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Smart Summary

Structured Summary of the Opinion

Factual and Procedural Background

Petitioners Nos. 4 and 5 were directors of petitioner No. 1 company and partners in the firms of petitioners Nos. 2 and 3; they were involved in publishing the daily newspaper "Jan Tantra" (now defunct). Respondent No. 1, a journalist, filed an application before Respondent No. 2 (the Authority under the Payment of Wages Act) seeking recovery of Rs. 2,726 under Section 15 of the Payment of Wages Act.

Respondent No. 1's case before the Authority was that he was employed as Editor of "Jan Tantra" from 1 June 1958 at a monthly salary of Rs. 175 (or wages as fixed by the Wages Board, whichever was higher) and that he performed additional duties as reporter, advertisement canvasser, translator and proof-reader, for which additional payment was due. He alleged non-payment of salary for the period October 1958 to January 1959 and claimed Rs. 1,676 by way of wages/compensation and pay in lieu of notice.

The petitioners denied the employment and salary allegations, contending respondent No. 1 served on an honorary basis, claiming they paid honoraria (Rs.100 for October 1958 and Rs.125 per month thereafter) and denying entitlement to wages for extra duties. Their primary contention was that respondent No. 1 was not a "worker" and that the remuneration was not "wages," so the Authority lacked jurisdiction. The Authority framed a preliminary issue on whether the application under the Payment of Wages Act was maintainable.

The Authority decided the preliminary issue against the petitioners, holding that although the applicant might not be a "worker" within the Factories Act definition, clause (4) of section 1 of the Payment of Wages Act covered all persons employed in any "factory" whether workers or not, and that the factual question of whether the applicant was employed in a factory should be decided after evidence. The petitioners challenged that decision in this Court.

Legal Issues Presented

  1. Whether the application under the Payment of Wages Act was maintainable before the Authority by virtue of section 1(4) (i.e., whether the applicant qualified as a "person employed in any factory" under the relevant statutory definitions).
  2. Whether the Authority under the Payment of Wages Act had jurisdiction to determine the claim where rival contracts between the parties were alleged (i.e., whether competing contractual claims ousted the Authority's jurisdiction to decide employment and wages).
  3. Whether section 17 of the Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955, removes or limits the Authority's jurisdiction under the Payment of Wages Act to determine disputes regarding wages of a working journalist.

Arguments of the Parties

Petitioners' Arguments (Appellants)

  • The Authority erred in holding the petition maintainable because the applicant (editor) could not be regarded as a person employed in any "factory" within the meaning of section 1(4) of the Payment of Wages Act and the definitions in the Factories Act.
  • Rival contracts were set up by the parties (the petitioners said honorary engagement and payment of honorarium; the applicant said salaried employment) and therefore the Authority had no jurisdiction to determine which contract governed — citing a Bombay High Court decision (Anthony Sabastin Almeda v. R. M. Taylor) to support the limitation on the Authority's jurisdiction.
  • Section 17 of the Working Journalists Act meant that disputes about wages of newspaper employees (working journalists) were to be recovered by application to the State Government or specified authority and then to the Collector; thus, the Payment of Wages Authority had no authority to determine such disputes.

Respondent's Arguments

  • Respondent No. 1 contended he was employed as Editor from 1 June 1958 on a salary of Rs.175 per month (or as fixed by the Wages Board) and that he performed additional remunerable duties; he claimed unpaid wages/compensation for specific months and payment in lieu of notice.
  • Implicit in his application was the position that the Authority under the Payment of Wages Act had jurisdiction to entertain and decide his claim for unpaid wages and related relief.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Anthony Sabastin Almeda v. R. M. Taylor, 58 Bom LR 899 (AIR 1956 Bom 737) Held that the Authority's jurisdiction is limited where employer and employee rely on different contracts; it is not within the Authority's remit to decide which of rival contracts subsists. The Court acknowledged observations in this case that might support the petitioners' argument, but treated them as not determinative in light of subsequent authorities and the broader statutory scheme.
A. R. Sarin v. B. C. Patil (AIR 1951 Bom 423) Considered the scope and ambit of the Authority's jurisdiction under the Payment of Wages Act; a leading case on the subject. The Court regarded Sarin's case as a landmark and relied on its principles to support the proposition that the Authority can determine whether a person has been employed as part of deciding what sums are payable as wages.
K. P. Mushran v. B. C. Patil (AIR 1952 Bom 235) Logical extension of the principles laid down in Sarin's case concerning the Authority's jurisdiction. The Court cited this case as part of the chain of authority affirming the Authority's competence to decide questions of employment when determining wages.
C. S. Lal v. Shaikh Badshah (AIR 1955 Bom 75) Affirmed that the Authority may determine whether a person was employed because the question of contract of employment underlies the Authority's power to decide sums payable as wages. The Court quoted this decision to support the view that the Authority can decide whether there was a subsisting contract of employment when assessing wage claims.
Vishwanath v. General Manager, Central Railway (Full Bench) (AIR 1958 Bom 111) Reaffirmed that the Authority is competent to decide whether a person had been employed and whether a master-servant relationship existed; within the ambit of its jurisdiction to determine such issues. The Court relied on this Full Bench decision (to which the present Court's author was a party) to reaffirm that the Authority may determine the existence of employment and the subsistence of a contract of employment when deciding wage claims; this disposed of the petitioners' rival-contract contention.

Court's Reasoning and Analysis

The Court proceeded in a stepwise statutory and precedent-based analysis:

  1. Statutory definitions: The Court examined section 1(4) of the Payment of Wages Act (which applies to "persons employed in any factory") and turned to the Factories Act definition of "factory" and "worker" (section 2 of the Factories Act, 1948). The court emphasised that these statutory definitions are broad in scope.
  2. Interpretation of "worker" and "persons employed in any factory": The Court rejected a narrow, designation-based approach. It concluded that whether a person is a "worker" depends on the nature and scope of the duties performed, not merely on the title "editor." Since an editor might perform duties that clearly fall within the definition of work incidental to or connected with a manufacturing process (or, by analogy, duties of varied character including reporting and canvassing), such a person could fall within the ambit of section 1(4) of the Payment of Wages Act.
  3. Jurisdiction in presence of rival contracts: The Court addressed the contention that rival contracts (different accounts of the contractual relationship) ousted the Authority's jurisdiction. After reviewing precedent (notably Sarin, Mushran, C. S. Lal and the Full Bench in Vishwanath), the Court held it is within the Authority's jurisdiction, when deciding sums payable as wages, to determine whether a person was employed and whether a subsisting contract of employment existed. Thus, the mere existence of rival contractual narratives did not deprive the Authority of jurisdiction to adjudicate wage claims.
  4. Effect of the Working Journalists Act, 1955 (section 17): The petitioners argued that section 17 provided a special recovery mechanism that removed the Payment of Wages Authority's competence over journalists' wage disputes. The Court examined the text of section 17 and noted the saving phrase "without prejudice to any other mode of recovery." The Court found nothing in section 17 that remotely suggests it curtails the Authority's jurisdiction under the Payment of Wages Act; the presence of the "without prejudice" language reinforced that the statutory recovery mechanism did not oust other remedies or authorities.
  5. Overall conclusion on the three contentions: Because the statutory definitions are broad, prior authorities supported the Authority's competence to determine existence of employment and contractual subsistence, and section 17 did not oust the Authority's jurisdiction, each of the three contentions advanced by the petitioners failed.

Holding and Implications

Holding: The petition is dismissed and the Rule is discharged with costs.

Implications:

  • The Authority's decision on the preliminary issue (that the application was maintainable and that jurisdiction to determine employment-related questions exists) stands.
  • The Court confirmed that whether a person is a "worker" or a "person employed in any factory" depends on the nature of duties performed, not solely on designation, and that the Authority under the Payment of Wages Act may determine whether an employment relationship existed when deciding wage claims.
  • No broader new legal principle or departure from the cited authorities was announced; the ruling applied existing statutory interpretation and precedents to reject the petitioners' contentions. The decision's direct effect is to leave the Authority's preliminary ruling intact and permit further factual inquiry and adjudication before the Authority on the merits.

Rule discharged. (As stated in the opinion)

    Jay Gujarat Prakashan Ltd. v. Hariprasad Hargovindas Pandya And Another Opponents.

    (1) Petitioners Nos. 4 and 5 are directors of petitioner No. 1 company and partners in the firms of petitioners Nos. 2 and 3. They were concerned with the publication of the daily newspaper "Jan Tantra", which we are informed is now defunct. For convenience and brevity we shall refer to them collectively. Respondent No. 1 who is a journalist filed an application for the recovery of Rs. 2, 726/- from the petitioners under Section 15 of the Payment of Wages Act before respondent No. 2, who is the Authority under the Payment of Wages Act, to be referred to by us as the Authority.

    The case of respondent No. 1 before the Authority was that the was he employed as an Editor of the daily newspaper "Jan Tantra" from 1st June 1958 on a monthly salary of Rs. 175/- or the wages to be fixed by the Wages Board appointed by the Government of India, whichever was higher. It was also his case before the Authority that he was employed to do work in various other capacities, viz., that of the reporter, an advertisement canvasser, a translator and a proof-reader and that the for the extra work, payment of the was to the him in addition to the salary. According to him, he worked in that manner upto February 1959, but for the period October 1958 to January 1959, his salary was not paid to him.

    After some differences between the parties, he severed his connections with the petitioners and the petitioners removed his name as editor and informed him that they had terminated his services. Before the Authority, he claimed Rs. 1,676/- as wages for the period 1-6-1958/0 by way of compensation and pay in lieu of notice. The petitioners, in their written statement filed before the Authority, contended that the application was not maintainable. They denied that the applicant (respondent No. 1 before us) was employed as an editor from 1-6-1958, or that his monthly salary was Rs. 175/-, as alleged.

    Their contention was that they were starting a new venture and respondent No. 1 had offered his services on an honorary basis, and it was in that capacity that he was taken up on the editorial Board of their paper `Jan Tantra". They also contended that the question of remuneration, if any, to be paid to him was to be considered in future if circumstances permitted. According to them the agreement between the parties was that the respondent No. 1 was to receive Rs. 100 for the month of October 1958, and Rs. 125/- per month as honorarium from November 1958 and that honorarium so computed had been paid to him.

    They denied that any extra work was done by him as alleged or that anything was to be paid to him for such work. Their principal contention was that respondent No. 1 was not a `worker' and that the remuneration paid to him was not `wages' at all the Authority had no jurisdiction to entertain the claim made against them. A preliminary issue was framed by the Authority, and the preliminary issue was, whether the application to the Authority under the Payment of Wages Act was maintainable.

    (2) The Authority decided the preliminary issue against the petitioners, Referring to the contention that respondent No. 1 (applicant before him was an editor and not a `worker' within the meaning of the relevant provisions of law he observed that it was true that the applicant was not a `Worker' within the meaning of the relevant provisions of law the observed that it was true that the applicant was not a `Worker' within the meaning of the relevant definition. He, however, took the view that the application was maintainable as the language of clause (4) of section 1 of the Payment of Wages Act covered all persons employed in any `factory' whether workers or not. He also observed in his judgment that the question whether the applicant was employed in the factory or not was a question of fact to be decided only after the parties had led evidence on the point. His conclusion that it was competent to him to entertain the petition is challenged by the petitioners before this Court on this petition.

    (3) It is contended before us by Mr. Kapadia, learned Advocate for the petitioners, that the Authority was in error in holding that the petition was maintainable before him as an Authority constituted under the Payment of Wages Act, on the ground that the applicant was a person employed in a `factory'. In order to appreciate this contention, it is necessary to refer to certain provisions of the Payment of Wages Act, 1936, and the Factories, Act, 1948, section 1(4) of the Payment of Wages Act which relates to the application of that Act is as under:-

    "It applies in the first instance to the payment of wages to persons employed in any factory and to persons employed (otherwise than in a factory upon any railway by a railway administration or, either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration."

    Section 2(1) of that Act states that `factory" means a factory as defined in clause (i) of section 2 of the Factories Act, 1934, and we have, therefore, to turn to the Factories Act, 1934, for the definition of the expression "factory".

    (4) section 2 of the Factories Act, 1948, defines "factory" as under:-

    " `factory' means any premises including the precincts thereof-

    (i) whereon ten or more workers are working or, were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of powers, or is ordinarily so carried on, or

    (ii) whereon twenty or more workers are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on, but does not include a mine, subject to the operation of the Mines Act, 1952 (XXXV of 1952), or a railway running shed."

    (5) section 2(1) of the Factories Act, 1948, defines `worker' as under:-

    "worker" means a person employed, directly or through any agency, whether for wages or not, in any manufacturing process, or in cleaning any part of the machinery of premises used for manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process."

    The argument stressed before us is that the Payment of Wages Act does not apply to an editor or a paper, because an editor of a paper cannot be regarded a person employed in any factory. It is also stressed that an editor of a paper cannot be regarded as a `worker' in a factory within the scope of the definitions of `worker' and `factory' in Sections 2(1) and 2(m) of the Factories Act, 1948.

    (6) Abstracted from the facts of the case, the argument must seem attractive. But in effect it asks us to refits to recognize the realities of the interpretative process. The expression `worker' as defined in section 2(1) of the Factories Act is one of amplitude and we must not read in that definition words of limitation not must be acquiesce in a construction which would modify of qualify its width of application unless there is any sound and cogent reason for doing so. When one has regard to the definitions of "factory" and "worker" in section 2 of the Factories Act and the scheme and object of the legislation under consideration, it becomes abundantly clear that the expression "persons employed in any factory" in section 1(4) of the Payment of Wages Act is not to be understood in any restricted and narrow sense, but in a wide and comprehensive sense.

    A person may have to do skilled or unskilled work, clerical work and also intelligent, and responsible work as a person employed in any manufacturing process of work incidental to, or connected with the manufacturing process, of the subject of the manufacturing process. An editor of a paper may or may not have anything to do with any such matter relating or incidental to the manufacturing process; or on the other hand it may be part of his duty by virtue of his contract with his employer to attend also to such matters.

    Therefore, whether he is a `worker' or not must necessarily depend on the nature of his work and not on his designation simplicity. An editor of a paper, whose duties are confined nor merely to the work strictly of editing the paper, but embrace also the humbler duties of a reporter, an advertisement canvasser, a translator and the proof-reader, is, in our judgment, a person within the ambit of section 1(4) of the Payment Wages Act. The present contention of the petitioners must, therefore be negative.

    (7) It is next urged by Mr. Kapadia that rival contracts were set up by the contesting parties and the Authority under the Payment of Wages Act had, therefore, no jurisdiction to determine the claim made by respondent No. 1 According to the petitioners, it is said, the respondent No. 1 was entitled only to honorarium of Rs. 100/- for the month of October 1958 and then monthly honorarium of Rs. 125/- whereas the case of respondent No. 1 before the Authority was that his salary was Rs. 175/- per month in addition to some payment for additional work. In support of his contention. Mr. Kapadia has relied on a decision of the High Court of Bombay in Anthony Sabastin Almeda v. R. M. Taylor, 58 Bom LR 899: (AIR 1956 Bom 737). In that case, it was held that:

    "The jurisdiction of the Authority under the Payment of Wages Act, 1936, is limited to decide what is contract in the sense of construing the contract in order to determine the liability of the employer to pay wages. But when the employer and the employee come before him and rely on different contracts, it is not within his jurisdiction to decide which of the two contracts holds the field, which of them is subsisting and under which of them the employer is liable to pay wages. It is only when there is no dispute as to the contract that subsists and regulates the rights and liabilities of the parties that the jurisdiction of the Authority arises to determine the quantum of wages."

    It is true that there are observations of the learned Chief Justice in that case, which, at first blush, may seem to lend support to the argument of Mr. Kapadia. It is also true that for many years after the Payment of Wages Act, 1936, found place on the statute book, the view seems to have prevailed that the Act did not apply where the factotum of employment was disputed. The leading case on the subject is A.R. Sarin v. B. C. Patil, (AIR 1951 Bom 423) where the scope and ambit of the jurisdiction of the Authority was considered in the light of the scheme and the relevant provisions of the Act. That case is a landmark among the decisions of the Courts on the question of the jurisdiction of the Authority. The logical extension of the principles laid down in Sarin's case, (AIR 1951 Bom 423) is to be found in K. P. Mushran v. B. C. Patil, (AIR 1952 Bom 235). I had to consider this question of jurisdiction of the Authority under the Payment of Wages Act in C. S. Lal v. Shaikh Badshah, (S) AIR 1955 Bom 75 and said:-

    "...........Again it is well established that it is open to the Authority under the Payment of Wages Act, in order to decide what sums are payable as wages, to determine whether a person has been employed or not, because the question of contract of employment can only arise if there was at the relevant time a subsisting contract of employment"
    . This question of the scope and ambit of the Authority under the Payment of Wages Act was considered in a Full Bench decision of the Bombay High Court in Vishwanath v. General Manager, Central Railway, ( AIR 1958 Bom 111) to which I was a party. We reaffirmed in that case that it was open to the Authority under the Payment of Wages Act in order to decide that sums are payable as wages, to determine whether a person had been employed or not. The view we took in that, case was that it was within the ambit of his jurisdiction to decide whether there was relationship of a master and servant between the employer and an employee, or, to use different language, whether there was a subsisting contract of employment between the employer and the employee. In that view of the matter, the present contention of the petitioners must be negatived.

    (8) It is lastly urged by Mr. Kapadia that the effect of section 17 of the Working Journalists (Conditions of Service) and Miscellaneous Provisions, Act, 1955, is that in case of working journalist, the Authority under the Payment of Wages Act would have no authority to determine any dispute about any wages due to him by his employer. That section is as under:-

    "Where any money is due to a newspaper employee from an employer under any of the provisions of this Act, whether by way of compensation, gratuity or wages, the newspaper employee may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the money due to him, and if the State Government or such authority as the State Government may specify in this behalf is satisfied that any money i so due, it shall issue a certificate for that amount to the Collector and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue." We are unable to reined anything in this section which can even remotely suggest that the jurisdiction of the Authority under the Payment of Wages Act has, in any manner, been affected by it. Moreover, the argument ignores the words "without prejudice to any other made of recovery" in the section. There is no substance in this contention and it must be negative.

    (9) These are the three contentions urged before us by Mr. Kapadia. They all fail and the petition must stand dismissed. Rule will be discharged with costs.

    (10) Rule discharged.

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    Jay Gujarat Prakashan Ltd. v. Hariprasad Hargovindas Pandya And Another Opponents.
    (Jun 16, 1960)