Case: Payment Of Wages Inspector Vs. Surajmal Mehta &amp; Anr

2. On the licence of the Barnagar Electric Supply and Industry Company, of which respondent 1 was at all material times the managing director, having been revoked by the Madhya Pradesh Government and the companys undertaking having been taken over by the Madhya Pradesh Electricity Board, respondent I served notices on the companys employees that their services would no longer be required as from October 1, 1962. Thereupon the appellant on behalf of 20 employees of the company filed an application under Section 15 (2) of the Act to recover from respondent 1 wages for the notice month and retrenchment compensation amounting to Rs. 12,853.60 P. payable to the employees under Section 25FF ofthe Industrial Disputes Act, 1947. On respondent 1 contesting the claim as also the jurisdiction of the Authority, the Authority raised certain preliminary issues, namely : (1) whether the said application was maintainable in view of the revocation of the companys licence, (2) whether the Authority had jurisdiction to determine the liability of respondent 1 for retrenchment compensation before the amount thereof was ascertained under Section 33C (2) of the Industrial Disputes Act and (3) whether in view of the services of the workmen not having been interrupted by the said transfer and the terms and conditions of service applicable to them after the said transfer being not in any way less favourable than before and the said Board as the new employer being liable after the transfer for compensation in the event of retrenchment, the employees were entitled to claim any compensation. By his order dated May 21, 1963, the Authority held against respondent 1 on the question of jurisdiction. Respondent 1 thereupon filed a writ petition in the High Court and a Division Bench of the High Court held that Section 15 of the Act did not apply and that the proper forum for such an application was a Labour Court under Sec. 33C (2) of the Industrial Disputes Act. This appeal challenges the correctness of this order.

Court's reasoning:
The High Court thought that it was not but Mr. Shroff relied on certain decisions of this Court to contest that part of the conclusion of the High Court. The Industrial Disputes Act, which as enacted in 1947 was a piece of legislation which mainly provided machinery for investigation and settlement of industrial disputes, has since then undergone frequent modifications. In 1953, by Act 43 of that year Chapter VA consisting of Sections 25A to 25J was incorporated providing therein compensation for layoff and retrenchment. It also provided a definition of retrenchment in Sec. 2 (oo). Chapter VA, as it then stood, did not expressly provide for compensation for termination of service on account of transfer of an undertaking by an agreement or as a result of operation of law or the closure of the undertaking.It must, however, be remembered that though such compensation falls within the definition of wages, cases may arise where it would not be a simple question of recovery of wages.In the present case, for instance, the defence taken by respondent 1 was that he was not the person responsible for payment of compensation and that the right of the workmen was defeated by reason of the proviso to Section 25FF being, according to him, applicable inasmuch as these workmen were continued in the employment by the said Board, the new employer, that therefore there had been no interruption in their employment, that the terms and conditions of service given to them by the new employer were in no way less favourable than those they had when the company was the employer, and that the new employer was responsible for payment of compensation if any retrenchment took place in future. The question, therefore, is whether in view of the limited jurisdiction of the Authority under Section 15 (2) of the Act, it was intended to deal with such questions, which in some cases might well raise complicated problems of both fact and law.It is explicit from the terms of Section 15 (2) that the Authority appointed under sub-section (1) has jurisdiction to entertain applications only in two classes of cases, namely, of deductions and fines not authorised under Sections 7 to 13 and of delay in payment of wages beyond the wage periods fixed under Section 4 and the time of payment laid down in Section 5. This is clear from the opening words of sub-section (2) of Section 15, namely, "where contrary to the provisions of this Act any deduction has been made or any payment of wages has been delayed. These being the governing words in the sub-section the only applications which the Authority can entertain are those where deductions unauthorised under the Act are made from wages or there has been delay in payment beyond the wage period and the time of payment of wages fixed or prescribed under Sections 4 and 5 of the Act. Section 15 (2) postulates that the wages payable by the person responsible for payment under Section 3 are certain and such that they cannot be disputed.It is true, as stated above, that the Authority has the jurisdiction to try matters which are incidental to the claim in question. Indeed Section 15 (1) itself provides that the Authority has the power to determine all matters incidental to the claim arising from deductions from or delay in payment of wages. It is also true that while deciding whether a particular matter is incidental to claim or not care should be taken neither to unduly expand nor curtail the jurisdiction of the Authority. But it has at the same time to be kept in mind that the jurisdiction under Section 15 is a special jurisdiction. The Authority is conferred with the power to award compensation over and above the liability for penalty of fine which an employer is liable to incur under Sectionour view it could not be so entertained. In the first place, the claim made in the instant case is not a simple case of deductions having been unauthorisedly made or payment having been delayed beyond the wage periods and the time of payment fixed under Sections 4 and 5 of the Act. In the second place, in view of the defence taken by Respondent 1, the Authority would inevitably have to enter into questions arising under the proviso to Section 25FF, viz., whether there was any interruption in the employment of the workmen, whether the conditions of service under the Board were any the less favourable than those under the company and whether the Board, as the new employer, had become liable to pay compensation to the workmen if there was retrenchment in the future. Such an inquiry would necessarily be a prolonged inquiry involving questions of fact and of law. Besides, the failure to pay compensation on the ground of such a plea cannot be said to be either a deduction which is unauthorised under the Act, nor can it fall under the class of delayed wages as envisaged by Ss. 4 and 5 of the Act.