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Union Of India (Uoi) And Ors. v. Triloki Nath Bhasin

Punjab & Haryana High Court
Mar 31, 1959
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Structured Summary of the Opinion — I.D. Dua, J.

Factual and Procedural Background

This revision was preferred by the Union of India under Section 44 of the Punjab Courts Act and Article 227 of the Constitution of India against the decision dated 12 March 1958 of Sri Om Prakash Sarma, Senior Subordinate Judge, acting as the authority under the Payment of Wages Act. The respondent, Triloki Nath Bhasin, an employee of the Northern Railway who retired on 28 May 1957, had claimed under Section 5(2) of the Payment of Wages Act the sum of Rs. 6-10-0 as an alleged unauthorized deduction from his January 1957 wages. The deduction was described as "law charges" (costs of a suit) and the authority below held that the deduction could be legally made under Section 7 of the Payment of Wages Act and that the petitioner's net emoluments at the time of deduction were less than Rs. 200, thus bringing the case within the Act. The Union of India sought revision of that decision.

Legal Issues Presented

  1. Whether the deduction of Rs. 6-10-0 (law charges/costs of a suit) from Triloki Nath Bhasin's wages was valid.
  2. Whether the Payment of Wages Act applied to the employee in the relevant wage-period (i.e., whether his wages averaged less than Rs. 200 per month for that wage-period).
  3. Whether Section 7(2)(h) of the Payment of Wages Act permitted the deduction on the basis that the deduction was required by an order of a competent authority (and whether the employer or railway department qualifies as such an "authority").

Arguments of the Parties

Union of India (Appellant) — Principal Contentions

  • At the relevant time the employee's pay was Rs. 225 per month; the fact that he drew less while on leave should not take him outside the statutory definition of "wages" (i.e., the argument that "wages" should be assessed by remuneration payable if contract terms were fulfilled).
  • Conceded that if the wages were in fact less than Rs. 200 per month the Act would apply; but argued that on the true view wages were above Rs. 200.
  • Contended that under Section 7(2)(h) the department was entitled to make the deduction because it was required to be made by an order of the Court or other authority competent to make such an order; reliance was placed on the authority of Union of India v. Kundal Lal.
  • Also raised procedural/contention arguments originally below that the claim did not fall within the Payment of Wages Act, that the applicant having retired there was no employer-employee relationship, and that a joint application against several defendants was not competent.

Respondent / Railway (as represented in the proceedings below)

  • The deduction was justified as being on account of costs awarded against the employee in litigation and could be legally deducted from his salary.
  • It was asserted (by respondents' written statements and the departmental witness) that during the relevant period the employee was on half average pay and in fact drew less than Rs. 200 (e.g., Rs. 177-8-0 per month as per the departmental statement).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Union of India v. Kundal Lal Relied upon by appellant to support the contention that a departmental order could amount to an "order of an authority" under Section 7(2)(h) permitting deduction. The Court read this authority as contrary to the appellant's submission: it emphasized that an employer or ordinary departmental order does not necessarily qualify as an "authority" within Section 7(2)(h); the Court used the passage to reject the contention that the railway department's internal order could justify the deduction.

Court's Reasoning and Analysis

Jurisdictional posture: The revisional petition was brought both under Section 115 CPC (in the same terms as Section 44 of the Punjab Courts Act) and Article 227 of the Constitution. The Court observed that the authority under the Payment of Wages Act is not a court subordinate to the High Court, so Section 115 CPC / Section 44 Punjab Courts Act did not apply; the Court therefore proceeded under Article 227. The Court framed the limited scope of interference under Article 227: to canalize proceedings of subordinate tribunals and ensure they remain within the bounds of law, not to disturb findings of fact or law unless a grave or manifest injustice is shown.

On the specific contentions:

  • Section 7(2)(h) contention: The Court found this contention unsustainable because (a) no court had passed an order requiring the deduction — the court below had only awarded costs against the judgment-debtor which are collectible by normal execution procedures; and (b) the clause requires that the deduction be ordered by an "authority" competent to make such an order. The Court accepted the reading (as derived from Union of India v. Kundal Lal) that an ordinary employer or departmental official is not necessarily an "authority" within the meaning of Section 7(2)(h). Because there were no rules conferring such special power on the employer in this case, the Section 7(2)(h) ground failed.
  • Applicability of the Payment of Wages Act (wage threshold): The Court examined the evidence produced below. The departmental witness (Kewal Krishan, clerk in Divisional Accounts) produced originals and a statement showing salary history: basic pay figures leading to Rs. 225 as basic pay but that during the period in question the employee was on half pay (leave preparatory to retirement) and drew less than Rs. 200 per month (the departmental statement gave Rs. 177-8-0). The authority below had earlier, by interlocutory order, found net emoluments at the time of deduction to be less than Rs. 200 and thus within the Act. The Court found that the wages payable for the relevant wage-period (while on leave preparatory to retirement) could be expressed in monetary terms and, as actually payable, were below the statutory threshold.
  • Interpretive approach to "wages": The Court adopted a purposive and benevolent construction of the Payment of Wages Act, stressing the statute's protective object for small salary holders: it should advance the remedy and suppress the mischief. The Court preferred construing "wages" to mean "earned wages" (the remuneration actually payable in the wage-period) rather than potential remuneration payable if all contract terms were fulfilled. It rejected the argument that taking leave preparatory to retirement should be treated as non-fulfilment of contract so as to displace the protective statutory regime.
  • Standard of interference on revision: Applying the limited scope of Article 227, the Court concluded the Union of India had not shown the authority's decision to be so clearly wrong or to have assumed jurisdiction not vested in it such as to warrant interference. On the merits, the Court found the authority's decision to be substantially correct.

Holding and Implications

Holding:

DISMISSED — The revision petition filed by the Union of India was dismissed and the decision of the authority under the Payment of Wages Act was upheld; the Court ordered dismissal with costs.

Implications:

  • The authority's determination that the deduction was unauthorized under the Payment of Wages Act (because the employee's wages for the relevant wage-period averaged less than Rs. 200) stands and is not set aside by this Court.
  • The Court rejected the contention that Section 7(2)(h) authorized the employer/department to make the deduction in the absence of an order by a court or other competent authority and in the absence of rules conferring such authority on the employer; thus the departmental/internal order did not justify the deduction on that statutory ground.
  • The opinion applies a benevolent, remedial construction to the Payment of Wages Act, indicating that in cases of doubt the construction should favor the employee; this interpretive approach is explained and applied to the facts of the case.
  • If any broader precedent is to be drawn, the Court's statements about the meaning of "authority" under Section 7(2)(h) and the purposive construction of the Payment of Wages Act are the primary legal takeaways. The Court did not purport to create a novel binding precedent beyond the resolution of the present dispute; it concluded the order below was "not open to any serious objection."
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JUDGMENT I.D. Dua, J.

1. This la a revision under Section 44 of the Punjab Courts Act and under Article 227 of the Constitution of India preferred by the Union of India from the decision dated 12 March 1958 of Sri Om Prakash Sarma, Senior Subordinate Judge, acting as the authority under Payment of Wages Act. Triloki Nath Bhasin, respondent, preferred a claim under Section 5(2) of the Payment of Wages Act for the payment of Rs. 6-10-0 on account of an alleged unauthorized deduction by the railway department.

He was an old employee of the Northern Railway and retired from service on 28 May 1957. A sum of Rs. 6-10-0 appears to have been deducted from his salary for the month of January 1957 on account of law charges, i.e., costs of a suit awarded against him. His contention has been that the deduction la unauthorized and could not have been legally effected from his wages. He has, however, claimed damages for mental worries as well.

2. This claim was opposed and it was contended inter alia that the claim did not fall within the scope of the Payment of Wages Act. It was also contended that the applicant having retired, there was no relationship of employer and employee between the parties and that a joint application against the several defendants was not competent; the deduction in question was justified being on account of costs of a law suit awarded against the petitioner which, according to the defendants, could be legally deducted from the salary due to the applicant.

Only one issue was framed, viz., "Whether the deduction in question is valid" and the authority came to the conclusion that the law charges in question could be legally deducted under Section 7 of the Payment of Wages Act. The learned Senior Subordinate Judge flame to the conclusion that the petitioner's net emoluments at the time of deduction being less than Rs. 200, his claim was within the scope of the Payment of Wages Act. It has also been observed that though one application against all the defendants might not be maintainable, a direction could without doubt be given to the Divisional Superintendent, Northern Railway, Ferozepore, who is the paymaster under the Act.

3. On revision, I was inclined not to interfere in this case in view of the petty amount involved and the decision being substantially just. Sri Saluja has, however, contended that the Union of India is interested in having the question of law decided because a number of other similar oases are pending before the authority under the Payment of Wages Act. I agreed to go into merits on the express condition that the decision even if goes in favour of the petitioner would not adversely affect the order passed in favour of Triloki Nath Bhasin in the instant case.

4. It is contended on behalf of the Union of India that the pay of Triloki Nath Bhasin at the relevant time was Rs. 225 per month but on account of leave he was drawing lees than Rs. 200 per month. On this basis it is submitted that the definition of the word "wages," as given in the Payment of Wages Act IV of 1936, means all remuneration which would, if the terms of the contract of employment were fulfilled, be payable, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed, or otherwise....

5. The mere fact that for a particular period on account of leave the employee draws lesser amount, his case would not be taken out of the definition of the term "wages." It is conceded that if the wages of the employee in the instant case amounted to less than Rs. 200 per month, he would be entitled to avail of the provisions of the Act but if the wages were above Rs. 200, then this Act would not be attracted. The learned Counsel has also contended that in any case under Section 7(2)(h) the department was entitled to make the deduction in question because this deduction was required to be made by order of the Court or other authority competent to make such order. This last contention, however, is wholly unsustainable.

It is admitted that no court has passed an order requiring the deduction In question to be made. The court only awarded costs in some proceedings and those costs are payable by the judgment-debtor and can be realized in accordance with the normal procedure. The counsel, however, contends that the deduction has been required to be made by an order of the railway department and for this submission reliance has been placed on Union of India v. Kundal Lal , but this authority, as I read it, instead of helping the learned Counsel goes against his contention as is clear from the following observations:

The question in the case Is whether the deductions had been ordered by any authority competent to pass the order. The learned Counsel for the respondent urged that every employer may be competent to pass an order for deductions of wages and he would certainly be so competent if he obtains an agreement from the employee agreeing to deductions being made by the employer.

It was further argued that, if this interpretation is put on the clause, the entire object of Section 7 would be defeated. I do not agree with the contention, because the clause requires that the order should be passed by an authority and, secondly, that the authority should be competent to make the order. Every employer would not come within the meaning of the word authority.

It is only a person having some special powers conferred upon him, who could be called, an authority. Even if an ordinary employer has obtained an agreement from the employee, which makes it legal for him to make deductions, the employer would not be an authority within the meaning of the word and would not be able to get the benefit of Clause (h) of Sub-section (2) of Section 7 of the Act.

It is conceded that there are no rules framed which would govern the relationship of the parties before me as employer and employee and which confer this power of deduction on the employer. In this view of the matter the contention based on Section 7(2)(h) must be repelled. Coming to the first submission, viz., that the Payment of Wages Act is not applicable to the present case, Section 1(6) of the Act lays down that nothing in this Act shall apply to wages payable in respect of a wage-period which, over such wage-period, average Rs. 200 a month or more.

In the present case the written statements filed on behalf of the respondents show that as the employee is on leave on half average pay, he is getting Rs. 177-8-0 per month. Kewal Krishan, clerk. Divisional Accounts office, Ferozepore, has appeared as a witness with all the original documents relating to the pay drawn by the employee. He also prepared the statement which he produced in Court showing the salaries drawn by the employee, Triloki Nath, from 1 May 1955 to 28 May 1957. According to this statement Triloki Neth's basic pay was Rs. 220 up to 30 June 1951.

In July 1955 his basic pay was Rs. 223-4-0 and from 1 August 1956 the basic pay was increased to Rs. 225 at which figure it continue up to 28 May 1958 when according to this witness's sworn testimony the applicant retired. After this date the employee

" drew half pay as leave salary on half average pay, up to the date of his retirement, viz., 28 May 1957 afternoon."
The. employee in the witness-box had sworn that the statement made by Kewal Krishan was incorrect and that he had only been drawing Rs. 110 and later on Rs. 112 maximum, as leave salary on half average pay from 1 May 1955 to 28 May 1957.

On this evidence the authority under the Payment of Wages Act, on 22 August 1957 by an interlocutory order came to the conclusion that the net emoluments of the employee at the time of the deduction in Question being less than Rs. 200 the claim was perfectly within the scope of the Act. Therefore the preliminary issue, whether the employee was governed by the Payment of Wages Act, was decided in his favour. The present revision petition has been preferred both under Section 115 of the Code of Civil Procedure (which is in the same terms as Section 44 of the Punjab Courts Act) and Article 227 of the Constitution.

The authority under the Payment of Wages Act not being a court subordinate to the High Court obviously Section 115 of the Code of Civil Procedure or Section 44 of the Punjab Courts Act cannot apply. Under Article 227 of the Constitution, however, the powers of this Court are confined to canalising the proceeding of the subordinate tribunals for the purpose of keeping them within the bounds of law. The power of interference under this article is limited only to seeing that the tribunal functions within the limits of its authority.

It is not permissible to interfere with findings of fact or even with findings of law if no grave or manifest injustice has resulted from such error. It is, in the circumstances, for the Union of India to show that the decision arrived at by the authority under the Act is so clearly wrong that it has assumed jurisdiction not vested in it by law. This the learned Counsel has not succeeded in establishing. However on the merits also there is not much substance. Under Section 4(2) of the Act no wage-period shall exceed one month and subject to this limit a person responsible for the payment of wages under Section 3 has been enjoined by Section 4(1) to fix wage-periods In respect of which wages are to be payable.

In the instant case admittedly the employee has been on leave preparatory to retirement during the period, including the wage-period in Question, up to 28 May 1957, when he formally retired. The petition out of which the present revision has arisen, it may be noted, was instituted in February 1957 while yet the employee was on leave preparatory to retirement and the amount In question has been deducted from the wages payable for the month of January 1957.

It Is obvious that by virtue of the definition of the term "wages" as contained in Section 2(vi), the wages payable in respect of the period of one month, would average to less than Rs. 200 a month. That the wages payable to the employee in the present cage, when he had taken leave preparatory to retirement, are capable of being expressed in terms of money and if all the terms of the employment, express or implied, were fulfilled, they would be payable only at the rate of less than Rs. 200 per month, has not only been pleaded by the Union of India but has also been so stated by the accountant in the witness-box.

The wages, in fact and actually, payable to an employee in the position of Triloki Nath Bhasin, during: the period of leave preparatory to retirement, would thus be clearly covered by the statute in question. It must not be forgotten that the Payment of Wages Act has been enacted by the legislature for the purpose of ensuring regular payment of wages to small salary holders so that they may be able to make their both ends meet. It ensures that such employees are paid their wages in a specified or particular form at regular, determined intervals without unauthorized deductions, it prohibits the employers to delay or withhold payment of the amount earned by workmen beyond the period specified in the Act. This statute, therefore, in my opinion, calls for a benevolent or beneficial construction: a construction which should advance the remedy and suppress the mischief.

In case of doubt the construction should be placed in favour of the employee. To apply the rule of strict construction In this case would, in my view, amount to defeating the real object and purpose of this enactment. It is in pursuance of general public policy, as stated alone, that the legislature has made mandatory provisions for payment of wages to the employees, covered by this enactment, before a prescribed date and deductions, which can legitimately be made front the wages, have also been clearly and* exhaustively laid down and it has been expressly provided that wages must be paid to an employee without deductions of any kind except those authorized by or under this Act, vide Section 7.

Considered in this light, the word "wages" as used in the statute must be construed to mean "earned wages" as distinguished from potential wages (remuneration actually payable) on fulfilment of contract should be the criterion. It has not been suggested at the Bar that taking leave preparatory to retirement can legitimately be described as non-fulfilment of contract. The learned Counsel for the petitioner has not drawn my attention to any direct precedent and he has submitted that the point being bare of authority, it is a matter of first impression only.

The respondent has not engaged any lawyer with the result that I have not been able to get any real assistance for his point of view. In view of the above discussion, however, as at present advised, I think that the instant case must be considered to be clearly covered by the provisions of the Payment of Wages Act and the order of the authority is not open to any serious objection.

6. For the reasons given above, I would dismiss this revision with costs.