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  • S. 15(2) of the Payment of Wages Act (for short the Act)
  • Art. 309 of the Constitution. Rule 157
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • S. 15(2) of the Payment of Wages Act (for short the Act)
  • Art. 309 of the Constitution. Rule 157
Smart Summary

Factual and Procedural Background

The case involves a dispute between the railway administration and twenty-eight of its employees regarding the right to avail casual leave. The employees sought casual leave on 2 January 1979 to participate in an agitation against the railway administration. Their applications for leave, submitted on 30 December 1978, were rejected. Despite the rejection, the employees absented themselves from duty and took part in the agitation. Consequently, the management withheld their wages for that day. The employees challenged the wage deduction before the Payment of Wages Authority under Section 15(2) of the Payment of Wages Act, which ruled in their favor. The management appealed under Section 17(1) of the Act to the District Judge, Palghat, who allowed the appeal and set aside the Authority's order. The employees then filed a revision petition against this decision.

Legal Issues Presented

  1. Whether the absence of employees from duty to participate in an agitation, after rejection of casual leave applications, constitutes authorised or unauthorised absence under the Payment of Wages Act.
  2. Whether the revision petition against the District Judge’s appellate order is maintainable under Section 115 of the Code of Civil Procedure, given the finality provisions in the Payment of Wages Act.
  3. Whether the Circular No. J.P 420.P dated 19 July 1978, which presumes leave is granted if no intimation of rejection is given, applies in the context of leave refused for participation in an agitation.
  4. Whether the management’s deduction of wages for unauthorised absence is lawful under Section 7(2)(b) of the Payment of Wages Act and the applicable railway service rules.

Arguments of the Parties

Employees' Arguments

  • The employees contended that since no intimation of rejection of their casual leave applications was given, Circular No. J.P 420.P applies, creating a presumption that leave was granted.
  • They argued that their absence was therefore authorised and the deduction of wages was illegal.

Management's Arguments

  • The management maintained that leave was explicitly rejected and that participation in an agitation is not a valid ground for granting casual leave.
  • They asserted the right to enforce discipline and maintain smooth railway operations, including refusal of leave during exigencies.
  • The deduction of wages was lawful under Section 7(2)(b) of the Payment of Wages Act for unauthorised absence.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hindustan Journals v. Govindan, [1952 — II L.L.J 242] Jurisdiction of civil Courts under Section 17 of the Payment of Wages Act and applicability of revisional jurisdiction under Section 115 of the Code of Civil Procedure. The Court relied on this decision to hold that the appellate authority under Section 17(1) is a subordinate Court subject to revisional jurisdiction of the High Court under Section 115 of the Code.
Varghese & Others v. M/S. Carmal Coir Works, [1964 K.L.T 616] Followed the principle that appellate jurisdiction under the Payment of Wages Act is vested in Courts subordinate to the High Court. The Court expressed respectful agreement with this precedent, reinforcing the maintainability of revision under Section 115 of the Code.
Railway Board v. P.R Subramaniyam, [1978 — (I) L.L.N 308] Authority of Railway Board under Article 309 of the Constitution to frame rules applicable to non-gazetted railway servants. The Court applied this precedent to affirm the validity of the Railway Establishment Code and the management’s authority to refuse leave and enforce discipline.

Court's Reasoning and Analysis

The Court began by identifying the core issue: whether the employees’ absence was authorised or unauthorised. It noted that the Payment of Wages Act permits wage deductions for unauthorised absence under Section 7(2)(b), and only unauthorised deductions can be challenged under Section 15(2). The Court examined the maintainability of the revision petition, concluding that the District Court’s appellate order is subject to revisional jurisdiction under Section 115 of the Code of Civil Procedure because the appellate authority is a subordinate Court and not a persona designata.

Regarding the leave applications, the Court rejected the employees’ reliance on Circular No. J.P 420.P, holding it applicable only in normal circumstances and subject to the Railway Establishment Code and Fundamental Rules. The Court emphasized that leave is not a right but a privilege subject to the exigencies of public service, especially during an agitation against the management. The management’s refusal of leave was lawful to maintain discipline and smooth functioning.

The Court further held that the employees’ absence was unauthorised and therefore justified the wage deduction under the Payment of Wages Act. It rejected the argument that the railway’s continued functioning despite the agitation entitled the employees to wages. The Court affirmed the authority of the Railway Board under Article 309 of the Constitution to make binding rules, including those governing leave and discipline.

Holding and Implications

The Court DISMISSED the civil revision petition with costs.

The direct effect is that the management’s deduction of wages for the day of unauthorised absence is upheld. No broader precedent altering existing legal principles was established. The decision reinforces the management’s authority to refuse leave for participation in agitations and affirms the applicability of the Payment of Wages Act provisions and Railway Establishment Code in such contexts.

    Surendranathan Nair v. Senior Divisional Personnel Officer

    In the legal battle between the railway administration and some of its employees the real issue is not the stake involved but establishment of rights. The employees are interested in getting established their unfettered right to avail of casual leave as they like on any day even for the purpose of launching an agitation against the railway administration under which they are working. The interest of the management is in preserving its rights to enforce discipline and ensure proper working of the railways. So far as each of the employees is concerned, what he is gaining by success or losing by defeat is only a day's wages which may not be more than 50 or 55 rupees. They must have spent many multiples of that figure to fight out this case.

    2. Twenty-eight employees of the railway administration are the revision petitioners. Against the management, the employees decided to have an agitation on 2 January 1979. On 30 December 1978, the petitioners submitted casual leave applications for 2 January 1979, to participate in the agitation. Those applications were rejected. Still they absented themselves from duty and participated in the agitation. Management withheld wages for the day. Petitioners complained before the Payment of Wages Authority under S. 15(2) of the Payment of Wages Act (for short the Act) and the claims were allowed. Against that order the management filed an appeal under S. 17(1) of the Act before the District Judge, Palghat. The appeal was allowed and the order set aside. Hence they have come up in revision.

    3. Section 15(1) of the Act provides for the appointment of an authority to hear and decide all claims of employees arising out of deductions from wages or delay in payment of wages. Section 15(2) authorises the employees to apply to the authority for direction under Sub-sec. (3) only in cases where deduction has been made from wages contrary to the provisions of the Act or when payments, were delayed. Under S. 7(2)(b) of the Act, the management has a legitimate right to make deductions from wages for absence from duty. If the deductions come under the authorisation in S. 7(2)(b) the petitioners cannot have any right to move under S. 15(2) for a direction under S. 15(3). Therefore, the real question is whether absence from duty is authorised or unauthorised.

    4. Before going into that question the first hurdle to be crossed is maintainability of revision. The Payment of Wages Authority can either dismiss the claim under S. 15(2) or give a direction under S. 15(3) or 15(4). From those orders an appeal is provided under S. 17(1). The appellate authority is the Court of Small Causes in a Presidency town and the District Court in other cases. In this case District Court is the appellate authority. Section 17(2) says that subject to the appeal under S. 17(1) the decision of the Payment of Wages Authority under Ss. 15(2), 15(3) or 15(4) shall be final. The only other relevant provision is S. 17(4) which authorises the appellate Court to refer any question of law for the decision of the High Court pending appeal. The matter to be decided is whether in such a situation a revision under S. 115 of the Code of Civil Procedure is maintainable.

    5. It is true that S. 17(2) gives a finality to the decision of the Payment of Wages Authority subject to the appeal provided under S. 17(1). That only means that the Act did not provide for any further right of appeal. The operative order in such cases where an appeal has been filed is that of the District Judge in appeal. The question then is only whether the appellate Court acting as such is a Court or only a persona designata. It is a Court the absence of provision for appeal is of no consequence. District Court is a Court undoubtedly subordinate to the High Court. From the decision of such a subordinate Court from which no appeal lies, the High Court is having undoubted revisional jurisdiction under S. 115 of the Code. What is required to attract the revisional jurisdiction under S. 115 of the Code is only the decision of a case by any Court subordinate to the High Court and in which no appeal lies thereto. Subsequent matters provided in S. 115 are only those affecting the decision in revision. The word “Court” does not include any person acting in an administrative capacity nor a person acting as a persona designata. When a matter is directed to be decided by certain Court, the Presiding Officer of such Court will act only as a Court and not as a persona designata. But where it is provided that a certain Judge by name or otherwise is to decide a matter, the entire provisions of the statute may have to be looked into for the purpose of determining whether the judicial officer acts as a Court or as a persona designata. It is the intention as gathered from the statute that determines the question. If the intention is that the Presiding Officer should enforce the rights and obligations created by the statute in the exercise of the existing jurisdiction of the Courts, they act only as Courts, but in such cases if the intention is to create new Courts then only the question will arise whether they are persona designata. The question of ouster of revisional jurisdiction of the High Court by the absence of a provision of the alleged finality or absence of provision for further appeal will arise only if the appellate authority is persona designata and not a Court subordinate to the High Court.

    6. Section 17(1) of the Act doest not present any difficulty at all. The two appellate forums provided under that provision are Court of Small Causes and District Court and not any particular Judge. Both are Courts subordinate to the High Court coming within the purview of S. 115 of the Code. The fact that no further provision for appeal is made only strengthens the applicability of S. 115 of the Code. A Division Bench of the Madhya Pradesh High Court in Hindustan Journals v. Govindan, [1952 — II L.L.J 242], took the view that jurisdiction conferred under S. 17 of the Act is on a civil Court already functioning under the Code and since it is a Court subordinate to the High Court, the jurisdiction under S. 115 of the Code is attracted. That decision was followed in Varghese & Others…* v. M/S. Carmal Coir Works…., [1964 K.L.T 616], and I am in respectful agreement with that view.

    7. When once the revisional jurisdiction is there the further question is whether the District Judge acted in excess of jurisdiction or exercised the jurisdiction illegally or with material irregularity. No such question arises in this case. The purpose of applying for leave was admittedly for participation in an agitation against the management. It is always within the powers of the management to refuse leave for that purpose in order to enforce discipline and maintain smooth functioning of the administration. The main contention was based on Circular No. J.P 420.P, dated 19 July 1978, alleged to have been issued by the Senior Divisional Personnel Officer providing that when an application for leave is presented and when no intimation has been given that it is rejected, it must be presumed that leave is granted. According to the revision petitioners no intimation was given to them that leave is rejected and hence the presumption under the circular is attracted and, therefore, the management cannot take the stand now that leave is rejected. On this basis it was contended that absence is not unauthorised and hence deduction of wage is illegal.

    8. Even going by the circular such a stand on the part of the employees, is not justified. In the first place one of the petitioners when examined admitted that they had notice of rejection. Secondly the circular can have application only in normal circumstances and that too only subject to the provisions of Fundamental Rule 67 contained in the Railway Establishment Code, Vol. II. In an extraordinary situation like an agitation by the employees none of the employees is having the right to compel the management to grant leave to them for participating in the agitation. Rule, 2106 of the Fundamental Rules provides that leave cannot be claimed as of right and when exigencies of public service so require, discretion to refuse or revoke leave of any description is reserved with the authority empowered to grant it. It may be true that Circular No. J.P 420.P, dated 19 July 1978, was issued under authorisation from the Railway Board. But, it can have effect only subject to the code and rules contained therein. Acting under exigencies of service is the right of the management to meet situations and enforce discipline and smooth functioning. No employee is entitled to claim casual leave as of right. It can be availed of only after being sanctioned. If 12 days causal leave is there they may be entitled to avail it spread over the year. But they cannot claim that casual leave has to be granted on any particular day even when exigencies of service do not justify such granting. The Railway Establishment Code and the rules contained therein are having the authority under Art. 309 of the Constitution. The rules made under the delegated powers is having general application to the non-gazetted railway servants including the petitioners. Rejection of leave under such circumstances was legal and proper. Absence from duty in such a situation especially for the purpose of participation in an agitation against the management is unauthorised. An unauthorised absentee has no right to compel the management to disburse wages for the period of unauthorised absence.

    9. Railway Establishment Code, Vol. I, are rules framed by the President under Art. 309 of the Constitution. Rule 157 of that code authorises the Railway Board, as permissible under Art. 309 of the Constitution, to have full powers to make rules of general application to non-gazetted railway servants under their control. Such rules are having the force of rules framed under the Art. 309 pursuant to the delegated power to the Railway Board. It was so held by the Supreme Court in the decision in Railway Board v. P.R Subramaniyam, [1978 — (I) L.L.N 308]. When the management acted under the above powers for enforcing discipline and maintaining the smooth functioning of the establishment the employees have no right to say that the action is illegal and they must be given wages though they absented from duty. The fact that in spite of their absence and agitation the railway establishment functioned properly on account of the arrangements made by the management is no justification for the petitioners to claim wages. Whether the railway establishment worked properly or not and whether the railway administration suffered anything or not is not the question. The question is only whether the petitioners were absent and whether their absence was unauthorised. That they were unauthorisedly absent is clear. If so, deduction of wages is proper under S. 7(2)(b) and the provisions of S. 15(2) are not attracted. The District Judge was perfectly correct in allowing the appeal.

    10. The civil revision petition has no merit and it is hereby dismissed with costs.

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    Surendranathan Nair v. Senior Divisional Personnel Officer
    (Jul 31, 1987)