Bombay High Court
General Motor-Owners' Association (By ... vs Mahamoodkhan Vazirkhan on 3 November, 1966
Equivalent citations: [1968(16)FLR398], (1968)ILLJ211BOM
Author: V.D. Tulzapurkar
Bench: V.D. Tulzapurkar
JUDGMENT Patel, J.
1. This petition is by the General Motor-owners' Association through its manager against the order of the Payment of Wages Authority directing the petitioner to pay a sum of Rs. 300 to respondent 1 together with the costs of the application. The short facts giving rise to this petition are that respondent 1 was in the employment of the petitioner as a bus-driver on a monthly salary of Rs. 60. When he was on duty outside, he was to get a sum of Rs. 90 as allowance. Respondent 1 apparently appeared to be employed from time to time as and when necessary and his employment was a casual employment. He was dismissed from service on 26 December, 1955. He then made an application under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, read with rule 36 of the rules framed by the State Government for a declaration that the change effected by the petitioner in respect of his employment was an illegal change. The district industrial court made a declaration on 30 March, 1960. The petitioner went in appeal. The State industrial court expressed the opinion that the employment of respondent 1 was of a casual nature, but it held that even so he could be dismissed only after holding a proper enquiry as required under the standing orders, and since no enquiry was held, the change was an illegal change. It confirmed the order of the district industrial court. Respondent 1 then filed an application before the Payment of Wages Authority for recovering his wages for the period 26 December, 1955 to 30 March, 1960, which ultimately came to be dismissed on the ground that the Payment of Wages Act was not applicable to motor transport industry. Thereafter he has raised a suit for recovering the wages of that period. Later, after the Payment of Wages Act was made applicable to this industry, he filed the present application claiming a sum of Rs. 3,750 for the period 1 April, 1960 to 30 April, 1962 at the rate of Rs. 150 per month. The petitioner raised several contentions including the one that the Payment of Wages Authority had no jurisdiction to award any amount under the Payment of Wages Act, 1936. It was further contended that the claim was barred by limitation. The Payment of Wages Authority held that the amount claimed fell within the definition of the term "wages," that it had jurisdiction and that the claim was not time-barred in respect of a sum of Rs. 300. The Court awarded the wages for a period of two months from 1 March, 1962, the date on which the Act came into force.
2. Sri Mohta contends that the matter does not fall within the jurisdiction of the Payment of Wages Authority inasmuch as what is claimed by respondent 1 cannot be wages within the meaning of the definition of "wages," contained in S. 2(vi). He further contends that the Payment of Wages Authority's jurisdiction to hear and decide claims is limited to claims arising out of deduction from wages or delay in payment of wages of persons employed and matters incidental to such claims. According to him, in order that a person should be entitled to claim wages under the Payment of Wages Act he must be employed during the period during which the claim arises.
3. The word "employed person" has been defined in S. 2(1) and includes the legal representative of a deceased employed person. This definition must indicate when read with the terms of S. 15(1) that the Payment of Wages Authority can have jurisdiction to determine the questions if the claim arises in respect of wages of a person who is actually employed by the employer. Section 15(2) also speaks of "wages of an employed person." Similarly, S. 15(3), proviso (a), and Sub-section (4) refer to "employed person." Section 20 imposes a penalty for the contravention of the provisions of the Act by a person "being responsible for the payment of wages to an employed person." It is doubtful if under the circumstances even a deeming provision will make S. 15 applicable. In our view, if there is a claim which smells of some other kind of claim, the Payment of Wages Authority would not have authority to entertain the claim.
4. In the present case, respondent 1 obtained a declaration from the district industrial court that the change effected by the employer was an illegal change. We have not been shown any standing order but are told that the standing orders are the same as model standing orders under the Act. There is no standing order in the model standing orders that when a declaration of illegal change is made under S. 41, the status quo ante shall be deemed to be restored, or it shall be deemed that such illegal change had not occurred. In the Act itself, detailed provisions have been made where different jurisdiction is conferred upon different authorities to grant different kinds of reliefs to an employee. Section 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, falls within Chap. VI which relates to illegal strikes and lookouts and illegal changes. Section 40 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, defines what these illegal strikes and lookouts and illegal changes are and S. 41 gives authority to the State industrial court or the district industrial court on certain conditions being complied with to decide whether any strike, lookout or change which has taken place is illegal. The section does not contain any provision authorizing the industrial court to bring about a status quo ante by its order and in case of dismissal, order reinstatement. Chapter VII of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, prescribes certain penalties for continuing such illegal changes, lookouts or strikes which do not involve again bringing about the original status. Section 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, specially relates to orders of dismissal of workmen. The employee is given liberty to apply to the Labour Commissioner for reinstatement. The Labour Commissioner, if he comes to the conclusion that the dismissal, discharge, removal or suspension was in contravention of any provisions of the Act or a standing order made thereunder, or that the order of punishment was passed more than six months after the alleged misconduct, is empowered either to reinstate the employee or award him such compensation as he deems proper within certain limits. The meaning of the section is clear and it is that a mere illegal charge, whether declared to be so or not does not, ipso facto restore the employee to his original employment. There is still a discretion in the Labour Commissioner, who deals with those matters and who is a different authority from the one to declare the illegal change, either to restore him to his employment or award him some amount as damages. In the Act, therefore, and in the standing orders, there is no provision that merely because a dismissal is declared to be an illegal change, it ipso facto means that the employee shall be deemed to be an employee. If this is so, it appears to us that the case cannot fall within S. 15 of the Payment of Wages Act and the claim cannot amount to wages within the meaning of the word as defined in the Act itself.
5. Now, it is true that the definition of the word "wages," as it was originally framed, referred to the terms of contract of employment, express or implied. By the change in 1957 by the amending Act, the definition is widened to "terms of employment, express or implied." The terms of employment would include terms implied by law. It is clear, therefore, that the Payment of Wages Authority is not confined only to the contractual terms of employment. By the improved definition, it may also refer to the terms of employment, either under a contract or under a statute or the standing orders under the Industrial Act. Having regard to the fact that the Payment of Wages Authority can make an order for payment of wages of only a person who is employed with the employer, it only means that the claim must relate to wages during the period of employment.
6. On behalf of respondent 1, reliance is placed on a decision of a Division Bench of the Court in Namdeo Shrawan Lokhande v. Chocks Canning and Mining, Ltd., Nagpur [1962 - II L.L.J. 323] . The respondents in that case were not present before the Court. The Payment of Wages Authority, under circumstances similar to the present, had held that merely because a change was declared to be illegal, it did not mean restoration of the employee in the employment and, therefore, the amount claimed was not wages. This Court held that having regard to the amendment brought about by amending Act 68 of 1957 in the definition of the word "wages," the amount claimed would fall within the definition. The Court held that the declaration can be taken into account as being one of the terms of employment and the order of the district industrial court would operate to show that he continued in the employment of his master. With respect, having regard to what we have stated, that is, different jurisdiction being conferred on different authorities to make different kinds of orders, (1) a declaration that a change is illegal, and (2) reinstatement of an employee dismissed,
7. it is not possible to make the assumption that has been suggested by the Division Bench. Apart from this, certain fundamental principles in this connexion were not brought to the notice of the Court including S. 16 of the Act. In Dr. S. Dutt v. University of Delhi there are some observations pertaining to the matter in issue. The case arose out of a wrongful dismissal of Dr. S. Dutt by the university authorities. The matter was referred to arbitration and the arbitrators declared that the dismissal was wrongful and further proceeded to reinstate Dr. S. Dutt in his previous employment. A contention was raised before the Supreme Court that the award directing reinstatement went beyond the scope of the dispute referred to the arbitrators and, therefore, was invalid. The answer to this question that was suggested was that the order of reinstatement was merely consequential to the declaration that the dismissal was wrongful. The Supreme Court negatived this contention, holding that there was no analogy between cases arising under the Industrial Disputes Act in an award and the one arising outside it. It said (p. 1054) :
"Now, it is not consequential to such a finding that the dismissal was of no effect, for a wrongful and mala fide dismissal is nonetheless an effective dismissal though it may give rise to a claim in damages."
8. The Court distinguished the decision in Western India Automobile Association v. Industrial Tribunal, Bombay [1949 L.L.J. 245] where the words "any dispute" in S. 10 of the Industrial Disputes Act (Central), 1947], were construed while considering the validity of an order of reinstatement of an employee by the industrial tribunal. Mst. Dewli Bakaram and others v. State Industrial Court and others [1959 - I L.L.J. 475] has no application since in that case the condition precedent to retrenchment not having been observed, it was held that employees were entitled to be reinstated. The decision does not say that the employees continued in employment. The Court held that S. 16 of the Act applied and the Labour Commissioner had jurisdiction. In State of Bombay v. Hospital Mazdoor Sabha and others [1960 - I L.L.J. 251], it was held that requirement prescribed by S. 25F(b) of the Industrial Disputes Act, 1947, for retrenchment is a condition precedent and non-compliance with its terms makes an order inoperative. This cannot be said of the present Act with which we are dealing where the Labour Commissioner is entitled to refuse reinstatement.
9. In the present case, the Local Industrial Act itself has made a distinction between the two authorities which are entitled to grant two different kinds of reliefs. Even the district industrial court did not, while deciding the matter under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, assume that it had jurisdiction to make an order of reinstatement in favour of the employee, nor did it make any. If it had made any such order probably that part of the order would have been held to be without jurisdiction as decided by a Division Bench of this Court in R. S. Rekchand Gopaldas Mohota Spinning and Weaving Mills (Private), Ltd. v. Laxman Das and others [1958 - II L.L.J. 180] where the precise amplitude of S. 41 read with rule 96 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, fell to be considered by the Bench. After referring to the provisions of S. 16 of the Act, the Court held that the district industrial court had no jurisdiction to direct reinstatement by its order, this power being specially vested in the Labour Commissioner under S. 16.
10. The conclusion reached above is supported by the decision in Jahiruddin and others v. Model Mills, Ltd., Nagpur [1966 - I L.L.J. 430]. The facts here were that the State took over management of the Model Mills under powers vested in it for the purpose, and thereafter appointed one of the respondents manager of the same. It seems that the State Government suspended the operation of S. 16 of the present Act in its application to the Model Mills. The manager terminated the services of the appellants before the Supreme Court. While considering this question, the Court decided that the right to claim reinstatement was inherent in industrial employment and was not created by S. 16 of the Act. It further held that the section merely provided for the remedy and during the time that the section was not operative, the remedy could not be enforced. But when its application became restored, the employee could apply to the Labour Commissioner for relief in accordance with the section, provided his application is in time. The decision indicates that there is no automatic restoration of the employment of the employee without an order under S. 16.
11. It seems to us that the Payment of Wages Authority can grant relief in respect of wages for the period during which the employee is employed by the employer. As in Namdeo v. Chocks, etc., Ltd. [1962 - II L.L.J. 323] (vide supra) different view is taken, we refer the following questions to a Full Bench :
(1) Whether a person, who is illegally dismissed, is entitled to make a claim for wages for a period after his dismissal under the Payment of Wages Act ?
(2) Whether a declaration that the change is illegal under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, makes and difference ?
(3) Whether the Payment of Wages Authority will have the power to entertain such an application when the above Act, by S. 16, makes a special provision for the same ?
JUDGMENT Patel, J.
12. This petition is filed by the manager of a weaving factory run by the State Government in Nagpur. The first eleven respondents were working in the weaving factory. In November, 1956, separate notices were issued to these workers to the effect that their services were not necessary with effect from 7 December, 1956. The respondents made an application to the district industrial court under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, for a declaration that the change effected by the petitioner was illegal change. The district industrial court held that, in respect of eight of the workmen, S. 25F of the Industrial Disputes Act, 1947, was not applicable while it was applicable in the case of four workers. The court also held that in the case of four persons, S. 25G of the said Act was applicable. An appeal was taken to the State industrial court which confirmed the finding of the trial Court that, in respect of eight persons, S. 25F was not applicable and reversed the finding of the district industrial court in respect of the other workmen and held that S. 25G was also not applicable. As the change was effected in contravention of the standing orders, the courts held that the discharge of the workmen was contrary to the provisions of the local Act and, therefore, held that the change was an illegal change. The respondents then filed an application for wages from the date of the discharge until the date of the application under S. 15 of the Payment of Wages Act. The application was made on 24 June, 1960. A point of jurisdiction was first decided by the Payment of Wages Authority in the negative. The respondents took a revision to the State industrial court who reversed the decision and remitted the matter to the Payment of Wages Authority for final orders. Thereafter the Payment of Wages Authority decided that the application was barred by time as it was not filed within the period provided by the Act. Against this finding, an appeal was again carried to the appellate authority which reversed the order of the Payment of Wages Authority and again remitted the matter to the Payment of Wages Authority. Against the judgment, the petitioner filed a special civil application under Art. 227 of the Constitution. This application was later withdrawn with permission to challenge the final order that may be made by the Payment of Wages Authority also on the same grounds. Eventually, the Payment of Wages Authority decided the application in favour of the respondents and made an order requiring the petitioner to pay the amount of Rs. 17,927.58. This decision seeks to challenge the order of the Payment of Wages Authority. An appeal against this decision was dismissed by the appellate authority.
13. The point involved in this case regarding eight workmen who are not governed by S. 25F is whether merely because the industrial courts declared that the discharge of the respondents was an illegal change, are the respondents entitled to apply under S. 15 of the Payment of Wages Act to the authority constituted under the Act. We have referred this question to a Full Bench in Special Civil Application No. 511 of 1965, decided on 6 July, 1966. There is still another question which arises in respect of the four workmen who have been held to be governed by S. 25F of the Industrial Disputes Act, 1947. Sri Kukday, relying on the decision in State of Bombay v. Hospital Mazdoor Sabha [1960 - I L.L.J. 251] (vide supra) argues that since the condition precedent for retrenchment under S. 25F(b) has not been implied with in the present case, the order of discharge must be regarded as inoperative and, therefore, the workmen must be still deemed to be continued in service or in employment of the employer. The arguments is needed very attractive but there are some difficulties in accepting the same. As we have pointed out in the order of reference to the Full Bench, the Payment of Wages Act at several places speaks of "persons employed." Section 20 prescribes penalties for offences under the Act. Sub-section (1) is :
"Whoever being responsible for the payment of wages to an employed person contrivances any of the provisions of any of the following section, namely, S. 5 except Sub-section (4) thereof, S. 7, S. 8 except Sub-section (8) thereof, S. 9, and S. 10 except Sub-section (2) thereof, and Ss. 11 to 13 both inclusive, shall be punishable with fine which may extend to two thousand rupees."
14. There are also other penalties prescribed in the other sub-sections. If it is held that even though the person is not actually employed with the employer, he must still be deemed to be employed for the purpose of S. 15, then from the date of discharge or dismissal the employer is liable to the penalties imposed under the section. The legislature could have hardly intended to bring about this result by including within the meaning of the words "persons employed" those who are to in fact employed but are deemed to have been employed for non-compliance with certain conditions of discharge of dismissal. True, as Sri Kukday points out that prosecution is not to be as a matter of course but has to be sanctioned by the proper authority. That may be so, but since the matter is one of principle and one of construction, some authority may be persuaded to exercise its powers. Therefore it may be difficult to include within the meaning of the words "persons employed" those who are deemed to be employed by reason of certain legislative construction of the relevant provisions. Inasmuch as we have referred the other matter to the Full Bench, we also refer the following additional question to the Full Bench, it being.
"Whether the four workmen in the present case who are governed by the provisions of S. 25F of the Industrial Disputes Act, 1947, can be regarded as persons employed within the meaning of S. 15, on the assumption that the discharge from employment was in contravention of the provisions of S. 25F."
FULL BENCH JUDGMENT Kotval, C.J.
15. The judgment in this special civil application shall also govern the disposal of Special Civil Application No. 630 of 1965, for in both the special civil applications a common point arises for decision, although under different circumstances.
16. In Special Civil Application No. 511 of 1965 three questions as follows have been referred for our decision :
(1) Where a person, who is illegally dismissed, is entitled to make a claim for wages for a period after his dismissal under the Payment of Wages Act ?
(2) Whether a declaration that the change is illegal under S. 41 of the Central Provisions and Berar Industrial Disputes Settlement Act, 1947, makes any difference ?
(3) Whether the Payment of Wages Authority will have the power to entertain such an application when the above Act, by S. 16, makes a special provision for the same ?
17. From a perusal of the order of reference, it is clear that the main point which the Division Bench considered was whether the case of Namdeo Shrawan Lokhande v. Chocks Canning and Mining, Ltd. [1962 - II L.L.J. 323] was correctly decided, and the points mentioned in the three questions which they formulated are really points which amount to reasons for determining whether the decision in Namdeo Shrawan case (vide supra) was correct or not. In our opinion, therefore, it is not necessary to frame questions upon each separate piece of reasoning and the controversy between the parties could well be represented by the question :
"Whether Namdeo v. Chocks, etc., Ltd. [1962 - II L.L.J. 323] was correctly decided."
18. Accordingly, we have reframed the question referred. Counsel for both the parties have no objection to the reframing of the questions.
19. In Special Civil Application No. 630 of 1965 a question is referred in addition to the above questions and it is :
"Whether the four workmen in the present case who are governed by the provisions of S. 25F of the Industrial Disputes Act, 1947, can be regarded as persons employed within the meaning of S. 15, on the assumption that the discharge from employment was in contravention of the provisions of S. 25F."
20. Section 15 referred to is S. 15 of the Payment of Wages Act. This will now be the second question to be answered in this reference.
21. The two references arise upon the following facts :
In Special Civil Application No. 511 of 1965 Mahamoodkhan, respondent 1, a driver of the General Motor-owners' Association, Washim, was dismissed on 26 December, 1955. He preferred an application under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, claiming that his dismissal amounted to an illegal change and should be so declared. On 30 March, 1960, the district industrial court declared the change illegal. An appeal filed by the employer to the State industrial court was dismissed. After thus obtaining the declaration that his dismissal amounted to an illegal change, he filed an application under the Payment of Wages Act which ultimately came to be dismissed on the ground that the Payment of Wages Act had not been made applicable to the motor industry. The Payment of Wages Act was made applicable to the motoring trade on 31 March, 1962 and then this second application under S. 15 of the Payment of Wages Act came to be filed on 2 May, 1962. It is out of that application that the present special civil application arises. Respondent 1 claimed his wages for the period from 1 April, 1960 to 30 April, 1962, amounting to Rs. 3,750 at the rate of Rs. 150 per month. The Payment of Wages Authority by its order, dated 30 January, 1965, has allowed a sum of only Rs. 300 being his salary for the months of March and April 1962 holding that the notification applying the Act to the motor industry was not retrospective in operation.
22. Now this order came to be challenged before the Division Bench by the employer and the ground inter alia was, that, what was claimed by Mahamoodkhan was not wages at all within the meaning of the definition of "wages" contained in S. 2(vi) of the Payment of Wages Act, and that in any case the right to claim wages was limited only to deductions from wages or delay in the payment of wages of persons employed, and for the period during which the claim was preferred Mahamoodkhan was not a person employed. Before the Division Bench it was also urged that a mere declaration of the change as illegal would not give rise to a right unless the amount was in fact wages.
23. In Special Civil Application No. 630 of 1965 twelve employees had also claimed under S. 41 of the Central Provinces and Berar Industrial Disputes Act, that their dismissal on 6 November, 1956, amounted to an illegal change and ought to be set aside. On 31 March, 1960, the district industrial court declared that the termination of services was illegal and the change amounted to an illegal change. An appeal filed by the employer was dismissed by the State industrial court on 8 August, 1961. The employees then applied on 24 June, 1960, under S. 15 of the Payment of Wages Act for payment of back-wages from 7 December, 1956 (the date of the termination of their services) to 21 June, 1960 (the date of the signing of their application).
24. Protracted proceedings took place. An order was passed by the Payment of Wages Authority, but in appeal its order was set aside and the case was remanded to it for fresh disposal. A writ petition to this Court was filed against the appellate order and withdrawn (Special Civil Application No. 445 of 1962) and so the appellate order of remand stood. After remand the Payment of Wages Authority directed the employer to pay Rs. 17,927.48 to the twelve applicants before it, as that amount was agreed upon. In deciding the application before it the authority rejected the employer's contention that the employees' claims did not amount to a claim for wages for the reason that "wages" means remuneration payable in respect of work done in the employment and the employees were no longer in the employment of the employer. The authority rejected the contention relying on the decision of this Court in Namdeo v. Chocks, etc., Ltd. [1962 - II L.L.J. 323] (vide supra) which was binding on it. In appeal the District Judge, Nagpur, confirmed all the findings of the authority also relying on Namdeo Shrawan case (vide supra) and dismissed the appeal.
25. The present writ petition has been filed against the appellate order of the District Judge and, as we have indicated, the short question that arises is whether Namdeo Shrawan case [1962 - II L.L.J. 323] (vide supra) was correctly decided. The contention is that unless an order of reinstatement be first passed, the Payment of Wages Authority would not have the jurisdiction to grant the wages merely upon a declaration that the dismissal amounted to an illegal change under S. 41 of the Central Provinces and Berar Industrial Disputes Settlement Act. It is urged that once an employees is dismissed the contract of service is put an end to and the mere declaration that the change made in industrial relationship is illegal cannot without more restore the pristine contract of service. It is urged that that is especially so when the Act gives the worker a remedy to have the contract of service restored. He can ask for reinstatement under S. 16. Therefore, it is urged that reading the provisions of the Act as a whole unless an order under S. 16 of the Central Provinces and Berar Industrial Disputes Settlement Act is first passed and the worker obtains an order of reinstatement, the Payment of Wages Authority would have no jurisdiction to grant the claim for wages even though the change has been declared illegal under S. 41. It was also pointed out that no order of reinstatement can ever be passed in the proceeding under S. 41, and under those circumstances the application for recovery of wages under S. 15 of the Payment of Wages Act was infructuous. On these submissions the Division Bench entertained doubt as to be correctness of the decision in Namdeo Shrawan case [1962 - II L.L.J. 323] (vide supra) and, therefore, referred the questions stated for decision by a Full Bench.
26. So far as the decision in Namdeo Shrawan case [1962 - II L.L.J. 323] (vide supra) is concerned, undoubtedly it does appear that we held that the fact that the industrial court declares that an illegal change has taken place consequent upon the dismissal of an employee, would be sufficient to give jurisdiction to the Payment of Wages Authority to grant him wages for the period from his dismissal till the date of the order under S. 41.
27. In that case we had expressed our view as follows :
"In our opinion, having regard to the provisions of Ss. 40 and 41 of the Central Provinces and Berar Industrial Disputes Settlement Act, if a declaration be obtained by a worker that the change effected by his dismissal was illegal, the declaration can be taken into account as being one of the terms of his employment within the amended definition (of wages) and, therefore, the order of the district industrial court would operate to show that he continued in the employment of his master . . ."
28. The decision in Namdeo Shrawan case [1962 - II L.L.J. 323] (vide supra) was virtually given ex parte. The employee alone appeared and the employer was absent. Counsel for the employee (and he is the same counsel who now represents the worker in Special Civil Application No. 511 of 1965) altogether failed to invite our attention to the provisions of S. 16 of the Central Provinces and Berar Industrial Disputes Settlement Act, and the argument proceeded only upon the provisions of Ss. 40 and 41 of that Act.
29. Sub-sections (2), (3), (3-a) and (3-b) of S. 16 are material for consideration upon this question. They run as follows :
"(2) Any employee, working in an industry to which the notification under Sub-section (1) applies, may, within six months from the date of such dismissal, discharge, removal or suspension, apply to the Labour Commissioner for reinstatement any payment of compensation for loss of wages.
(3) On receipt of such application, if the Labour Commissioner, after such enquiry as may be prescribed, finds that the dismissal, discharge, removal or suspension was in contravention of any of the provisions of this Act or in contravention of a standing order made or sanctioned under this Act or was for a fault or misconduct committed by the employee more than six months prior to the date of such dismissal, discharge, removal or suspension he may direct, -
(i) either that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal, discharge, removal or suspension, as the case may be, to the date of the order of the Labour Commissioner; or
(ii) that the employee shall, in addition to the wages from the date of dismissal, discharge, removal or suspension to the date of the order of the Labour Commissioner, be paid by the employer such sum not exceeding rupees two thousand five hundred by way of compensation having regard to the loss of employment and the possibility of getting suitable employment thereafter.
(3-a) On an order being passed by the Labour Commissioner directing reinstatement, the employee shall be deemed to have been reinstated on the date of the order and shall from that date be entitled to wages at the rate to which he was entitled immediately prior to his dismissal, discharge, removal or suspension, as the case may be, until his employment is lawfully terminated.
(3-b) If the employer fails to pay the employee his wages in accordance with Sub-section (3-a) or the compensation awarded to him under Sub-section (3), the amount shall be recovered from his in such manner as may be prescribed."
30. Sub-section (2) indicates two remedies, namely, reinstatement and payment of compensation for loss of wages; and in Sub-section (3). Cls. (i) and (ii), there are references to payment and to "wages," respectively. It seems that the draftsman of the section assumed that consequent upon reinstatement, wages would automatically become payable because the contract of service would by the order of reinstatement be restored and, therefore, in Sub-section (3)(i) he states as one of the two reliefs which could be granted that the employee shall be reinstated forthwith or by a specified date and paid for the whole period from the date of dismissal, discharge, removal or suspension, as the case may be, to the date of the order of the Labour Commissioner. In Clause (ii) he speaks about payment of compensation but prefaces it by the words "in addition to the wages," thus making it clear again that the right to receive wages is always there as soon as the order of reinstatement is passed. It was a point in dispute whether the reference to wages is a reference to wages as such or to compensation in lieu of wages, but we need not go into this question here. Whatever doubt there may be on the working of Clause (ii) of Sub-section (2) on reading S. 3(a) it is clear beyond doubt that on an order of reinstatement being made two consequences flow
(a) that the worker is reinstated and that the contract of service is restored, and
(b) that from that date he is entitled to wages at the rate he was entitled to prior to the date of his dismissal.
31. It is clear from the provisions of the section that in regard to an industrial dispute arising upon the dismissal of an employee this particular piece of legislation has provided a special remedy, namely, the remedy by way of reinstatement of restoration of the contract of service in addition to other remedies. That being so it must follow that upon dismissal it would not be enough that the employee has the change declared illegal in order to get back his contract of service. He must get an order of reinstatement in his favour. Section 41 must be read along with S. 16. It is settled law that where a statute grants special rights and creates special remedies, the parties to a dispute are necessary limited to that special remedy alone in order to secure that special right : see N. P. Ponnuswami v. Returning Office, Namakkal . Section 41 merely deals with the question which forum is to decide whether a change which has taken place or in respect of which notice has been given is illegal, among other things. It has to be read with S. 31 which requires notice of change to be given; S. 57 which defines "illegal change" and Sch. II to the Act. In terms, therefore, the jurisdiction of the authority under these provisions is limited to declaring whether a change is illegal. Since the relief of reinstatement is specifically mentioned in S. 16, it seems to us that a party seeking to recover his wages on the basis of his contract of employment must take that remedy before he can claim payment of wages.
32. Section 15 of the Payment of Wages Act gives jurisdiction to the Authority under the Payment of Wages Act to her and decide claims arising out of deductions from wages or delay in payment of wages of persons employed. "Wages" is defined in S. 2(vi) to mean "all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payment to a person employed in respect of his employment or of work done in such employment, and includes . . ."
33. We are not concerned here with the clauses of inclusion. It is clear from the section that in order that an amount should be granted by the Authority under the Payment of Wages Act. It must first of all fall within the definition of "wages" and that means that there must be an employer and it must be an amount payable to a person employed in respect of his employment or of work done in such employment. Now, when as in the present case, the employee is dismissed and the dismissal is merely declared to be an illegal change, the utmost that that order can imply is that the dismissal was wrong. It cannot imply that the employee is once again in the service of his employer.
34. So far as the jurisdiction of the Payment of Wages Authority is concerned, the mere declaration that the dismissal is wrongful cannot give it jurisdiction to decree a claim for wages for that period. There must be an order of reinstatement, and admittedly there was no order of reinstatement passed in the present case. To the extent, therefore, that the decision in Namdeo v. Chocks, etc., Ltd., [1962 - II L.L.J. 323] (vide supra) holds that an order passed under S. 41 simpliciter would give jurisdiction to the Payment of Wages Authority to decree a claim for wages of that employee, that decision must be held to be incorrect. Without an order of reinstatement, the Payment of Wages Authority would have no jurisdiction to order the payment of wages.
35. Turning to Special Civil Application No. 630 of 1965, the appellate order of the Assistant Judge, Nagpur, also referred to the decision in Namdeo Shrawan case [1962 - II L.L.J. 323] (vide supra) and to the amendment of the definition of "wages." That was also the contention advanced on behalf of the employees both by Sri Dharmadhikari and by Sri Kukday. The amendment in the definition was only this that the previous words "if the terms of the contract of employment were fulfilled" were substituted by the words "if the terms of employment express or implied, were fulfilled." By this amendment it does not appear to have been the intention to suggest that a claim to wages could arise even though there be no contract of employment. On the contrary it seems to us that the scope of the definition was enlarged rather than curtailed. When the words "contract of employment" were dropped and the words "terms of employment" were added, the intention was merely to bring within the ambit of the definition cases where the contract of service was statutorily or otherwise by operation of law or by any lawful order, modified, e.g., by a notification under the Minimum Wages Act. That is also clear from the Objects and Reasons stated for the amendment in 1957. The terms of payment under contracts of employment used to be frequently modified by awards of tribunals or other settlements or the wages revised statutorily or through adjudication, arbitration and other proceedings under the industrial law, and the intention was to include within the definition of "wages" not merely the contractual wages but also the wages that fixed by operation of law or the lawful order passed by a person or an authority. The amendment in the definition of "wages," therefore, makes no difference for the purposes of the point before us.
36. Considering the definition of "wages" prior to the amendment, a Division Bench of this Court held in Arvind Mills, Ltd. v. Gadgil [A.I.R. 1941 Bom. 26] that "wages" means remuneration payable on the fulfilment of the contract of employment and therefore means wages earned, and that it would not include potential wages or bonus. Chief Justice Beaumont said :
". . . No doubt, on the language of the definition there is something to be said for that view, but it has to be observed that, under the opening words of S. 2, the definition only apply if there is nothing repugnant in the subject or context. It seems to me that the word 'wages' as used in most, at any rate, of the sections of the Act, plainly does not mean potential wages, but wages earned."
and ". . . The expression 'remuneration,' which would, if the terms of the contract were fulfilled, by payable, seems to me to mean no more than remuneration payable on the fulfillment of the contract."
37. After the amendment in the definition, it has been held that wages fixed by an award in an industrial dispute between an employer and an employee would be included in the definition of "wages," but the view of the Bombay High Court was upheld by the Supreme Court in their decision in Muhammad Qasim Larry v. Muhammad Samsuddin and another [1964 - II L.L.J. 430].
38. Turning to the facts in Special Civil Application No. 630 of 1965 in Para. 14 of the decision of the industrial court, it specifically declined to grant reinstatement as well as back-wages, so far as all the twelve employees were concerned, though it held that there was an illegal change. So far as S. 25F was concerned it held that only four out of the twelve workers had put in the requisite service of 240 days entitling them to retrenchment compensation. The State industrial court dismissed the employee's appeal. In the face of those orders, we cannot see how, having regard to the definition of wages, the Payment of Wages Authority could possibly have jurisdiction to entertain the claim for wages. The employees who had been dismissed had not obtained an order for reinstatement and so cannot be held to be in employment, and unless they were in employment, they would not be entitled to wages. In that view, the additional question referred in Special Civil Application No. 630 of 1965 must be answered in the negative, that is to say, it must be held that the four workmen in that case cannot be regarded as persons employed within the meaning of S. 15 of the Payment of Wages Act.
39. In the result, the answers to the questions posed are as follows :
Q. 1 : Namdeo v. Chocks, etc., Ltd. [1962 - II L.L.J. 323] (vide supra) was incorrectly decided, in so far as it held that the Payment of Wages Authority will have jurisdiction to grant wages without an order of reinstatement in accordance with law.
Q. 2 : The second question, the one referred in Special Civil Application No. 630 of 1965, is answered in the negative.