C.W.P. No.7981 of 1989 -1- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P. No.7981 of 1989 Date of Decision: 10.12.2009 Haryana Tourism Corporation Ltd. ....Petitioner Versus Authority under the Minimum Wages Act, 1948, Faridabad and others ....Respondents Present: Mr. Vivek Singla, Advocate for Mr. Surinder Lamba, Advocate for the petitioner. Mr. D.S. Nalwa, Addl. A.G., Haryana. CORAM:HON'BLE MR. JUSTICE K. KANNAN 1. Whether Reporters of local papers may be allowed to see the judgment ? Yes 2. To be referred to the Reporters or not ? Yes 3. Whether the judgment should be reported in the Digest? Yes -.- K. KANNAN J.(ORAL) 1. The impugned order is imposition of penalty of eight times of the amount being the difference of what the management was liable to pay as minimum wages and what it actually paid. On inspection by the Labour Inspector, it was found that 38 workmen in the petitioner-establishment had been paid less than the minimum wages and on a notice issued, the management responded admitting the liability and stating that they had made good the deficiency and had paid to all the workmen the respective minimum wages payable to them. The Authority C.W.P. No.7981 of 1989 -2- constituted under the Minimum Wages Act still went on to hold that under the provisions of Section 20(2), they will be liable to damages and awarded eight times as penalty to each of the workmen as per the annexure found in the order. 2. Learned counsel for the petitioner contends that the order came to be passed at the instance of the Authority, who in his private capacity had a grouse against the Corporation. The petitioner's contention was that in an unsavoury incident that took place on 20.09.1988, the Officer, who has been described as the 3rd respondent in the writ petition, had an altercation at the restaurant and bar run by the Corporation when the 3rd respondent allegedly consumed liquor but left the restaurant without making payment. The staff of the restaurant was alleged to have stopped him, at which the officer threw the amount and one of the staff also got some injury when he attempted to stop the officer. This incident appears to have been complained to the police but later withdrawn on a compromise alleged to have been entered into by the Corporation with the customer, who was described to be the 3rd respondent. This incident is set out in express terms in the writ petition in paragraph 7. The 3rd respondent has filed the counter in his individual capacity as well as in the capacity as the Authority under the Minimum Wages Act and the incident has not been denied anywhere in the reply. The impugned order itself has been passed only subsequent to this incident. C.W.P. No.7981 of 1989 -3- 3. Learned counsel appearing for the petitioner states that there was personal bias for the officer against the Corporation which has coloured his perception and the decision to impose penalty of eight times was not on objective considerations but on account of mala fide exercise of the power. The law relating to mala fides and when it could vitiate an order have come through several decisions and the first requisite is that the person against whom mala fide is attributed shall be made a party. The second requirement is that the details of the bias or the basis for the attribute of the mala fide conduct must be clearly expressed. In this case, such an averment relating to an altercation has not been denied at all. It is too obvious that the person, who passed an order could not have forgotten what had taken place at the premises of the Corporation when the Officer was caught on a hot pursuit by the staff for walking away without payment after liquor consumption and the money which he did not part with was ultimately secured from him. The personal bias is writ large and the decision to impose a penalty ought not to have been undertaken by the officer. Learned counsel for the State, Sh. Nalwa contends that if the Act itself puts into his hand the power to decide and if such a decision was taken to impose a penalty within the realm of power granted under a statute, then it cannot be assailed on the ground of mala fides. 4. The Act gives a latitude of discretion in the matter of C.W.P. No.7981 of 1989 -4- imposition of penalty. Section 22 also contemplates an opportunity to be given to the affected party before it takes a decision. The language expressed in Section 20 detailing a procedure to hear and decide on the aspect of damages upto a particular limit is definitely a quasi-judicial function and an Authority, who has such a power to decide ought to take an objective assessment that would justify the levy of penalty. In this case, if he had a personal problem with the Corporation staff in any of this personal dealings, he ought to have recused himself from taking the decision. I agree with the contention of the learned counsel for the petitioner that the decision could not have been objective or at least, it cannot be accepted by any normal rational person to have been objective. That yet another Officer could have also passed the same order is not the point in issue. On the other hand whether the Officer that passed the order could have been influenced by his own personal predilection against the Corporation or any of its officers is alone the issue. Such a bias cannot be ruled out in this case. The order impugned is, therefore, liable to be quashed. 5. Even while quashing the order, I am of the view that if there had been a default or lapse on the part of the Corporation to pay the minimum wages but it had admittedly failed but later made good, the law contemplates imposition of a penalty but the quantum of penalty will be a matter for an exercise of discretion C.W.P. No.7981 of 1989 -5- that would depend on various factors. In this case, the contention of the petitioner was that it was not deliberate and it had been paid immediately after it was noticed by the Authority. The said aspect will be considered at the appropriate time when the Authority, who shall not be the 3rd respondent, takes up the matter for consideration afresh and take a decision if it so decides to undertake such an exercise at all. Subject to this liberty, the writ petition is allowed. There shall be, however, no direction as to costs. If a fresh enquiry is undertaken by the competent authority, needless to state that the petitioner shall have adequate opportunity to state its case before a final decision is taken up by the Authority. (K. KANNAN) JUDGE December 10, 2009 Pankaj*