IN THE HIGH COURT OF ALLAHABAD
A. B. Srivastava, J.
D.C.M.LIMITED - Appellant
Versus
PRESCRIBED AUTHORITY (PAYMENT OF WAGES ACT) - Respondents
C. M. W. P. 9328 Of 1987
Decided On : 07/12/1996
PAYMENT OF WAGES ACT - SECTION 15 - JURISDICTION OF PRESCRIBED AUTHORITY - SCOPE - DISPUTE REGARDING EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP - NOT INCIDENTAL TO CLAIM FOR DEDUCTION OF WAGES - CANNOT BE DECIDED BY PRESCRIBED AUTHORITY.
Fact of the Case:
Employees of a sugar mill filed a claim under Section 15 of the Payment of Wages Act, alleging that the mill had deducted wages and delayed payment. The mill contested the claim, arguing that the employees were not its employees but rather those of a contractor. The prescribed authority found in favor of the employees and awarded them compensation.
Finding of the Court:
The court held that the prescribed authority did not have jurisdiction to decide the question of whether the employees were employees of the mill or the contractor. This was a contentious issue that required an in-depth inquiry and consideration of questions of law and facts, which could not be decided in summary proceedings under Section 15 of the Payment of Wages Act.
Issues: 1. Whether the prescribed authority under the Payment of Wages Act has jurisdiction to determine the existence of an employer-employee relationship in a claim for deduction of wages? 2. Whether the question of employer-employee relationship is incidental to the claim for deduction of wages and can be decided by the prescribed authority?
Ratio Decidendi: The court relied on the Supreme Court decision in Payment of Wages Inspector, Ujjain v. Suraj Mal Metha and Anr., which held that the jurisdiction of the prescribed authority under Section 15 of the Payment of Wages Act is limited and does not extend to deciding contentious questions of employer-employee relationship. The court also noted that the Industrial Disputes Act provides a more appropriate forum for resolving such disputes.
Final Decision: The court allowed the writ petition and quashed the impugned orders of the prescribed authority. It held that the employees could seek a reference of their claim to the competent Labour Court under the provisions of the Industrial Disputes Act.
( 1 ) BY means of this writ petition, the petitioner has sought a declaration that the respondent No. 1 has no jurisdiction to act as the Prescribed Authority under the Payment of Wages Act and for quashing the order dated September 12, 1984 of the Prescribed Authority accepting the claims of the respondent Nos. 4 to 29 to be within limitation and order dated March 31, 1987 awarding a total sum of Rs 11,51,150/- to the respondent Nos. 4 to 29. The break up being Rs 1,04,650/towards payment of deductions made from the wages of these respondents and Rupees 10,46,500/- being compensation at ten times of the said amount. The amount awarded to each of the respondent being Rs. 40,250/ -.
( 2 ) THE respondent Nos. 4 to 29 made applica tion under Section 15 of the Payment of Wages act, 1936 to the respondent No. 1, the prescribed authority alleging that they are employed in the daurala Sugar Works, Meerut, a unit of M/s Delhi Cloth and General Mill Ltd as Palledars. Their terms of employment and conditions are governed by the I and II Sugar Wage Board re ports. The petitioner employer has not paid the wages of the respondents Nos. 4 to 29 for the pe riod October 1, 1981 as fixed by the II Sugar Wage Board. For the period June 1, 1980 to Sep tember 30, 1981 they have been paid less amount of Rs. 100/- per month besides Rs. 550/reward and bonus Rs. 1200/- total amount of Rs. 3375/- per respondent. A claim of compensation at the rate of ten times of the amount due was also made. A prayer for condonation of delay in filing the claim was also made.
( 3 ) THE petitioner contested the claim of the respondents alleging that they are not its employees rather they are labourers of the contractor, who used to provide their services to the petitioner mill in terms of the contract. Being employees of the contractor, it is the contractor, and not the petitioner, who is liable to pay salary and other dues to the respondents, no deduction from the wages has been made and the claim is not maintainable before the prescribed authority under the payment of Wages Act.
( 4 ) BEFORE the prescribed authority both the parties led the oral and documentary evidence holding that the respondent Nos. 4 to 29 are employees of the petitioner and further finding that they are entitled to the wages from October 1981, difference of wages from June 1, 1981 to September 30, 1981 at the rate of Rs. 100/- per month, reward at Rs. 550/- per annum and bonus at the rate of Rs. 1200/- per annum which has been illegally deducted from their wages. The prescribed authority awarded the amount of wages and compensation amounting to Rs. 11,51,150/- as stated above. Aggrieved, the petitioner has come up before this Honble Court.
( 5 ) THE main contention on behalf of the petitioner upon which the impugned orders of the prescribed authority have been assailed is that the claim laid by the respondents was not cognizable by the prescribed authority under Section 15 of the Payment of Wages Act, in so far as the grant of claim involved adjudication as to whether or not the respondents were employees of the petitioner. The scope of Section15 does not envisage an enquiry into a contentious question of existence of relationship of employer and employee between the parties, such matter being within the jurisdiction of a Labour Court under the provisions of Industrial Disputes Act. Factually also it is contended that the findings and the conclusions of the prescribed authority are bad in view of overwhelming evidence indicating that the respondents were employees of a contractor who under the terms of the contract was responsible to provide the services of palledars to the petitioners Mill and was employer of the respondents, directly responsible for making payment of wages to them.
( 6 ) ON behalf of contesting respondents, on the other hand, it is contended that it is not each and every disputed question relating to status of an employee, or the terms of employment, whic
REFERRED TO : Payment of Wages Inspector, Ujjain v. Suraj Mal Metha and Anr.
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