Andhra HC (Pre-Telangana)
District Co-Operative Central Bank ... vs State Of Andhra Pradesh And Ors. on 25 June, 1997
Equivalent citations: 1998(2)ALD535, 1998(2)ALT744
Author: A.S. Bhate
Bench: A.S. Bhate
ORDER N.V. Hanumanthappa, J.
1. The petitioner in all the writ petitions is the District Co-operative Central Bank Ltd., West Godavari, Eluru. The petitioner-bank filed the above writ petitions seeking a writ of Mandamus declaring the first proviso to Section 48(3) of A.P. Shops and Establishment Act 1988 as unconstitutional, arbitrary and ultra vires and inconsistent with the principles of natural justice and consequently direct the 2nd respondent to entertain and decide the appeal filed by the petitioner against the orders dated 29-12-1992 of the 3rd respondent without insisting on the deposit of back wages.
2. A few facts that are necessary to dispose of these writ petitions are as follows: -The petitioner bank engaged the workmen in all the writ petitions (4th respondent in all the writ petitions) as N.M.Rs. on daily wage basis in the petitioner bank, hereinafter referred to as 'the Management'. Subsequently they were terminated from service w.e.f 1-10-1987 on the ground that their appointments were made without following the procedure. Questioning the said termination the workmen filed writ petitions and this Hon'ble Court disposed of the writ petition directing the workmen to file an appeal under Section 48(2) of the Act and also directed the management to continue the workmen in service during the pendency of the appeal. The workmen preferred appeal before the 3rd respondent-Asst. Commissioner of Labour who in turn allowed the same holding the termination of the workmen as invalid and directed the management to regularise the services of the workmen from the date of joining into service and confer all attendant benefits on par with regular employees. The 3rd respondent further observed in the appeal that the difference of wages and other monetary benefit payable to the workman from the date of his joining services till the date of passing the order shall be deemed as back wages within the meaning of Section 48(3) of the Act. Aggrieved by this order, the management filed second appeal before the 2nd respondent-Dy.Commissioner of Labour who in turn rejected to accept the appeal in proceedings No.8/10420/93, dt. 8-11-1993 and directed the management to deposit the back wages as per the orders of the 3rd respondent dt: 29-12-1992 within 15 days from the date of receipt of the said order. The petitioner submits that the 2nd respondent purporting to act under proviso to Section 48(3) of the Shops and Establishment Act, which provides that the second appeal shall not be entertained unless the employer deposits the entire amount of back wages as ordered by the appellate authority, directed to deposit the back wages. The management contends that the said proviso is an unreasonable restriction and it is violative of Article 14 of the Constitution of India as no such restriction is imposed on the employee who wishes to prefer an appeal. It deprives the management of its legitimate right of agitating before the appellate authority. The petitioner also submits that there is no reinstatement ordered by the 3rd respondent and, as such, ordering backwages in the absence of reinstatement is not in accordance with law. Hence these writ petitions.
3. Since the question of law involved in all these writ petitions is common, they are clubbed and disposed of by a common order.
4. Two points are raised in these writ petitions - firstly whether the, first proviso to sub-section (3) of Section 48 of the Andhra Pradesh Shops and Establishments Act, 1988 is violative of Article 14 of the Constitution of India as it envisages that in case where the employer wants to file second appeal against the orders of the appellate authority, the employer has to deposit the payment so ordered by the appellate authority, to get the second appeal entertained, and, whereas such a requirement or condition is not imposed on the employee if he desires to prefer such appeal; and secondly whether the authority is justified in ordering payment of difference of wages for the period during which the workman not worked?
5. Sri V.V.S.Rao, learned senior Counsel for the petitioner attacked the vires of Section 48(3) proviso as arbitrary and illegal. According to him, a right to prefer second appeal is given to the employer on condition precedent i.e. on deposit of backwages, whereas such condition is not imposed on the employee who wishes to prefer such appeal. This is quite arbitrary and unreasonable classification. To support his contention he placed reliance in Budhan Choudhary v. State of Bihar, , Ram Krishna Dalmia v. Justice Tendolkar, , InRe. Special Courts Bill, 1978 AIR 1979 SC 178.
6, In Budhan Choudhary v. State of Bihar, (supra), the Supreme Court held as follows:
"It is now well established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group and (ii) that, that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different objects or occupations or the like. What is necessary is that there must be nexus between the basis of classification and the object of the Act under consideration. It is also well established by the decisions of this Court that Article 14 condemns discrimination not only by a substantive law but also by a law of procedure"
In Ram Krishna Dalmia v. Justice Tendolkar, (supra), the Supreme Court held as follows:
"A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification, but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection of classification after such scrutiny, the Court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself In such a case the Court will strike down both the law as well as the executive action taken under such law."
In In Re. Special Courts Bill, 1978 (supra), the Supreme Court held as follows:
"If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can be annulled as offending against the equal protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory, irrespective of the way in which it is applied."
7. The learned senior Counsel for the management also contended that the authority is not right in ordering payment of difference of wages to the workman in the absence of a direction of reinstatement of the workman who was terminated on a particular date. To make such an order there should have been a direction of reinstatement. He also contended even the regularisation ordered by the 3rd respondent is illegal and it is hit by the principles laid down by the Supreme Court in Aswani Kumar v. State of Bihar, and Khagesh Kumar v. Inspector General of Registration, wherein the Supreme Court declined to direct the Government to regularise the services of the employees whose appointments were made in flagrant violation of the Government circulars.
8. He lastly contended that the authorities are not justified in ordering payment of backwages for the period for which the workman not worked. On the other hand, the relief should have been from the date of judgment To support his contention he placed reliance in Dharwad District P. W.D. Literate Daily Wages Employees Association v. State of Karnataka, AIR 1990 SC 883, wherein the Supreme Court held as follows:
"We can well realise the anxiety of the petitioners who have waited too long to share the equal benefits mandated by Part IV of the Constitution in respect of their employment. At the same time, we cannot overlook the constraints arising out of or connected with availability of State resources. Keeping both instrumentalities of the State that may be connected with the implementation of the scheme to act with a sense of fairness, anxiety to meet the demands of the-human requirements and also anxious to fulfil the constitutional obligations of the State, the directions which we give below will give a final shape to the scheme thus:
1. The casual daily rated employees appointed on or before 1-7-1984 shall be treated as monthly rated establishment employees at the fixed pay of effect from 1-1-1990. They would be entitled to an annual increment of Rs.15/- till their services are regularised. On regularisation they shall be put in the minimum of the time scale of pay applicable to the lowest Group D cadre under the Government but would be entitled to all other benefits available to regular government servants of die corresponding grade.
Those belonging to the B or C Groups upon regularisation shall similarly be placed at the minimum of the time scale of pay applicable to their respective groups under Government service, and shall be entitled to all other benefits available to regular Government servants of these grades..
2. From amongst the casual and daily rated employees who have completed ten years of service by 31-12-1989, 18,600/-shall immediately be regularised with effect from 1-1-1990 on the basis of seniority-cum-suitability.
3. The remaining monthly rated employees covered by the paragraph 1 who have completed ten years of service as on 31st December,1989, shall be regularised before 31st December, 1990, in a phased manner on the basis of seniority-cum-suitabilily, suitability being understood in the same way as above.
4. The balance of casual or daily rated employees who become entitled to absorption on the basis of completing ten years of service shall be absorbed/ regularised in a phased manner on the same principle as above on or before December,31, 1997.
5. At the point of regularisation, credit shall be given for every unit of 5 years of service in excess of ten years and one additional increment in the time scale of pay shall be allowed by way of weightage. There was a direction that the claim on other heads would be considered at the time of final disposal. We have come to the conclusion that apart from these reliefs no other would be admissible.'' On the other hand, Sri Venkataramana, learned Counsel for the workman supported the orders of the authorities. According to him, the first proviso to sub-section (3) of Section 48 of A.P.Shops and Establishments Act is most reasonable and quite mandatory and it is not violative of Art.14 of the Constitution of India. Its non-compliance will not permit the management to prosecute the second appeal.
Section 48(3) reads as follows:
"Against any decision of the authority under sub-section (2), a second appeal shall lie to such authority as may be notified by the Government within thirty days from the date of communication of the decision and the decision of such authority on such appeal shall be final and binding on both the employer and the employee and shall be given effect to within such time as may be specified in the order of that authority:
Provided that the second appeal shall not be entertained unless the employer deposits the entire amount of backwages as ordered by the appellate authority under sub-section (2) or the amount of compensation ordered as the case may be."
The object of the A.P.Shops and Establishments Act is to regulate conditions of work and employment in shops, commercial establishments, restaurants, theatres and other establishments and to provide for matters connected therewith. Conditions of work include hours of work, safely, health and payment of wages and security of tenure of service etc. This is a beneficial legislation made for the benefit of the workman. We can find sinilar benefit being provided in some other legislations like the Payment of Wages Act, 1956 and 'Workmens' Compensation Act.
9. Section 17 of the Payment of Wages Act reads as follows:
"(1) An appeal against an order dismissing either wholly or in part an application made under sub-section (2) of Section 15, or against a direction made under sub.section (3) or sub-section (4) of that section, may be preferred, within thirty days of the date on which the order or direction was made, in a Presidency-town before the Court of Small Causes and elsewhere before the District Court -
(a) by the employer or other person responsible for the payment of wages under Section 3, if the total directed to be paid by way of wages and compensation exceeds three hundred rupees or such direction has the effect of imposing on the employer or the other person a financial liability exceeding one thousand rupees, or
(b) by an employed person, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf or any Inspector under this Act, or any other person permitted by the authority to make an application under subsection (2) of Section 15, if the total amount of wages claimed to have been withheld from the employed person exceeds twenty rupees or from the unpaid group to which the employed person belongs or belonged exceeds fifty rupees.
(c) .....
Sub-section (1-A) of Section 17 reads as follows:
"No appeal under clause (a) of subsection (1) shall He unless the memorandum of appeal is accompanied by a certificate by the Authority to the effect that the appellant has deposited the amount payable under the direction appealed against."
Section 30 of Workmen's Compensation Act reads as follows:
"(1) An appeal shall lie to the High Court from the following orders of a Commissioner, namely
(a) an order awarding as compensation a lumpsum whether by way of redemption of a half-monthly payment or otherwise or disallowing a claim in full or in part for a lumpsum;
(aa) an order awarding interest or penalty under Section 4-A
(b) an order refusing to allow redemption of a half-monthly payment
(c) .....
(d) ..... " (e) ..... Third proviso to Section 30 of the Act reads as follows:
"Provided further that no appeal by an employer under clause (a) shall lie unless the memorandum of appeal is accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against.'' The provisions referred to above are not only identical to that of the A.P. Shops and Establishments Act and the object of these Acts is to see that the workmen are not deprived of the fruits ordered by the authority concerned in the event of the employer prefering an appeal against the order of compensation or back wages and to see that they are not subjected to starvation during the pendency of the appeal by the employer.
10. While interpreting Section 30(1) of the Workmen's Compensation Act, the Allahabad High Court in Sesha Enterprises v. Promod Kumar, ACJ (1983) 678 held as follows:
"According to the third proviso of Section 30(1) of the Act maintainability of appeal by employer is barred unless the memo of appeal was accompanied by a certificate issued by the Commissioner that the appellant had deposited with him the amount payable under the order appealed against. The proviso makes it incumbent for an employer-appellant to first pay the money due under the order and then obtain a certificate from the authority concerned and this proof must be filed at the time of presentation of appeal. The provision is mandatory in nature and not merely directory and, as such, the appeal filed without the accompanying certificate would be incompetent. Learned Counsel for the appellant has tried to place reliance on Ramnivas Khandelwal and Anr. v. Mt. Mariam, , but that does not appear to be good law any longer in view of Bahurangi Lal v. Sahebjan, . There is ample authority to the contrary and for this reference may also be made to 1957 Himachal Pradesh 26. In view of tie clear provision of law there is no need for much of a discussion. Suffice it to say that the whole act has been so designed so as to sub-serve the cause of the employees and this provision has obviously been made with a view to curb and restrict the right of the employer to file an apeal so that he must first obey and comply with the order appealed against before his appeal could even be entertained. It is a wholesome provision and were it not so it would have been very easy for an employer to harass the poor empolyee by merely filing an appeal and then delay the payment of the money due to endless execution proceedings thus gaining as undue advantage over the injured employee who could thus be put to untold hardship. It is to avoid and obviate such difficulty that this provision had been made and I have no manner of doubt that the proviso can best serve the intention behind the legislation only if the same was held to be mandatory and not merely directory in nature. I have given careful consideration to the matter and I feel no hesitation in holding that an appeal under Section 30 of the Act filed by an employer would not be competent unless the memorandum of appeal was accompained by the requisite certificate of the Commissioner.'' Similar is the view of the Patna High Court in The Bihar Journals Ltd. v. Nityanand Singh, wherein it was held as follows:
"The third proviso to Section 30( 1) requires that the memorandum of appeal should be accompanied by a certificate by the Commissioner to the effect that the appellant has deposited with him the amount payable under the order appealed against. This statutory provision should be read along with Section 8(2) of the Act Rule 9 of the Workmen's Compensation Rules as adapted in Bihar is also important in this connection Thus the certificate granted by the Commissioner, Workmen's Compensation, and the challan filed by the appellants along with the original memorandum of appeal should comply with the requirements of Section 8(2) of the Act or Rule 9."
From the above, it is clear that if one wants to file an appeal one has to comply with the requirement of depositing the amount of compensation or back wages which is mandatory in nature.
11. Now the question is whether such requirement is arbitrary or unconstitutional, as contended by the learned senior Counsel for Management.
12. The provisions in the respective legislations referred to above have been made with a view to see that the poor workman whose position is always vulnerable is not subjected to the dictates of the management and the amount of compensation or back wages liable to be deposited as a condition precedent for prosecuting the second appeal by the management be paid to the workman so that he can make a living with it during the pendency of the appeal, otherwise the management will be compelling the workman to starve during the pendency of the second appeal which the management may keep pending for years together. Hence, it can safely be said that the classification is reasonable as it is made to secure the safety of the workman and, thus, achieve the object of the Act. As such it is not violative of Article 14 of the Constitution of India Time and again it is stated that there can be a reasonable classification under Art. 14 of the Constitution of India and such classification shall not defeat the spirit of the constitution or the object sought to be achieved by any of the legislation. Thus, we hold that the authorities relied on by the learned senior Counsel are of no use to the case on hand.
13. From the discussion made above and in the light of the principles laid down by the Supreme Court and other Courts on the validity or otherwise of the similar provisions, we cannot accept the contention of Sri V. V.S.Rao, learned senior Counsel that the first proviso to sub-section (3) of Section 48 of the A.P.Shops and Establishments Act is violative of Article 14 of the Constitution of India There, is no arbitrariness in its command. The requirement made under Section 48(3) of the Act is mandatory. It compels the employer that he shall pay first the wages ordered and to prosecute the appeal. Object behind this is to see that the workmen being placed in vulnerable positions shall enjoy the fruits of the order passed by the competent authority immediately, instead of forcing the underfed and half clothed poor employee to endless litigation and execution which directly facilitate the employer to gain undue advantage over the injured employee. The above provision is a beneficial legislation. It is based on intelligible differential which has a rationale relation to the object sought to be achieved. Section 48(3) of the Act is neither discriminatory nor oppressive. It has not conferred any arbitrary and/or uncontrolled power on the concerned. It is a piece of social legislative and meant for welfare of the employee. It answers the dictates of social justice. Accordingly, we uphold the constitutional validity of the said proviso.
14. Regarding the second contention whether the workmen is entitled for wages in the absence of reinstatement or not or whether the regularisation ordered by the Asst. Commissioner (3rd respondent) is illegal or not are all the issues to be agitated before the appellate Court by preferring second appeal on payment of amount already ordered and they cannot be decided by this Court at this stage. In these writ petitions we are concerned whether the first proviso to sub-section (3) of Section 48 of the AP.Shops and Establishments Act is unconstitutional or not
15. Accordingly, the writ petitions are dismissed upholding the constitutional validity of the first proviso to sub-section (3) of Section 48 of the A.P.Shops and Establishments Act, 1988 and reserving liberty to the petitioner-management to prefer second appeal before the Deputy Commissioner of Labour (2nd respondent) within 30 days from the date of receipt of a copy of this order after complying with the mandatory requirement as stated supra If such appeals are filed. The Dy. Commissioner of Labour shall consider and dispose of the same in accordance with law. All other contentions are kept open. There shall be no order as to costs.