# M/S. Upper Doab Sugar Mills Muzaffarnagar v. Prescibed Authority and others

- **Citation:** (2012) 2 ILRA 763
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2012-05-11
- **Case number:** Civil Misc. Writ Petition No. 32242 of 1997
- **Bench:** Sudhir Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-upper-doab-sugar-mills-muzaffarnagar-v-prescibed-authority-and-others-42279
- **Pages:** 5

## Headnote

Payment of Wages Act, 1936-Section-15
(2)
and
(3)-Power
of
Prescribes
Authority-where
the
relationship
of
employer
and
employee
seriously
disputed-the claimant being worker of
contractor/Transporter have no concern
with
petition-such
question
is
not
incidental
but
a
substantive
jurisdictional
issue-order
passed
by
Prescribed Authority-beyond jurisdiction.

Held: Para 16

To my mind, this issue is not incidental
to the question of deduction or delayed
payment but a condition precedent to
attract the very provisions of Act 1936.
Therefore, in a case where the very
relationship is under a serious cloud, and
needs
a
detailed
but
exclusive
discussion, it is beyond the jurisdiction
of Prescribed Authority under Section
15(1) and (2) of the Act 1936 and has to
be adjudicated in appropriate regular
proceedings by raising an industrial
dispute. It could not have been decided
by an authority under Section 15(1)
while entering a claim under Section
15(2) and assuming jurisdiction upon
itself to decide the said issue. It is infact
not an incidental but a substantial
jurisdictional
issue
relating
to
very
applicability of Act 1936. Hence this
could
not
have
been
decided
by
Prescribed Authority under Section 15 of
Act 1936. The impugned orders passed in
both the writ petitions are thus wholly
without jurisdiction.
Case law discussed:
1980 (40) FLR 362

## Text

2 All] M/S. Upper Doab Sugar Mills Muzaffarnagar V. Prescibed Authority and others
763

7. Since similar matters are coming
up before this Court repeatedly, it would
be appropriate that the said question may
be answered by the Larger Bench, at the
earliest possible. Let the papers be laid
immediately before the Hon'ble The Chief
Justice for constituting the Larger Bench.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.05.2012

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Civil Misc. Writ Petition No. 32242 of 1997
And
Civil Misc Writ Petition No. 974 of 1998

M/S.
Upper
Doab
Sugar
Mills
Muzaffarnagar

 ...Petitioner
Versus
Prescribed Authority and others

 ...Respondents

Counsel for the Petitioner:
Sri V.B. Singh
Sri S.D.Singh

Counsel for the Respondents:
S.C.
Sri Deepak Verma
Sri S.K. Srivastava

Payment of Wages Act, 1936-Section-15
(2)
and
(3)-Power
of
Prescribes
Authority-where
the
relationship
of
employer
and
employee
seriously
disputed-the claimant being worker of
contractor/Transporter have no concern
with
petition-such
question
is
not
incidental
but
a
substantive
jurisdictional
issue-order
passed
by
Prescribed Authority-beyond jurisdiction.

Held: Para 16

To my mind, this issue is not incidental
to the question of deduction or delayed
payment but a condition precedent to
attract the very provisions of Act 1936.
Therefore, in a case where the very
relationship is under a serious cloud, and
needs
a
detailed
but
exclusive
discussion, it is beyond the jurisdiction
of Prescribed Authority under Section
15(1) and (2) of the Act 1936 and has to
be adjudicated in appropriate regular
proceedings by raising an industrial
dispute. It could not have been decided
by an authority under Section 15(1)
while entering a claim under Section
15(2) and assuming jurisdiction upon
itself to decide the said issue. It is infact
not an incidental but a substantial
jurisdictional
issue
relating
to
very
applicability of Act 1936. Hence this
could
not
have
been
decided
by
Prescribed Authority under Section 15 of
Act 1936. The impugned orders passed in
both the writ petitions are thus wholly
without jurisdiction.
Case law discussed:
1980 (40) FLR 362

(Delivered by Hon'ble Sudhir Agarwal, J.)

1. Heard Sri S.D.Singh, learned
counsel for the petitioner. Names of Sri
Deepak Verma and Sri S.K.Srivastava are
shown in the cause list for the respondents
but none has appeared though the case has
been called in revised except learned
Standing Counsel for the respondents.

2. The common question that arises in
both the matters relates to the very
jurisdiction of the Prescribed Authority
under Payment of Wages Act, 1936
(hereinafter referred to as "Act 1936") to
decide the issue relating to relationship of
employer and employee and therefore, are
being heard and decided by this common
judgment.

3. The writ petition is directed against
order dated 7.7.1997 (Annexure 7 to the
writ petition No.32242 of 1997), and
764 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
18.8.1997 (Annexure 1 to the writ petition
No.974 of 1998) passed by Prescribed
Authority under the Act 1936 allowing the
claim of workmen regarding alleged non
payment/deduction/delayed
payment
of
their wages along with compensation.

4. Sri S.D.Singh, learned counsel for
the petitioner contended that claim under
Section 15 of Act 1936 can be registered by
an
'employee'
against
'employer'
complaining about delayed or non payment
of wages or wrongful deduction but when
there is a serious dispute about very
existence of relationship of 'employer' and
'employee' between the claimant and
alleged employer, such an issue cannot be
decided in a summary proceeding under
Section 15 of Act 1936 Act but for the said
purpose claimant has to invoke jurisdiction
of regular adjudication of dispute before
Labour Disputes Adjudicatory Forum by
raising an Industrial Dispute. In such
matters, Prescribed Authority ought not to
proceed to decide seriously disputed
question
of
employer
and
employee
relationship. Such a audacity on the part of
Prescribed Authority is wholly unwaranted
and render his order without jurisdiction.
The impugned order therefore cannot
sustain. He placed reliance on a Division
Bench decision of this Court in M/s E.Hill
& Company (P) Ltd., Mirzapur Vs. City
Magistrate Mirzapur & Anr., 1980(40)
FLR 362.

5.

Learned
Standing
Counsel
defended the impugned order relying on the
findings recorded therein and said that no
interference is called for in this matter.

6. The term "employee" has not been
defined as such under the Act 1936 but
Section 2 contains the definition of
"employed person" and "employer" as
under:

"(i) "employed person" includes the
legal representative of a deceased employed
person;

(i-a) "employer" includes the legal
representative of a deceased employer;"

7. Both the definitions are inclusive
but do not throw any light on the meaning
of these terms as such.

8. Similarly the term "wages" is
defined in Section 2(vi) reads as under:

"wages
means
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 payable to a
person
employed
in
respect
of
his
employment or of work done in such
employment, and includes-

(a) any remuneration payment under
any award or settlement between the parties
or other of a Court;

(b) any remuneration to which the
person employed is entitled in respect of
overtime work or holidays or any leave
period;

(c)
any
additional
remuneration
payable under the terms of employment
(whether called a bonus or by any other
name);

(d) any sum which by reason of the
termination of employment of the person
employed is payable under any law,
contract or instrument which provides for
2 All] M/S. Upper Doab Sugar Mills Muzaffarnagar V. Prescibed Authority and others
765
the payment of such sum, whether with or
without deductions, but does not provide for
the time within which the payment is to be
made;

(e) any sum to which the person
employed is entitled under any scheme
framed under any law for the time being in
force,
but does not include-

(1) any bonus (whether under a
scheme of profit sharing or otherwise)
which
does
not
form
part
of
the
remuneration payable under the terms of
employment or which is not payable under
any award or settlement between the parties
or order of a Court;

(2)
the
value
of
any
houseaccommodation, or of the supply of light,
water, medical attendance or other amenity
or of any service excluded from the
computation of wages by a general or
special order of the State Government;

(3) any contribution paid by the
employer to any pension or provident fund,
and the interest which may have accrued
thereon;

(4) any travelling allowance or the
value of any travelling concession;

(5) any sum paid to the employed
person to defray special expenses entailed
on him by the nature of his employment; or

(6) any gratuity payable on the
termination of employment in cases other
than those specified in sub-clause (d).

9. This definition of 'wages' is pari
materia with the similar definition of
"wages" in 2(h) of the Contract Labour
(Regulation and Abolition) Act, 1970.
Section 3 of Act 1936 provides that, every
employer is under an obligation for
payment of all wages to persons employed
by him. Section 15(2) of Act 1936 entitles a
person employed but not paid his wages or
when there is any unauthorized deduction or
delay in payment, to make an application
before
the
Prescribed
Authority
i.e.
authority notified under sub section (1) of
Section 15 for claiming such wages. A
reading of sub-section (2) and (3) of Section
15 makes it clear that the application can be
moved not only against the employer but if
there is any other person responsible for
payment of wages of such employed
person, application can be filed under
Section 15(2) against such person also. To
attract Section 15(2) of Act 1936, two
things therefore must exist namely a person
'employee' and another person who had
employed
such
person,
namely
the
"employer" or other person responsible for
payment of wages under Section 3 i.e. to
whom the employer has authorized.

10. The limited scope of adjudication
under Section 15 is regarding the claim
arising out of deduction or delayed payment
and not any other issue namely, the very
existence of relationship of employer and
employee or the question whether the
claimant was a person employed or not or
that the person against whom such a claim
is raised whether he is an employer or the
person authorized for payment or not. If in a
given case an issue other than that of
alleged deduction or delay in payment
arises and the competent authority finds that
such an issue has been raised only to defeat
an otherwise bona fide claim and in its view
the incidental issue raised is bogus,
fictitious, superfluous or fanciful, it can
continue to proceed to decide the matter but
where a serious, bona fide, genuine dispute
766 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
of relationship arises, this Court is also of
the view that such an issue cannot be
adjudicated by the authorities under Section
15(1) and (2) of the Act, 1936, lacking
inherent jurisdiction to entertain such a
dispute.

11. In Shri Ambica Mills Co. Ltd.
Vs. S.B. Bhatt and Anr., the Apex Court
observed that a jurisdiction conferred upon
the authority under Section 15 is limited and
exclusive, therefore, if any incidental issue
is taken for adjudication, it must take care
that under the guise of deciding incidental
issue,
limited
jurisdiction
is
not
unreasonably or unduly extended.

12. I find that to the same effect is the
view taken by the Division Bench in M/s E.
Hill & Company (P) Ltd. (supra) wherein
this Court considered the words "all matters
incidental to such claims" and quoted from
Shri Ambika Mills Co. Ltd. (supra) as
under:

"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."

13. After referring to various
authorities of Apex Court and various other
Courts, the Division Bench in M/s E.Hill &
Co. (P) Ltd. (supra) said:

"A mere denial of existence of the
relationship of employer and employee may
not oust the jurisdiction of the Authority
under the Payment of Wages Act but where
a serious controversy is raised about the
existence, continuance or emergence of a
fresh contract of employment, the Authority
would have no jurisdiction to entertain and
try the claim as the dispute may involve
decisions of complicated questions of law
and fact. In the present case the employee
admittedly
tendered
his
resignation,
whatever be circumstances under which this
step was taken. The resignation was
admittedly accepted but the parties are at
variance
whether
the
employee
was
reinstated. According to the petitioner the
letter of reinstatement was a forgery. It is
not a case of mere denial of the contract of
service. The very foundation for the claim of
wages is in dispute. Such a question cannot
possibly be characterised as incidental to
the claim for wages. The Authority illegally
assumed jurisdiction to entertain and try the
claim of respondent No. 2 under Section 15
of the Act."

14. In the present case it was clearly
pleaded by petitioners in the written
statement filed before Prescribed authority
that petitioners had engaged a Transporter
2 All] Vinod Prakash Chaturvedi V. Presiding Officer. Labour Court and others
767
for carrying out their goods. The concerned
claimants were employees of Transporter
who was under contract with the petitioner
for transportation purpose only. There was
no relationship of employer and employee
with the claimants vis a vis the petitioner.

15. The petitioner, in both the writ
petitions, is a sugar industry engaged in the
manufacturing of sugar for which it
purchased
sugarcane
from
sugarcane
grower and is engaged in all incidental
activities for manufacturing of sugar. From
the impugned order it is evident that the
question of very existence of relationship of
employer and employee was seriously
pressed before Prescribed Authority. In its
entire order it has discussed the issue of
relationship, with reference to various other
statutes and authorities. It has also referred
to
some
evidences
on
this
aspect.
Apparently the Prescribed Authority, in the
case in hand, has decided a seriously
disputed question regarding the very
existence of relationship of employer and
employee between the petitioner and the
claimants.

16. To my mind, this issue is not
incidental to the question of deduction or
delayed payment but a condition precedent
to attract the very provisions of Act 1936.
Therefore, in a case where the very
relationship is under a serious cloud, and
needs a detailed but exclusive discussion, it
is beyond the jurisdiction of Prescribed
Authority under Section 15(1) and (2) of the
Act 1936 and has to be adjudicated in
appropriate regular proceedings by raising
an industrial dispute. It could not have been
decided by an authority under Section 15(1)
while entering a claim under Section 15(2)
and assuming jurisdiction upon itself to
decide the said issue. It is infact not an
incidental but a substantial jurisdictional
issue relating to very applicability of Act
1936. Hence this could not have been
decided by Prescribed Authority under
Section 15 of Act 1936. The impugned
orders passed in both the writ petitions are
thus wholly without jurisdiction.

17. The writ petitions, in the facts and
circumstances of the case, as discussed
above, are allowed. The impugned orders
dated 7.7.1997 (Annexure 7 to the writ
petition No.32242 of 1997), and 18.8.1997
(Annexure 1 to the writ petition No.974 of
1998) passed by Prescribed Authority are
hereby quashed.

18. However, this order shall not
preclude
the
concerned
respondents
workman
to
take
recourse
to
such
proceedings as permissible in law for
enforcing their claim, if any.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 18.05.2012

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.

Civil Misc. Writ Petition No. 40478 of 1997

Vinod Prakash Chaturvedi
 ...Petitioner
Versus
Presiding Officer. Labour Court & others

 ...Respondents

Counsel or the Petitioner:
Sri S.N. Dubey

Counsel for the Respondents:
C.S.C.
Sri Ranjit Saxena

U.P.
Industrial
Tribunal
Act,
1947
Section 33-C(2)-claim of extra wages on
discharge of extra duties-Labour Court
refused
on
ground
issue
requires
adjudication-scope of 33 confined with