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The Unique Mtoor and General Insurance Co. Ltd. Vs. Krishmira Singh Sidhu and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 569D of 1959
Judge
Reported in3(1967)DLT500
ActsDelhi Shops and Establishments Act, 1954 - Sections 2(8)
AppellantThe Unique Mtoor and General Insurance Co. Ltd.
RespondentKrishmira Singh Sidhu and ors.
Advocates: V.P. Joshi and; N.D. Bali, Advs
Excerpt:
.....and establishments act, 1954 - order holding that company and manager responsible for payment of wages of employees employed by manager on behalf of owner challenged - allegedly liability for payment of wages had been illegally fixed on company by authority - manager only acting as agent of company - applicants were employees of company though formally employed by manager on company's behalf - employees actually employed by company - petitioner failed to make out case for interference with impugned order - impugned order justified. - - on receipt of such statement, the chief inspector, on being satisfied about its correctness is to register the establishment in the prescribed manner and to issue a registration certificate to the occupier. statutes like the one which concerns us in..........ln c.w.no .20-d of 1960),'.the authority has in addition ntoed that the managing director .of the company shri a. l. sanghi had been in correspondence with toe applicant shri k. c. mehra. and the said mr. sanghi. was fully aware of shri mehra a being the employee of the company*, in one of the. letters.which passed ' between them. the company ; had:' expressed thanks to shri mehra .for the information given by him in regard to the activities of mr. kubba. the company's divisional manager at delhi. indeed in the impugned order in this case, it is also observed that the company had instructed one of its employees at delhi, namely, shri krishan baldev to serve on all the companys employees appointed by shri kubba ntoices of termination of their services with effect from 30th june 1958, and.....
Judgment:

Dua, J.

(1) These three writ petitions :Civil Writs Nos. 569-D of 1959, 20-D and 21-D of 1960) raising, as they do, common question of law, are being dispossed of by one order As a matter of fact, the petitioner's learned counsel has addressed arguments only in C. W. No. 569-D of 1959, it being conceded that the toher two cases would stand or fall with it.

(2) In C. W. No. 569-D of 1959, five applications under secton 21, Delhi Shops and Establishments Act, 1954 (hereinafter called the Act) were made to the Authority under the Act for the recovery of earned wages by four applicants, two applications apparently being by the same person Shri Krishna Baldev (Respondent No. 4 in this Court) for two different periods. These applications were contested by the Unique Mtoor and General Insurance Company Ltd., the present petitioner in this Court ?.nd by Shri Ram Chandra H. Kubba, Ex-Divisional Manager of the said Company. Shri Ram Chandra H. Kubba, it may be pointed out, has beed pleaded as respondent No. 2 in the present proceedings.

(3) The learned authority under the Act. (Dr. Kashmira Singh Sidhu, Administrative Subordinate Judge, Delhi) came to the conclusion that the various applicant? had been employed by Shri Ram Chandra H. Kubba on behalf of the Company and the applicants concerned before the authority had served the Company for various periods mentioned in the impugned order. This Court is nto concerned in the present proceedings with the details in respect of the said periods of service. The question raised before the Authority concerned was whether the present petitioner the Unique Mtoor and General Insurance Company Ltd., could be considered to be the employer against whom applications under section 21 of the Act could be presented. The argument addressed on behalf of the Company was that the Divisional Manager was the person who represented the Company at the Delhi office or establishment and that, thereforee, the Company could nto be held to have anything to do with the question of payment of wages to the employees claimed in the proceedings under the Act. The Authority came to the conclusion that the language of the definition of the word 'employer' in the aforesaid Act was easily susceptible of the meaning that an owner remains an employer under all circumstances and that if his business is nto directly managed by him, his manager would also fall within this definition. The Authority also ntoiced in the impugned order that Shri Ram Chandra H. Kubba had urged that the applicants had of course been technically employed by him, but in doing so, he Had merely carried out the mandate of the head office which alone was to be held responsible for the payment of the employees' wages. Indeed, it came to a positive conclusion that the applicants before it had been employed by Shri Kubba on behalf of the Company. It further expressed the view that buth the owner and the Manager were responsible for the payment of the wages of the employees employed by the Manager on behalf of the owner. The various claims of the applicants were thus allowed and direction issued for the necessary payment. This order was made on 16th October, 1959.

(4) The Company then presented the present petition under Article 226 of the Constitution challenging the impugned order on the ground that the liability for payment of wages had been illegally fixed on it by the Authority under the Act. Thit writ petition was admitted by the Mtoion Branch (D. Falshaw and Chopra JJ.) on 15th December, 1959, but stay was refused. It appears that a couple of months latter, the Company filed antoher application under section 151, Code of Civil Procedure, slating that the amounts allowed had since been deposited by the Company with the Authority (respondent No. 1) and it was prayed that respondents Nos. 3 to 6 be restrained from withdrawing the amount till the final disposal of the writ petition. This matter came up before D. Falshaw, J. who made an ex parte order restraining the withdrawal in the meantime of the amounts deposited. In October, 1961, the Company applied under Order 5 Rule 20, Code of Civil Procedure, for effecting substituted service on Shri Ram Chandra H. Kubba respondent No. 2 on the ground that the petitioner had come to learn that certain criminal proceedings had been instituted against the said Shri Kubba by third parties and that he had gone underground. Prayer was accordingly made for substituted service on him and this was allowed on 6th November, 1981. In spite of substituted service on one of the respondents, which would normally be exepected to be for an actual date, this writ petition has only been set down for hearing after 8 years on its admission. All the time, I am told the- stay order has been in operation. Such inordinate delay in a case of the present nature cannto but be deplored.

(5) The learned counsel for the petitioner has, in support of his challenge to the impugned order, very strongly asserted that the petitioner-company had ntohing to do with its establishment in Delhi and that Shri Kubba, respondent No. 2, who had been appointed by the Company as its Divisional Manager for running the Delhi establishment, was all in all and was, thereforee, for all practical purposes, its proprietor. On this premise according to the counsel's argument, the Company could nto be held liable for payment of wages claimed in the applications under section 21 of the Act. At one stage, the petitioner's counsel went to the length of suggesting that the Company was nto even the proprietor of the establishment at Delhi, but Realizing the untenability of this extreme contention, the counsel explained that what he had meant to state was that for the purposes of the present proceedings, the employees-applicants before the Authority had to prove positively that the petitioner-company was the owner or the proprietor of the establishment at Delhi and as inch could be held liable for the payment of the wages under the Act. Of course the counsel has also contended that the statutory scheme excludes the liability of the owner when the Manager is made the sole in charge of the business estaulishment in circumstances similar to the present,

(6) On behalf of the respondents, Shri N. D. Bali has controverter this submission and has canvassed in support of the view adopted by the Authority in the impugned order The learned counsel has added that. in any event, there is no manifest injustice caused to the petitioner Company by the impugned order because it is indisputable that Shri Chandra H. Kubba was acting as the Agent of the Company in his capacity as its Divisional Manager and the applicants-employees were in effect and substance the employees of the Company, though formally employed by the Manager on its behalf. It is emphasised that the impugned order is substantially just and this Court should, in its discretion, decline interference in writ proceedings.

(7) In my view, the petitioner has nto made out any ground for interference with the impugned order on writ side. The Act amends and consolidates the law relating to, infer alia, the regulation of payment of wages of persons employed in commercial and toher establishments etc., and also provides for certain matters connected therewith. The word 'commercial establishment', as defined in section 2(5) of the Act, means any premises wherein, inter alia, any trade, business or profession etc., is carried on and it specifically includes premises in which business of insurance etc., is carried on. It is nto disputed before me that the petitioner's business would be included in the definition. The word Employee' has been defined in section 2 to mean any person employed, whether directly or toherwise, about the business of an establishment for the owner or the occupier thereof. It is unnecessary for our present purpose to refer to the extended definition of this word which includes a person discharged or dismissed whose claims have nto been settled in accordance with the Act. The word 'employer' is defined in section 2(8) to mean the owner of any establishment about the business of which persons are employed,' and where the business of such an establishment is nto directly managed by the owner, this word means the Manager, Agent or representative of such owner in the said business. The word 'establishment' has been defined in section 2(9) to mean, inter alia, a shop or a commercial establishment to which this Act applies. The word 'occupier' as defined in section 2(17), which has also been referred to at the bar, means 'a person owing or having charge or control of the establishment and includes the Manager, Agent or representative of such occupier.' These definitions, it may be pointed out, are nto rigid but are subject to the context requiring toherwise. Section 5 dealing with the registration of establishments provides that the -occupier of every establishment has to send to the Chief Inspector a statement in a prescribed form together with the prescribed fee containing, inter alia, the name of the employer and the Manager, if any. On receipt of such statement, the Chief Inspector, on being satisfied about its correctness is to register the establishment in the prescribed manner and to issue a registration certificate to the occupier. Section 19, providing turn regulating the time and conditions of payment of wages, imposes an obligation on every employer or his agent or the Manager of any establishment to fix periods in respect of which wages to the employees are to be payable and such person is to be responsible for the payment to persons employed by him of all wages required to be paid under the Act. Section 21 provides for the appointment of the Authority to hear and decide all claims arising out of delayed payment or non-payment of earned wages of an employee employed in any establishment. The authority entertaining the application has to hear the applicant and the employer as provided in sub-suction (3) of this section and then direct payment to the employee of the amount due to him together with such compensation as the Authority may think fit, nto exceeding half the amount due or Rs. 100.00 whichever is less. Such order of payment is without prejudice to any toher penalty to which the employer may be liable under the Act. Every direction of the Authority under this section is made final. Section 34 enjoins the employer to furnish every employee with a letter of appointment and such letter is to contain, inter alias the name of the employer. Section 43 provides for the determination of employer for the purposes of the Act. Sub section (1) deals with cases of establishments owned by firms or toher associations of individuals. In such cases, any one of the individual partners or members may be prosecuted and punished under the Act for any offence forwhich an employer in an establishment is punishable. This, however, is subject to the proviso that the firm or association concerned may nominate, by giving ntoice to the Inspector, one of its members resident in the Union Territory to be the employer for the purposes of the Act. in which case, such nominee is to be deemed, so long as he is so resident, to be the employer until his nomination is cancelled or he ceases to be such member. Sub-section (2) deals witt cases where establishments are owned by companies. According to this sub-section, any one of the directors of a company may be prosecuted and punished under the Act for an offence for which the employer is punishable. In the case of a private company, this liability extends to all the share-holders. A similar proviso is added to this sub-section which enables the Company. by giving ntoice to the Inspector, to nominate its director, and in the case of a private company, to nominate a share-holder-, residing in the Union territory to be the employer. It is also relevant to point out at this stage that section 3 of the Act expressly saves the rights and privileges of the employees under toher laws, contracts, customs or usages applicable to the establishments concerned.

(8) The scheme of the Act, so far as I have been able to discern, does nto seem to exclude the liability of the petitioner-company for the wages of the employees concerned who have been specifically and expressly found by the Authority in the impugned order to have been employed by Shri Ram Chandra H. Kubba on behalt of the' petitioner- company. This finding is nto open to challenge in the present proceedings. As a matter of fact, Annexures 'A' and 'B' to the written statement of respondents Nos. 4 and 6. fully justify this finding. Having been so employed on behalf of the company, the employees were within their legal rights to consider the Company as their employer and demand their wages from it. Section 21 of the Act does nto in terms state that the direction for payment of wages can only be given to the Manager of the business when the establishment concerned is nto directly managed by the owner : in any event, it certainly does nto purport to prohibit the Authority from giving directions to the owner through its Manager to make payment of the wages to its employees. The definition of the word 'employer' seems to me to have been intended principally to facilitate the proper and effective enforcement of the provisions of this beneficent legislation and nto to prejudice the rights of the employees. To accede to the petitioner's contention would, in the present case, render the direction of the Authority .futile and deprive the employees of its fruits for the simple reason that Shri Kubba has nto only- left the petitioner , -company's service but he is stated to have gone underground as a fugitive from law. Acceptance of the petitioner's submission would defeat rather than achieve or promtoe the statutory aim and object. Statutes like the one which concerns us in the case in hard. enacted as they are, in providing, .inter alia, security for payment of wages to the employees, demand liberal interpretation so as to acomplish the long-range social objectives. They are intended to ensure recovery of wages of the employees who may be unable to effectively enforce their right through the long-drawn civil litigation in the ordinary Courts or who may fee] seriously handicapped in doing so in the unequal combat at law against the proprietors of the establishments because of economic pressure. Such provisions accordingly deserve to be generously construed in favor of the employees.

(9) On behalf of. the petitioner, Shri Joshi has zealously concentrated on section 43 ('2.) of the Act and has emphasised that in the case of a company, it is only the di'ectors who can be prosecuted and punished for the offences under the Act and .this. by necessary implication, excludes the liability of the Company for payment of wages claimed by the employees under section 21. This argument is unacceptable for more reasons than one. In the first in stance .'this section, as usual in case of companies, only clarifies the position in regard to criminal liability which clearly brings different consideration into play ; there being no prosecution for an offence under the Act in the .present case, the analogy may nto be apt. And then,, my atten,tion has nto been drawn to any ntoice, given by the Company nominating any one of its directors resident in the Union territory who .is to be deemed to be the, employer for the purposes of the Act. If no director 'is to be deemed to be the employer then, in view of the, funding, of the. Authority that the applicants employees before it had,been. employed by Shri Kubba, on behalf of the petitioner-company, it seems time to.be futile.'.on 'the part of the petitioner's counsel to attempt to escape liability on the basis of section 43(2), and to fix it solely on Shri Kubba, who is indisputably no longer the.petitioner-company''s Manager. The.fact that he is no longer the Company's Manager, is. clear from Annexure 'C' to the written statements of defendants Nos. 4 and 6.

(10) Finally, it may .bepointed out that relief by way of writ cannto be had as a matter of course and the High Court is entitled to refuse it, if, in its opinion, there is no failure or miscarriage of justice. This judicial: discretion. vests in the.High Court to advance the cause of substantial justice . In the case in hand . the impugned order seems to me to be .eminentky just and,fair and,is clearly nto'' shown even to be tainted with' any serious or giave legal infirmity. The present is, thereforee, by no means a fit case in which this Court should interfere on its writ side. This petition accordingly.fails and is dismissed with costs.

(11) Ln C.W.No .20-D of 1960),'.the Authority has in addition ntoed that the Managing Director .of the Company Shri A. L. Sanghi had been in correspondence with toe applicant shri K. C. Mehra. and the said Mr. Sanghi. was fully aware of Shri Mehra a being the employee of the Company*, In one of the. letters.which passed ' between them. the Company ; had:' expressed thanks to Shri Mehra .for the information given by him in regard to the activities of Mr. Kubba. the Company's Divisional Manager at Delhi. Indeed in the impugned order in this case, it is also observed that the Company had instructed one of its employees at Delhi, namely, Shri Krishan Baldev to serve on all the Companys employees appointed by Shri Kubba ntoices of termination of their services with effect from 30th June 1958, and Krishan Baldev was himself also asked to take such a ntoice from the Company. Later, it appears, that these instructions were withdrawn and Krishan Bildev was directed to continue in service as before and that he should nto serve any ntoice of termination of service on any toher employees of the Company. In view of those obervations of the Authority in the impugned order, it is obviously futile for the petitioner-company to urge that he was nto its employee.

(12) In C. W. No. 21-D of 1960, Shri Vijay Kumar Bawania is the employee concerned, and, as observed in the earlier part of this judgment, this petition has to stand or fall with C. W. No. 569-D of 1959.

(13) As a result of the foregoing discussion, all these three writ petitions fail and are dismissed with costs.


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