Narayanaswami Ayyar (C.V.) vs Vasudeva Ayyar (K.A.)

P. Rajagopalan, Officiating C.J.

The respondent, plaintiff in S.C.S. No. 229 of 1955 on the file of the District Munsif''s Court, Coimbatore, was an employee of the petitioner,

the defendant in the suit. The plaintiff''s services terminated on 24 October 1954. On 31 March 1955 the plaintiff sued the defendant for the

recovery of a sum of Rs. 300, The details of that claim as given in the plaint were:

(1) salary from 1 August 1954 up to 1 October 1954 at Rs. 75 per month-Rs. 150.

(2) Daily wages at Rs. 2-8-0 per day for Sundays from June 1954 to 8 September 1954,17 Sundays-Rs. 42-8-0.

(3) Leave salary earned by the plaintiff for his service under the defendant from June 1951 to September 1954 at Rs. 2-8-0 per day-Rs. 125.

(4) Fifteen days'' salary in lieu of notice- Rs. 37-8-0.

From the total sum of Rs. 355 thus arrived at the plaintiff deducted Rs. 33. He gave up a sum of Rs. 22 and he limited his claim to Rs. 300. The

plaintiff admitted that for a period 1 October 1954 to 24 October 1954, he had been paid his wages on a daily basis.

The defendant pleaded Section 22 of the Payment of Wages Act (TV of 1936) in bar of the jurisdiction of the civil court to take cognizance of

the plaintiff''s claim. The defendant pleaded further that the claim for leave salary was barred by limitation. The defence to the claim for

compensation in lieu of notice was that the defendant had voluntarily stayed a way from work on 24 October 1954, and that he was not entitled to

any compensation.

The learned District Munsif held that Section 22 of the Payment of Wages Act was no bar to the maintainability of the suit. He negatived the

claim of the the plaintiff for leave salary and for compensation of fifteen days'' salary in lieu of notice, and he decreed the claims (1) Rs. 135

constituting the arrears of salary, and (2) Rs. 42-8-0 the arrears of wages for Sundays on which the plaintiff worked.

The defendant applied u/s 25 of the Provincial Small Cause Courts Act to revise the Judgment of the learned District Munsif. When the revision

petition came on for hearing before Ramaswami Grounder, J., he sought a direction to post the case before a Division Bench for disposal:

In his order of reference Ramaswami Gounder, J., stated:

The main question to be considered in this civil revision petition is whether the claim Involved in the suit out of which the present revision petition

arises falls within the jurisdiction of the special authority constituted under the Payment of Wages Act and whether the civil court has no jurisdiction

to investigate into the claim. This question is one of considerable importance, and on this there has been no decision of this Court. There are,

however, bench decisions of other High Courts but unfortunately they are not uniform and some of them are conflicting.

In our opinion, it is neither practicable nor desirable to attempt to evolve a formula which could be of universal application in deciding what falls

within the scope of Sections 15 and 22 of the Payment of Wages Act (hereinafter referred to as the Act.) Our endeavour will be to examine

whether the claim put forward in the suit, details of which we have furnished above, was one the cognizance of which by a civil court was barred

by Section 22 of the Act. The claim of the plaintiff in the suit, it should be remembered, was to recover a sum of Rs. 300 from the defendant. It

was, if we may characterize it as such, a composite claim. The component parts of the claim were:

(1) arrears of salary that had accrued to the plaintiff when he was in the service of the defendant but which were not paid ;

(2) a claim for what was called leave salary for a period during which the plaintiff did not take any leave but continued to be on duty during which

period he received his wages, and

(3) compensation for wrongful termination of services without any notice.

That the learned District Munsif negatived the second and third heads of these claims cannot obviously affect the determination of the question,

Was the suit as framed maintainable in a civil court"" ? That has to be answered with reference only to the averments in the plaint. One other factor

to be noticed at this stage is that the plaintiff did not apply to the appropriate authority u/s 15 of the Act to recover the arrears of salary due to him.

Section 22(d) of the Act, which is the relevant statutory provision, for our purpose, runs:

No Court shall entertain any suit for the recovery of wages or of any deduction from wages in so far as the sum so claimed . . .

(d) could have been recovered by an application u/s 15.

Section 15(1) authorizes the State Government to nominate the authorities to hear and decide for any specified area all claims arising out of

deductions from wages or delay in payment of wages of persona employed or paid in that area. The relevant portion of Section 15(2) runs:

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 . . . may apply to such authority [authority appointed under Sub-section (1)] for a direction under Sub-section (3):

Provided that every such application shall be presented within six 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 six months when the applicant satisfies the authority that he had

sufficient cause for not making the application within such period.

Section 2(vi) of the Act defined wages:

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, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person

employed or otherwise, to a person employed in respect of his employment or of work done in such employment, and includes any bonus or other

additional remuneration of the nature aforesaid which could be so payable and any sum payable to such person by reason of the termination of his

employment. . .

It is not necessary for the purposes of this case to set out the exclusions specified in Sub-cls. (a) to (e). What has to be noticed at this stage is

that the definition of ""wages"" includes within that expression any sum payable to an employee by reason of the termination of his employment.

Section 5 of the Act prescribes the dates on which wages become payable. Section 5(2) provides:

Where the employment of any person is terminated by or on behalf of the employer, the wages earned by himself shall be paid before the expiry of

the second working day from the day on which his employment is terminated.

It is with reference to these statutory provisions that we have to decide the question whether the claim put forward by the plaintiff was one that

fell within the mischief of Section 22(d) of the Act.

The plaintiff''s claim, it should be remembered, was not that anything was unlawfully deducted but that what was due to him was not paid. So

the question is, was the suit filed by the plaintiff one ""for recovery of wages in so far as the sum so claimed could have been recovered by an

application u/s 15 of the Act.

Once again we have to point out that it was a composite claim to recover a sum of Rs. 300 that the plaintiff preferred. Part of that claim was

certainly for arrears of wages as wages have been defined in Section 2(vi) of the Act. The arrears of unpaid salary for August and September

1954, clearly fall within the definition of wages in Section 2(vi). So did the claim for payment at Rs. 2-8-0 per day for each of the seventeen

Sundays on which the plaintiff claimed he worked. Both these items constituted remuneration, which according to the plaintiff was payable to him

under the terms of the contract of employment during the period the plaintiff was in the service of the defendant. The due date for the payment of

these items would have to be decided with reference to Section 5(1) of the Act.

It should be equally clear that the claim for leave salary cannot fall within the definition of wages in Section 2(vi) of the Act. The claim, it should

be remembered, was not for any period during which the plaintiff was on leave. The claim, if we understood the learned Counsel aright, was

something like this. The plaintiff earned leave during his period of service under the defendant between June 1951 and September 1954. The total

period of leave so earned under the relevant statutory rules was 54 days. The plaintiff, however, did not take that leave. Had he taken the leave he

would have been entitled to leave salary. The claim was that as he did not take leave, and as the earned period of leave lapsed when the plaintiff''s

services terminated in October 1954, he was entitled to compensation for the loss of that leave earned but not taken. When the claim is thus

analysed, it should be obvious that it cannot be brought within the scope of the definition of ""wages"" in Section 2(vi) of the Act.

Similarly the claim for compensation of fifteen days'' wages in lieu of notice of termination of services cannot be brought in the circumstances of

this case within the scope of the definition of "" wages"" in Section 2(vi). It was not the case of either party that the contract of service between the

plaintiff and the defendant, either express or implied, provided for the payment of any ascertained or ascertainable sum on termination of service

without notice. What the plaintiff claimed as compensation under this head, not related to the contract of service between himself and his employer,

fell outside the scope of Section 2(vi). it was not a claim for wages for work done. It was not a contractual obligation that the plaintiff sought to

enforce, and it could not therefore be viewed as any sum payable to the plaintiff by reason of the termination of his employment within the meaning

of Section 2(vi) of the Act. There could, therefore, be no question of any compensation becoming payable on the date specified in Section 5(2) of

the Act.

Thus the position is that of the four sub-heads of the composite claim put forward by the plaintiff in the suit, the first two, which were claims for

(1) arrears of unpaid salary for the months of August and September 1954, and (2) arrears of unpaid remuneration for seventeen Sundays on

which the plaintiff worked, were items which could have been made the subject of an application u/s 15(2) of the Act, but which in fact did not

form the subject-matter of any such application. The other two items, which were in essence claims for compensation for which the contract

between the parties did dot provide, fell outside the scope of Section 15(2) of the Act and therefore of Section 22(d) of the Act. Though that

would be the position when the sub-heads of the claim preferred in the suit are so analysed, the question for determination still is, was the suit filed

by the plaintiff one for the recovery of wage in so far as the amount claimed in the suit could have been recovered by an application u/s 15 of the

Act.

The answer to that question, with reference to the circumstances of this case which we have adverted to above, must, in our opinion, be in the

negative. It was certainly not a suit for recovery of wages simpliciter. Something more was asked for by the plaintiff, which, as we have pointed out

earlier, was in essence a claim for compensation as distinct from a claim for wages. A substantial portion of the claim in the suit fell outside the

scope of Sections 15(2) and 22(d). It should be noted that it was not the case of anyone at any stage that the claim was preferred in the civil court

mala fide to get over the special period of limitation prescribed by Section 15(2) of the Act. What considerations should prevail when lack of good

faith is pleaded and proved we are not called upon to consider in this case. We should also like to emphasize again that the claim in the suit was a

composite one. The plaintiff in effect claimed that a sum of Rs. 322 was lawfully due to him. He gave up Rs. 22. He did not specify further either in

the plaint or at any later stage whether this deduction of Rs. 22 was from any one of the four sub-heads of the claim enumerated in the plaint. It

was out of the total of the claim as calculated by him Rs. 322, that this sum of Rs. 22 was deducted. Whether to such a composite claim or any

portion thereof the bar of Section 22(d) would apply is therefore the real question to be answered in this case. The basic principle we have to

remember is that unless a civil court is divested of its jurisdiction by a statutory provision, whether in express terms or by necessary intendment, the

jurisdiction of the civil court remains unimpaired. It is on that basis that Section 22 of the Act including Sub-clause (d) thereof will have to be

interpreted, Of course, any interpretation placed on the scope of Section 22(d) will have to be consistent with the scheme of the Act as a whole,

an Act designed to secure prompt payment of wages to the employees and an expeditious disposal of the claim, for example, that wages of an

employee or any portion thereof has been wrongfully withheld from him by his employer.

What u/s 22(d) a civil court is barred from entertaining is, a suit for the recovery of wages in so far as the sum so claimed could have been

recovered by an application u/s 15. As we said, the suit as filed by the plaintiff was not only for the recovery of wages. The expression "" in so far

as the sum so claimed,"" as it occurs in Section 22, has to be construed with reference to the expression ""suit for recovery of wages."" We do not

think that Section 22 contemplated and provided for the splitting up of a claim preferred by a plaintiff in good faith for recovery of a specified sum

into its component parts, to verify whether a portion or portions of the claim could have been preferred u/s 15(2) of the Act. The test should be,

does the suit taken as a whole, on a fair reading of the averments in the plaint, amount to a suit for recovery of wages or for the recovery of any

deduction from wages within the meaning of Section 22 of the Act. We are satisfied that the suit filed by the plaintiff in this case did not satisfy that

test, and therefore the bar imposed by Section 22 did not apply. The civil court was not divested of its jurisdiction to entertain that suit.

It is true that the scope of Section 15 of the Act has been the subject-matter of conflicting decisions of other High Courts, as pointed out in his

order of reference by Ramaswami Gounder, J. We do not consider it necessary for the disposal of the case before us to attempt to resolve the

conflict of views of the other High Courts. No reported case was brought to our notice where any other High Court had to answer the question in

the specific form in which it arose in the case before us.

In Sarangdhar Singh and Another Vs. Lakshmi Narayan Wahi, the claim as preferred in the civil court was for the recovery of a sum of Rs.

1,013-3-0 of which Rs. 28 was due to the plaintiff as arrears of salary for the month of August 1941. The rest of the amount was claimed as due

to the testator who had been the manager of the defendant firm, and under whose probated will the plaintiff claimed the amount due to the testator.

The learned Judges held that the suit as framed by the plaintiff in that case did not fall within the. mischief of Section 22 of the Act. The learned

Judges, however, were apparently not called upon to decide whether the claim for Rs. 28 could be separated for the purpose of Section 22 of the

Act, and whether that portion of the claim in the suit should be dismissed on the ground that it fell within the mischief of'' Section 22(d) of the Act.

Of the cases cited before us, this came nearest the question we have have had to decide, and if we may say so with all respect to the learned

Judges, it can be viewed only as of a negative value. As we said, no reported case was brought to our notice where the question arose for

determination in the form in which it has arisen before us.

In N. Venkatavaradan Vs. Sembiam Saw Mills, Sembiam, Madras, , Krishnaswami Nayudu, J., held that a claim by an employee, which is in

effect a claim for damages for wrongful termination of services, is not one which a Commissioner under the Payment of Wages Act is competent to

enquire into and that the remedy in such cases is by a suit in a civil court. But there the learned Judge did not have to deal with a claim for wages as

such which accrued to the employee during the period he actually worked.

The scope of Section 15 of the Act was discussed at some length by Chagla, C.J., in A.R. Sarin v. B.C. Patil 1951 II L.L.J. 188, the scope of

which decision was explained further in Balakrishnan v. A. Rangnekar 1958 I L.L.J. 215 by Tendolkar, J., who had been a party to the earlier

decision. The learned Judges were of the view that Section 15 of the Act did not confine the jurisdiction of the authority appointed under that

section of the Act only to claims, where wages were admitted to be due but were not paid. The narrower view of the scope of Section 15 of the

Act taken by Beokett, J., in Simpalax Manufacturing Company, Ltd. v. Alla-ud-Din AIR 1945 Lah. 195 did not commend itself to the learned

Judges of the Bombay High Court, though they did not specifically refer to the Lahore decision. The learned Judges of the Patna High Court,

however, specifically dissented from the Lahore view in Sarangdhar Singh and Another Vs. Lakshmi Narayan Wahi, . If we may say so with

respect, the language of Section 15 in its setting in the Act viewed as a whole did not warrant the narrowing down of its scope by Beckett, J. It

was not urged before us that the claim for arrears of wages for August and September 1954 and the claim for wages due for the Sundays during

which the plaintiff claimed he worked also fell outside the scope of Section 15(2).

The learned District Munsif, it should be remembered, held that the ban imposed by Section 22(d) did not apply because the plaintiff''s case

was one of a dismissed employee for recovery of past salary. That view is clearly wrong. It is on other grounds that we have held that Section

22(d) did not exclude the jurisdiction of the Court of Small Causes to entertain the plaintiff''s suit as it was presented.

The petition fails and is dismissed with costs.