Case: The Rashtriya Mill Mazdoor Sangh, Bombay Vs. B.A. Ekbote and Others

K.K. Desai, J.1. The facts necessary to be noticed in connection with the second contention are as follows : In respect of the 43 employees who had given the above written agreements to the company, the total sum claimed in diverse small amounts aggregated to Rs. 23,994-04. In respect of this total claim, by the statement filed before the Authority, the company admitted diverse amounts aggregating to Rs. 15,792-49 being due to these employees. The difference between the aggregate claim made on behalf of these 43 employees and the claim admitted to be due by the company came to Rs. 8,201-55. It is therefore, clear that, between all of them, the 43 employees relinquished their claim to the extent to Rs. 8,01-55. The contention of the petitioner Sangh in respect of this small difference is that such relinquishment of claim is not permitted under S. 23 of the Act.2. This section runs as follows :"any contract or agreement, whether made before or after the commencement of this Act whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purports to deprive him of such right. " the contention on behalf of the company is that the only right that is conferred by the Act on an employed person is to be found in Section 15 which provides :-" (1). . . . . . . (2) Where contrary to the provisions of this Act any deduction has been made from the wages of an employed person, or any payment of wages has been delayed, such person himself or. . . may apply to such authority for a direction under sub-s. (3). (3) When any application under sub-s. (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under S. 3, and after such further inquiry (if any) as may be necessary, may. . . direct the refund to the employed person of the amount deducted, or the payment of the delayed wages together with the payment of such compensation as the authority may think fit. . . "The submission of the company is that the provision in S. 23 has not the effect of providing that, in the matter of applications made before the Authority for recovery of deduction illegally made, an employee has no right to make a compromise with his employer for receiving in complete settlement the amount agreed between the parties as illegally deducted. Conversely, on behalf of the petitioner-Sangh it is argued that liberty is not reserved to an employee to make any such compromise. The submission was that the object of the legislation contained in S. 23 was to protect employees against their employers who would always be in a position to take undue advantage of the employees difficulties of diverse kinds. A valid compromise could not be made because of S. 23.3. Now, it is difficult for us to accept the above submission made on behalf of the petitioner-Sangh. Genuine and valid compromise made between an employee and an employer in connection with disputes between them as regards the true and correct amounts of illegal deductions payable to the employee cannot be held to be relinquishment of rights. Apparently there can be genuine disputes in respect of amounts claimed by employees in applications made under the Act. In numerous case, an employer may be able to prove that though the claims were for very large amounts, the illegal deductions were really of small amounts which were payable by them. The question is whether, in connection with such genuine disputes between an employee and an employer, S. 23 provides that settlement cannot be made and compromise cannot be effected. What is null and void under the section is relinquishment of rights conferred under the Act. When under compromise an agreed amount is held to be due and payable to an employee, the compromise cannot be described as an agreement for relinquishment of rights conferred by the Act.4. In this connection, reference may be made to the case of Heilgers and Co. v. Nagesh Chandra a. I. R. (1949) F. C. 142, which was relied upon on behalf of the petitioner-Sangh. In that case, a settlement made in industrial disputes in respect of claims for bonus payable by an employer by an award made by the Industrial Tribunal by consent of parties, was challenged as being in violation of the provisions in S. 23 of the Act. The Federal Court negatived the contention and held :"the scheme of the Payment of Wages Act, read along with the Industrial Disputes Act, showed that there was nothing to prevent such an agreement being made between an employer and employee, and much less to make such agreement illegal and prohibited by the Payment of wages Act. "5. Mr. Buch also relied upon the observation of the Allahabad High Court in Union of India v. Kundan Lal A. I. R. (1957) All. 363 to the effect that S. 23 of the Payment of Wages Act lays down that any contract or agreement whereby an employed person relinquishes any right conferred by the Act shall be null and void in so fat as it purports to deprive him of such right. A right to file an application under S. 15 of the Payment of Wages Act could not be taken away by any agreement or compromise of the kind made by respondent No. 1 in this case (See also swadeshi Cotton Mills Co. v. Rajeswar Prasad [1960 - II L. L. J. 707] which was not cited at the bar).6. It appears to us that there is nothing in the two authorities relied upon on behalf of the petitioner-Sangh which is contrary to what we have observed above as regards the true construction and effect of the provisions in S. 23 of the Act. As genuine compromise was permissible to be made by the 43 employees who gave the written agreements mentioned above, we are unable to accept the second contention made on behalf of the petitioner-Sangh.7. In this connection, it requires to be recorded that the amount due to these 43 employees, as admitted on behalf of the company in the statement filed by it before the Authority, was deposited by the company in the office of the Authority. That amount has been recovered by the petitioner-Sangh without prejudice to its contentions made in this petition. The amount as agreed to be due by the company has now been received by these 43 employees. The agreements made by these 43 employees, so far as the company is concerned, have now been completely performed and the company has discharged its obligation for payment of illegal deductions claimed by these employees before the Authority, in the application that was made by the petitioner-Sangh. We must add that it was permissible for these 43 employees by way of agreement to admit that the amounts mentioned by the company as payable to them in the statement filed (before the Authority) were the only amounts payable to them and to accept those amounts in full settlement of the claims made on their behalf in the application filed by the petitioner-Sangh. Having regard to this finding, the second contention fails. As the second contention fails, we do not deem it necessary to consider and decide the first contention to law made on behalf of the petitioner-Sangh before us.

Decision:
0[ds]Now, it is difficult for us to accept the above submission made on behalf of theGenuine and valid compromise made between an employee and an employer in connection with disputes between them as regards the true and correct amounts of illegal deductions payable to the employee cannot be held to be relinquishment of rights. Apparently there can be genuine disputes in respect of amounts claimed by employees in applications made under the Act. In numerous case, an employer may be able to prove that though the claims were for very large amounts, the illegal deductions were really of small amounts which were payable by them. The question is whether, in connection with such genuine disputes between an employee and an employer, S. 23 provides that settlement cannot be made and compromise cannot be effected. What is null and void under the section is relinquishment of rights conferred under the Act. When under compromise an agreed amount is held to be due and payable to an employee, the compromise cannot be described as an agreement for relinquishment of rights conferred by the Act.It appears to us that there is nothing in the two authorities relied upon on behalf of theIn this connection, it requires to be recorded that the amount due to these 43 employees, as admitted on behalf of the company in the statement filed by it before the Authority, was deposited by the company in the office of the Authority. That amount has been recovered by thewithout prejudice to its contentions made in this petition. The amount as agreed to be due by the company has now been received by these 43 employees. The agreements made by these 43 employees, so far as the company is concerned, have now been completely performed and the company has discharged its obligation for payment of illegal deductions claimed by these employees before the Authority, in the application that was made by theWe must add that it was permissible for these 43 employees by way of agreement to admit that the amounts mentioned by the company as payable to them in the statement filed (before the Authority) were the only amounts payable to them and to accept those amounts in full settlement of the claims made on their behalf in the application filed by theHaving regard to this finding, the second contention fails. As the second contention fails, we do not deem it necessary to consider and decide the first contention to law made on behalf of the