Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
Smart Summary

Structured Summary of the Legal Opinion

Factual and Procedural Background

The respondent (plaintiff in S.C.S. No. 229 of 1955 before the District Munsif's Court, Coimbatore) had been employed by the petitioner (defendant in that suit). The plaintiff's services terminated on 24 October 1954. On 31 March 1955 the plaintiff filed suit for recovery of a sum of Rs. 300, the plaint itemising four heads: (1) salary from 1 August 1954 to 1 October 1954 at Rs.75 per month (Rs.150); (2) daily wages at Rs.2-8-0 per day for 17 Sundays from June 1954 to 8 September 1954 (Rs.42-8-0); (3) leave salary earned from June 1951 to September 1954 at Rs.2-8-0 per day (Rs.125); and (4) fifteen days' salary in lieu of notice (Rs.37-8-0). From a computed total of Rs.355 the plaintiff deducted Rs.33, gave up Rs.22, and limited the claim to Rs.300. The plaintiff admitted that wages for the period 1 October 1954 to 24 October 1954 had been paid on a daily basis.

The defendant pleaded Section 22 of the Payment of Wages Act (to bar civil court jurisdiction) and further pleaded limitation in respect of the leave-salary claim; the defendant also alleged that the plaintiff voluntarily stayed away from work on 24 October 1954 and so was not entitled to compensation in lieu of notice.

The learned District Munsif held that Section 22 of the Payment of Wages Act did not bar the suit, rejected the claims for leave salary and for the fifteen days' salary in lieu of notice, and decreed (1) Rs.135 as arrears of salary and (2) Rs.42-8-0 as arrears for Sundays worked.

The defendant applied under Section 25 of the Provincial Small Cause Courts Act to revise that judgment. The referral to a Division Bench posed the principal question whether the claim fell within the jurisdiction of the authority appointed under the Payment of Wages Act and whether the civil court was thereby deprived of jurisdiction.

Legal Issues Presented

  1. Whether the claim in the civil suit fell within the jurisdiction of the special authority constituted under the Payment of Wages Act (i.e., whether the civil court lacked jurisdiction because Section 22 bars such a suit).
  2. Whether the suit, being a composite claim containing items that could have been recovered by an application under Section 15 of the Payment of Wages Act, was nevertheless barred in respect of those items by Section 22(d) of the Act.
  3. Whether the proper test is to split a composite claim into component parts to determine which portions could have been pursued under Section 15(2) and thus be barred by Section 22(d), or whether the court should determine, on a fair reading of the plaint as a whole, whether the suit is essentially a suit for recovery of wages within Section 22.

Arguments of the Parties

Plaintiff's (Respondent's) Position

  • The plaint set out a composite claim for Rs.300 made up of four heads: unpaid salary for specified months, unpaid wages for Sundays worked, leave salary earned but not taken (claimed as compensation), and fifteen days' salary in lieu of notice.
  • The plaintiff did not apply under Section 15 of the Payment of Wages Act to recover the arrears that he alleged were due.
  • The plaint admitted payment on a daily basis for 1 October to 24 October 1954.

Defendant's (Petitioner's) Position

  • The defendant relied on Section 22 of the Payment of Wages Act to contend that the civil court lacked jurisdiction to entertain the claim to the extent it sought recovery of wages or deductions recoverable under Section 15.
  • The defendant contended that the leave salary claim was barred by limitation.
  • The defendant asserted that the claim for compensation in lieu of notice should fail because the plaintiff had voluntarily stayed away from work on 24 October 1954.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sarangdhar v. Lakshmi Narayan The suit in that case was held not to fall within the mischief of Section 22 of the Payment of Wages Act (the court in that matter did not decide separability of the small wages portion from the larger claim). The court regarded the decision as nearest in approach to the present question but of only negative value because those Judges were apparently not called upon to decide whether a small arrear portion could be separated and dismissed under Section 22(d). The present court did not treat Sarangdhar as resolving the specific issue before it.
Venkatavamdan v. Sembium Saw Mills (1955-II L.L.J. 11) Held that a claim for damages for wrongful termination of services is not within the competence of a Commissioner under the Payment of Wages Act; remedy for such a claim is in a civil court. The court cited this authority for the proposition that claims in the nature of damages for wrongful termination fall outside the Payment of Wages Act's jurisdiction and are properly the subject of civil proceedings; but noted that that case did not involve a concurrent claim for accrued wages.
A.R. Sarin v. B.C. Patil (1951-II L.L.J. 188) Discussion of the scope of Section 15 — the view taken (by Chagla, C.J.) was that Section 15 did not confine the authority's jurisdiction only to cases where wages were admitted to be due but unpaid. The court relied on this line of authority to reject a narrow construction of Section 15 and to support the broader view that certain unpaid remuneration claims fall within Section 15(2).
Balakrishnan v. A. Rangnekar (1958-I L.L.J. 215) Explanation and clarification of the scope of A.R. Sarin v. B.C. Patil; supports the broader construction of Section 15. The court cited this subsequent explanation as reinforcing the broader view of Section 15's scope and as relevant to the question whether particular unpaid remuneration items could have been the subject of an application under Section 15(2).
Simpalax Manufacturing Co. Ltd. v. Alla-ud-Din (A.I.R. 1945 Lah. 195) Beckett, J.'s narrower view that Section 15 should be construed narrowly (confined to admitted wages) was articulated in this Lahore decision. The court noted that the narrower Lahore view did not commend itself to the Judges in A.R. Sarin and Balakrishnan; it cited the Lahore decision as an alternative narrower approach which it did not adopt for the present case.

Court's Reasoning and Analysis

The court's analysis proceeded from the statutory provisions and definitions in the Payment of Wages Act. It focused on Section 22(d) which bars civil courts from entertaining suits "for the recovery of wages or of any deduction from wages" insofar as the sum claimed "could have been recovered by an application under Section 15." Section 15(2) authorises a specified authority to hear applications where deductions have been made or payment of wages delayed, with a six-month limitation subject to extension for sufficient cause. Section 2(vi) defines "wages" to include "any sum payable to such person by reason of the termination of his employment," and Section 5(2) prescribes that wages on termination must be paid before the expiry of the second working day.

Applying these provisions to the plaint, the court analysed the four sub-heads of the composite claim:

  • The arrears of unpaid salary for August and September 1954 and the claimed remuneration for seventeen Sundays on which the plaintiff alleged he worked were found to fall within the statutory definition of "wages" and therefore could have been the subject of an application under Section 15(2).
  • The claim for leave salary, however, was for leave earned but not taken; the court found that the claim was not for a period during which the plaintiff was on leave and thus did not fall within the definition of "wages" in Section 2(vi).
  • The claim for fifteen days' salary in lieu of notice was characterised as a claim for compensation for wrongful termination, not as an accrued contractual entitlement. The court observed that neither party asserted that the contract provided for payment of any ascertained sum on termination without notice; consequently, that claim fell outside Section 2(vi) and was not a wages claim recoverable under Section 5(2).

The court emphasised that the plaintiff's suit was a composite claim containing both items within the ambit of Section 15 and items outside it. The central question therefore became whether Section 22(d) deprived the civil court of jurisdiction because part of the claim could have been pursued under Section 15.

The court rejected an approach that would mechanically split a composite claim into components and bar the whole suit or parts thereof simply because some components could have been brought under Section 15. Instead, the appropriate test was whether the suit, taken as a whole on a fair reading of the plaint, amounted to a suit for recovery of wages or of deductions from wages within the meaning of Section 22. The court held that Section 22 did not contemplate such a dissection where a plaintiff in good faith advanced a composite claim that included non-wage compensation claims alongside wage claims.

Additional points in the court's reasoning included:

  • The basic principle that a civil court's jurisdiction remains unimpaired unless expressly or by necessary intendment divested by statute.
  • The interpretation of Section 22 must be consistent with the Act's scheme, which aims to secure prompt payment of wages and expeditious disposal of wage claims, but this policy does not automatically oust civil jurisdiction where the suit as framed is not essentially a wages suit.
  • No allegation was made that the plaintiff filed the suit mala fide to evade the six-month limitation under Section 15(2); the court did not have to decide issues relating to mala fides.

On this basis, and having regard to the composition of the plaint and the nature of the claims, the court concluded that the suit as presented did not fall within the mischief of Section 22(d) and that the civil court was not divested of jurisdiction.

The court also noted the existence of conflicting decisions in other High Courts about the scope of Section 15, but considered it unnecessary to resolve those conflicts for the disposal of the present petition, observing that no reported case had addressed the precise question in the specific form it arose here.

Holding and Implications

Holding: The petition fails and is dismissed with costs. More specifically, the Division Bench held that Section 22(d) of the Payment of Wages Act did not bar the civil court from entertaining the plaintiff's suit as framed; the suit, taken as a whole, was not a suit for recovery of wages in so far as the amount claimed could have been recovered under Section 15.

Implications:

  • Direct effect: The judgment of the District Munsif (which had allowed part of the plaintiff's wage claims and rejected leave-salary and notice-in-lieu claims) stands subject to the result that the civil court was properly competent to hear the suit; the revision petition by the defendant is dismissed with costs.
  • Scope and precedent: The court refrained from laying down a universal formula for determining the scope of Sections 15 and 22 and expressly declined to resolve conflicting High Court authorities on Section 15 in general. The decision is therefore of limited precedential scope: it establishes the test applied in this case (whether the suit taken as a whole is essentially a wages claim) but does not purport to resolve all conflicts about the scope of Section 15. No broad new rule resolving other conflicting decisions was announced.

    C.V Narayanaswami Iter v. K.A Vasudeva Iyer.

    1. The respondent, plaintiff in S.C.S. No. 229 of 1955 on the file of the District Munsif's Court, Coimbatore, was an employee of the petitioner, the defendant in the suit. The plaintiff's services terminated on 24 October 1954. On 31 March 1955 the plaintiff sued the defendant for the recovery of a sum of Rs. 300, The details of that claim as given in the plaint were:

    (1) salary from 1 August 1954 up to 1 October 1954 at Rs. 75 per month-Rs. 150.

    (2) Daily wages at Rs. 2-8-0 per day for Sundays from June 1954 to 8 September 1954,17 Sundays-Rs. 42-8-0.

    (3) Leave salary earned by the plaintiff for his service under the defendant from June 1951 to September 1954 at Rs. 2-8-0 per day-Rs. 125.

    (4) Fifteen days' salary in lieu of notice- Rs. 37-8-0.

    From the total sum of Rs. 355 thus arrived at the plaintiff deducted Rs. 33. He gave up a sum of Rs. 22 and he limited his claim to Rs. 300. The plaintiff admitted that for a period 1 October 1954 to 24 October 1954, he had been paid his wages on a daily basis.

    2. The defendant pleaded Section 22 of the Payment of Wages Act (TV of 1936) in bar of the jurisdiction of the civil court to take cognizance of the plaintiff's claim. The defendant pleaded further that the claim for leave salary was barred by limitation. The defence to the claim for compensation in lieu of notice was that the defendant had voluntarily stayed a way from work on 24 October 1954, and that he was not entitled to any compensation.

    3. The learned District Munsif held that Section 22 of the Payment of Wages Act was no bar to the maintainability of the suit. He negatived the claim of the the plaintiff for leave salary and for compensation of fifteen days' salary in lieu of notice, and he decreed the claims (1) Rs. 135 constituting the arrears of salary, and (2) Rs. 42-8-0 the arrears of wages for Sundays on which the plaintiff worked.

    4. The defendant applied under Section 25 of the Provincial Small Cause Courts Act to revise the Judgment of the learned District Munsif. When the revision petition came on for hearing before Ramaswami Grounder, J., he sought a direction to post the case before a Division Bench for disposal:

    In his order of reference Ramaswami Gounder, J., stated:

    The main question to be considered in this civil revision petition is whether the claim Involved in the suit out of which the present revision petition arises falls within the jurisdiction of the special authority constituted under the Payment of Wages Act and whether the civil court has no jurisdiction to investigate into the claim. This question is one of considerable importance, and on this there has been no decision of this Court. There are, however, bench decisions of other High Courts but unfortunately they are not uniform and some of them are conflicting.

    In our opinion, it is neither practicable nor desirable to attempt to evolve a formula which could be of universal application in deciding what falls within the scope of Sections 15 and 22 of the Payment of Wages Act (hereinafter referred to as the Act.) Our endeavour will be to examine whether the claim put forward in the suit, details of which we have furnished above, was one the cognizance of which by a civil court was barred by Section 22 of the Act. The claim of the plaintiff in the suit, it should be remembered, was to recover a sum of Rs. 300 from the defendant. It was, if we may characterize it as such, a composite claim. The component parts of the claim were:

    (1) arrears of salary that had accrued to the plaintiff when he was in the service of the defendant but which were not paid ;

    (2) a claim for what was called leave salary for a period during which the plaintiff did not take any leave but continued to be on duty during which period he received his wages, and (3) compensation for wrongful termination of services without any notice.

    That the learned District Munsif negatived the second and third heads of these claims cannot obviously affect the determination of the question, " Was the suit as framed maintainable in a civil court" ? That has to be answered with reference only to the averments in the plaint. One other factor to be noticed at this stage is that the plaintiff did not apply to the appropriate authority under Section 15 of the Act to recover the arrears of salary due to him.

    Section 22(d) of the Act, which is the relevant statutory provision, for our purpose, runs:

    No Court shall entertain any suit for the recovery of wages or of any deduction from wages in so far as the sum so claimed . . .

    (d) could have been recovered by an application under Section 15.

    5. Section 15(1) authorizes the State Government to nominate the authorities to hear and decide for any specified area all claims arising out of deductions from wages or delay in payment of wages of persona employed or paid in that area. The relevant portion of Section 15(2) runs:

    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 . . . may apply to such authority [authority appointed under Sub-section (1)] for a direction under Sub-section (3):

    Provided that every such application shall be presented within six months from the date on which the deduction from the wages was made or from the date on which the payment of the wages was due to be made, as the case may be :

    Provided further that any application may be admitted after the said period of six months when the applicant satisfies the authority that he had sufficient cause for not making the application within such period.

    6. Section 2(vi) of the Act defined wages:

    Wages means all remuneration, capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise, to a person employed in respect of his employment or of work done in such employment, and includes any bonus or other additional remuneration of the nature aforesaid which could be so payable and any sum payable to such person by reason of the termination of his employment. . .

    7. It is not necessary for the purposes of this case to set out the exclusions specified in Sub-cls. (a) to (e). What has to be noticed at this stage is that the definition of "wages" includes within that expression any sum payable to an employee by reason of the termination of his employment.

    8. Section 5 of the Act prescribes the dates on which wages become payable. section 5(2) provides:

    Where the employment of any person is terminated by or on behalf of the employer, the wages earned by himself shall be paid before the expiry of the second working day from the day on which his employment is terminated.

    9. It is with reference to these statutory provisions that we have to decide the question whether the claim put forward by the plaintiff was one that fell within the mischief of Section 22(d) of the Act.

    10. The plaintiff's claim, it should be remembered, was not that anything was unlawfully deducted but that what was due to him was not paid. So the question is, was the suit filed by the plaintiff one

    "for recovery of wages in so far as the sum so claimed could have been recovered by an application under Section 15 of the Act."

    11. Once again we have to point out that it was a composite claim to recover a sum of Rs. 300 that the plaintiff preferred. Part of that claim was certainly for arrears of wages as wages have been defined in Section 2(vi) of the Act. The arrears of unpaid salary for August and September 1954, clearly fall within the definition of wages in Section 2(vi). So did the claim for payment at Rs. 2-8-0 per day for each of the seventeen Sundays on which the plaintiff claimed he worked. Both these items constituted remuneration, which according to the plaintiff was payable to him under the terms of the contract of employment during the period the plaintiff was in the service of the defendant. The due date for the payment of these items would have to be decided with reference to Section 5(1) of the Act.

    12. It should be equally clear that the claim for leave salary cannot fall within the definition of wages in Section 2(vi) of the Act. The claim, it should be remembered, was not for any period during which the plaintiff was on leave. The claim, if we understood the learned Counsel aright, was something like this. The plaintiff earned leave during his period of service under the defendant between June 1951 and September 1954. The total period of leave so earned under the relevant statutory rules was 54 days. The plaintiff, however, did not take that leave. Had he taken the leave he would have been entitled to leave salary. The claim was that as he did not take leave, and as the earned period of leave lapsed when the plaintiff's services terminated in October 1954, he was entitled to compensation for the loss of that leave earned but not taken. When the claim is thus analysed, it should be obvious that it cannot be brought within the scope of the definition of "wages" in Section 2(vi) of the Act.

    13. Similarly the claim for compensation of fifteen days' wages in lieu of notice of termination of services cannot be brought in the circumstances of this case within the scope of the definition of " wages" in Section 2(vi). It was not the case of either party that the contract of service between the plaintiff and the defendant, either express or implied, provided for the payment of any ascertained or ascertainable sum on termination of service without notice. What the plaintiff claimed as compensation under this head, not related to the contract of service between himself and his employer, fell outside the scope of Section 2(vi). it was not a claim for wages for work done. It was not a contractual obligation that the plaintiff sought to enforce, and it could not therefore be viewed as any sum payable to the plaintiff by reason of the termination of his employment within the meaning of Section 2(vi) of the Act. There could, therefore, be no question of any compensation becoming payable on the date specified in section 5(2) of the Act.

    14. Thus the position is that of the four sub-heads of the composite claim put forward by the plaintiff in the suit, the first two, which were claims for (1) arrears of unpaid salary for the months of August and September 1954, and (2) arrears of unpaid remuneration for seventeen Sundays on which the plaintiff worked, were items which could have been made the subject of an application under Section 15(2) of the Act, but which in fact did not form the subject-matter of any such application. The other two items, which were in essence claims for compensation for which the contract between the parties did dot provide, fell outside the scope of Section 15(2) of the Act and therefore of Section 22(d) of the Act. Though that would be the position when the sub-heads of the claim preferred in the suit are so analysed, the question for determination still is, was the suit filed by the plaintiff one for the recovery of wage in so far as the amount claimed in the suit could have been recovered by an application under Section 15 of the Act.

    15. The answer to that question, with reference to the circumstances of this case which we have adverted to above, must, in our opinion, be in the negative. It was certainly not a suit for recovery of wages simpliciter. Something more was asked for by the plaintiff, which, as we have pointed out earlier, was in essence a claim for compensation as distinct from a claim for wages. A substantial portion of the claim in the suit fell outside the scope of Sections 15(2) and 22(d). It should be noted that it was not the case of anyone at any stage that the claim was preferred in the civil court mala fide to get over the special period of limitation prescribed by Section 15(2) of the Act. What considerations should prevail when lack of good faith is pleaded and proved we are not called upon to consider in this case. We should also like to emphasize again that the claim in the suit was a composite one. The plaintiff in effect claimed that a sum of Rs. 322 was lawfully due to him. He gave up Rs. 22. He did not specify further either in the plaint or at any later stage whether this deduction of Rs. 22 was from any one of the four sub-heads of the claim enumerated in the plaint. It was out of the total of the claim as calculated by him Rs. 322, that this sum of Rs. 22 was deducted. Whether to such a composite claim or any portion thereof the bar of Section 22(d) would apply is therefore the real question to be answered in this case. The basic principle we have to remember is that unless a civil court is divested of its jurisdiction by a statutory provision, whether in express terms or by necessary intendment, the jurisdiction of the civil court remains unimpaired. It is on that basis that Section 22 of the Act including Sub-clause (d) thereof will have to be interpreted, Of course, any interpretation placed on the scope of Section 22(d) will have to be consistent with the scheme of the Act as a whole, an Act designed to secure prompt payment of wages to the employees and an expeditious disposal of the claim, for example, that wages of an employee or any portion thereof has been wrongfully withheld from him by his employer.

    16. What under Section 22(d) a civil court is barred from entertaining is, a suit for the recovery of wages in so far as the sum so claimed could have been recovered by an application under Section 15. As we said, the suit as filed by the plaintiff was not only for the recovery of wages. The expression " in so far as the sum so claimed," as it occurs in Section 22, has to be construed with reference to the expression "suit for recovery of wages." We do not think that Section 22 contemplated and provided for the splitting up of a claim preferred by a plaintiff in good faith for recovery of a specified sum into its component parts, to verify whether a portion or portions of the claim could have been preferred under Section 15(2) of the Act. The test should be, does the suit taken as a whole, on a fair reading of the averments in the plaint, amount to a suit for recovery of wages or for the recovery of any deduction from wages within the meaning of Section 22 of the Act. We are satisfied that the suit filed by the plaintiff in this case did not satisfy that test, and therefore the bar imposed by Section 22 did not apply. The civil court was not divested of its jurisdiction to entertain that suit.

    17. It is true that the scope of Section 15 of the Act has been the subject-matter of conflicting decisions of other High Courts, as pointed out in his order of reference by Ramaswami Gounder, J. We do not consider it necessary for the disposal of the case before us to attempt to resolve the conflict of views of the other High Courts. No reported case was brought to our notice where any other High Court had to answer the question in the specific form in which it arose in the case before us.

    18. In Sarangdhar v. Lakshmi Narayan the claim as preferred in the civil court was for the recovery of a sum of Rs. 1,013-3-0 of which Rs. 28 was due to the plaintiff as arrears of salary for the month of August 1941. The rest of the amount was claimed as due to the testator who had been the manager of the defendant firm, and under whose probated will the plaintiff claimed the amount due to the testator. The learned Judges held that the suit as framed by the plaintiff in that case did not fall within the. mischief of Section 22 of the Act. The learned Judges, however, were apparently not called upon to decide whether the claim for Rs. 28 could be separated for the purpose of Section 22 of the Act, and whether that portion of the claim in the suit should be dismissed on the ground that it fell within the mischief of' Section 22(d) of the Act. Of the cases cited before us, this came nearest the question we have have had to decide, and if we may say so with all respect to the learned Judges, it can be viewed only as of a negative value. As we said, no reported case was brought to our notice where the question arose for determination in the form in which it has arisen before us.

    19. In Venkatavamdan v. Sembium Saw Mills 1955-II L.L.J. 11, Krishnaswami Nayudu, J., held that a claim by an employee, which is in effect a claim for damages for wrongful termination of services, is not one which a Commissioner under the Payment of Wages Act is competent to enquire into and that the remedy in such cases is by a suit in a civil court. But there the learned Judge did not have to deal with a claim for wages as such which accrued to the employee during the period he actually worked.

    20. The scope of Section 15 of the Act was discussed at some length by Chagla, C.J., in A.R. Sarin v. B.C. Patil 1951-II L.L.J. 188, the scope of which decision was explained further in Balakrishnan v. A. Rangnekar 1958-I L.L.J. 215 by Tendolkar, J., who had been a party to the earlier decision. The learned Judges were of the view that Section 15 of the Act did not confine the jurisdiction of the authority appointed under that section of the Act only to claims, where wages were admitted to be due but were not paid. The narrower view of the scope of Section 15 of the Act taken by Beokett, J., in Simpalax Manufacturing Company, Ltd. v. Alla-ud-Din A.I.R. 1945 Lah. 195 did not commend itself to the learned Judges of the Bombay High Court, though they did not specifically refer to the Lahore decision. The learned Judges of the Patna High Court, however, specifically dissented from the Lahore view in Sarangdhar v. Lakshmi Narayan . If we may say so with respect, the language of Section 15 in its setting in the Act viewed as a whole did not warrant the narrowing down of its scope by Beckett, J. It was not urged before us that the claim for arrears of wages for August and September 1954 and the claim for wages due for the Sundays during which the plaintiff claimed he worked also fell outside the scope of Section 15(2).

    21. The learned District Munsif, it should be remembered, held that the ban imposed by Section 22(d) did not apply because the plaintiff's case was one of a dismissed employee for recovery of past salary. That view is clearly wrong. It is on other grounds that we have held that Section 22(d) did not exclude the jurisdiction of the Court of Small Causes to entertain the plaintiff's suit as it was presented.

    22. The petition fails and is dismissed with costs.

    Use AI to get other relevant cases.

    Comments

    C.V Narayanaswami Iter v. K.A Vasudeva Iyer.
    (Jan 6, 1958)