A D DIVEKAR Vs. DINESH MILLS LTD

JUDGEMENT

(1.) THIS is an application under Articles 226 and 227 of the Constitution, which arises out of an application made by the district labour officer and inspector under the Payment of Wages Act to the authority under the Payment of Wages Act at Baroda in respect of compensation payable to 450 workmen and 20 clerks of opponent 2, Sri Dinesh Mills, Ltd. whose services were terminated by the mill on the ground that the mill was being closed. It was the contention of the inspector that there was payable to the employees of the mill, under the provisions of Section 25f, Clause (b), of the Industrial Disputes Act, retrenchment compensation was "wages" within the meaning of that term as defined in the Payment of Wages Act. The mill has failed to pay this amount, and consequently there was either deduction of wages or delay in payment of wages, upon which he was entitled to make an application to the authority under the Payment of Wages Act under Section 15 of that Act.

(2.) THE application was opposed on behalf of the mill, and the only contentions which it will be necessary to state for the purpose of this application are that the authority under the Payment of Wages Act had no jurisdiction to hear the application of the inspector, and in the second instance the representative union, acting on behalf of the workers, had made an application to the industrial court that the services of the employees were not properly terminated and the employees continued in service. An appeal from the unfavourable decision of the court had been filed to the Appellate Tribunal, and the employees could not, in the same breath, contend in one of that their retrenchment was illegal and they still continued in service and then ask from another court compensation for retrenchment, which must be upon the basis that the termination of the services of the employees was perfectly legal. The mill contended that the authority under the Payment of Wages Act had no jurisdiction to hear the dispute, because Section 25f, Clause (b), was ultra vires the Constitution, because awarding compensation restricts the right of the employer to carry on his business, which included the right to close his business, when he liked. They contended, in the second instance, that even if the Act was not void of the Constitution, there was no compensation payable to the employees, inasmuch as the closure of the mills was obligatory upon the mill, as it could not carry on the business of manufacture profitably and the employees could not be said to be retrenched. The mills said, in the third Instance, that assuming that compensation was payable to the employees under Section 25f, Clause (b), of the Industrial Disputes Act, it could not be said that it was " wages. " "wages" have been defined in the Payment of Wages Act to include, among other things, sums payable upon the termination of services. But this Court has taken the view in Sarin v. Patil 53 Bom. L. R. 674, that damages claimed by a workman upon the wrongful dismissal of his services did not amount to "wages" within the meaning of that term as defined by the Payment of Wages Act. Compensation payable upon the termination of services would not, therefore, fall within the part of the definition, which includes therein sums payable to any person by reason of the termination of his employment. "wages" has also been defined to mean remuneration ?which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise. . . . But compensation payable upon termination of service would not amount to remuneration, nor could the amount claimed by the employee be said to be payable. The mill contended finally that in any case the contentions which they raised included questions like Section 25p, Clause (b), being void as contravening Article 19 (1) (g) of the Constitution, and the authority under the Payment of Wages Act had no jurisdiction to decide such complicated questions. Its jurisdiction (sic) is delay in payment of wages, when it was admitted that wages were due to the employees. When the employer was flatly denying his liability to pay the alleged wages, and as a matter of fact even the constitutionality of the provisions of the Industrial Disputes Act, under which the employees were claiming compensation, the authority constituted under the Payment of Wages Act had no jurisdiction to decide the question. 2. The learned authority under the Payment of Wages Act has decided that he had no jurisdiction to decide the payability of the compensation, because it was not "wages," and above he said that inasmuch as it appeared the representative union had made an application to the industrial court, from the decision in which an appeal had been filed to the Labour Appellate Tribunal in which the employees maintained that the termination of their services were wrongful and they still continued in service, they could not, in the same breath, by another application, claim that compensation was payable to them upon termination of their services.

(3.) THE inspector has come to this Court under Articles 226 and 227 of the Constitution for quashing the order of the authority under the Payment of Wages Act and giving a suitable direction to it; and it is obvious, in the first instance, that inasmuch as the inspector contended that there was compensation payable to the employees upon termination of their services, and such compensation amounted to "wages" which had not been paid, the authority under the Payment of Wages Act had to decide the question whether what the employees claimed amounted to "wages" or not. The jurisdiction of the authority depended upon the claim of the employees being for "wages," and the authority had jurisdiction to decide every question of fact or law which arose in determining as to whether the claim was in respect of deduction or delay in payment of wages. If the amount which the employees claimed amounted to wages, and they were not paid, it is obvious that there was either deduction or delay in payment of wages, and the authority had jurisdiction consequently to determine as to whether the amount which the employees claimed was "wages. " The inspector said that the amount was payable to the employee under Section 25f, Clause (b), of the Industrial Disputes Act. The mill challenged that this law was unconstitutional, contending that it offended against Article 19 (1) (g) of the Constitution. This question has admittedly now been decided by a Division Bench of this Court in K. N. Joglekar v. Barsi Liqht Railway 57 Bom. L. R. 448 : 1955--I L. L. J. 371, which decision is binding upon all the courts and tribunals subordinate to this Court. The section is held not to offend against Article 19 (1) (g), and so far as this part of the contention of the mill is concerned there is nothing for the authority under the Payment of Wages Act to decide hereafter. The second question which was raised by the mill as to whether compensation was payable to the employees upon the termination of their services under Section 25f, Clause (b), has again been decided by this Court in the same case, where it was held that Section 2 (oo) defined "retrenchment" to mean the termination by the employer of the service of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action, and whatever the reason for which the employer may have terminated the service of a workman if it was not by way of punishment, the termination amounted to retrenchment within this definition. In any case, even if this Court had not decided these two questions in K. N. Joglekar v. Barsi Light Railway 57 Bom. L. R. 448 : 1955--I L. L. J. 371, whether any amount would be payable to the employees or not under the provisions of Section 25p, Clause (b), of the Industrial Disputes Act would depend upon the decision of the question as to the unconstitutionality of that section and whether the amount, which the employee claimed under the provisions of that section could be said to be claimable by him at all, on the ground that he was retrenched when his services were terminated by the employers on the ground that they were closing an unprofitable manufacturing plant. It could be convenient to go into the question whether the authority constituted under the Payment of Wages Act had jurisdiction to decide these questions later. But it had authority to decide the question as to whether, assuming that the employees were entitled to the sum which they claimed under the provisions of Section 25f Clause (b), of the Industrial Disputes Act, it could be said that this amount fell within the term "sum payable upon the termination of their services. . . . as used in the definition of "wages" or it could be said to be "remuneration payable to the employees" and therefore "wages".