1. Heard Sri S.D.Singh, learned counsel for the petitioner. Names of Sri Deepak Verma and Sri S.K.Srivastava are shown in the cause list for the respondents but none has appeared though the case has been called in revised except learned Standing Counsel for the respondents.
2. The common question that arises in both the matters relates to the very jurisdiction of the Prescribed Authority under Payment of Wages Act, 1936 (hereinafter referred to as "Act 1936") to decide the issue relating to relationship of employer and employee and therefore, are being heard and decided by this common judgment.
3. The writ petition is directed against order dated 7.7.1997 (Annexure 7 to the writ petition No.32242 of 1997), and 18.8.1997 (Annexure 1 to the writ petition No.974 of 1998) passed by Prescribed Authority under the Act 1936 allowing the claim of workmen regarding alleged non payment/deduction/delayed payment of their wages along with compensation.
4. Sri S.D.Singh, learned counsel for the petitioner contended that claim under Section 15 of Act 1936 can be registered by an 'employee' against 'employer' complaining about delayed or non payment of wages or wrongful deduction but when there is a serious dispute about very existence of relationship of 'employer' and 'employee' between the claimant and alleged employer, such an issue cannot be decided in a summary proceeding under Section 15 of Act 1936 Act but for the said purpose claimant has to invoke jurisdiction of regular adjudication of dispute before Labour Disputes Adjudicatory Forum by raising an Industrial Dispute. In such matters, Prescribed Authority ought not to proceed to decide seriously disputed question of employer and employee relationship. Such a audacity on the part of Prescribed Authority is wholly unwaranted and render his order without jurisdiction. The impugned order therefore cannot sustain. He placed reliance on a Division Bench decision of this Court in M/s E.Hill & Company (P) Ltd., Mirzapur Vs. City Magistrate Mirzapur & Anr., 1980(40) FLR 362.
5. Learned Standing Counsel defended the impugned order relying on the findings recorded therein and said that no interference is called for in this matter.
6. The term "employee" has not been defined as such under the Act 1936 but Section 2 contains the definition of "employed person" and "employer" as under:
"(i) "employed person" includes the legal representative of a deceased employed person;
(i-a) "employer" includes the legal representative of a deceased employer;"
7. Both the definitions are inclusive but do not throw any light on the meaning of these terms as such.
8. Similarly the term "wages" is defined in Section 2(vi) reads as under:
"wages means all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and includes-
(a) any remuneration payment under any award or settlement between the parties or other of a Court;
(b) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;
(c) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);
(d) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;
(e) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force, but does not include-
(1) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;
(2) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government;
(3) any contribution paid by the employer to any pension or provident fund, and the interest which may have accrued thereon;
(4) any travelling allowance or the value of any travelling concession;
(5) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or (6) any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d).
9. This definition of 'wages' is pari materia with the similar definition of "wages" in 2(h) of the Contract Labour (Regulation and Abolition) Act, 1970. Section 3 of Act 1936 provides that, every employer is under an obligation for payment of all wages to persons employed by him. Section 15(2) of Act 1936 entitles a person employed but not paid his wages or when there is any unauthorized deduction or delay in payment, to make an application before the Prescribed Authority i.e. authority notified under sub section (1) of Section 15 for claiming such wages. A reading of sub-section (2) and (3) of Section 15 makes it clear that the application can be moved not only against the employer but if there is any other person responsible for payment of wages of such employed person, application can be filed under Section 15(2) against such person also. To attract Section 15(2) of Act 1936, two things therefore must exist namely a person 'employee' and another person who had employed such person, namely the "employer" or other person responsible for payment of wages under Section 3 i.e. to whom the employer has authorized.
10. The limited scope of adjudication under Section 15 is regarding the claim arising out of deduction or delayed payment and not any other issue namely, the very existence of relationship of employer and employee or the question whether the claimant was a person employed or not or that the person against whom such a claim is raised whether he is an employer or the person authorized for payment or not. If in a given case an issue other than that of alleged deduction or delay in payment arises and the competent authority finds that such an issue has been raised only to defeat an otherwise bona fide claim and in its view the incidental issue raised is bogus, fictitious, superfluous or fanciful, it can continue to proceed to decide the matter but where a serious, bona fide, genuine dispute of relationship arises, this Court is also of the view that such an issue cannot be adjudicated by the authorities under Section 15(1) and (2) of the Act, 1936, lacking inherent jurisdiction to entertain such a dispute.
11. In Shri Ambica Mills Co. Ltd. Vs. S.B. Bhatt and Anr., the Apex Court observed that a jurisdiction conferred upon the authority under Section 15 is limited and exclusive, therefore, if any incidental issue is taken for adjudication, it must take care that under the guise of deciding incidental issue, limited jurisdiction is not unreasonably or unduly extended.
12. I find that to the same effect is the view taken by the Division Bench in M/s E. Hill & Company (P) Ltd. (supra) wherein this Court considered the words "all matters incidental to such claims" and quoted from Shri Ambika Mills Co. Ltd. (supra) as under:
"if a claim is made by an employee on the ground of alleged illegal deduction or alleged delay in payment of wages several relevant facts would fall to be considered. Is the applicant an employee of the opponent ?; and that refers to the subsistence of the relation between the employer and the employee. If the said fact is admitted, then the next question would be what are the terms of employment ? Is there any contract of employment in writing or is the contract oral ? If that is not a point of dispute between the parties then it would be necessary to enquire what are the terms of the admitted contract. In some cases a question may arise whether the contract which was subsisting at one time had ceased to subsist and the relationship of employer and employee had come to an end at the relevant period. In regard to an illegal deduction a question may arise whether the lock-out declared by the employer is legal or illegal. In regard to contracts of service some times parties may be at variance and may set up rival contracts, and in such a case it may be necessary to enquire which contract was in existence at the relevant time."
13. After referring to various authorities of Apex Court and various other Courts, the Division Bench in M/s E.Hill & Co. (P) Ltd. (supra) said:
"A mere denial of existence of the relationship of employer and employee may not oust the jurisdiction of the Authority under the Payment of Wages Act but where a serious controversy is raised about the existence, continuance or emergence of a fresh contract of employment, the Authority would have no jurisdiction to entertain and try the claim as the dispute may involve decisions of complicated questions of law and fact. In the present case the employee admittedly tendered his resignation, whatever be circumstances under which this step was taken. The resignation was admittedly accepted but the parties are at variance whether the employee was reinstated. According to the petitioner the letter of reinstatement was a forgery. It is not a case of mere denial of the contract of service. The very foundation for the claim of wages is in dispute. Such a question cannot possibly be characterised as incidental to the claim for wages. The Authority illegally assumed jurisdiction to entertain and try the claim of respondent No. 2 under Section 15 of the Act."
14. In the present case it was clearly pleaded by petitioners in the written statement filed before Prescribed authority that petitioners had engaged a Transporter for carrying out their goods. The concerned claimants were employees of Transporter who was under contract with the petitioner for transportation purpose only. There was no relationship of employer and employee with the claimants vis a vis the petitioner.
15. The petitioner, in both the writ petitions, is a sugar industry engaged in the manufacturing of sugar for which it purchased sugarcane from sugarcane grower and is engaged in all incidental activities for manufacturing of sugar. From the impugned order it is evident that the question of very existence of relationship of employer and employee was seriously pressed before Prescribed Authority. In its entire order it has discussed the issue of relationship, with reference to various other statutes and authorities. It has also referred to some evidences on this aspect. Apparently the Prescribed Authority, in the case in hand, has decided a seriously disputed question regarding the very existence of relationship of employer and employee between the petitioner and the claimants.
16. To my mind, this issue is not incidental to the question of deduction or delayed payment but a condition precedent to attract the very provisions of Act 1936. Therefore, in a case where the very relationship is under a serious cloud, and needs a detailed but exclusive discussion, it is beyond the jurisdiction of Prescribed Authority under Section 15(1) and (2) of the Act 1936 and has to be adjudicated in appropriate regular proceedings by raising an industrial dispute. It could not have been decided by an authority under Section 15(1) while entering a claim under Section 15(2) and assuming jurisdiction upon itself to decide the said issue. It is infact not an incidental but a substantial jurisdictional issue relating to very applicability of Act 1936. Hence this could not have been decided by Prescribed Authority under Section 15 of Act 1936. The impugned orders passed in both the writ petitions are thus wholly without jurisdiction.
17. The writ petitions, in the facts and circumstances of the case, as discussed above, are allowed. The impugned orders dated 7.7.1997 (Annexure 7 to the writ petition No.32242 of 1997), and 18.8.1997 (Annexure 1 to the writ petition No.974 of 1998) passed by Prescribed Authority are hereby quashed.
18. However, this order shall not preclude the concerned respondents workman to take recourse to such proceedings as permissible in law for enforcing their claim, if any.
Order Date :- 11.5.2012 KA