# Alchemist Ltd v. Dinesh Chandra Tripahthi & Anr

- **Citation:** (2020) 1 ILRA 1950
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-12-04
- **Case number:** Writ-C No. 21892 of 2016
- **Bench:** Dr. Yogendra Kumar Srivastava
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/alchemist-ltd-v-dinesh-chandra-tripahthi-anr-45102
- **Pages:** 20

## Headnote

A. Payment of Wages Act, 1936 - Section
15 (2) - Claims arising out of deductions
from wages or delay in payment of wages
- the authority under Section 15 of the
Act,
1936
is
a
tribunal
of
limited
jurisdiction - mere denial of existence of
relationship of employer and employee
may not be sufficient to oust the
jurisdiction of the authority under the
Act, 1936 - it would only be in a case
where a serious dispute is raised with
regard to the existence of the contract of
employment that the authority would
cease to have jurisdiction to entertain the
claim
as
the
same
may
involve
adjudication upon complicated questions
of law and fact - orders passed by the
Prescribed Authority set aside. (Para 4, 12,
30, 33 & 38)

The Industrial Tribunals while deciding matters
relating to labour disputes in proceedings
which are summary in nature are to dispose of
the issues, whether preliminary or otherwise, at
the same - where the claim had been made
under Section 15 of the Act, 1936 raising a
grievance with regard to delay in payment of
wages and as per terms of the first proviso to
sub-section (3) of Section 15 the authority
under the Act, 1936 is enjoined to dispose of
the claim as far as applicable within a period of
three months from the date of registration of
the claim by authority - The second proviso to
sub-section (3) mandates that the period of
three months may be extended if both parties
to the dispute agree for any bonafide reason to
be recorded by the authority that the said
period of three month may be extended to
such period as may be necessary to dispose of
the application in a just manner. (Para 36)

Held: - In a claim filed under Section 15 of the Act,
1936 arising out of deductions from wages or delay
in payment of wages time is of essence and the
matter cannot be lingered on the pretext of deciding
preliminary issues. (Para 37)

Writ Petitions allowed. (E-7)

List of cases cited: -

## Text

_Characters 0–39,499 of 68,138. This is a partial read: ask again with offset=39499 for what follows._

1 All. Smt. Nanhi Devi Vs. State of U.P. & Ors.
1951

18. In view of the discussion made
hereinabove the judgments on which the
reliance has been placed by the learned
counsel for the petitioner are of no help to
him.

19. In the facts and circumstances of
the case, it is provided that in fact the final
inquiry has not been concluded till date,
the same shall be concluded as per the
Rule 6 of the Rules, 1997 within time
bound period and, if possible, within a
period of three months.
----------
(2020)1ILR 1950

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.12.2019

BEFORE
THE HON'BLE DR. YOGENDRA KUMAR
SRIVASTAVA, J.

Writ-C No. 21892 of 2016
Connected With
Writ-C No. 21801 of 2016 & Writ-C No. 21847
of 2016 & Writ-C No. 21891 of 2016

Alchemist Ltd. ...Petitioner
Versus
Dinesh Chandra Tripahthi & Anr.
 ...Respondents

Counsel for the Petitioner:
Sri Shashwat Kishore Chaturvedi

Counsel for the Respondents:
C.S.C., Sri Krishan Chandra Tripathi

A. Payment of Wages Act, 1936 - Section
15 (2) - Claims arising out of deductions
from wages or delay in payment of wages
- the authority under Section 15 of the
Act,
1936
is
a
tribunal
of
limited
jurisdiction - mere denial of existence of
relationship of employer and employee
may not be sufficient to oust the
jurisdiction of the authority under the
Act, 1936 - it would only be in a case
where a serious dispute is raised with
regard to the existence of the contract of
employment that the authority would
cease to have jurisdiction to entertain the
claim
as
the
same
may
involve
adjudication upon complicated questions
of law and fact - orders passed by the
Prescribed Authority set aside. (Para 4, 12,
30, 33 & 38)

The Industrial Tribunals while deciding matters
relating to labour disputes in proceedings
which are summary in nature are to dispose of
the issues, whether preliminary or otherwise, at
the same - where the claim had been made
under Section 15 of the Act, 1936 raising a
grievance with regard to delay in payment of
wages and as per terms of the first proviso to
sub-section (3) of Section 15 the authority
under the Act, 1936 is enjoined to dispose of
the claim as far as applicable within a period of
three months from the date of registration of
the claim by authority - The second proviso to
sub-section (3) mandates that the period of
three months may be extended if both parties
to the dispute agree for any bonafide reason to
be recorded by the authority that the said
period of three month may be extended to
such period as may be necessary to dispose of
the application in a just manner. (Para 36)

Held: - In a claim filed under Section 15 of the Act,
1936 arising out of deductions from wages or delay
in payment of wages time is of essence and the
matter cannot be lingered on the pretext of deciding
preliminary issues. (Para 37)

Writ Petitions allowed. (E-7)

List of cases cited: -

1. A.V.D'costa Vs. B.C. Patel and Ors.,2

2. Shri Ambica Mills Co. Ltd. Vs. Shri S.B.Bhatt
and another3

3. Payment of Wages Inspector Vs. Surajmal
Mehta and Ors.,4

4. M/s E.Hill & Company (P) Ltd., Mirzapur Vs.
City Magistrate Mirzapur & Anr5
1952 INDIAN LAW REPORTS ALLAHABAD SERIES
5. D.C.M. Limited, New Delhi Vs. Prescribed
Authority, Meerut and others6

6. M/s. Upper Doab Sugar Mills Muzaffarnagar
Vs. Prescribed Authority and others7

7. D.P. Maheshwari Vs. Delhi Administration
and others8

8. National Council for Cement & Building
Materials Vs. State of Haryana and others9

9. Cooper Engineering Ltd. Vs. P.P. Mundhe10

10. S.K. Verma Vs. Mahesh Chandra11

11.D.P. Maheshwari Vs. Delhi Administration12
(supra)

12.Workmen Vs. Hindustan Lever Ltd.13

(Delivered by Hon'ble Dr. Yogendra
Kumar Srivastava, J.)

1. Heard Sri S.K.Chaturvedi, learned
counsel
for
the
petitioner,
Sri
K.C.Tripathi, learned counsel appearing
for
the
first
respondent
and
Sri
Shreeprakash Singh, learned Standing
Counsel
appearing
for
the
second
respondent in the present petition along
with connected matters.

2. Challenge in Writ-C No. 21892 of
2016 is to an order dated 07.04.2016
passed by the Prescribed Authority under
the Payment of Wages Act, 1936/Deputy
Labour
Commissioner,
U.P.,
Jhansi
Region, Jhansi in Case No. P.W. 35 of
2009 (Dinesh Chandra Tripathi Vs.
Director Alchemist and others) whereby
certain issues were framed and the matter
was posted for hearing the parties on
merits. The other three writ petitions
(Writ-C Nos. 21801/2016, 21847/2016 and
21891/2016) seek to challenge similar
orders of the same date i.e. 07.04.2016
which had been passed by the Prescribed
Authority in Case Nos. P.W. 42/2010,
P.W. 16/2012 and P.W. 18/2011.

3. All the four writ petitions are
based on a similar set of facts and as such
with the consent of the counsel for the
parties the matters are being taken up for
disposal together.

4. The records of the case reflect that
an application under Section 15 (2) of the
Payment of the Wages Act, 19361 was
filed by the first respondent claiming
wages for the period 16.01.2009 to
30.11.2009. The first respondent also filed
similar applications under Section 15 (2)
of the Act, 1936 claiming wages for the
period 1.12.2009 to 30.10.2010, 1.11.2010
to 3.9.2011 and 1.10.2011 to 30.9.2012,
registered as Case Nos. 42/2010, 16/2012
and 18/2011 respectively.

5. The aforementioned cases were
contested by the petitioner by filing
detailed written reply/objections dated
20.3.2010 stating that the applicant (first
respondent herein) had abandoned his
services and as such he was discontinued
from the rolls of the petitioner-company
with effect from 13.2.2008. It was
accordingly submitted that the applications
filed under Section 15 of the Act, 1936
were not maintainable and as such the
question of jurisdiction and maintainability
be decided as a preliminary issue.

6. Taking into consideration the
application filed by the first respondent
and also the reply/preliminary objections
submitted by the petitioner as also its
rejoinder the Prescribed Authority passed
the order dated 07.04.2016 wherein it was
stated that in the light of the facts which
had been presented before it, it was
necessary to decide the issues with regard
1 All. Alchemist Ltd. Vs. Dinesh Chandra Tripathi & Anr.
1953
to the jurisdiction of the Prescribed
Authority under the Act, 1936, the
question with regard to existence of
employer-employee relationship during
the period in question, and as to whether
the applicant was entitled to the reliefs
prayed for. The matter was fixed for
25.04.2016 for hearing the parties on
merits.

7. Identical orders were passed on
the same date i.e. 07.04.2016 in all the
four cases which had been filed by the first
respondent
before
the
Prescribed
Authority, and the said orders have been
challenged by filing these writ petitions
which are being decided together.

8. The grounds of challenge in these
writ petitions are that the services of the
first respondent having stood terminated
on 13.02.2008, unless the order of
termination was not declared illegal the
applications filed under the Act, 1936
were not maintainable and that the
Prescribed
Authority
ought
to
have
decided the question of maintainability of
the claim petitions before proceeding
further with the matter.

9. The counsel for the petitioner has
contended that the question of employeremployee
relationship
which
would
involve adjudicating upon complicated
questions of fact and law was beyond the
scope and jurisdiction of the Prescribed
Authority under the Act, 1936 and
accordingly the Prescribed Authority was
proceeding beyond its jurisdiction.

10. Per contra, learned counsel
appearing for the first respondent has
submitted that the issue of employeremployee relationship was incidental to the
main question involved in the claims
petitions and therefore there was no error in
the order passed by the Prescribed Authority
and proceeding further with the matters.

11. On the basis of the rival
contentions raised by the parties the
question which falls for consideration is
regarding the scope and jurisdiction of the
Prescribed Authority under the Act, 1936
and to what extent the issue of employeremployee relationship can be considered
in such proceedings.

12. In order to appreciate the
controversy involved in the present writ
petitions the relevant provisions under the
Act, 1936 may be adverted to. The
provisions contained under Section 15 of
the Act, 1936 which relate to claims
arising out of deductions from wages or
delay in payment of wages, are being
extracted below :-

"15. Claims arising out of
deductions from wages or delay in
payment of wages and penalty for
malicious or vexatious claims- (1) The
appropriate
Government
may,
by
notification in the Official Gazette, appoint
-

(a)
any
Commissioner
for
workmen's Compensation; or

(b) any officer of the Central
Government exercising functions as,--

(i)
Regional
Labour
Commissioner; or

(ii)
Assistant
Labour
Commissioner with at least two years'
experience; or

(c) any officer of the State
Government not below the rank of
Assistant Labour Commissioner with at
least two year's experience; or

(d) a presiding officer of any
Labour Court or Industrial Tribunal,
1954 INDIAN LAW REPORTS ALLAHABAD SERIES
constituted under the Industrial Disputes
Act, 1947 (14 of 1947) or under any
corresponding
law
relating
to
the
investigation and settlement of industrial
disputes in force in the State; or

(e)
any
other
officer
with
experience as a Judge of a Civil Court or a
Judicial Magistrate,

as the authority to hear and
decide for any specified area all claims
arising out of deductions from the wages,
or delay in payment of the wages, of
persons employed or paid in that area,
including all matters incidental to such
claims:"

Provided
that
where
the
appropriate
Government
considers
it
necessary so to do, it may appoint more
than one authority for any specified area
and may, by general or special order,
provide for the distribution or allocation of
work to be performed by them under this
Act.

(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 any legal
practitioner or any official of a registered
trade union authorized in writing to act on
his behalf, or any Inspector under this Act,
or any other person acting with the
permission of the authority appointed
under sub-section (1), may apply to such
authority for a direction under sub-section
(3):

Provided
that
every
such
application shall be presented within
twelve months from the date on which the
deduction from the wages was made or
from the date on which the payment of the
wages was due to be made, as the case
may be :

Provided
further
that
any
application may be admitted after the said
period of twelve months when the
applicant satisfies the authority that he had
sufficient cause for not making the
application within such period.

(3) When any application under
sub-section (2) is entertained, the authority
shall hear the applicant and the employer
or other person responsible for the
payment of wages under Section 3, or give
them an opportunity of being heard, and,
after such further enquiry, if any, as may
be necessary, may, without prejudice to
any other penalty to which such employer
or other person is liable under this Act,
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, not exceeding ten
times the amount deducted in the former
case and not exceeding three thousand
rupees but not less than one thousand five
hundred rupees in the latter, and even if
the amount deducted or delayed wages are
paid before the disposal of the application,
direct the payment of such compensation,
as
the
authority
may
think
fit,not
exceeding two thousand rupees :

Provided that a claim under this
Act shall be disposed of as far as
practicable within a period of three months
from the date of registration of the claim
by the authority :

Provided further that the period
of three months may be extended if both
parties to the dispute agree for any bona
fide reason to be recorded by the authority
that the said period of three months may
be extended to such period as may be
necessary to dispose of the application in a
just manner:

Provided also that no direction
for the payment of compensation shall be
made in the case of delayed wages if the
1 All. Alchemist Ltd. Vs. Dinesh Chandra Tripathi & Anr.
1955
authority is satisfied that the delay was due
to -

(a) a bona fide error or bona fide
dispute as to the amount payable to the
employed person; or

(b)
the
occurrence
of
an
emergency, or the existence of exceptional
circumstances, the person responsible for
the payment of the wages was unable, in
spite of exercising reasonable diligence; or

(c) the failure of the employed
person to apply for or accept payment.

(4) If the authority hearing an
application under this section is satisfied-

(a) that the application was
either
malicious,
or
vexatious,
the
authority may direct that a penalty not
exceeding three hundred seventy-five
rupees be paid to the employer or other
responsible for the payment of wages by
the person presenting the application; or

(b) that in any case in which
compensation is directed to be paid under
sub-section (3), the applicant ought not to
have been compelled to seek redress under
this section, the authority may direct that a
penalty not exceeding three hundred
seventy five rupees be paid to Appropriate
Government by the employer or other
person responsible for the payment of
wages.

(4-A) Where there is any dispute
as to the person or persons being the legal
representative or representatives of the
employer or of the employed person, the
decision of the authority on such dispute
shall be final.

(4-B) Any inquiry under this
section shall be deemed to be a judicial
proceeding within the meaning of Sections
193, 219 and 228 of the Indian Penal Code
(45 of 1860).

(5) Any amount directed to be
paid under this section may be recovered-

(a)
if
the
authority
is
a
Magistrate, by the authority as if it were a
fine imposed by him as Magistrate, and

(b) if the authority is not a
Magistrate, by any Magistrate to whom the
authority makes application in this behalf,
as if it were a fine imposed by such
Magistrate."

13. This Court may take note of the
fact that the Payment of Wages Act, 1936
was enacted to ensure that the wages
payable to employees covered by the Act
are disbursed by the employers within the
prescribed
time
limit
and
that
no
deductions other than those authorised by
law are made by the employers.

14. The term wages has been defined
under Section 2 (vi). Under Section 3 a
general responsibility is cast upon every
employer
for
payment
to
persons
employed by him of all wages required to
be paid under the Act. The time schedule
for payment of wages is prescribed under
Section 5. Section 7 enumerates the
deductions which may be made from the
wages. The fines which can be imposed on
any employed persons are specified under
Section 8. Deductions for reason of
absence from duty, for damage or loss, for
services
rendered,
for
recovery
of
advances and for recovery of loans are
provided for under Sections 9, 10, 11, 12,
12-A respectively.

15. Section 15 of the Act, 1936
provides for filing of claims arising out of
deductions from wages or delay in
payment of wages. This section not only
provides the forum but also provides the
remedy
for
non-payment
of
wages,
whether by way of deductions or delay.
The authority under the Act for the
purposes of hearing and deciding the
1956 INDIAN LAW REPORTS ALLAHABAD SERIES
claims under Section 15 is appointed by
the
appropriate
Government
by
notification in the Official Gazette. The
authority so appointed is empowered to
hear all claims arising out of deductions
from wages or delay in payment of wages
and all incidental matters.

16. Upon an application being filed
under Section 15 (2), the authority
appointed for the purpose is required to
hear the applicant and the employer or
other person responsible for the payment
of wages under section 3, or give them an
opportunity of being heard, and, after such
further inquiry, if any, as may be
necessary, may, without prejudice to any
other penalty to which such employer or
other persons are liable under the Act,
direct the refund to the employed persons
of the amount deducted, or the payment of
the delayed wages, together with the
payment of such compensation as it may
think fit, not exceeding ten times the
amount deducted in the former case and
not exceeding three thousand rupees but
not less than one thousand five hundred
rupees in the latter, and even if the amount
deducted or delayed wages are paid before
the disposal of the application, it may
direct the payment of such compensation,
as it may think fit, not exceeding two
thousand rupees.

17. The proviso to sub-section (3)
lays down that a claim under the Act shall
be disposed of as far as practicable within
a period of three months from the date of
registration of the claim by the authority. It
has also been provided that no direction
for payment of compensation shall be
made in the case of delayed wages if the
authority is satisfied that the delay was due
to - (a) a bona fide error or bona fide
dispute as to the amount payable to the
employed person, or (b) the occurrence of
an emergency, or the existence of
exceptional circumstances, the person
responsible for the payment of the wages
was unable, in spite of
exercising
reasonable diligence, or (c) the failure of
the employed person to apply for or accept
payment.

18. The scope of jurisdiction of the
authority under Section 15 of the Act,
1936 fell for consideration in the case of
A.V.D'costa Vs. B.C. Patel and Ors.,2
and it was held that the authority set up
under Section 15 is a tribunal of limited
jurisdiction which could decide only what
actual terms of the contract between the
parties were in order to determine the
actual wages. The observations made in
the judgment are being extracted below :-

"7. The Authority set up under
section 15 of the statute in question is
undisputably
a
tribunal
of
limited
jurisdiction. Its power to hear and
determine disputes must necessarily be
found in the provisions of the Act. Such a
tribunal, it is undoubted, cannot determine
any controversy which is not within the
ambit of those provisions. On examining
the relevant provisions of the Act it will be
noticed that it aims at regulating the
payment of wages to certain classes of
persons employed in industry. It applies in
the first instance to the payment of wages
to persons employed in any factory or
employed by a railway administration; but
the State Government has the power after
giving three months' notice to extend the
provisions of the Act or any of them to the
payment of wages to any class of persons
employed in any class or group of
industrial establishments. "Wages means -

"all remuneration, capable of
being expressed in terms of money, which
1 All. Alchemist Ltd. Vs. Dinesh Chandra Tripathi & Anr.
1957
would, if the terms of the contract of
employment, express or implied, were
fulfilled, be payable........... to a person
employed in respect of his employment or
of work done in such employment....."
(omitting words not necessary for our
present purpose).

Section 3 lays down that every
employer or his representative or nominee
shall be responsible for the payment to
persons employed by him of all wages.
Section 3 provides for fixation of "wageperiods" which shall not exceed one month
in any case. Section 5 indicates the last
date within which, with reference to the
particular wage-period, wages shall be
paid.

Section 7 lays down that the
wages of an employed person shall be paid
to him without deductions of any kind
except those authorized by or under the
Act. Section 7(2) in cls. (a) to (k) specifies
the heads under which deductions from
wages may be made, namely, fines;
deductions
for
absence
from
duty;
deductions for damage to or loss of goods
of the employer; deductions for house
accommodation supplied by the employer;
deductions for amenities and services
supplied by the employer; deductions for
recovery of advances or for adjustment of
over payments of wages; deductions of
income-tax payable by the employee;
deductions to be made under orders of a
Court or other competent authority;
deductions for subscriptions to, and for
repayment of advances from any provident
fund; deductions for payments to cooperative societies, etc.; and finally,
deductions made with the concurrence of
the employed person in furtherance of
certain schemes approved by Government.
No other deductions are permissible. It is
also laid down that every payment made
by the employed person to the employer or
his agent shall be deemed to be deduction
from wages. Each of the several heads of
deductions aforesaid is dealt with in detail
in sections 8 to 13.

Section
8
lays
down
the
conditions and limits subject to which
fines may be imposed and the procedure
for imposing such fines. It also requires a
register of such fines to be maintained by
the person responsible for the payment of
wages. Section 9 deals with deductions on
account of absence from duty and
prescribes the limits and the proportion
thereof to wages. Section 10 similarly
deals with deductions for damage or loss
to the employer and the procedure for
determining the same. Like S. 8, this
section also requires a register of such
deductions
and
realizations
to
be
maintained by the person responsible for
the payment of wages.

Section 11 lays down the limits
of deductions for house accommodation
and other amenities or services which may
have been accepted by the employee,
subject to such conditions as the State
Government may impose. Section 12 lays
down the conditions subject to which
deductions for recovery of advances may
be made from wages. Finally S.13
provides that the deductions for payment
to co-operative societies and insurance
schemes
shall
be
subject
to
such
conditions as the State Government may
prescribe.

xxxx

We then come to S.15 which
makes provision for the appointment of the
Authority "to hear and decide for any
specified area all claims arising out of
deductions from the wages, or delay in
payment
of
the
wages
of
persons
employed or paid in that area". Where the
Authority finds that any deduction has
been made from the wages of an employed
1958 INDIAN LAW REPORTS ALLAHABAD SERIES
person or the payment of any wages had
been delayed, he may at the instance of the
wage-earner
himself
or
any
legal
practitioner or any official of a registered
trade union authorized in writing to act on
his behalf, or any Inspector under the Act
or any other person acting with the
permission of the Authority, after making
such enquiry as he thinks fit and after
giving an opportunity to the person
responsible for the payment of wages
under S.3 to show cause, direct the refund
to the employed person of the amount
deducted or the payment of delayed wages
together with such compensation as he
may determine.

The section also lays down the
limits and conditions of his power to direct
payment of compensation to the employed
person or of penalty to the employer, if he
is satisfied that the application made on
behalf
of
an
employee
was
either
malicious or vexatious. His determination
is final subject to a very limited right of
appeal under S.17. Section 18 vests the
Authority with all the powers of a civil
Court under the Code of Civil Procedure,
for the purpose of taking evidence, of
enforcing the attendance of witnesses and
of
compelling
the
production
of
documents. Section 22 lays down that no
Court shall entertain any suit in respect of
wages or of deduction from wages in so
far as the claim forms the subject matter of
a pending proceeding under the Act or has
formed the subject of a direction in favour
of or against the plaintiff under Section 15,
or which could have been recovered by the
application under that section.

xxxx

10. In our opinion, the scheme of
the Act as set forth above shows that if an
employee were to state that his wages
were, say Rs. 100 per month, and that Rs.
10 had been wrongly deducted by the
authority responsible for the payment of
wages, that is to say, that the deductions
could not come under any one of the
categories laid down in S.7(2), that would
be a straight case within the purview of the
Act and the authority appointed under S.15
could entertain the dispute. But it is said
on behalf of the respondent that the
authority has the jurisdiction not only to
make directions contemplated by sub-s.(3)
of S.15 to refund to the employed person
any amount unlawfully deducted but also
to find out what the terms of the contract
were so as to determine what the wages of
the employed person were.

There
is
no
difficulty
in
accepting that proposition. If the parties
entered into the contract of service, say by
correspondence and the contract is to be
determined with reference to the letters
that passed between them, it may be open
to the authority to decide the controversy
and find out what the terms of the contract
with reference to those letters were. But if
an employee were to say that his wages
were Rs. 100 per month which he actually
received as and when they fell due,but that
he would be entitled to higher wages if his
claims to be placed on the higher wages
scheme had been recognized and given
effect to, that would not, in our opinion, be
a matter within the ambit of his
jurisdiction.

The authority has the jurisdiction
to decide what actually the terms of the
contract between the parties were, that is
to say, to determine the actual wages; but
the authority has no jurisdiction to
determine the question of potential wages.
The respondent's complaint in the present
case comes within the latter illustration. If
the respondent's claim to be placed on the
scheme of higher wages had been unduly
passed over by the appellant, if indeed he
had the power to do so, the obvious
1 All. Alchemist Ltd. Vs. Dinesh Chandra Tripathi & Anr.
1959
remedy of the respondent was to approach
the higher authorities of the railway
administration by way of departmental
appeal or revision; but instead of doing
that, he has sought his redress by making
his claim before the authority under the
Act.

The question is, has the authority
the power to direct the appellant or his
superior officers who may have been
responsible for the classification, to revise
the classification so as to upgrade him
from the category of a daily wage-earner
to that of an employee on the monthly
wages scheme. If the respondent had been
on the cadre of monthly wages and if the
appellant had withheld his rise in wages to
which he was automatically entitled,
without any orders of his superior officers,
he might justly have claimed the redress of
his grievance from the authority under the
Act, as it would have amounted to an
under payment.

But in the present case, on the
case as made on behalf of the respondent,
orders of the superior officers were
necessary to upgrade him from a daily
wage-earner to a higher cadre. The
authority under the Act has not been
empowered under S.15 to make any such
direction to those superior officers. The
appellant is responsible to pay the
respondent only such wages as are shown
in
the
relevant
register
of
wages
presumably maintained by the department
under the provisions of the Act, but he
cannot be directed to pay the respondent
higher wages on the determination by the
authority that he should have been placed
on the monthly wages scheme.

xxxx

15. The jurisdiction of the
Tribunal arises under S.15 of the Payment
of Wages Act, 1936 (Act IV of 1936)
(hereinafter referred to as the Act). The
Tribunal is set up to decide "all claims
arising out of deductions from the wages
or delay in payment of wages". The relief
which it is authorised to award is to direct
"the refund of the amount deducted, or the
payment of the wages delayed". Such a
direction made by the Tribunal is final,
under S.17 of the Act, subject to the right
of appeal provided therein. Under S.22, no
suit lies in any Court for the recovery of
wages or of any deduction there from
which could have been recovered by an
application under S.15.

However limited this jurisdiction
of the Tribunal, and however elaborate the
provisions in the Act for the preparation
and display by the employer of the table of
wages payable to the employees, and for
the inspection thereof by the Factory
Inspectors, it cannot be supposed that the
jurisdiction of the Tribunal is only to
enforce the wages so displayed or
otherwise
admitted.
Such
a
narrow
construction would rob the machinery of
the Act of a great deal of its utility and
would confine its application to cases
which are not likely to arise often, in a
well-ordered
administration
like
the
Railways. Indeed, I do not gather that such
a construction was pressed for, before us,
in the arguments.

Even a Tribunal of limited
jurisdiction,
like
the
one
under
consideration, must necessarily have the
jurisdiction to decide, for itself, the
preliminary facts on which the claim or
dispute before it depends. In the instant
case, it must have jurisdiction to decide
what the wages payable are and, for that
purpose, what the contract of employment
and the terms thereof are. The judgment of
my learned brothers in this case apparently
recognizes the jurisdiction of the Tribunal
as above stated, when it said that the
Tribunal has the power "to find out what
1960 INDIAN LAW REPORTS ALLAHABAD SERIES
the terms of the contract were to determine
what the wages of the employed person
were". Whether the Tribunal's decision in
this behalf is conclusive or not is a matter
that does not arise for decision in this case.

16. But, it is said that the
Tribunal has no authority to determine the
question
of
"potential
wages".
Undoubtedly a claim to a higher potential
wage cannot be brought in under the
category of "claims
arising out of
deduction from the wages or delay in
payment of the wages" if that wage
depended on the determination by a
superior departmental or other authority as
to whether or not a particular employee is
entitled to the higher wage-a determination
which
involves
the
exercise
of
administrative judgment or discretion or
certification, and which would, in such a
situation, be a condition of the payability
of the wage.

But where the higher wage does
not depend upon such determination but
depends on the application of, and giving
effect to, certain rules and orders which, for
this purpose, must be deemed to be
incorporated in the contract of employment,
such a wage is, in my view, not a prospective
wage, merely because the paying authority
concerned makes default or commits error in
working out the application of the rules. In
this context it is relevant to notice that the
definition of "wages" in the Act is "all
remuneration which would if the terms of the
contract, express or implied, 'were' fulfilled,
be payable". The word "were" in this
definition which I have underlined, seems to
indicate that even a "prospective wage" which
would be payable on the proper 'application'
of the rules in the sense which I have
explained above may well fall within its
scope. The wage under the Act is not,
necessarily, the immediately pre-existing
wage but the presently-payable wage."

19. The scope of jurisdiction of the
authority under Section 15 again came to
be considered in the case of Shri Ambica
Mills Co. Ltd. Vs. Shri S.B.Bhatt and
another3, and it was held that the only
claims which can be entertained by the
authority are claims arising out of
deductions made in payment of wages. It
was stated in the judgment as follows :-

"11. The scheme of the Act is clear.
The Act was intended to regulate the payment
of wages to certain classes of persons
employed in industry, and its object is to
provide for a speedy and effective remedy to
the employees in respect of their claims arising
out of illegal deductions or unjustified delay
made in paying wages to them. With that
object S. 2(vi) of the Act has defined wages.
Section 4 fixes the wage period. Section 5
prescribes the time of payment of wages; and
S. 7 allows certain specified deductions to be
made. Section 15 confers jurisdiction on the
authority appointed under the said section to
hear and decide for any specified area claims
arising out of deductions from wages, or delay
in payment of wages, of persons employed or
paid in that area. It is thus clear that the only
claims which can be entertained by the
authority are claims arising out of deductions
or delay made in payment of wages. The
jurisdiction thus conferred on the authority to
deal with these two categories of claims is
exclusive; for S. 22 of the Act provides that
matters which lie within the jurisdiction of the
authority are excluded from the jurisdiction of
ordinary civil courts. Thus in one sense the
jurisdiction conferred on the authority is
limited by S. 15, and in another sense it is
exclusive as prescribed by S. 22."

20. While considering the ambit and
scope of the expression "claims arising out
of deductions or delay made in payment of
wages" it was held that in dealing with
1 All. Alchemist Ltd. Vs. Dinesh Chandra Tripathi & Anr.
1961
claims arising out of deductions or delay
made in payment of wages the authority
inevitably would have to consider questions
incidental to the said matters. In determining
the scope of these incidental questions care
must be taken to see that under the guise of
deciding incidental matters the limited
jurisdiction is not unreasonably or unduly
extended. Care must also be taken to see that
the scope of these incidental questions is not
unduly limited so as to affect or impair the
limited jurisdiction conferred on the authority.
The observations made in the judgment are as
follows:-

"12. In dealing with claims
arising out of deductions or delay made in
payment of wages the authority inevitably
would
have
to
consider
questions
incidental
to
the
said
matters.
In
determining the scope of these incidental
questions care must be taken to see that
under the guise of deciding incidental
matters the limited jurisdiction is not
unreasonably or unduly extended. Care
must also be taken to see that the scope of
these incidental questions is not unduly
limited so as to affect or impair the limited
jurisdiction conferred on the authority.
While considering the question as to what
could be reasonably regarded as incidental
questions let us revert to the definition of
wages prescribed by S. 2(vi). Section 2(vi)
as it then stood provided, inter alia, that
'wages' means all remuneration capable of
being expressed in terms of money which
would, if the terms of the contract of
employment, express or implied, were
fulfilled, be payable to a person employed
in respect of his employment or of work
done in such employment, and it includes
any
bonus
or
other
additional
remuneration of the nature aforesaid which
would be so payable and any sum payable
to
such
person
by
reason
of
the
termination of his employment. It also
provided that the word "wages" did not
include five kinds of payments specified in
clauses (a) to (e). Now, if a claim is made
by an employee on the ground of alleged
illegal deduction or alleged delay in
payment of wages several relevant facts
would fall to be considered. Is the
applicant an employee of the opponent?;
and that refers to the subsistence of the
relation between the employer and the
employee. If the said fact is admitted, then
the next question would be: what are the
terms of employment? Is there any
contract of employment in writing or is the
contract oral? If that is not a point of
dispute between the parties then it would
be necessary to enquire what are the terms
of the admitted contract. In some cases a
question may arise whether the contract
which was subsisting at one time had
ceased to subsist and the relationship of
employer and employee had come to an
end at the relevant period. In regard to an
illegal deduction a question may arise
whether the lock-out declared by the
employer is legal or illegal. In regard to
contracts of service some times parties
may be at variance and may set up rival
contracts, and in such a case it may be
necessary to enquire which contract was in
existence at the relevant time...."

21. While considering the question as
to what could be reasonably regarded as
incidental questions, it was stated in the
aforementioned case of Shri Ambica
Mills that it would be inexpedient to lay
down any hard and fast or general rule
which would afford a determining test to
demarcate the field of incidental facts
which can be legitimately considered by
the authority and those which cannot be so
considered. The observations made in this
regard in the judgment are as follows :-
1962 INDIAN LAW REPORTS ALLAHABAD SERIES

"....we do not propose to consider
these possible questions in the present appeal,
because, in our opinion, it would be
inexpedient to lay down any hard and fast or
general rule which would afford a determining
test to demarcate the field of incidental facts
which can be legitimately considered by the
authority and those which cannot be so
considered..."

22. The provisions under sub-section
(1) of Section 15 may again be referred to
at this stage and the same are being
extracted below :-

"15. Claims arising out of
deductions from wages or delay in
payment of wages and penalty for
malicious or vexatious claims- (1) The
appropriate
Government
may,
by
notification in the Official Gazette, appoint
-

(a)
any
Commissioner
for
workmen's Compensation; or

(b) any officer of the Central
Government exercising functions as,--

(i)
Regional
Labour
Commissioner; or

(ii)
Assistant
Labour
Commissioner with at least two years'
experience; or

(c) any officer of the State
Government not below the rank of
Assistant Labour Commissioner with at
least two year's experience; or

(d) a presiding officer of any
Labour Court or Industrial Tribunal,
constituted under the Industrial Disputes
Act, 1947 (14 of 1947) or under any
corresponding
law
relating
to
the
investigation and settlement of industrial
disputes in force in the State; or

(e)
any
other
officer
with
experience as a Judge of a Civil Court or a
Judicial Magistrate,

as the authority to hear and
decide for any specified area all claims
arising out of deductions from the wages,
or delay in payment of the wages, of
persons employed or paid in that area,
including all matters incidental to such
claims:"
(emphasis supplied)

23. The expression "including all
matters incidental to such claims" was
introduced by the Payment of Wages
(Amendment) Act, 1964 [Act No. 53 of
1964], and it appears to have been
introduced for the purposes of clarifying
the position of law which had already been
laid down in terms of the judgment in the
case of Shri Ambica Mills.

24.