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Ganpat Laxman Vaite Vs. Lionel Holland - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberCivil Revn. Appln. No. 680 of 1953
Judge
Reported inAIR1955Bom431; (1955)57BOMLR405; ILR1955Bom520
ActsPayment of Wages Act, 1936 - Sections 3, 15(2) and 15(3); Factories Act, 1948 - Sections 7(1) and 7(5)
AppellantGanpat Laxman Vaite
RespondentLionel Holland
Appellant AdvocateV.S. Desai, Adv.
Respondent AdvocateD.M. Parulekar and ;B.K. Sonar, Advs.
Excerpt:
payment of wages act (iv of 1936), sections 3, 15 - factories act (lxiii of 1948), sections 2 (n), 7(5)--'employer' whether means person responsible for payment of wages when wages accrue or when application for wages made--construction.; the expression 'employer' in section 3 of the payment of wages act, 1936, means the person who is the employer at the date when the application for wages was filed under section 15(2) of the act.; the material date to consider is not who was responsible for payment of wages when the wages accrued, but the material date to consider is who was the person responsible for the payment of wages at the date when the application is made. - .....revision application arises out of an. application filed by the petitioners under section 15(2), payment of wages act for arrears of wages for a period 1-1-1350 to 21-9-1951, and also in the-case of some workers for bonus for the years 1947-48, it appears that the factory which employed the petitioners was owned by the opponent up to 7-1-1947. on that date a limited company was incorporated in england in the name of caulfield holland & co., which took over the business of the exponent's factory which was being run in the name of holland & co.by an agreement dated 16-1-1947, the opponent was, appointed the managing director of the company and was put in charge of the company's-business which was being done previously by holland & co. a man by the name of hudson was the local manager of.....
Judgment:
ORDER

1. This revision application arises out of an. application filed by the petitioners under Section 15(2), Payment of Wages Act for arrears of wages for a period 1-1-1350 to 21-9-1951, and also in the-case of some workers for bonus for the years 1947-48, it appears that the factory which employed the petitioners was owned by the opponent up to 7-1-1947. On that date a limited company was incorporated in England in the name of Caulfield Holland & Co., which took over the business of the exponent's factory which was being run in the name of Holland & Co.

By an agreement dated 16-1-1947, the opponent was, appointed the managing director of the company and was put in charge of the company's-business which was being done previously by Holland & Co. A man by the name of Hudson was the local manager of this factory and under the Factories Act he was named as the manager. On 6-9-1951, the opponent gave notice to the employees of closure of business and their services were terminated on 21-9-51, when the factory closed down its business. It may be pointed out that the notice was also served on Hudson and Hudson ceased to be in the employ of the factory from 21-9-1951.

2. Now, it is not disputed that the amount of wages and bonus is due to the petitioners. The contention of the oppouent is that he is not liable to pay this amount. The Payment of Wages Authority ordered the defendant to pay this amount. The opponent appealed to the Small Causes Court and the learned Chief Judge has held that there is no liability upon the opponent to pay this amount, and the petitioners have now come in revision.

3 When we turn to the Payment of Wages Act, Section 3 provides that every employer shall be lespuusible lor the payment to persons employed by him oi alt wages required to he paid under this Act. There is a proviso to this section & we are con-terncd with Sub-clause (a) of that proviso which lays down that in the case of persons; employed in factories, if a person has been named as the manager of the factory under clause (f) of Sub-section (1) of Section 7 of the Factories Act, 1948, then he shall be responsible for such payment. Therefore, in the case of a factory the person responsible for the payment of wages and who is looked upon as an employer is the person pamea as the manager.

Then we come to Section 15 and Sub-section (2) deals with the application to be made by the employee for delayed wages or for deduction from wages, and Sub-section (3) provides that when any application under Sub-section (2) is entertained, the Authority shall hear the applicant and the employer or other person responsible for the payment of wages under Section 3.

4. Now, the question that I have to consider is whether the opponent was the employer within the meaning of the Payment of Wages Act responsible for the payment of wages of the petitioners. The view taken by the learned Chief Judge is that the person who was named as the manager was Hudson and therefore the liability to pay wages is upon Hudson and not upon the opponent. Now, in construing Section 3 and deciding what meaning has got to be given to the expression 'employer * one must took at Section 15(3) of the Act. The Authority has got to hear the employer when an application is made by the employee and it is clear that the person who has got to be heard is the person who is the employer at the date when the application or wages has been made.

The employees are only concerned with getting their wages and the Act provides for the machinery which entitles them to get those wages. The machinery furnishes a speedy remedy and the object of the Act is to fix the responsibility for the payment of wages upon some person who is in the position of an employer at the date when the application is made. Therefore, in my opinion, the material date to consider is not who was responsible for payment of wages when the wages accrued, but the material date to consider is who was the person responsible for the payment of wages at the date when the application is made. Unless I give this interpretation to the expression 'employer' used in Section 3, the whole machinery set up by the Legislature under the Payment of Wages Act would become unworkable.

Take this very case. There is a limited company in England which has appointed a managing director. That managing director is responsible for the working of the factory. He names a manager as required under the Factories Act. He quietly dismisses the employees, dismisses the manager, closes the factory, does not pay the wages, and when an application for delayed wages is made bv the employees, he turns round upon them arid says 'you must proceed against the manager who lias disappeared or you must proceed against the limited company which is situated in England'.

Therefore the law reouires that there must be some one responsible at the date when the application is made for the payment of wages to the employees who have made the application. The only question that the Authority has got to consider is, who is the person responsible at that date?

5. Now, in this case two views are possible. If it is suggested that the case rails under Sub-clause (a) oi the proviso to Section 3 inasmuch as employees were employed in the factory, then at the date when the application was made Hudson was no longer the named manager because his services had already been dispensed with, and when we turn to Section 7(5) of the Factories Act, it provides that during any period lor which no person has been designated as manager of the factory or during which the person designated does not manage the factory, any person found acting as manager, or if no such person is found, the occupier himself, shall be deemed to be the manager of the factory for the purposes of this Act.

Now, 'occupier' is defined as a person who has ultimate control over the affairs of the factory. If there was no named manager of this factory at the date when the application was made, then the occupier would be deemed to be the manager of the factory, and there can be no doubt that on the facts of this case the opponent is the occupier of the factory. He is in ultimate control of the affairs of this company, Mr. Parulekar says that under this definition the occupier would be the limited company in England and not the opponent. I am not prepared to accept that contention. The person who is in ultimate control must be a person in India who can be got at under the Factories Act, & as far as this country is concerned, the person who was in ultimate control was the opponent and not the company incorporated in England.

The other possible view is that there was no factory existing at the date when the application was made and therefore the proviso would have no application, in which case we must construe the main Section 3 itself and under that section what we have to consider is whether the opponent was the employer. Now, the expression 'employer' has not een defined in the Act, but in my opinion the widest meaning should be given to that expression. In this case, again, there is no difficulty in coming to the conclusion that the opponent was the employer within the meaning of Section 3. It was he who actually discharged the employees & therefore he had the ^authority to dispense with their services. It is only an employer who can dismiss servants employed for a particular purpose, and I do not understand how the opponent can possibly contend that he is not the employer of the petitioners when he exercises the most important power of an employer to dispense with their services.

Therefore from that point of view also the opponent would be liable to pay the wages under Section 15. The fallacy, with respect, into which the learned Chief Judge has fallen is that he has considered the material date to be the date at which the wages accrued to the petitioners and because at that date Mr. Hudson was the employer and not the opponent, he has taken the view that the oppo-nent cannot be made responsible for the payment of the wages of the petitioners. But as I have point-ed out, the opponent was undoubtedly the employers within the meaning of Section 3 at the date when the peti-tion was presented by the petitioners and it is her who under the Payment of Wages Act is responsible for the payment of wages.

6. in my opinion, therefore, the decision ofthe learned Chief Judge cannot stand. The resultis that the rule will be made absolute with costsand the decision of the Payment of Wages Authority will be restored. The petitioners will also getthe costs of the lower appellate Court.

7. Rule made absolute.


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