of service in addition to other remedies. That being so, it must follow that upon dismissal it would not be enough that the employee has the change declared illegal in order to get back his contract of service. He must get an order of reinstatement in his favour . Section 41 must be read along with S. 16. It is settled law that where a statute grants special rights and creates special remedies, the parties to a dispute are necessarily limited to that special remedy alone in order to secure that special right; see P. Ponnuswami v. Returning Officer, Namakkal, : [1952]1SCR218 . Section 41 merely deals with the question which forum is to decide whether a change which has taken place or in respect of which notice has been given is illegal, among other things. It has to be read with Section 31, which requires notice of change to be given, Section 57 which defines 'illegal change' and the 2nd Schedule to the Act. In terms, therefore the jurisdiction of the authority under these provisions is limited to declaring whether a change is illegal. Since the relief of reinstatement is specifically mentioned in Section 16, a party seeking to recover his wages on the basis of his contract of employment must take that remedy before he can claim payment of wages.

(15) Section 15 of the Payment of Wages Act gives jurisdiction to the Authority under the Payment of Wages Act to hear and decide claims arising out of deductions from wages or delay in payment of wages of persons employed. 'Wages' is defined in Section 2(vi) to mean '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 or of work done in such employment, and includes. . . . . . .'. We are not concerned herewith the clauses of inclusion. It is clear from Ss. 15 and 2(vi) of the Payment of Wages Act that in order that an amount should be granted by the Authority under the Payment of Wages Act, it must first of all fall within the definition of 'wages' and that means that there must be an employer and it must be an amount payable to a person employed in respect of his employment or of work done in such employment. Now, when the employee is dismissed and the dismissal is merely declared to be an illegal change, the utmost that that order can imply is that the dismissal was wrong, it cannot imply that the employee is once again in the service of his employer.

(16) So far as the jurisdiction of the Payment of Wages Authority is concerned, the mere declaration that the dismissal is wrongful cannot give it jurisdiction to decree a claim for wages for that period. There must be an order of reinstatement, and admittedly there was no order of reinstatement passed in the present case. To the extent, therefore, that the decision in : (1962)IILLJ323Bom holds that an order of passed under S. 41 simpliciter would not give the jurisdiction to the Payment of Wages Authority to decree a claim for wages of that employee. Without an order of reinstatement, the Payment of Wages Authority would have no jurisdiction to order the payment of wages.

(17) Turning to Special Civil Application No. 630 of 1965, the Appellate order of the Assistant Judge, Nagpur, also referred to the decision in Namdeo Shrawan's case, : (1962)IILLJ323Bom and to the amendment of the definition of 'wages'. That was also the contention advanced on behalf of the employees both by Mr. Dharmadhikari and Mr. Kukday. The amendment in the definition was only this that the previous words 'if the terms of the contract of employment, express or implied, were fulfilled'. By the 1957-amendment of S. 2(vi) it does not appear to have been the intention to suggest that a claim to wages could arise even though there be no contract of employment. On the contrary it seems that the scope of definition was enlarged rather than curtailed. When the words 'contract of employment' were dropped and the words 'terms of employment' were added, the intention was merely to bring within the ambit of the definition cases where the contract of service was statutorily or otherwise by operation of law or by any lawful order, modified e.g. by a notification under the Minimum Wages Act. That is also clear from the Objects and Reasons stated for the amendment in 1957. The terms of payment under contracts of employment used to be frequently modified by awards of tribunals or other settlements or the wages revised statutorily or through adjudication, arbitration and other proceedings under the industrial law and the intention was to include within the definition of 'wages' not merely the contractual wages but also the wages thus fixed by operation of law or the lawful order passed by a person or an authority. The amendment in the definition of 'wages' therefore makes no difference for the purposes of the point before us.

(17-A) Considering, the definition of 'wages' prior to the amendment, Division Bench of this Court held in Arvind Mills v. K. R. Gadgil, : AIR1941Bom26 that 'wages' means remuneration payable on the fulfilment of the contract of employment and therefore means wages earned, and that it would not include potential wages or bonus. Chief Justice Beaumont said

'No doubt on the language of the definition there is something to be said for that view, but it has to be observed that, under the opening words of Section 2, the definitions only apply if there is nothing repugnant in the subject or context. It seems to me that the word 'wages' as used in most, at any rate of the sections of the Act, plainly does not mean potential wages, but wages earned and at page 28 the expression 'remuneration', which would if the terms of the contract were fulfilled, be payable' seems to me to mean no more than 'remuneration payable on the fulfilment of the contract.'.'

(18) After the amendment in the definition, it has been held that wages fixed by an award in an industrial dispute between an employer and an employee would be included in the definition of 'wages', but the view of the Bombay High Court was upheld by the Supreme Court in their decision in Md. Qasim Larry v. Md. Samsuddin, : (1964)IILLJ430SC .

(19) Turning to the facts in Special Civil Application No. 630 of 1965 in paragraph 14 of the decision of the Industrial Court, it specifically declined to grant reinstatement as well as back wages so far as all the twelve employees were concerned, though it held that there was an illegal change. So far as section 25F was concerned it held that only four out of the twelve workers had put in the requisite service of 240 days entitling them to retrenchment compensation. The State Industrial Court dismissed the employee's appeal. In the face of those orders, we cannot see how, having regard to the definition of wages, the Payment of Wages Authority could possibly have jurisdiction to entertain the claim for wages. The employees who had been dismissed had not obtained an order for reinstatement and so cannot be held to be in employment, and unless they were in employment, they would not be entitled to wages. In that view, the additional question referred in Special Civil Application No. 630 of 1965 must be answered in the negative, that is to say, it must be held that the four workmen in that case cannot be regarded as persons employed within the meaning of Section 15 of the Payment of Wages Act.

(20) In the result, the answers to the questions posed are as follows:

Q. 1: : (1962)IILLJ323Bom was incorrectly decided, in so far as it held that the Payment of Wages Authority will have jurisdiction to grant wages without an order of reinstatement in accordance with law.

Q.2: The second question, the one referred in Special Civil Application No. 630 of 1965, is answered in the negative.

(21) Answer accordingly.


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