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Manager Hindusthan Journals, Private Limited Vs. Govind Ram Sawal Ram - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMadhya Pradesh High Court
Decided On
Case NumberCivil Revn. No. 218 of 1960
Judge
Reported inAIR1963MP25; [1962(4)FLR520]; (1962)IILLJ242MP; 1962MPLJ437
ActsPayment of Wages Act, 1936 - Sections 2, 7, 15 and 17; Code of Civil Procedure (CPC) - Sections 115; Constitution of India - Article 227; Madhya Pradesh Shops and Establishments Act - Sections 26(2); Madhya Pradesh Payment of Wages Rules
AppellantManager Hindusthan Journals, Private Limited
RespondentGovind Ram Sawal Ram
Appellant AdvocateJ.D. Patel, Adv.
Respondent AdvocateG.M. Chaphekar, Adv.
DispositionPetition dismissed
Cases ReferredC.V. Narayanaswami Iyer v. K.A. Yasuoeva Iyer
Excerpt:
- - the mere failure of the applicant to mention that section 30, madhya pradesh shops and establishments act attracted section 15 of the payment of wages act to such cases, cannot render the application invalid. in the present case, however, we have section 26(1)(a) granting the privilege leave to the employee, and 26(2) obliging the employer to pay leave salary on the termination of the employment in circumstances like the present ones. if the employer is entitled to anything outside this list of legal deductions, he cannot touch the wages but may please himself by bringing suits, like any other claimant......by the m. b. shops and establishments act. on the merits the questions are, whether a claim for leave salary under section 26 of the madhya pradesh shops and establishments act, is a claimfor wages as defined in section 2(vi) of the payment of wages act. (the relevant provisions of the m. b. shops and establishments act are identical in their wording with those of the m. p. act: for convenience, the number of tne later act are used:) finally, whether the employer is justified in adjusting against the wages payable to the employee the price of a grinding mill which he took away from one of the employer's agents letting him debit it to the employer's account.2. no controversy can, at this stage, be raised in regard to the facts as found by both the lower tribunals. the opposite party.....
Judgment:

Krishnan, J.

1. This is an application in the alternative under Section 115, C.P:C. and Article 227 of the Constitution by the employer, from the appellate order by the District Court under Section 17 of the Payment of Wages Act, affirming the order of the Payment of Wages Authority under Section 15 of the Act. Two of the questions for consideration are ones of form though still Important in view of thefrequency with which they arise. Firstly, whether application of this type should not be filed straightway as one in revision under Section 115, C.P.C. without bringing inArticle 227 of the Constitution: Secondly, whether the petition becomes ineffective because of the non-mention ct the application of the Payment of Wages Act to the wages in the establishments covered by the M. B. Shops and Establishments Act. On the merits the questions are, whether a claim for leave salary under Section 26 of the Madhya Pradesh Shops and Establishments Act, is a claimfor wages as defined in Section 2(vi) of the Payment of Wages Act. (The relevant provisions of the M. B. Shops and Establishments Act are identical in their wording with those of the M. P. Act: for convenience, the number of tne later Act are used:) finally, whether the employer is justified in adjusting against the wages payable to the employee the price of a grinding mill which he took away from one of the employer's agents letting him debit it to the employer's account.

2. No controversy can, at this stage, be raised in regard to the facts as found by both the lower tribunals. The opposite party was a clerk under the petitioner in anestablishment at Indore which comes under operation ofthe Madhya Pradesh Shops and Establishments Act. Theemployer was liable to pay the wages which were Rs. 110/-P. M. At the relevant point of time four months paywas outstanding and, in addition, the employee had notavailed of two months' privilege leave to which he wasentitled under Section 26(1) of the Act. It was also foundthat during the period of employment a grinding mill was given to th employee by an agent of the employer and on the materials before the tribunal, it was found that asum of Rs. 400/- had been debited to the employer.

The tribunals have held, firstly that certain formal defects, pointed out by the employer in the application, were not fatal and did not attract limitation with reference to the date on which they were removed. They aiso held that the employer was not competent to adjust the price of the grinding mill against the wages due to the employee. Thirdly, under Section 2(vi) even as it stood before the amendment by Act No. 68 of 1957 (which came into force in 1958), the leave earned by the employee came under the definition of wages. Accordingly, the claim of me employee was allowed in toto by the concurrent orders of the tribunals. The cross claim for the price of the grinding mill has been, as it were, left open to be pursued by the employer at his choice in the civil Court.

3. Ground No. 1:-- The practice that has grown up here of litigants filing these applications indiscriminately under Section 115 C.P.C. or Article 227 of the Constitution, calls for disapproval. Section 17, Payment of Wages Act (and the similar provisions in several other Acts) provide for appeals from a statutory tribunal, which is not a Court under the C.P.C., to be preferred to the District Court; under this Act, the appellate tribunal will be the Small Cause Court in the Presidency towns. Either way, the appellate tribunal is not a persona designata but a civil Court already functioning under the C.P.C. and subordinate as such, to the High Court. This is already covered by a number of judicial decisions of this High Court and of the Supreme Court itself, so that there is no more doubt as to the manner in which the litigants aggrieved by the order of the statutory tribunal can approach the High Court. As there is no occasion for invoking Article 227 where the tribunal concerned is one functioning under C.P.C., all such applications should come up in revision under Section 115, Civil Procedure Code to be disposed of as such.

4. Ground No. 2:-- The employee's application was not on any printed form, and w s further worded in terms of the Payment of Wages Act making it appear thereby that it arose in course of the employment in a factory. Later on, after more than six months, however, the position was clarified by the employee-applicant by a reference to Section 30, Madhya Pradesh Shops and Establishments Act enabling the employee to apply to the authority appointed under the Payment of Wages Act, for wages that had been withheld or delayed. It is seriously urged that the application that was originally filed, was under the Factory Act and by the time it was in effect amended, the claim had become time-barred and that either way the application should not have been entertained. Though a form has been prescribed in the payment of Wages Rules for application under Section 15, there is no enactment or statutory rule that an application not made in a particular printed form supplied by a particular authority should be dismissed.

All that it means is that the details given in the form should be given in every application. If the applicant omits any particular detail, the employer may draw the attention of the authority. Otherwise there is no special magic about the form. Further, the Act was at the first instance made applicable for the payment of wages to the employees in factories and in railways, but by certain subsequent enactments, it came to be applied to the payment of wages to employees in establishments other than factories. The mere failure of the applicant to mention that Section 30, Madhya Pradesh Shops and Establishments Act attracted Section 15 of the Payment of Wages Act to such cases, cannot render the application invalid. Obviously, a provision of Statute operates just the same even if the party does not mention it.

5. Ground No. 3:-- Coming to the merits, the contention of the employer in regard to leave salary is that this is not the wages as defined under the Payment of Wages Act. Conceivably the employee might go to a civil Court but that is another matter. As against it, the latter has tried to support the finding of the tribunals that even the imamended Section 2(vi) of the Act includes leave salary available to the employee under the Statute, A mere reading of that section would make this clear. Section 2(vi) in so far as it is applicable to our case runs thus:

'Wages means all remunerations (whether by way of salary, allowances or otherwise) expressed in terms of money which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed.. ..'

Originally there was a list of exclusions but in 1957, it was amended giving a list of inclusions which are very important for the purposes of bonus, but which have no bearing on leave salary. Section 26(1) of the Madhya Pradesh Shops and Establishments Act runs thus:--

'A person employed in an establishment to which this Act applies, shall be entitled (a) after every twelve months continuous employment, to privilege leave for a total period of one month.. .. .. ..'

(2) If an employee entitled to leave under Sub-section (1) is discharged by his employer before he has been allowed the leave, or if, having supplied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him the amount payable under Section 27 in respect of the leave.'

Section 27 lays down the rule for the calculations of leave salary in regard to which there is no controversy here. Thus the claim to leave salary is one arising directly by operation of statute and not, on the one hand, by an express agreement of the parties nor on the other, by the decision of another tribunal,

6. The first argument on behalf of the employer is that, to become wages under Section 2(vi) of the Act, the claim should arise from a term of the contract express or implied. Since a provision of Statute cannot be called a term of contract, this claim is not wages though the employee may, if he chooses, bring a suit in the civil Court. This argument overlooks the simple principle that whenever Statute provides, in regard to any relationship, in this case between the employer and the employee, the provision automatically introduces itself in the contract, in fact to the extent of modifying the terms of the agreement in so far as they conflict with it. Here the agreement is silent in regard to the leave salary but the statutory provision automatically becomes a term of the contract. Therefore this argument has no force.

The rulings of the Federal Court in F.W. Reiigers ana Co. v. Nagesh Chandra, AiR 1949 FC 142: Divisional Engineer, G.I.P. Railway v. Mahadeo Raghoo, (S) AIR 1955 SC 295; A. V. D'Costa, Divisional Engineer, G.I.P. Railway v. B.C. Patel, (S) AIR 1955 SC 412: and Bala Subrahmanya v. B.C. Patel, AIR 1958 SC 518 have been cited. In the first and the last cases, the claim was for bonus, given rot by contract nor by direct operation of statute, but by an award of an Industrial Court in its decision of a dispute referred to it under the Industrial Disputes Act. As the law stood before the amendment in 1957, bonus of this kind would not be 'wages'. In the two other cases, it was respectively, house allowance, and what has been called 'the potential wages'. Therefore the principles of these rulings have no application to the present case wherethe leave salary itself has been straightway granted by Statute.

Yet another ruling referred to by the employer is the one reported in C.V. Narayanaswami Iyer v. K.A. Yasuoeva Iyer, AIR 1958 Mad 360 where it was held that the claim for leave salary in that was one entertainable in Civil Court and not under Section 15, Payment of Wages Act. The principles laid down there are certainly unexceptionable, but apparently there was no provision either in the contrjct or in the relevant statute of that case, that in the event ot the employee not availing of the leave, the employer shall pay him leave salary on the average or on any other basis. In the present case, however, we have Section 26(1)(a) granting the privilege leave to the employee, and 26(2) obliging the employer to pay leave salary on the termination of the employment in circumstances like the present ones. So the Madras ruling has no application here.

The result of the discussion is that leave salary to which the employee is entitled by the direct operation of the Statute is wages as defined in Section 2(vi), Payment of Wages Act.

7. Ground No. 4:-- Regarding pay for four months amounting to Rs. 400/-, the employer's reply was that most of it (i.e. Rs. 400/-) had been adjusted, the employee having received the benefit by taking without payment a grinding mill from an agent of the employer. The question before the tribunal was, whether this was a deduction that the employer was legally competent to make under the Act. In the absence of any statutory bar, it is obviously equitable for a Court to give credit to the defendant in the same suit for any payment made by him to the plaintiff. This would save multiplicity of legal action and prevent the plaintiff from having the advantage of his claim being granted, while the defendant's claim is postponed. But where the parties are not equally placed, and one is in a position to take unfair advantage over the other, legislature steps in end expressly prevents the former from holding, as security for its claim arising out of other transactions, the dues payable to the latter. The payment of Wages Act does not prohibit any dealings between the employer and the employee outside that relationship; but it does prohibit the employer from making use of the wages payable on account of the employment for the satisfaction of the claims that he might have against the employee on account of the other transactions. Therefore as far as wages are concerned, only certain deductions expressly mentioned in Section 7 can be made. If the employer is entitled to anything outside this list of legal deductions, he cannot touch the wages but may please himself by bringing suits, like any other claimant. This is a restriction of the general law for the benefit of the employee who is presumed to be less advantageously placed.

8. In this case, the story in ragard to the grinding mill is obscure, but the following elements emerge from the evidence led by the employer. He runs a newspaper at Indore while at Ratlam he has an agent, who, in addition to distributing his newspaper in that area, also sells some grinding machines. One of the grinding machines was taken by this employee and was still with him on the date of the termination of the employment. Whether or not the employee made any representation to the agent and whether or not the representation was false or one, acquiesced in by the employer, the agent in his dealings with the employer debited its price to his account. If this is correct, the employee has received properly the price of which has been ultimately paid by the employer, in an ordinary suit between the parties at equal advantage, theemployer would certainly be entitled to plead this either as satisfaction or set off and invite the Court to examine the facts. But the tribunal under Section 15, is concerned only with the wages as defined in the Act. It is not competent to give effect to a deduction other than any covered by Section 7.

9. The employer has tried to bring it under Section 7(f) even according to him, it is not a case where the employee has taken an advance payment of his wages and the deduction is for recovery of such an advance. There has been neither a prayer for an advance-payment nor a recovery of such an advance. It is just an adjustment, as already noted, made on account of transaction altogether outside the scope of employment. So it was not a proper deduction. The finding of the tribunals is correct that whatever merits of the allegations, they could not justify the deduction.

10. In the result the petition, which is properly one of revision, is dismissed. Hearing fee payable by the employer-petitioner to the opposite party-empioyee Rs. 50/-.

Nevaskar, J.

11. I agree.


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