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Bagicha Mills Co-operative Society Ltd. Vs. Natwarlal Mulshankar Joshi - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberCivil Revision Application No. 513 of 1957
Judge
Reported in(1958)60BOMLR1363; (1959)ILLJ370Bom
ActsBombay Shops and Establishments Act, 1948 - Sections 38; Bombay Co-operative Societies Act, 1925 - Sections 54; Payment of Wages Act - Sections 22 and 38
AppellantBagicha Mills Co-operative Society Ltd.
RespondentNatwarlal Mulshankar Joshi
Excerpt:
.....under payment of wages act.;the scheme of compulsory arbitration envisaged under section 54 of the bombay cooperative societies act, 1925, does not cease to have validity in the case of a cooperative society, which is a commercial establishment, to which by a notification issued under section 38 of the bombay shops and establishments act, 1948, the payment of wages act, 1936, is made applicable. therefore, such a notification does not override the provisions of section 54 of the bombay co-operative societies act, 1925.;majoor sahkari bank v. majmudar (1955) 57 bom. l.r. 1097 referred to. - - 1. a rather important and interesting question arises in this civil revision application with regard to the apparent conflict between s. now, the payment of wages act clearly does not apply to the..........apparent conflict between s. 38 of the bombay shops and establishments act, 1948, and s. 54 of the bombay co-operative societies act, 1925. the opponents are employed by the petitioner which is a co-operative society in ahmedabad, and they made an application to the authority under the payment of wages act claiming retrenchment compensation under the industrial disputes act. the petitioner contended that the application was not maintainable and that the opponents should have proceeded under s. 54 of the bombay co-operative societies act. that contention was rejected by the authority under the payment of wages act. in appeal, the learned district judge upheld the view of the authority and the co-operative society has now come in revision to this court. now, the payment of wages act.....
Judgment:

1. A rather important and interesting question arises in this civil revision application with regard to the apparent conflict between S. 38 of the Bombay Shops and Establishments Act, 1948, and S. 54 of the Bombay Co-operative Societies Act, 1925. The opponents are employed by the petitioner which is a co-operative society in Ahmedabad, and they made an application to the Authority under the Payment of Wages Act claiming retrenchment compensation under the Industrial Disputes Act. The petitioner contended that the application was not maintainable and that the opponents should have proceeded under S. 54 of the Bombay Co-operative Societies Act. That contention was rejected by the Authority under the Payment of Wages Act. In appeal, the learned District Judge upheld the view of the authority and the co-operative society has now come in revision to this Court. Now, the Payment of Wages Act clearly does not apply to the petitioner-co-operative society. What is contended is that it has been made applicable by reason of a law passed by the Bombay State and that law is the Bombay Shops and Establishments Act. The original Act was Act No. XXIV of 1939 and under that Act a notification was issued by Government on 17 December, 1943, by which it declared co-operative societies to be commercial establishments, and it is not disputed by Mr. Kazi that by reason of that notification the Bombay Shops and Establishments Act became applicable to the petitioner co-operative society. Then comes the Act, the Bombay Shops and Establishments Act, LXXIX of 1948. By this Act 'commercial establishment' is much more widely defined, and, again, it is not disputed by Mr. Kazi that a co-operative society would be a commercial establishment within the meaning of this Act. Therefore, it is conceded that this Act applies to the petitioner co-operative society. This Act contains a new provision and that provision is S. 38, which says : 'Notwithstanding anything contained in the Payment of Wages Act, 1936, herein referred to as 'the said Act,' the State Government may, by notification published in the official gazette, direct that subject to the provisions of Sub-section (2) the said Act shall, in such local areas as may be specified in the notification, apply to all or any class of establishments or to all or any class of employees to which or whom this Act for the time being applies';

and under this section Government issued a notification on 3 March 1955, and this notification applies to Ahmedabad; and It is not disputed that as far as the notification is is concerned the petitioner-co-operative society comes within the ambit of the said Act. Therefore, what was urged before the Payment of Wages Authority and the learned District Judge - it is unfortunate that the opponents are not represented before me - was that by reason of S. 38 the Payment of Wages Act became applicable to the petitioner and, therefore, it was competent to the opponents to make the claim which they did before the Payment of Wages Authority. Indeed, what was further urged was that the Payment of Wages Act Authority constituted the only forum before which the opponents could have applied for relief.

2. It is true that S. 22 of the Payment of Wages Act bars any suit for the recovery of wages or any deduction from wages or any amount which could have been recovered by an application under S. 15 and there can be no doubt that the claim made by the opponents could not have been litigated in a civil Court by means of a suit. But it is important to note that what is barred by S. 22 is a suit. Now, under S. 54 of the Bombay Co-operative Societies Act there is a scheme of compulsory arbitration which has got to be resorted to in any dispute touching the constitutional business of the society between the society and Its servants, and the question for my determination is whether the notification applying the Payment of Wages Act overrides the provisions of S. 54. Obviously, Government overlooked the provisions of this section; but if the effect of the notification is clearly to override the section, then I must give effect to the notification. It may be said that the Payment of Wages Act provides a summary and effective remedy to an employee but it may equally truly be said that S. 54 also affords a summary remedy with regard to all disputes between a co-operative society and its servants. It may even be said that this remedy is even more effective because it does away with litigation before a judicial forum and a usual appeal to a higher Court, because the dispute under S. 54 is to be decided by arbitration with all the necessary concomitants that go with an arbitration. Now, the learned District Judge has taken the view that there is a conflict between the Payment of Wages Act and the Bombay Co-operative Societies Act and in view of this conflict the Central Act should prevail. I do not see any conflict between the Payment of Wages Act and the Bombay Co-operative Societies Act, 1925. As I have Just pointed out, what the Payment of Wages Act bars is a suit in a civil court to recover what can be recovered by an application under S. 15 of the Payment of Wages Act. But the Payment of Wages Act does not bar all proceedings with regard to a claim made by a servant which can be the subject-matter of an application under S. 15. There is nothing, as far as I can see, in the Payment of Wages Act which prevents an arbitration between an employer and his employee and all that S. 54 of the Bombay Co-operative Societies Act does is to introduce compulsory arbitration in every case of dispute touching the constitution or business of the society between the society and its servants. Unless the Payment of Wages Act prevented an arbitration or barred any mode of settlement between an employer and an employee other than adjudication by an Authority under the Payment of Wages Act, I see no reason why S. 54 should be hold to have been overridden by the provisions of S. 38 of the Bombay Shops and Establishments Act. It may be said that in this view of the case the notification issued on 3 March, 1955, which applies to the petitioner-co-operative society, would be infructuous and ineffective. Although the notification intended that a co-operative society should be governed by the provisions of the Payment of Wages Act, in the view I am taking, the co-operative society does not come within the ambit of that statute. As I pointed out, when the notification was issued, Government did not have S. 54 in mind, and if it applied the notification to co-operative societies, effect must be given to that notification to the extent it is possible to give. If S. 54 still continues to apply notwithstanding the provisions of the Payment of Wages Act and if compulsory arbitration is permissible oven under the provisions of the Payment of Wages Act and such arbitration is not barred, then there is no reason to hold that merely because by the notification issued on 3 March, 1955, the Payment of Wages Act was made applicable to the co-operative societies, the scheme of compulsory arbitration ceases to have any validity in all those cases where a co-operative society is a commercial establishment to which the notification of 3 March, 1955 has been applied. Just as the Payment of Wages Act may be looked upon as a piece of social legislation intended to help employees drawing small salaries to recover wages from employers in a summary and efficacious manner, the Bombay Co-operative Societies Act can also be looked upon as a piece of social legislation which encourages the co-operative movement and encourages co-operative societies to function effectively and one of the important sections of the Act is S. 54 which prevents a co-operative society being dragged into a civil court.

3. My attention was drawn by Mr. Kazi to a decision of this Court in Majoor Sahkari Bank v. Majmudar : (1955)IILLJ755Bom . In that case the Bombay Industrial Disputes Act was made applicable to the business of banking companies and the question was whether that notification applied to the particular bank which was doing banking business and the Court hold that it did apply to that society; and what we pointed out in the judgment was that S. 54 would not apply to a case like this, because the questions that arose under the Industrial Disputes Act are not matters which can be dealt with by a civil Court and also pointed out that to hold that the notification does not apply would cause obvious injustice because whereas the employees of other banks would be protected by the Industrial Disputes Act and would be getting all the benefits conferred under that Act, the employees of the co-operative societies, although doing the business of banking, will be deprived of the benefits merely because of S. 54 of the Bombay Co-operative Societies Act. That argument cannot apply to the question before me in this revision application. By holding that the employees must go to compulsory arbitration under S. 54, I am not doing anything which will cause injustice to these employees. The arbitrators are as competent to give them reliefs which they seek as is the Authority under the Payment of Wages Act. The only question before me is which is the forum to which the employees should go. Both the forums are competent to give reliefs and, I have already pointed out, both the forums are equally efficacious and the remedy can be obtained by a summary procedure. On the whole, I would hesitate to hold that S. 54 has been abrogated in the case of a dispute between a co-operative society and its employees, unless there was a clear provision of law to that effect, and I do not see such a clear provision of law in S. 38 of the Bombay Shops and Establishments Act and the notification dated 3 March 1955 issued by Government.

4. The result is the revision application must succeed. Rule made absolute. The application of the opponents will be dismissed.

5. Mr. Kazi assures me on behalf of the co-operative society that the amount claimed by the opponents has already been paid or if not paid will be paid and that the co-operative society is fighting this revision application as a test case. No order as to costs.


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