MAJOOR SAHKARI BANK LTD Vs. JASMAT GOPAL

JUDGEMENT

(1.) This special civil application raises a short question regarding the construction of section 24A of the Bombay Co-operative Societies Act 1925 and section 7(2)(j) of the Payment of Wages Act IV of 1936. The question arises in the following manner:- Petitioner No. 1 society is a Co-operative society registered under the Bombay Co-operative Societies Act 1925 and its business is inter alia to grant loans to its members who are workers in the textile mills in Ahmedabad. Under the by-laws of the society only the permanent employees of the textile mills in Ahmedabad and who are also members of the Textile Labour Association Ahmedabad could become members of the society. In accordance with these by-laws respondent No. 1 was a member of petitioner No. 1 society. One Natwarlal Mohanlal another member of the society applied in February 1957 for a loan from the society. Under the said by-laws the society would advance such a loan on the personal security of a member if two other members were to stand as sureties for him. Respondent No. 1 and one Ahmed Dawood both of whom were at the material time employees of the second petitioner mills stood sureties for Natwarlal who also happened to be an employee at that time of the second petitioner mills. Natwarlal executed a writing in favour of the society agreeing therein to repay the loan of Rs. 600/granted by the society. Below the said writing the first respondent and the said Ahmed executed a bond of suretyship as contemplated by section 24A of the Co-operative Societies Act 1925 The said writing inter alia provided that the sureties agreed that they were liable jointly and severally to pay in time and properly the aforesaid amount of loan together with interest thereupon and all costs to the bank subject to all the conditions accepted by the debtor the said Natwarlal Mohanlal and to the rules of the society regarding the loan. It also provided that in case the said Natwarlal failed to pay regularly the instalments the sureties agreed that the society should recover all the amounts due in the account of the said Natwarlal from our wages dearness allowance bonus payable to us by the mill (i. e. the second petitioner mills) by getting the same deducted from the mill in full or in instalment as the Bank thinks fit. Before the loan of Rs. 600/was repaid in full Natwarlal and the said Ahmed Dawood left the service of the second petitioner mills. It is an admitted fact that only an amount of Rs. 345/out of the said amount of Rs. 600/was paid by the said Ahmed Dawood and Natwarlal leaving the balance unpaid. Thereafter by its letter dated July 9 1958 the first petitioner society called upon the second petitioner mills to deduct the amount from the wages dearness allowance bonus etc. payable to the first respondent and the said Ahmed Dawood by the mills and to pay the deducted amount to the society until the debt was wiped off. The said letter drew the attention of the second petitioner mills to the provisions of section 24A(2) of the Bombay Co-operative Societies Act 1925 stating therein that it was permissible to the mills to make such deductions under the Payment of Wages Act 1926 It appears that in pursuance of that letter the petitioner mills withheld payment of wages to the first respondents and thereupon the first respondent filed Application No. 281 of 1958 under the Payment of Wages Act before the Authority under the Act. The defence of the second petitioner mills was that they had retained the said amount from the first respondent in view of the letter dated July 4 1958 received from the first petitioner society and in view of the fact that the society had approached them under the provisions of section 24A of the Bombay Co-operative Societies Act 1925 and section 7(2)(j) of the Payment of Wages Act 1936.

(2.) The Authority under the Payment of Wages Act raised two preliminary issues (1) whether the bank was entitled to require the petitioner mills to make deductions from the wages payable to the first respondent and (2) if not whether such deductions were illegal. The Authority found the first issue in the negative and the second in the affirmative with the result that the only thing left to be done was to decide as to what was the amount of deduction made from the wages during the period from June 1 1956 to August 9 1958 This petition challenges the aforesaid findings given by the Authority on the said two preliminary issues.

(3.) Mr. Nanavati appearing for the two petitioners attacked the decision of the Authority on the ground that it was contrary to the provisions of section 24A of the Bombay Co-operative Societies Act 1925 and section 7(2)(j) of the Payment of Wages Act 1936 He contended that on a true construction of these provisions the petitioner mills were bound to withhold the payment of wages for the aforesaid period to the first respondent on a requisition made therefor by the first petitioner society upon the ground that there was a debt due and payable by the first respondent to the society. He further contended that the provisions of section 24A being mandatory the petitioner mills were not only bound to withhold and deduct the payment but that such deductions were lawful and therefore no application under the Payment of Wages Act was maintainable at the instance of the first respondent.