Ramcharan vs District Judge Jabalpur

P.V. Dixit, C.J.—The petitioner in this case presented an application u/s 15(2) of the Payment of Wages Act before the Competent Authority for an order against the respondents nos. 3 to 5 for payment of retrenchment compensation to him. Accordding to the petitioner he was in the service of the said respondents for nearly 30 years, that on 29th September 1959 non-applicant no. 5, the Bombay Garage Jabalpur, intimated to him that his services were terminated from 30th September 1959; and that his claim for payment of retrenchment compensation was not countenanced by the said opponents. The Authority under the Payment of Wages Act rejected the petition holding that there was a dispute whether the applicant was in the service of the aforesaid opponents and whether his services had been terminated; that it had no jurisdiction to determine this dispute; and that the petitioner''s remedy was before the Industrial Court. The petitioner then preferred an appeal before the District Judge, Jabalpur, against the order of the Authority. That appeal was rejected by the learned District Judge on the authority of the dicision of this Court in P.L. Singh and Another Vs. C.B. Kekre, Dist. Judge and Others, . The applicant now prays that the order of the Authority refusing to entertain his application u/s 15 (2) be quashed and a writ of mandamus be issued to the Authority for entertaining his claim.

The short question that arises for determination in this case is as to the jurisdiction of the Authority under the Payment of Wages Act to hear and decide a claim for payment of retrenchment compensation. Section 15 of the Payment of Wages Act gives to the Authority jurisdiction to hear and decide for any specified area claims arising out of deductions of wages or delay in payment of Wages of persons employed or paid in that area. As has been very recently pointed out by the Supreme Court in Shri Ambica Mills Co. Ltd. Vs. S.B. Bhatt and Another, .

.....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.122.

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 affect or impair the limited jurisdiction conferred on the Authority.

Now, ''wages'' as defined in Section 2 (vi) (d) of the Act include "any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument..." Any gratuity payable "on the termination of employment in cases other than specified in sub-clause (d)" is, however, excluded under sub-clause (e) (6) of Section 2 (vi) from the definition of wages. The amount of retrenchment compensation payable to an employee is clearly an amount payable to him by reason of the termination of his employment. It is not a gratuity payable on the termination of employment. The distinction between retrenchment compensation and gratuity has been pointed out by the Supreme Court in The Indian Hume Pipe Co. Ltd. Vs. The Workmen and Another, . It was observed in that case that gratuity paid to workmen is intended to help them after retirement, whether the retirement was the result of the rules of superannuation or of physical disability, and that the general principle underlying gratuity schemes was that by their length of service workmen were entitled to claim a certain amount as retirement benefit. As regards retrenchment compensation it was stated by the Supreme Court that it was not a retirement benefit at all but a compensation paid to a workman on his retrenchment and was intended to give him some relief and to soften the rigour of hardship resulting from retrenchment. These two dicisions of the Supreme Court leave no doubt that the petitioner''s claim as regards retrenchment compensation can be entertained and adjudicated upon by the Authority; and, in fact, according to the Supreme Court''s decision in Shri Ambica Mills Co. vs. S. B. Bhatt (supra), the Authority has exclusive jurisdiction in the matter. If the Authority has jurisdiction to hear and decide a claim with regard to retrenchment compensation, then it must decide the incidental questions, namely whether the petitioner was at all an employee of the opponents and whether his services had been terminated or whether he was still in employment. On finding that the petitioner''s services had been terminated, the Authority would then be required to determine the amount of compensation payable to the applicant and whether the employer responsible for paying it had or had not paid the amount to the applicant.

For these reasons the order dated 2nd February 1960 of the Authority under Payment of Wages Act is quashed and the Authority is directed to entertain the petitioner''s claim and decide it in accordance with law. There will be no order as to costs. The outstanding amount of the security deposit shall be refunded to the petitioner.