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Textile Labour Union, Nadiad Vs. New Shorrock Spinning and Manufacturing Company Ltd. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberReference (I.C.) No. 81 of 1959
Judge
Reported in(1960)ILLJ129Bom
ActsBombay Industrial Relations Act, 1946 - Sections 3 and 81; Payment of Wages Act, 1936 - Sections 2(4) and 6; Payment of Wages (Amendment) Act, 1953 - Sections 3; Payment of Wages Rules - Rule 8A; Constitution of India - Article 254
AppellantTextile Labour Union, Nadiad
RespondentNew Shorrock Spinning and Manufacturing Company Ltd.
Excerpt:
.....would be so payable .in view of this definition, the supreme court in raja ram v. that clause will apply even in a case like the present whereby a subsequent amendment in the central law the term 'wages' is given an extended meaning, and this gives rise to the conflict between the state and central law, so that the state law cannot be obeyed without contravening the central law. for reasons which we shall set forth presently, we think this is too narrow a test there may well be cases of repugnancy where both laws say 'don't,'but in different ways......paid in current coins or in currency notes or in both.' a proviso was added to this by payment of wages (bombay amendment) act, lxii of 1953, by the bombay legislature which is as follows :- 'provided that when the amount of any bonus payable to an employed person exceeds an amount equal to one-fourth of his earnings exclusive of dearness allowance) for the year to which the bonus relates, such excess shall be paid or invested in the manner prescribed.' rule 8a of the bombay payment of wages rules provides inter alia that the payment of such excess over one-fourth shall be made in the form of national savings certificates. at the time when this proviso came in force, bonus under agreement, as in this case, was not included in the term 'wages,' for it was defined in clause (vi) of s. 2.....
Judgment:
Acts/Rules/Orders:

Bombay Industrial Relations Act, 1946 - Sections 3 and 81; Payment of Wages Act, 1936 - Sections 2(4) and 6; Payment of Wages (Amendment) Act, 1953 - Section 3; Payment of Wages Rules - Rule 8A; Constitution of India - Article 254

DECISION

1. This case was referred by the Judge of the Second Labour Court at Ahmedabad, under S. 81 of the Bombay Industrial Relations Act, 1946. The question of law that we have to decide is, whether S. 3 of the Bombay Act LXII of 1953 is void on account of its repugnancy to S. 6 of the Payment of Wages Act, IV of 1936.

2. This point arises in the following circumstances. The Textile Labour Union, Nadiad, filed an application against the New Shorrock Spinning and ., Nadiad, stating that the company by its failure to pay to its employees the entire amount of bonus by a certain date stated in the agreement, had committed an illegal change, which it should be directed to withdraw. It is common ground that on 18 September, 1958 an agreement was arrived at between the parties under which the workers were entitled to receive bonus equivalent to 30 per cent of their basic wages for the year 1957, and this bonus was to be paid before 31 October, 1958. The company paid 25 per cent of the total basic wage, and the remaining amount it offered to pay in the form of national savings certificates. The company says that it was bound under S. 3 of the Payment of Wages (Amendment) Act LXII of 1953 read together with rule 8A, to pay any bonus above 25 per cent in the form of national savings certificates. On behalf of labour it was objected that this proviso to S. 6 which was added by S. 3 of the Bombay Act LXII of 1953 was void, because S. 6 of the Central Act enjoins that all payments of wages should be made in current coins and currency notes, and by S. 3 of the Payment of Wages (Amendment) Act, LXVIII of 1957, S. 2(4) of the Payment of Wages Act, 1936, has been amended, so that bonus under agreement or settlement is included in 'wages.' Considering that a question of constitutional law was involved, the Advocate-General was called and heard on the point, on 11 July, 1959. He suggested that we should withhold decision of this case for a month, as it was expected that an Ordinance will be passed to resolve the conflict which gave rise to this reference. As the period of one month has passed, we decide the case as follows.

3. We shall first consider the various provisions of the Central and the State Act which are relevant for the purpose. It is not disputed that the subject-matter of these provisions of law falls under item 24 of the Concurrent List Sch. VII of the Constitution, and in case of repugnancy of the State law to the Central law, Art. 254 of the Constitution will apply. Section 6 of the Payment of Wages Act IV of 1936 is as follows :-

'All wages shall be paid in current coins or in currency notes or in both.'

A proviso was added to this by Payment of Wages (Bombay Amendment) Act, LXII of 1953, by the Bombay legislature which is as follows :-

'Provided that when the amount of any bonus payable to an employed person exceeds an amount equal to one-fourth of his earnings exclusive of dearness allowance) for the year to which the bonus relates, such excess shall be paid or invested in the manner prescribed.'

Rule 8A of the Bombay Payment of Wages Rules provides inter alia that the payment of such excess over one-fourth shall be made in the form of national savings certificates. At the time when this proviso came in force, bonus under agreement, as in this case, was not included in the term 'wages,' for it was defined in Clause (vi) of S. 2 of the Payment of Wages Act, 1936, as follows :-

'Wages means all remuneration capable of being expressed in terms of money, which would, if the terms of contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed, or otherwise, to a person employed in respect of his employment and includes any bonus or other additional remuneration of the nature aforesaid which would be so payable ...'

In view of this definition, the Supreme Court in Raja Ram v. Patil had held that bonus payable under an award of the industrial court does not fall within the definition of 'wages' as defined in S. 2(vi) of the Payment Wages Act. The amendment which introduced the above proviso, which requires payment of bonus in excess of one-fourth of the basic wages for the year in the manner prescribed, had received the assent of the President, and even if it was repugnant to the Central Act, prevailed in the State of Bombay. After that the Parliament amended the definition of 'wages' by S. 3 of the Payment of Wages (Amendment) Act LXVIII of 1957, as a result of which S. 2(vi) of the Payment of Wages Act (as now amended) runs as follows :-

'includes -

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

but does not include -

(1) any bonus (whether under a scheme of profit-sharing or otherwise) which does not form 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 ...'

According to this definition bonus under an agreement or settlement is included in wages. The bonus which is excluded in (a)(1) is that which does not form part of remuneration payable under the terms of employment, or which is not payable under any award or settlement. A repugnancy therefore arises between the proviso to S. 6 introduced by the State Act and S. 6 of the Central legislature which requires payment of wages in current coins or in currency notes. The Labour Court has expressed the view that the subject-matter of S. 3 of the Bombay Act LXII of 1953 cannot be said to be the same as that of S. 3 of Act LXVIII of 1957 of the Parliament; the former section deals with the mode of payment of wages, while the latter section deals with the scope of the definition of 'wages,' and though the latter section has indirectly enlarged the scope of the application, it cannot be said that it has in any way added to, amended, varied or repealed, the former section so as to make the proviso to Clause (2) of Art. 254 of the Constitution applicable. He also says that S. 3 of Bombay Act LXII of 1953 was comprehensive section covering every kind of bonus, which was or could be included in the term 'wages' as defined in S. 2(vi) of the Payment of Wages Act, for it did not make any mention about the nature of bonus. We are unable to agree with this view. Clause 2 provides that the Parliament subsequent to the said assent can enact any law with respect to the same matter including a law adding to, amending, varying or repealing a law made by the State legislature. This means that if the Parliament passed any law after the assent or subsequent to the assent by the President to the State law, any law that is inconsistent therewith, notwithstanding the assent of the President, the State Law to the extent of its repugnancy to the provisions of the Central Act, would be void. In Basant Lal v. Bansi Lal it was held that even when the new Central Act only extended duration of the old Act, the State Act to the extent it is repugnant to the new Central Act will be void though it had previous to the new Central Act obtained the assent of the President. The contention that the Act is merely a continuation of the old Act was not accepted (see pp. 54-55). In Zaverbhai v. State of Bombay it was held that the provincial law which had been reserved for the assent of the Governor-General under S. 107(2) of the Government of India Act would be void to the extent of repugnancy if the Central legislature passed an Act on the same subject. The labour court was in error in interpreting the Clause 2 of Art. 254 to mean that unless the Central Act adds to, amends, varies or repeals directly or expressly the State Act, or that, unless it is regarding absolutely identical matter, the clause would not apply. That clause will apply even in a case like the present whereby a subsequent amendment in the Central law the term 'wages' is given an extended meaning, and this gives rise to the conflict between the State and Central law, so that the State law cannot be obeyed without contravening the Central law.

4. In 1939 Cal. 628, Stewart v. Brojendra Kishore, it was held that even in the absence of such a direct conflict there can be repugnancy when the two provisions of the law were different as will appeal from the following observations :-

'It is sometimes said that two laws cannot be said to be properly repugnant unless there is a direct conflict between them as when one says 'do' and the other 'don't' there is no true repugnancy, according to this view, if it is possible to obey both the laws. For reasons which we shall set forth presently, we think this is too narrow a test there may well be cases of repugnancy where both laws say 'don't,' but in different ways. For example, one law may say 'No person shall sell liquor by retail, that is in quantities of less than five gallons at a time' and another law may say, 'No person shall sell liquor by retail, that is in quantities of less than ten gallons at a time.' Here it is obviously possible to obey both laws, by obeying the more stringent of the two, namely, the second one; yet it is equally obvious that the two laws are repugnant, for to the extent to which a citizen is compelled to obey one of them the other not actually disobeyed is nullified.'

Therefore, if the Central Act says here that the payment should be made in coin or currency notes, and the State law enjoins payment of above 25 per cent of year's basic wages in national savings certificates, there is no doubt they are inconsistent with each other and the State law is repugnant to the Central law. We therefore think that the proviso to S. 6 of the Payment of Wages Act, 1936, added by Payment of Wages (Bombay Amendment) Act LXII of 1953 has since the passing of Amendment Act LXVIII of 1957 become void in view of Clause 2 of Art. 254 of the Constitution as being repugnant to S. 6 of the Payment of Wages Act (Central).

5. The question of repugnancy of the above amendment had never come up before this Court. In Md. Nain v. New Shorrock Spinning and Manufacturing Company 1958 I L.L.J. 684 before a Full Bench the point raised on behalf of labour was that the proviso introduced by the amendment in 1953 was invalid because the purchasing of national savings certificate was not a matter within the competence of the State legislature. The Full Bench of which we were parties repelling this contention held that this proviso aims at welfare of labour and therefore the subject-matter falls under item 24 of the Concurrent List in Sch. VII of the Constitution. We have carefully gone through that decision before expressing our view in this case and find nothing in it which is contrary to what we have held here.

6. The file may be returned to the labour court for decision in the light of our opinion on the question referred to.


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