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  • jurisdiction.4. Payment of Wages Act
  • Sec. 15 of the Payment of Wages Act
  • Act. Clause (b) of Sub-sec. (2) of Sec. 7
  • PAYMENT OF WAGES ACT
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  • jurisdiction.4. Payment of Wages Act
  • Sec. 15 of the Payment of Wages Act
  • Act. Clause (b) of Sub-sec. (2) of Sec. 7
  • PAYMENT OF WAGES ACT
Smart Summary

Factual and Procedural Background

This petition under Article 226 of the Constitution challenges two orders: an order of the Authority under the Payment of Wages Act dated 20 January 1969, and an order of the District Judge, Varanasi dated 31 October 1969, which dismissed the petitioner's (Railway Administration's) appeal and upheld the Authority's order.

The factual core: Dal Singar (opposite party No. 1) was employed by Eastern Railway as a Fitter-Khalasi at the Loco Shed, Mughalsarai. In July 1965 there was a dispute about whether he failed to report for duty on 23 July 1965. Dal Singar's case was that 23 July was his rest day and that when he reported on subsequent dates he was not permitted by his immediate superior to resume duties. The Administration treated periods of non-working as leave without pay and deducted wages.

Procedurally, Dal Singar filed an application under Section 15 of the Payment of Wages Act claiming wages for 23 July to 22 August 1965 (registered as Case No. 9 of 1966), and that claim was decreed by the Authority; that order was not challenged and payment was made. He filed a further application on 12 December 1966 under Section 15 claiming wages from 24 August 1965 to 9 August 1966 (seeking Rs. 978.25). The Authority again decreed his claim; on appeal the Additional District Judge, Varanasi, upheld the Authority's order. The Railway Administration petitioned under Article 226 attacking those decisions.

Legal Issues Presented

  1. Whether the Authority under the Payment of Wages Act and the District Judge on appeal had jurisdiction to determine whether the employee (Dal Singar) remained absent from duty for the period for which wages were withheld.
  2. Whether the Railway Administration was entitled to deduct wages on the ground of the employee's alleged absence where no departmental inquiry or order of a competent authority was produced.
  3. What is the scope of the Authority's jurisdiction under Section 15 of the Payment of Wages Act to examine incidental facts (such as whether an employee was prevented from working) when deciding a claim for withheld wages?
  4. Which party bears the burden of proof when a deduction from wages is challenged under the Act, and what evidence must the employer produce to justify deductions under Sections 7(2)(b) and 7(2)(h)?

Arguments of the Parties

Petitioners' (Railway Administration) Arguments

  • The Authority and the Additional District Judge had no jurisdiction to inquire into or record findings on whether Dal Singar was absent from duty; that question was within the exclusive domain of the Railway Administration.
  • The Railway Administration was entitled to deduct wages for the period of absence; those deductions could not be interfered with by the Authority or the District Judge and the courts had exceeded their jurisdiction.
  • The Administration contended that Dal Singar continued to remain absent with effect from 23 August 1965 and therefore the period was treated as leave without pay.
  • At a later stage the petitioners argued that it was not incumbent upon them to produce any departmental order before the Authority or Court and that a mere statement that the employee remained voluntarily absent should have been accepted; moreover, they suggested the burden of proof of illegal deduction lay on the employee.

Respondent's (Dal Singar / Opposite Party No. 1) Arguments

  • Dal Singar asserted he reported for duty but was not allowed to resume work by officers of the Railway Administration; he denied having remained voluntarily absent for the disputed periods.
  • He sought recovery of wages under Section 15 of the Payment of Wages Act for the two disputed periods; the Authority found in his favour, and that finding was upheld on appeal.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Kundan Lal v. Union of India (Division Bench decision) Authority under the Payment of Wages Act cannot sit in appeal over disciplinary/punishment orders passed by Railway authorities where a departmental inquiry had been conducted and punishment order existed. The court distinguished Kundan Lal: because in the present case no departmental inquiry, finding or order by a competent Railway authority was produced, Kundan Lal did not bar the Authority from investigating whether deductions were legally made.
Sri Ambika Mills v. S.B. Bhatt (Supreme Court) Established that the Authority's jurisdiction under Section 15 is exclusive but narrow; the Authority must consider incidental matters necessary to decide claims for deductions or delayed payment of wages, taking care not to unduly extend or unduly restrict that incidental jurisdiction. The court relied on this decision to justify the Authority's competence to investigate incidental factual issues (e.g., whether the employee was prevented from working) when deciding a Section 15 claim in the absence of departmental orders.
Payment of Wages Inspector v. Suraj Mal Mehta (Supreme Court) Affirmed similar observations about the scope of the Authority's jurisdiction under the Payment of Wages Act and its competence to decide incidental matters while exercising Section 15 powers. The court noted the case as support for the principle that the Authority may investigate incidental facts necessary for its limited and exclusive jurisdiction under Section 15 and applied that principle to uphold the Authority's findings here.

Court's Reasoning and Analysis

The court proceeded by construing the Payment of Wages Act and the relevant provisions relied upon by the parties.

Key statutory points extracted and applied by the court:

  • Section 15 gives the Authority power to direct payment where deductions are wrongly made or wages are delayed.
  • Section 7(2) enumerates permissible deductions; clause (b) permits deductions in respect of absence from duty and clause (h) permits deductions under an order of a competent court or authority.
  • Section 9 further explains circumstances under which deductions permitted by clause (b) may be made.

From these provisions the court distilled the following legal principles, as applied to the facts:

  • Deductions from wages are permissible only if the employee wilfully and voluntarily absents himself from duty, or where deduction is authorized by an order of a competent authority.
  • If an employer makes deductions and the employee challenges them before the Authority, the employer has the onus to establish that the deductions were made in accordance with the Act — i.e., to place material showing voluntary absence or a valid competent-authority order authorizing deduction.
  • The Authority's jurisdiction under Section 15 is exclusive but narrow; it must be allowed to decide incidental questions necessary to adjudicate a claim for wages, but it must not usurp the functions of disciplinary or service-rule authorities where a proper order or finding already exists (as explained in Kundan Lal and Supreme Court precedents).

Applying these principles to the case at hand:

  • Dal Singar asserted he reported for work but was prevented from resuming duty. The Authority framed an issue on that fact and, after evidence from both sides, found that the Railway Administration failed to prove voluntary absence.
  • The Railway Administration had not produced any departmental inquiry report, charge-sheet, punishment order, or any order of a competent authority showing that Dal Singar was held to have been voluntarily absent or that any competent order authorized deduction under Section 7(2)(h).
  • Because no such order or findings were produced, the Kundan Lal ratio (prohibiting the Authority from sitting in appeal over departmental punishment where an order exists) did not apply; the Authority was justified in investigating incidental facts necessary to decide the Section 15 claims.
  • The court emphasized that a bare assertion by the employer was insufficient — where a service contract exists and wages are deducted, the employer bears a heavy burden to justify deductions by producing appropriate evidence and orders required by the Act.
  • On the evidence before the Authority and the District Judge, the Authority's factual findings that Dal Singar did not voluntarily absent himself were proper and were rightly upheld on appeal.

Holding and Implications

Holding:

Petition dismissed.

Implications (direct effect on the parties):

  • The orders of the Authority under the Payment of Wages Act and the Additional District Judge, Varanasi, which decreed Dal Singar's claims for wages (including the sum of Rs. 978.25 in the second claim) are upheld.
  • The Railway Administration's challenge was rejected because it failed to discharge the evidentiary burden of proving that deductions were made in accordance with Sections 7(2)(b) or 7(2)(h) — specifically, no departmental inquiry, charge-sheet, punishment, or competent-authority order was produced to justify deduction.
  • No order as to costs was made because no one appeared for the opposite party at the hearing before this Court.

Broader implications and precedent:

The opinion applies established principles from Supreme Court authority (Sri Ambika Mills v. S.B. Bhatt; Payment of Wages Inspector v. Suraj Mal Mehta) concerning the Authority's exclusive but limited jurisdiction under Section 15 and reiterates the employer's burden to justify deductions. The court distinguished Kundan Lal on its facts. The decision does not claim to lay down a new general rule beyond the application of these existing authorities.

Petition dismissed.

    Divisional Accounts Officer, And Another v. Dal Singar, Fitter Khalasi And Others Opposite-Parties.

    K.N Singh, J.:— This is a petition under Article 226 of the Constitution for ??? the order of the Authority under the Payment of Wages Act dated 20th January, 1969 and the order of the ??? District Judge, Varanasi dated 31st October, 1969 dismissing the petitioner's appeal and upholding order of the authority.

    2. Dal Singar, opposite party No. 1 as in the employment of the Eastern Railay. He was posted as Fitter-Khalasi in ??? Loco Shed at Mogulsarai. On 22nd ??? 1965 he worked till 16 hours and as ??? day following was his rest day, he rented for duty on 24th July, 1965, but the F.I, who was the immediate superior ??? of opposite party No. 1, did not ??? him to resume his duties. He was ??? to explain as to why he had not ??? for duty on 23rd July, 1965. He plained that since 23rd July was his rest ??? he did not report for duty. No ??? were taken, no punishment was ??? nor he was suspended, instead he ??? not allowed to work. He filed an application under Sec. 15 of the Payment of ??? Act before the Authority under the Payment of Wages Act (hereinafter refer ??? to as the Authority), for the payment his salary for the period from 23rd July 22nd August, 1965. That application ??? registered as Case No. 9 of 1966 before Authority, opposite party No. 3. The ??? Administration contested that case, the authority decreed the claim of respondent No. 1 and directed the Administration of Eastern Railway to pay the wages of opposite party No. 1 for the said period from 23rd July to 22nd August, 1965. That order became final as the petitioners did not challenge that order. Payment of the amount so decreed was made to Dal Singar. He, however, filed another application on 12th December, 1966 under Sec. 15 of the Payment of Wages Act before the Authority, respondent No. 3, claiming wages for the period from 24th August, 1965 to 9th August, 1966 on the allegation that his wages had been withheld illegally by the Railway Administration of the Eastern Railway and that he was not allowed to do his work although he reported everyday for doing his duty. The petitioners entered appearance and opposed the workman's claim before the Authority. Their plea before the Authority was that Dal Singar continued to remain absent with effect from 23rd August, 1965, he never turned up for resuming his duty. Later on, Dal Singar resumed his work and thereupon the Railway Administration treated the period of his absence from duty as leave without pay; hence he was not paid any wages for the said period. The authority as well as the Additional District Judge, Varanasi on appeal by Railway administration rejected the case set up by the railway administration and decreed the claim of Dal Singar, for a sum of Rs. 978.25 The present petition is directed against the aforesaid two orders.

    3. The learned counsel for the petitioners has urged that the Authority under the Payment of Wages Act as well as the Additional District Judge hearing appeal against the order of the Authority had no jurisdiction to record any finding as to whether Dal Singar remained absent from duty for the period for which his claim for wages was raised. According to the learned counsel the Railway Administration was entitled to deduct wages of Dal Singar opposite party No. 1 as he remained absent from duty; the decision of the Railway Administration could not be interfered with or questioned by the Authority or by the District Judge; both the courts, the Authority as well as District Judge have exceeded their jurisdiction.

    4. Payment of Wages Act is a special enactment which ensures speedy recovery of wages. Sec. 15 lays down that if any deduction from wages is wrongly made or if any delay is caused in payment of the wages, the employee concerned may file an application before the Authority for the payment of his wages. After hearing the parties, the Authority is empowered to direct the employer to make the payment, 1 Sec. 7(2) of the Act enumerates deductions from the wages of an employee which are prescribed under the Act. Clause (b) of Sub-sec. (2) of Sec. 7 lays down that deductions from the wages of an employed person can be made in accordance with the provisions of the Act which may be for absence from duty. Similarly, clause (h) of Sub-sec. (2) of the same section permits deduction of wages if such deduction is made under an order of a Court or authority competent to make such order. Sec. 9 of the Act further lays down the circumstances under which deductions permissible under clause (b) of Sub-sec. (2) of Sec. 7 to be made. These provisions clearly show that deductions from the wages of an employee are permissible only if the employee wilfully and voluntarily absents himself from duty. If the employee is prevented from resuming his duty by any officer of the employer, in that event no deduction of wages is permissible under the Act. In a case where deductions are made by the employer and if the matter is agitated before the Authority, it is incumbent on the employer to establish that the deductions from the wages of the employee were made in accordance with provisions contained in the Act. If the employer claims right to deduct wages on account of absence from duty, it would be the duty of the employer to place material before the Authority to show that the employee concerned remained wilfully absent from duty, or that an order had been passed by a competent Authority for the deduction of wages. If this burden is not discharged by the employer, the employee would be entitled to his wages.

    5. In the present case, Dal Singh the affected employee asserted before ??? Authority that he reported for work ??? was not allowed to resume his duty by ??? officers of the Railway Administration. An issue was framed on that question Evidence was led by both the parties are thereafter the Authority as well as the Additional District Judge recorded finding that the Railways Administration had ??? to prove that the employee remain absent voluntarily from duty during ??? period in question. On the contrary ??? the courts have held that Dal Singar, ??? party No. 1 reported to duty but, was not allowed to resume work as his ??? mediate superior officer was annoyed ??? him. Repelling the contention of ??? way administration the District Judge ??? rightly observed that if the employee ??? to remain absent voluntarily for period of one year the Railway Administration would have certainly taken ??? against him, he would have been dismiss from service. No charge-sheet was, he ever, issued against him, no department enquiry was held, or any punishment awarded to Dal Singar, and further order for deduction of wages was pass by any competent authority in consequently of any departmental inquiry. The ??? dings recorded by the Authority and Additional District Judge clearly show ??? opposite party No. 1 did not absent ??? self voluntarly from his duty during period in question. The petitioners' ??? that they were entitled to ??? hold Dal Singar's wages under Sec. ??? (b) of the Act therefore fails.

    6. Learned counsel for the petitioner has urged that the Authority as well as District Judge had no jurisdiction to ??? the aforesaid finding as it was within exclusive jurisdiction of the Railway ministration to decide the question wether the employee remained absent ??? duty or not. Once that decision is ??? by competent officers of the Railway ministration, the Authority has no ??? to investigate that question of sit in appeal upon the orders passed the officers of the Railway Department earned counsel has placed reliance on the ??? Bench case of Kundan Lal v. Union of India.1

    7. In Kundan Lal's case a Division ??? of this Court held that it was not open to the Authority under the Payment Wages Act to sit in appeal over the ??? of punishment passed by the Railway Authorities against their employee, and it was not open to such an employee to ??? the Authority under the Payment Wages Act to set at naught the decisions the authority under the Railway Establishment Code. The facts of that case could show that the Railway employee in at case was charged for having ??? mis-conduct. A departmental inquiry is held, thereafter an order of punishment was passed against him, requiring the ??? to pay certain amount of money the Railway Administration to make ??? the loss suffered by the Railway ??? on account of the negligence that employee. It was in pursuance of ??? said order of punishment that ??? were made from the salary of that ???. The employee, however, ??? the Authority under the Payment Wages Act. The Authority made an inquiry into the question whether the loss used to the Railway Administration was ??? to the negligence of the employee, the Authority recorded findings that the employee was not responsible for the loss ??? therefore, the deduction of wages was ???. The Authority ignored the ??? recorded by the officers of the Railway in the departmental proceedings, ??? it recorded its own findings on the question which were the subject matter of ??? proceedings against the employee. The Union of India thereupon ??? a writ petition before this Court which is allowed and a special appeal filed by ??? Railway employee was dismissed. It is under the aforesaid circumstances that is court held that the Authority had no ??? to sit in appeal over the orders punishment passed by the Railway ??? its employee. There is no doubt that once an order as required under the rules regulating the service conditions of an employee is passed, the Authority cannot sit in appeal over that order while exercising jurisdiction under the Payment of Wages Act. In the present case, however, that situation does not prevail. No order of a competent authority has been placed before this Court showing that any inquiry was held or that any findings were recorded by any competent officer of the Railway Administration, holding that Dal Singar respondent No. 1 remained voluntarily absent from duty during the period in question. In the absence of any such order or decision by the Railway Authorities the Authority was, in my opinion, justified in considering the question whether the deductions were made according to the provisions contained in the Payment of Wages Act and while determining that question the Authority had full jurisdiction to investigate and record findings on incidental matters.

    8. The scope of jurisdiction of the Authority under the Act while exercising its powers under Sec. 15 was considered at length by the Supreme Court in Sri Ambika Mills v. S.B Bhatt.2 After analysing the provisions of the Act their Lordships held that the jurisdiction conferred on the Authority to deal with the question prescribed under Sec. 15 of the Act was exclusive; but, at the same time that jurisdiction was narrow. Their Lordships made the following observation:

    “In dealing with the claims arising out of deduction or delay made in payment of wages, the Authority inevitably would have to consider questions incidental to the said matters. In determining the scope of these incidental questions care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction is not unreasonably or unduly extended. Care must also be taken to see that the scope of these incidental questions is not unduly limited so as to affect or impair the limited jurisdiction conferred on the authority.”

    9. After considering the various judicial decisions cited before the Court, Their Lordships observed:

    “In our opinion, it would be inexpedient to lay down any hard and fast or general rule which would afford a determining test to demarcate the field of incidental facts which can be legitimately considered by the authority and those which cannot be so considered.”

    10. Similar observations were made by the Supreme Court in the case of Payment of wages Inspector v. Suraj Mal Mehta.3

    11. The law laid down by the Supreme Court makes it clear that the Authority while exercising its exclusive powers under Sec. 15 of the Act is empowered to investigate and inquire into incidental matters which may be necessary for the exercise of that power. In the present case the sole plea raised by the petitioners for the deduction of wages of the employee was that he remained absent voluntarily from duty during the period in question. The employee on the other hand denied to have remained absent. According to him he reported for duty, but he was not allowed to work. The Railway Administration itself did not held any inquiry nor any competent officer or authority recorded any findings on that question. No order of any competent authority holding that Dal Singar opposite party No. 1 remained voluntarily absent throughout the period in question, was placed before the Authority or the District Judge. As already observed no such order has been filed even before this Court. Under the circumstances, the Authority had to investigate the facts on the basis of which petitioners justified deduction of wages. On the evidence on record the Authority recorded findings that the employee did not voluntarily absent from duty. The findings recorded by the Authority was upheld in appeal. In the absence of any order or finding recorded or produced by the petitioners the Authority and the District Judge were fully entitled to record their own findings on the question.

    12. Learned counsel for the petitioners has then urged that it was not incumbent on the Railway Administration to have filed any order before this Court or before the Authority or the District Judge, and the mere statement on behalf of the Railway Administration that the employee, opposite party No. 1 remained voluntarily absent during the period in question, should have been accepted. He has urged that burden of proof to establish illegal deduction was on the employee and the Railway administration was not required to produce any order or to lead any evidence before the Prescribed Authority. There is no force in this submission. As already observed, whenever a right is claimed by the employer to deduct wages of its employee, it has to establish that the deduction was made in accordance with the provisions contained in the Act. Once it is proved that there was a service contract and in pursuance of that service contract the employer was liable to pay wages to its employee and that such wages were not paid, then a heavy burden would lie on the employer to justify its action. In the present case similar situation prevailed. The petitioners admitted to have deducted wages, therefore, the burden lay on them to justify the deduction of wages of Dal Singar opposite party No. 1. Once deduction of wages of Dal Singar was established, the petitioners were required to justify their action by leading evidence before the Authority to show that the deductions were made in accordance to the provisions of the Act. The petitioners relied upon Sec. 7(2)(b) and (h) to justify their action, hence a heavy burden of proof lay on them to prove that deduction made by them was in accordance to Sec. (2)(b) and (h) of the Act. The petitioners failed to produce evidence before the Authority that any inquiry had been held against Dal Singar of that any order had been passed by a competent authority holding Dal Singar to have remained voluntarily absent from duty, Similarly, no order passed by any competent authority as required by clause (h) of Sec. 7(2) of the Act was produced by the petitioners before the Authority or even before his Court. A bald statement of the petitioners without any satisfactory evidence, could not be sufficient in law to reject the employee's claim. Sec. 7(2)(h) pre-??? existence of an order issued by a Court of law or by a competent authority, which include officers of the Railway administration authorised under the rules, directing for the deduction of wages of the employee. If no such order it produced, ??? proved to have been issued, the Authority shall have full jurisdiction to reject he employee's plea. The petitioners have ??? filed any order as contemplated by Sec. (2)(h) of the Act, hence they were not ??? to deduct the wages. The petitioners failed to discharge their burden; ??? the Authority and the District Judge ??? decreed the claim of opposite party No. 1.

    13. In the result, the petition is dismissed; but since no one has appeared to ??? it on behalf of the opposite ???, there will be no order as to costs.

    Petition dismissed.

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    Comments

    Divisional Accounts Officer, And Another v. Dal Singar, Fitter Khalasi And Others Opposite-Parties.
    (Sep 9, 1971)