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Smart Summary

Factual and Procedural Background

This appeal arises from an order by Mr. Justice Coyajee dismissing a petition filed by Modern Mills, Ltd. seeking a writ of certiorari against an authority appointed under the Payment of Wages Act, 1936. The dispute originated from an award dated March 20, 1948, by the Industrial Court under the Bombay Industrial Relations Act, 1946, concerning disputes between textile mills and their employees. Condition 6 of the award stipulated that eligible employees not in service on the payment date could claim their bonus by submitting written claims to the mill manager before May 21, 1948, with no claims entertained thereafter.

Jagardeo Shantaram, an employee who left service on March 12, 1948, submitted his bonus claim by posting a letter dated May 18, 1948. However, the mill received the letter on May 24, 1948, after the deadline. Modern Mills contended that the claim was late and refused payment. Jagardeo applied to the authority under the Payment of Wages Act, which held that he was entitled to the bonus. Modern Mills challenged this order via writ of certiorari, leading to the present appeal.

Legal Issues Presented

  1. Whether the authority appointed under the Payment of Wages Act, 1936, had jurisdiction to construe the Industrial Court's award under the Bombay Industrial Relations Act, 1946, in determining if the deduction (non-payment of bonus) was authorized.
  2. Whether the authority exceeded its jurisdiction by interpreting or effectively altering the Industrial Court's award when ordering payment of the bonus.
  3. Whether only the Labour Court under the Bombay Industrial Relations Act has jurisdiction to interpret or modify awards made by the Industrial Court.

Arguments of the Parties

Appellant's Arguments (Modern Mills)

  • The authority under the Payment of Wages Act was not empowered to construe the Industrial Court's award; this jurisdiction is exclusively vested in the Labour Court under the Bombay Industrial Relations Act.
  • The authority acted beyond its jurisdiction by construing the award and ordering payment, effectively altering the terms of the award.
  • The claim by Jagardeo was submitted after the deadline of May 21, 1948, and thus he was not entitled to the bonus.

Respondent's Arguments (Jagardeo Shantaram)

  • The claim was submitted on May 18, 1948, by posting the letter, which should be deemed as timely submission under condition 6 of the award.
  • The authority under the Payment of Wages Act had jurisdiction to determine whether the deduction (non-payment of bonus) was authorized, which required interpretation of the award.
  • The authority did not alter or amend the award but merely interpreted it and applied it to the facts.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court examined the statutory scheme of the Payment of Wages Act, 1936, particularly section 15, which empowers the appointed authority to determine whether any deduction from wages is authorized under the Act. Since "wages" includes bonus, the authority must assess if the deduction (non-payment of bonus) was lawful. This necessitates construing the award to decide whether the deduction was authorized.

The court acknowledged that under the Bombay Industrial Relations Act, 1946, only the Labour Court has jurisdiction to modify or change awards. However, it distinguished between interpreting an award and altering it. The authority's role was limited to interpreting condition 6 of the award to determine if the employee's claim was timely submitted.

The authority accepted that posting the claim on May 18, 1948, constituted timely submission, interpreting the award accordingly. Although this interpretation might be erroneous, it did not amount to altering the award. The court emphasized that the present proceeding was not an appeal against the authority's decision but a question of jurisdiction. The court concluded that the authority acted within its jurisdiction by construing the award to decide on the validity of the deduction.

Consequently, the learned Judge's dismissal of the writ petition was upheld as correct.

Holding and Implications

The appeal is dismissed with costs.

The direct effect of this decision is that the authority under the Payment of Wages Act has jurisdiction to interpret industrial awards for the limited purpose of determining whether deductions from wages are authorized under the Act. The authority does not have jurisdiction to amend or alter such awards; that power remains exclusively with the Labour Court under the Bombay Industrial Relations Act. No new precedent beyond this jurisdictional clarification was established.

    The Modern Mills, Ltd. , (Original Petitioners) v. V.R Mangalvedhekar .

    Chagla, C.J:—

    This is an appeal from an order of Mr. Justice Coyajee by which he dismissed the petition presented by the Modern Mills, Ltd., for a writ of certiorari against the authority appointed under the Payment of Wages Act, 1936. It would appear that an award was made by the Industrial Court under the Bombay Industrial Relations Act, 1946, on March 20, 1948, in respect of certain disputes between the textile mills and their employees, and condition 6 of this award provided:

    “Persons who are eligible for bonus but who are not in service of the Mill on the date of payment shall be paid in one lump sum on May 31, 1948, provided claims in writing are submitted to the Manager of the Mill concerned before May 21, 1948, after which no application for bonus shall be entertained.”

    One Jagardeo Shantaram, an employee of the Modern Mills, who had left the services on March 12, 1948, made an application for the bonus which had been declared by a letter dated May 18, 1948, and which letter he had posted on that day. But the letter was received by the Modern Mills on May 24, 1948, and the contention of the Modern Mills was that as the claim had been submitted after May 21, 1948, he was not entitled to any bonus. Thereupon Jagardeo applied to the authority under the Payment of Wages Act and that authority held that Jagardeo was entitled to be paid the bonus declared under the award. It is this order which was sought to be challenged by a writ of certiorari.

    Now, the contention of Mr. Rege is that it was not open to the authority under the Payment of Wages Act to construe the award made by the Industrial Court. According to him it is only the Labour Court set up under the Bombay Industrial Relations Act which is entitled to construe the award, and in construing the award the authority has acted beyond his jurisdiction.

    Now, in order to understand this contention we must look at the scheme of the Payment of Wages Act, IV of 1936. Section 15 of the Act confers jurisdiction upon the authority that is to be appointed under sub-s. (1) of that section, and sub-s. (2) provides:

    “Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person, or any payment of wages has been delayed, such person himself, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector under this Act, or any other person acting with the permission of the authority appointed under sub-section (1), may apply to such authority for a direction under sub-section (3).”

    Therefore, it is competent to the authority appointed under s. 15(1) to determine whether any deduction has been made from the wages of an employed person contrary to the provisions of the Act; and under the definition of “wages” bonus is a part of wages. Now, s. 7 lays down what are the deductions which may be made from the wages of an employee, and sub-cl.(2)(h) provides the deductions required to be made by an order of a Court or other authority competent to make such order. The contention of Mr. Rege is that the Modern Mills refused to pay the bonus to the employee because they were required not to pay that bonus under the award of the industrial Court. But it is for the authority under s. 15(2) to determine whether such a deduction made by the employers was an authorised deduction under s. 7. If the contention of the employer is that he is required by the award not to pay the wages, it is for the authority to be satisfied that such a contention is a valid one, and in order to determine that he must construe the award and be satisfied that the award on which the employer is relying requires the employer not to pay the bonus. It is impossible to contend, in my opinion, that it is not open to the authority under the Payment of Wages Act to construe the award in order to determine whether the deduction made by the employer was an authorised deduction or not.

    It is then urged that what the authority has done is really to make a change in the award which was passed by the Industrial Court. Now, turning to the provisions of the Industrial Relations Act, in the definition s. 3(18) where “Industrial matter” is defined all matters pertaining to any right or claim under or in respect of or concerning a registered agreement or a submission, settlement or award made under the Act would constitute an industrial matter, and there is no dispute, and there can be none, that an interpretation of an award would be an industrial matter. Then under s. 42(4) it is open to an employee desiring a change in respect of among other matters an industrial matter specified in Schedule III to make an application to the Labour Court; and when we turn to Schedule III we find that item (5) relates to construction and interpretation of awards, agreements and settlements. Therefore, Mr. Rege is quite right when he says that if an employee requires a change in the award then he has got to apply to the Labour Court for that purpose, and the power of the Labour Court is dealt with in s. 78(1)(A)(a), and sub-cl. (iii) of that sub-clause provides for any change made by an employer or desired by an employee in respect of an industrial matter specified in Schedule III and matters arising out of such change. Therefore, it is clear from the scheme of the Bombay Industrial Relations Act, 1946 that it is only when a change is sought by an employee in the terms of an award made by the Industrial Court that he has got to make an application to the Labour Court and only the Labour Court has jurisdiction to make such changes. We quite agree with Mr. Rege that an authority appointed under the Payment of Wages Act would have no jurisdiction to order any change in an award made by the Industrial Court. But the question that we have to consider is whether in ordering the payment of the bonus the authority in any way has made a change in the award. For that purpose we must turn to the judgment delivered by the authority. It is clear from that judgment that the case of the employee was that he had complied with the terms of the award in sending his application on May 18, 1948, by registered post and his whole contention was that when he posted the letter he must be deemed to have submitted his application to the Management, and as he posted the letter before May 21, 1948, he complied with condition 6 and he did submit the application before May 21, 1948. Now, that contention was accepted by the authority. He may have been quite wrong in putting that interpretation upon condition 6. But the authority nowhere suggests in his judgment that when he ordered the Mills to pay the wages he was doing so contrary to the provisions of cl. 6 of the award or that he was in any way altering or amending cl. 6. It is quite clear from the judgment that in ordering so he was giving effect to the award as he understood it and interpreted it. Really the grievance that Mr. Rege has is that the interpretation put by the authority is an erroneous one. But that would be preferring an appeal against the decision of the authority, and we are not here hearing an appeal from his decision. The question which we have to consider and decide is whether in passing the order he did he acted within or without jurisdiction in construing condition 6 as he understood it. In our opinion, in giving effect to it by ordering the Modern Mills to pay the wages he was acting within jurisdiction. In our opinion, therefore, the learned Judge was right in coming to the conclusion which he did, and the result is that the appeal fails and is dismissed with costs.

    Bhagwati, J.:—I agree.

    Attorneys for appellants: Panye & Co.

    Attorneys for respondent: Little & Co.

    Appeal dismissed.
    A.J.P
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    The Modern Mills, Ltd. , (Original Petitioners) v. V.R Mangalvedhekar .
    (Mar 13, 1950)