RAJASTHAN HIGH COURT

          Maharaja Shri Umaid Mills Ltd.

          Vs.

          Collector

          Civil Writ No. 274 of 1958
          (Modi and Chhangani, JJ.)

          11.11.1959

          JUDGMENT

Modi, J.

1. This is a writ application by the Maharaja Shri Umaid Mills Ltd. Pali through its
manager under Art. 226 and 227 of the Constitution challenging an order of the
District Magistrate, Pali, dated the 17th October, 1958, the Authority appointed under
the Payment of Wages Act, 1936 (No. IV of 1936) (hereinafter referred to as the Act)
in circumstances presently to be mentioned.

2. The opposite parties Nos. 2 to 52 are workmen of the aforesaid Mills in its weaving
department. They made an application to the said authority, (which was not dated but
must have been filed before the 25th August, 1958), stating that "the authorities of

Mills have unlawfully started deducting the above said  1/- attendance price every
month from our monthly wages from March 1958 uptil now and also for future.
Whereas such deduction of attendance price exists in any books of Indian Labour
Laws and Industrial Legislation. This approach is in accordance with Payment of
Wages Act, 1936." This is almost the entire application which was filed by the
opposite parties before the Authority. Thereupon a notice was issued to the petitioner
on the 25th August, 1958, asking him to see the Authority on the 26th August, 1958.
A reply was filed on behalf of the petitioner on the 10th October, 1958, in which
several objections to the maintainability of the application of the opposite parties were
raised. It was submitted that a payment of rupee one per mensem was made in the past
as a prize to encourage the habit of regularity in attendance among the workers but
that such a prize did not fall within the definition of the term "wages" as defined in the
Act, and, therefore, the application of the opposite parties was misconceived and not
maintainable in law. It was further submitted that this arrangement was in vogue in
accordance with an earlier award based on a settlement which had been arrived at
between the parties in 1955, but thereafter a subsequent settlement had been arrived at
on the 26th February, 1958 between the management and two trade unions of the
workers of the Mills, namely, The Textile Labor Union and the Rashtriya Mazdoor
Congress, both of which were functioning at all relevant times and which between
them represented all the workmen, by virtue whereof certain additional benefits such
as bonus and gratuity were given to the workers and the attendance prize in question
was abolished. It was also submitted that the opposite parties as also the other
workmen of the Mills were enjoying the additional benefits in accordance with these
settlements, and, therefore, they were not entitled to claim the attendance prize in
question. It may also be pointed out here that it is common ground before us that an
industrial dispute has been raised by some of the workmen with reference to the
binding nature of these settlements and that is pending before the Industrial Tribunal
of this State. Lastly, it was urged that the application made by the opposite parties was
entirely irregular inasmuch as it did not specify the value of the relief sought by them
nor they claimed any relief, and even the allegations made therein had not been
certified as required by form B of the application provided under Appendix 1 of the
Act. It was, therefore, prayed that the application should be dismissed on that ground
alone. On the 10th October, 1958, however the matter did not make any further
progress, and the case was adjourned to the 17th October, 1958, at the request of the
opposite parties who stated that they wished to file a rejoinder (see Ex. C.). No
rejoinder was, however, filed on the 17th October, and it appears that arguments were
heard on that very day, and the Authority eventually held that the application of the
opposite parties had force and that whatever amount had been deducted should be
paid. As for the argument advanced on behalf of the petitioner that the attendance
prize had been stopped as a result of the settlements arrived at between the petitioner
and its workmen dated the 26th February, 1958, the Authority held that such
settlements were null and void by virtue of sec. 23 of the Act, and therefore, they were
of no force. The Authority also seems to have held that the alleged deduction was bad
because the provisions of sec. 8 of the Act had not been complied with, no notice
having been exhibited in that behalf under sub-sec. (2) of sec. 8 (this has been
obviously mis-described as a proviso), although it is difficult to see how that section
had any relevance, because it deals with the matter of fines, and not with the
withholding of any allowance like the one with which we are concerned in the present
case. It is this order which is being impugned in the present application.

3. The application is opposed by the opposite parties, mainly on the grounds that
although settlement was arrived at between the management and the two trade unions
on the 26th February, 1958, the latter did not represent the majority of the workmen
including the opposite parties, and so they could not be held to be bound by it and that
the revised wage structure brought about by the aforesaid settlement had in fact
reduced the wages of the workmen and did not benefit them and in any case such a
settlement was void under sec. 23 of the Act and the opposite parties could not
therefore be held bound to it in any manner whatsoever.

4. At the very outset, we should like to observe that the Authority under the Payment
of Wages Act who was the District Magistrate in the present case should have seen to
it that there was a proper application before him to enable him to take proper
proceedings under the Act. The application filed by the opposite parties before the
Authority has been set out almost in extenso above, and we would unhesitatingly say
that it is a model of what an application under the Act ought not to be. Leaving aside
minor defects altogether, the application complains of an illegal deduction of wages.
But strangely enough, it does not mention what was the quantum of the wage of the
workers per month at the material times before the alleged deduction and after it and
no reference to a subsisting contract is made in that connection. Again, the application
does not specify any value of the relief claimed. Nor does the application mention any
relief which was sought to be prayed for. R. 3 of the Payment of Wages Procedure
Rules read with sec. 16 of the Act clearly provides inter alia that a single application
made by a group of persons under sec. 15(2) of the Act shall be in Form B prescribed
under the Rules. Last but not the least, the application does not bear any certificate by
the applicants as required under the rules to the effect that the statement of facts
contained in the application was correct to the best of their knowledge or belief as the
case may be. We have taken this opportunity of pointing out some of the glaring
defects of the application in question to indicate our disapproval of the entertaining of
such applications, and to ensure do future that the Authority under the Act sees to it
that he must have a proper application in accordance with law, presented to him before
he entertains the same or gives his verdict on it. The importance of what we have
pointed out above would, we hope, unmistakably appear to all those concerned when
we invite attention to sec. 22 of the Act which bars the jurisdiction of civil courts to
entertain any suit in respect of all claimers which, broadly speaking, fall within the
scope of this Act. It must be remembered that the scheme of the Act is to set up a
special tribunal with a special jurisdiction conferred upon it and to oust the jurisdiction
of the civil courts to the extent of such special jurisdiction.

5. This brings us to the merits of the order passed by the Authority in the present case.
The factual position which was not disputed before us is somewhat like this. It is
common ground that the opposite parties (as also some other workmen in the Mills)
used to, get an attendance prize of  1/- per month provided that they did not absent
themselves for more than three days in a month in accordance with an industrial award
made prior to the 26th February, 1958. For some time prior to the last-mentioned date
differences arose between the parties and so two fresh settlements (Exs. E. and F.)
were come to between the parties, and the workmen were represented therein by two
Unions, namely, the Textile Labor Union and the Rashtriya Mazdoor Congress Pali.
According to the petitioner, these organizations represented all the workmen
numbering about 2600 workmen in the Mills, though the opposite parties seem to
dispute this. Be that as it may, by these two settlements, the whole workload and the
wage structure was revised and it, is claimed by the petitioner, which is not disputed,
that the system of paying gratuity to the work- men was introduced for the first time
which did not exist before. Since 5th March, 1958, all the workmen, including the
opposite parties, have been working on the basis so revised. It is important to mention
in this connection that from the date of these settlements the earlier ward dated the
23rd February, 1955, published in the Rajasthan Rajpatra dated the 26th February
1955, was to stand terminated. By clause (5) of the settlement it was provided that the
adjustments of personal allowance, personal dearness allowance and attendance prize
in case of old rate piece workers was to be as mentioned in schedule G and this is how
the so called attendance prize has come to be abolished. The position which emerges
from the aforementioned facts is that according to the petitioner the terms of
employment subsist at the time of the application before the Authority were governed
by the settlements dated the 26th February, 1958, and the earlier award dated the 23rd
February, 1955, no longer remained in operation.

6. In order to complete the picture, it is necessary to mention that an industrial dispute
having lately been raised with respect to this settlement by some of the workmen who
claimed not to belong to either of the Trade Unions who took part in the settlement
and were signatories to it, the State Government, by its notification dated the 8th May,
1959 published in the Rajasthan Rajpatra dated the 2nd July, 1959, has made a
reference to the Industrial Tribunal of the State as to whether the said settlement had
reduced the total emoluments of the workers by its operation and whether the
agreement can be said to be operative on workmen who did not belong to either of the
Unions and if so to what relief they were entitled.

7. Against this background, the question to determine is whether the abolition of the so
called attendance prize amounts to a deduction of wages within the meaning of the
Act. Or putting the matter in a slightly different manner, the question is whether the
Authority under the Act had or would have jurisdiction to deal with the matter which
was brought before it for a direction in the circumstances of the case.

8. On a most careful and anxious consideration of this question, our answer to it is in
the negative. As we have already pointed out above, the Act we are called upon to
construe is a special Act, and has a limited scope, but within its proper limits has an
exclusive jurisdiction and bars the jurisdiction of civil courts altogether. The object of
the Act is to eliminate all avoidable delays in the payment of wages to workmen
within the meaning of this Act and to protect them from unlawful deductions in the
payment of their wages. As held in Arvind Mills v. K. R. Gadgil, 1 In the general
purpose of the Act is to ensure that employed persons shall be paid their wages in a
particular form and at regular intervals and without any an authorized deductions.
Now, the term "wages" has been defined by sec. 2(vi) of the Act. It is unnecessary to
quote this definition as we shall assume for our present purposes without pronouncing
any definite opinion on it that the prize attendance falls within the ambit of this
definition. All the same, it is important to remember that the term "wages", shown of
all verbiage, means remuneration in terms of money payable by an employer to his
employee for services rendered according to the terms of the contract between them.
See Divisional Engineer, G. I. P. Rly. v. Mahadeo, 2 Sec. 7 specifies the permissible
deductions from such wages, and all other deductions would therefore be unlawful.
But where the real dispute is as regards the very contract by which wages are to be
governed in a particular case, such a dispute is a mere fundamental one and seems
taus to fall outside the scope of this Act which is indeed limited. Thus, where the
employer relies on one contract which according to his submission is the subsisting
contract and governs the quantum of wages payable at all material times, but the
employed persons repudiate such a contract and contend that their wages are governed
by another contract, so that the wages claimed or the deductions complained against
would be valid or not according as the one or the other contract is adjudged to be the
operative one, then such a controversy is, in our considered opinion, foreign to the
limited scope of the Act and cannot be legitimately decided by any authority
appointed under the Act. The essential dispute in such a case lies, if we may say so,
far deeper and involves the determination of issues far more serious and complicated
and must be left to other competent tribunals or courts to decide.
9. An almost parallel case came before the Bombay High Court in Anthony S. Almeda
v. R. M. Taylor, 3 The following observations of Chagla C. J. who delivered the
judgment of the Bench are opposite and may well he reproduced here:

       "What the Authority is asked to decide is not what is the contract between the
       employer and the employee but which is the contract which regulates the terms
       of employment between the parties.
       In our opinion, the jurisdiction of the Authority is limited to decide what is the
       contract in the sense of constructing the contract in order to determine the
       liability of the employer to pay wages. But when the employer and the
       employee come before him and rely on different contracts, it is not within his
       jurisdiction to decide which of the two contracts holds the field, which of them
       is subsisting and under which of them the employer is liable to pay wages." (the
       italic is ours)

This case was later approved by a Full Bench of the Bombay High Court in Viswanath
Tukaram v. G. M., Central Rly.,4 and if we may say so, with all respect, enunciates the
correct, principle.

10. Summing up the whole position, therefore, we may say that where the essential
question is really not as to what the wages of the persons aggrieved were nor that there
was any delay in the payment of those wages nor still that there was any unlawful
deduction from such wage, but the question is whether the wages fall rightly to be
governed by a contract relied upon by the employer as the subsisting contract or
whether it falls to be governed by an earlier contract relied upon by the employed
persons and the validity of the subsisting contract is challenged, and the question is
which of the two contracts would or should govern the relationship of the parties, then
the Authority under the Act in question has no jurisdiction to decide which of the
contracts should regulate the rights of the parties. We hold accordingly.

11. It was next contended before us that the cases of The Bombay High Court to which
we have referred above have not considered sec. 23 of the Act and therefore they
should not be accepted as laying down the sound law, and that the authority in the
present case had rightly held that the agreements of 1956 were void by virtue of sec.
23 and, therefore, the earlier award of 1955 still held the field. We have carefully
considered this argument and have not felt impressed by it. Sec. 23 reads as follows:

       "Any contract or agreement whether made right conferred by this Act shall be
       null and void before or after the commencement of this Act in so far as it
       purports to deprive him of such whereby an employed person relinquishes any
       right."

The contracts which are made null and void by this section, even though they might
have been entered into before the commencement of this Act, are those which relate to
rights conferred by this Act but not to others. The only rights which according to its
main provisions, it confers are that the persons employed in certain industries shall
receive their "agreed" wages in the prescribed form without delay and without any
unlawful fines or deductions from their wages. It clearly seems to us that the Act does
not confer any right to receive a particular wage irrespective of agreement between the
parties nor even that it bans all alterations in the structure of wages which might be
occasioned by the exigencies of a particular industry, at a particular time, by mutual
agreements arrived at between the employer and the persons employed. All that this
section, therefore, enjoins is that the rights of an employed person to receive a regular
payment of his wage which has been conferred upon him by sec. 4, 5 and 6 or his
right to receive his wages without deductions of any kind except those permitted by
sec. 7 and sec. 8 shall be preserved to him in tact notwithstanding any contract to the
contrary which might have been made between the employer and the employees
whether before or after the commencement of this Act. The section does not ban any
other contracts. This provision of law, therefore, in no way, affects the conclusion at
which we have arrived in the foregoing part of our judgment and we have no doubt
that the Authority under the Act in the present case fell into a palpable and manifest
error when it came to the conclusion that the agreement dated the 26th February, 1956,
was null and void and of no effect by virtue of the provision contained in sec. 23 of the
Act. We are categorically of the view that sec. 23 is not at all attracted into application
in the circumstances of this case and we hold accordingly.

12. For the foregoing reasons, it must inevitably follow that the order of the Authority
under the Act is bad for want of jurisdiction and cannot be sustained. We, therefore,
allow this application and quash the impugned order dated the 17th October, 1958, but
without any order as to costs.

Cases Referred.

1. A.I.R 1941 Bom 26
2. A.I.R 1955 S.C 295
3. A.I.R 1956 Bom 737
4. A.I.R 1958 Bom 111