Balkrishna Kashinath Khopkar v. A.S Rangnekar And Another,

Tendolkar, J.:— This petition raises a very important & interesting question as to the jurisdiction of the Payment of Wages Authority. The petitioner before us is the Secretary of the Wollen Mill Kamgar Union & the second Opponents are the Raymond Woollen Mills, Ltd. It appears that 48 watchmen employed by the second opponents applied for recovering delayed wages to the Payment of Wages Authority. Their case was that they worked as watchmen in three shifts and each of these three shifts was for fifteen days; and in these shifts they were made to work for more than eight hours a day and they were, therefore entitled to overtime wages. The second opponents inter alia contended that in point of fact no over-time work was done by any of the watchmen. The Payment of Wages Authority, being the Joint Civil Judge at Thana, held that he had no jurisdiction to determine this disputed question of fact and, therefore, dismissed the application. It is this order of the Payment of Wages Authority that is challenged on this petition on the ground that the Authority failed to exercise jurisdiction which it possessed having taken a wrong view of its own jurisdiction; and the question that has been debated before us is whether the Payment of Wages Authority had or had not jurisdiction to decide whether the watchmen had in fact worked overtime for the purpose of determining whether their wages for over-time work had been delayed.

2. Now, in the first Instance, it would be useful to get rid of the ground on which the Payment of Wages Authority appears to have proceeded; and that ground is that under S. 15 of the Payment of Wages Act the Authority can hear and decide all claims arising out of delay in payment of wages or deductions from wages which are admitted and not wages which are disputed. Apparently, the proposition is supposed to have been laid down by a Division Bench of this Court in Sarin v. Patil, 53 Bom LR 674 : (AIR 1951 Bom 423) (A). I was a party to that decision and I take my full share of responsibility for everything that is found in the judgment which was delivered by my Lord the Chief Justice. It is true that in the course of that judgment at page 677 (of Bom LR): (at page 425 of AIR) the following sentence appears: “Delay in payment of wages can only mean delay in payment of wages which are admitted”; but if one reads the judgment a little further, it appears to be plain that this is only a somewhat unguarded statement. In a subsequent passage at page 678 (of Bom L.R): (at page 426 of AIR) where we attempt to lay down what we think is the jurisdiction of the Authority under the Statute, we deal with the contention advanced by Counsel at the Bar in relation to such jurisdiction and this is what the learned Chief Justice observes:

“It has been suggested by Mr. Seervai that this construction of the statute really confines the jurisdiction of the Authority only to cases where wages are admitted, and Mr. Seervai says that if the Legislature intended that the Authority should only try cases of admitted wages, there was nothing easier than for the Legislature to have so stated. It is not correct that our decision leads to the conclusion that the jurisdiction of the Authority is so limited or restricted because there may be various cases within its jurisdiction where the liability to wages is denied or disputed and which the Authority would still be competent to decide.”

3. In face of this unequivocal statement, it would be wrong to fix upon the solitary sentence which appears earlier as a ratio of that case; and as one who was a party to that decision, I have no hesitation in saying that it was not our intention to lay down that all that the Payment of Wages Authority can deal with is admitted wages. The matter is also dealt with in A.D Divekar v. A.K Shah, 57 Bom LR 1074 (B), by another Division Bench of this Court, where in terms the Division Bench has held that S. 15 of the Payment of Wages Act, 1936, does not limit the jurisdiction of the Authority under the Act to entertertain admitted claims arising out of deductions from wages or delay in payment of wages. Here the Payment of Wages Authority acted on what it considered to be well established viz., that the wages must be admitted before it could have jurisdiction; but this assumption is not warranted by the decisions of this Court and in so far as the judgment of the Payment of Wages Authority is based on this assumption, it cannot be sustained. None-the-less it still remains to be determined whether the Payment of Wages Authority had in fact jurisdiction to determine the dispute that arose.

4. There is yet another common assumption with regard to the jurisdiction of the Payment of Wages Authority which may at the outset be dealt with. That assumption is that the jurisdiction of the Authority is a summary jurisdiction and, therefore, limited in character. It seems to us that is an assumption which is not justified by the provisions of the Payment of Wages Act. Section 18 of the Act confers upon the Payment of Wages Authority all the powers of a Civil Court under the Code of Civil Procedure for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents; and the Payment of Wages (Procedure) Rules, 1937 made exercise of the powers conferred by sub-s. (1) of S. 26 of the Payment of Wages Act, read with S. 22 of the General Clauses Act, by the Governor-General in Council provide procedure which in its main essentials is comparable with the procedure of the Civil Court. There is specific provision in R. 8 thereof for the appearance of parties together with all relevant documents and witnesses, if any. So that whilst it may be — and that is a matter we have to determine in the context of the present dispute — that the jurisdiction of the Authority is limited in some manner, it is wrong to suppose that it is merely an Authority of summary jurisdiction and, therefore, its jurisdiction must be construed in the context of its possessing only summary jurisdiction.

5. Now, turning to the question that we have to determine, the scheme of the Payment of Wages Act has been examined by us in the case of Sarin v. Patil (A), and it has also been examined by Their Lordships of the Supreme Court in the case of D'Costa v. Patel 57 Bom LR 738 : ((S) AIR 1955 sc 412) (c). section 15 confers the jurisdiction on the said Authority to decide “all claims arising out of deductions from wages or delay in payment of wages”; and the relief which it is entitled to grant is to direct the refund of the amount deducted or the Payment of Wages delayed. In addition, under sub-section (3) of that section the Authority has power to make an order for compensation along with an order for payment of delayed wages or of the amount deducted. To sub-s. (3) there is a proviso, the relevant part of which is in the following terms:

“Provided that no direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to

(a) a bona fide error or bona fide dispute as to the amount payable to the employed person or his legal representative.”

6. Now, this proviso appears to us to have an important bearing in determining the scope of the jurisdiction of the Authority. Undoubtedly, the proviso is restrictive of the power conferred on the Authority to make an order for payment of compensation; but if the circumstances in which it is prevented from making such an order for compensation require a determination of certain matters, obviously it must impliedly be within the competence of the Authority to determine whether such circumstances exist or do not exist. Here the Authority cannot make an order for compensation if it is satisfied that there was a bona fide error or bona fide dispute as to the amount payable. Were it correct to say that the Authority had no right to determine a dispute as to the amount payable, in the first place, in a case in which there is a dispute as to the amount payable, there could be no order made by the Authority to pay delayed wages and there could be no question of its making an order for compensation within the operative part of sub-section (3); in the second place, before the Authority can possibly be satisfied that the dispute was a bona fide one, it must of necessity have implied authority to examine the dispute and to determine it, because without determining the dispute there is no method that we can think of whereby a quasi-judicial authority could come to a conclusion that the dispute was a bona fide one. It appears to us, therefore, to be implicit in cl. (a) of the proviso to sub-s. (3) of S. 15 that the Authority has jurisdiction to decide a dispute as to the amount payable. Now, such a dispute may take various forms. The amount payable may be dependent on the rate of wages or of dearness allowance or on the rate of over-time. It may equally be dependent on the time during which the employee has worked and whether he has worked over-time or not. Now, the rate of wages or of dearness allowance or of over-time may either be a matter of contract or may be the subject-matter of an award; and whether it is the one or the other, it has already been held by the Courts that the Authority has jurisdiction to determine these matters in order to determine the amount payable. Going back once again to Sarin's case, the learned Chief Justice in his judgment at page 678 (of Bom LR): (at PP. 425, 426 of AIR) in terms observes:

“It is certainly competent to the Authority to construe the terms of the contract of employment in order to determine what wages are to be paid, and even if the contract of employment has been terminated, it is open to him to construe its terms in order to determine whether any sums are payable by reason of the termination. It would also be open to him to determine whether a person has been employed or not, because the question of contract of employment and the terms of the contract can only arise provided the person seeking relief was employed.”

7. And their Lordships of the Supreme Court in D'Costa's case (C) upheld the soundness of this decision. Sinha, J., in the judgment of their Lordships observes at page 745 (of Bom LR): (at page 416 of AIR):

“But it is said on behalf of the respondent that the Authority has the jurisdiction not only to make directions contemplated by sub-s. (3) of S. 15 to refund to the employed person any amount unlawfully deducted but also to find out what the terms of the contract were so as to determine what the wages of the employed person were. There is no difficulty in accepting that proposition.”

8. That is so far as the rate of wages or of dearness allowance or of over-time is to be found from the terms of the contract. Then in another decision of a Division Bench of this Court reported in Valajibhai Avcharbhai v. Chimanlal, 58 Bom LR 198 : (AIR 1957 Bom 109) (D), my learned brother Mr. Justice Shah in his judgment at p. 200 (of Bom LR): (at p. 110 of AIR) observes:

“The legislature has conferred jurisdiction upon the authority to entertain applications by employees for an order for payment of wages alleged to be unlawfully deducted or delayed; and in a claim of that character, all questions which are incidental to the determination of delayed wages or wages unlawfully deducted will, in our judgment, be within the competence of the Authority.”

9. Therefore, there is clear authority for the proposition that in so far as the amount payable depends upon the rate of wages or of dearness allowance or of over-time, the Payment of Wages Authority has jurisdiction to determine it; but what is urged by Mr. Chandrachud on behalf of the Mills is that where there is a dispute as to a question of fact as to whether the employee rendered services in order to earn the wages, that is not a dispute with regard to the amount payable. We do not think that this argument is well founded. The days or hours for which the employee has worked are an essential element in determining the amount payable and any dispute as to how many days or how many hours of a day the employee has worked is a dispute that directly affects the amount payable and is, therefore, a dispute as to the amount payable within the meaning of cl. (a) of the proviso. There appears to us to be no jurisdiction to restrict the operation of the proviso to cases of a dispute where the amount payable depends upon a dispute as to the rate of wages or of dearness allowance or of over-time and to hold that there is jurisdiction to decide this dispute only and not a dispute as to the amount payable arising out of a factual dispute as to the number of days or hours for which the employee has actually worked. The view that we have taken of this proviso to sub-section (3) of S. 15 derives support from a decision of the Nagpur High Court reported in Bhagwat Rai v. Union of India, ILR (1953) Nag 433 : (AIR 1953 Nag 136) (E).

10. Then it is argued by Mr. Chandrachud that under the Bombay Payment of Wages Rules, 1937, R. 5 requires that in every factory or industrial establishment to which the Act is made applicable the paymaster shall maintain a Register of wages in Form II-A. Failure to maintain such a Register is made penal by R. 24 read with S. 26(4) of the Act itself. When one turns to Form II-A which is annexed to the rules, the Register has several columns in which details are to be given with regard to every person who is employed in the establishment; and the contention is that the details so given are the details which shall form the basis of any petition for delayed wages before the Payment of Wages Authority. In other words, what is argued is that the particulars entered in Form II-A cannot be disputed and if they are disputed, in any event the Payment of Wages Authority has no jurisdiction to determine any such dispute. Now, in the first instance, we find nothing in the Bombay Payment of Wages Rules whereby the particulars entered in the Register kept in Form II-A have been made conclusive between the employer and the employee. But apart from this altogether, it is clear that in respect of some of these particulars such as column No. 5 “Rate of minimum wages piece/time”, column No. 6 “Actual rate of wages”, column No. 7 “Rate of Dearness Allowance, if any”, and column No. 10 “Rate of over-time” these are matters which may form the subject-matter of a contract between the employer and the employee and may be governed by the terms of the contract or they may be equally governed by the terms of the contract or they may be equally governed by the terms of an award binding on the parties. In both the cases, as we have already pointed out, if a dispute arises as to what the correct rate is under the terms of the contract or of the award, it has already been held that the Payment of Wages Authority has jurisdiction to determine it; and if so, we do not see why similar jurisdiction should not exist in the Payment of Wages Authority in respect of other columns of this Form and the particular columns with which we are concerned are column No. 9 “Total days and hours over-time worked” and column No. 13 “Over-time earning.” In our opinion, therefore, the Payment of Wages Authority had jurisdiction to determine the dispute as to whether in fact the watchmen had worked overtime in order to enable it to determine what were the wages payable in respect of which a complaint had been made to him that payment had been delayed. The matter is not covered by any authority to which our attention has been drawn; but it does appear that it has been assumed in certain decisions of this Court that such jurisdiction exists. One of such decisions is reported in Penambur Vishnumurti v. Fernandes, 58 Bom LR 799 : (AIR 1957 Bom 64) (F), where a Division Bench of this Court was dealing with a refusal by the Payment of Wages Authority to entertain an application by an employee of a bakery for payment of over-time wages. The application was made under S. 63 of the Bombay Shops and Establishments Act, 1948 and the question that the Division Bench had actually to decide was whether the application was maintainable in view of the fact that under Sch. II, item 8 of the Act the prohibition contained in the Act prohibiting the employer from making the employee work beyond the hours prescribed therein was removed as regards the class of employees to which this particular employee belonged; but in holding that such an application was maintainable the learned Chief Justice in his Judgment observes (p. 801) (of Bom LR): (at pages 65, 66 of AIR):

“In our opinion, therefore, if the employee in this case establishes that he has worked overtime in any particular week, he would be entitled to over-time wages as provided by S. 63. Whether in fact he has so worked has not yet been decided by the Authority. Therefore, we will send this matter back to the Authority with the direction that if the employee establishes the fact of working over-time, then his claim should be allowed as provided by S. 63 of the Act.”

11. As we have said earlier, this assumes that the Payment of Wages Authority had jurisdiction to determine the question as to whether the employee had worked over-time. There are other unreported decisions to the same effect. They appear to us to be in accordance with what we have held to be the true position in law under the Payment of Wages Act that the Payment of Wages Authority has jurisdiction to determine every question which is relevant to the determination of the amount payable to the employee, whether the dispute is as to the contractual terms or whether it is factual. In our opinion, therefore, the learned Civil Judge of Thana, acting as the Authority under the Payment of Wages Act, with respect, wrongly held that he had no jurisdiction and, therefore, failed to exercise jurisdiction which he possessed. We, therefore, set aside his order and direct him to dispose of the application according to law. The second Opponent shall pay the costs of the petitioner.

12. Before parting with this case, we would like to point out that because of the lack of any attempt made by the Legislature to define the scope of the jurisdiction of the Payment of Wages Authority under S. 15 in a manner that could be understood by the employees who are the persons mainly concerned with this Act, there has been a great deal of litigation in the law Courts in an attempt to define the scope of the jurisdiction of the Payment of Wages Authority in dealing with an application under S. 15. It appears to us that a time has arrived when Parliament may see its way to suitably amend the Act so as to indicate, as precisely as the nature of the case makes it possible to indicate it, the scope and extent of the jurisdiction of the Payment of Wages Authority in a manner which can be understood by the class of people for whose benefit the legislation has been enacted. It is relevant in this context to keep in mind that by reason of the provisions of this Act S. 22, ousts the jurisdiction of a Civil Court in respect of all claims which can be entertained under S. 15 of the Act and if the employee is not in a position to determine whether a remedy under S. 15 does or does not lie in a given case, he may, if he resorts to a Civil Court, be faced with the bar under S. 22 and if he resorts to his remedy under S. 15, may find that his remedy under S. 22 has by then become barred if there is no jurisdiction in the Payment of Wages Authority. Cases have been known of employees having lost their rights by reason of this uncertainty as to the law and it appears to us to be a matter of great importance to the employees that the scope and extent of the jurisdiction of the Payment of Wages Authority should be clarified by statutory amendments by Parliament.

H.G.P

Petition allowed.