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CASE NO.: Appeal (civil)  6288-6289 of 2000

PETITIONER: L.I.C. of India

RESPONDENT: Anwar Khan (since deceased) through Lrs

DATE OF JUDGMENT: 23/04/2007

BENCH: Dr. ARIJIT PASAYAT & LOKESHWAR SINGH PANTA

JUDGMENT: J U D G M E N T

Dr. ARIJIT PASAYAT, J.

Challenge in this appeal is to the order passed by a  Division Bench of the Allahabad High Court affirming the  order passed by the learned Single Judge of the said High  Court.

Background facts in a nutshell are as follows:

Questioning decision taken by the appellant-Life  Insurance Corporation of India (in short ’LIC’) fixing the age  of retirement of Development Officer, presently called the  Field Officer at 58 years, a suit was filed by respondent- Anwar Khan.  The said Anwar Khan has expired in the  meantime and his legal representatives are presently the  respondents.  The suit was filed primarily for declaration  that in view of the agreement between the Field Officers  Association and the LIC age of retirement is 60 years. The  suit was decreed on 30.7.1981 and the appeal by the LIC  was dismissed on 27.3.1982.  The second appeal filed  before the High Court is pending.  During the pendency of  the second appeal, the respondent-Anwar Khan moved the  authorities under the Payment of Wages Act, 1936 (in short  the ’Act’) claiming compensation.  Stand of the LIC before  the original authority was that the Development Officers  are not covered by the Act as they get more than  Rs.1,000/- p.m. By Order dated 11.6.1993, the Assistant  Labour Commissioner held that the claimant was entitled  to wages for the relevant period plus double the amount as  compensation. An appeal was preferred by the LIC.  The  Appellate Authority by order dated 7.5.1999 modified the  Award to the extent that the claimant was entitled to the  wages claimed along with the compensation of amount  equivalent to back wages. LIC filed a writ petition  questioning correctness of the order of the Appellate  Authority.   

The learned Single Judge dismissed the writ petition.  The Division Bench of the High Court held that Letters  Patent Appeal was not maintainable. As noted above,  Anwar Khan died in 1990. Stand before the High Court was  that the authorities under the Act should not have decided  the claim made as the suit filed was merely for a  declaration and no consequential relief was granted.  In

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any event, the Act has no application and no compensation  is payable.  The application was filed under Section 15(2) of  the Act.  Reference was also made to the U.P. Dookan Aur  Vanijya Adhisthan Adhiniyam, 1962 (in short the  "Adhiniyam").  

The High Court noted that the Assistant Labour  Commissioner observed that no evidence was led regarding  nature of the job.  Therefore, the claim that the applicant  was belonging to the supervisory category is not acceptable.   With regard to Section 15 of the Act, it was noted that the  salary which was being paid to the claimant was factually  to be decided. Initially the Assistant Labour Commissioner  held that the suit was not maintainable. In appeal, the  matter was remanded. A plea was raised that the suit was  pre-mature since there was no definite determination as  second appeal was pending.  The High Court held that even  if the Act has no application that does not render the  proceedings irregular.  

It was submitted by the learned counsel for the LIC  that the High Court has erred in holding that under Section  18 of the Adhiniyam, the Act has application.  It was  pointed out that undisputedly the claimant was receiving  salary of more than Rs.1500/-.  The expression "employee"  is defined under the Adhiniyam in Section 2(6) and "Wages"  has been defined under Section 2(18).  Section 18 relates to  recovery of wages.  It is also pointed out that compensation  could not have been awarded since there was a bona fide  dispute about the liability.   In response, learned counsel for the respondent  submitted that the Field Officers are not workmen.  The  question of the amount received as wages has to be decided  only after it is decided as to whether Section 14 of the  Adhiniyam has no application.  It is only then Section 16 of  the Adhiniyam which shall have no application.   Undisputedly, the LIC is a commercial establishment in  terms of Section 2(4) of the Adhiniyam. Since it is covered  by the Adhiniyam, because of non-payment, Section 18  makes the Act applicable. It was pointed out that in the  application made it was clearly pointed out that the same  was under Section 15 of the Act and under Section 18 of  the Adhiniyam. It is pointed out that what is under  challenge is the entitlement and, therefore, there cannot be  any bona fide dispute about the amount payable to bring in  application of proviso to sub-section (3) of Section 15 of the  Act.  It is pointed out that pursuant to the direction given  by the original authority a sum of Rs.1,28,000/- had been  deposited and a sum of Rs.60,000/- has already been  withdrawn.  It is, therefore, submitted that this is not a fit  case for exercise of jurisdiction under Article 136 of the  Constitution of India, 1950 (in short the ’Constitution’).   

A few provisions of the Act and the Adhiniyam need to  be noted.  Sections 14 and 15 of the Adhiniyam read as  follows:

"14. Payment of wages for period of earned  leave \026 (1) An employee proceeding on  earned leave shall, on demand, be given  advance payment of the wages for half the  period of the leave, and the wages for the  remaining half period of such leave shall be  payable to him along with the wages for the

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first wage period after he resumes duty.

(2)     The wages for the period of sickness  leave shall be payable to the employee  along with his wages for the first wage  period after he resumes duty.

(15)    Deductions from wages -  No  deductions from the wages of an employee  shall be made except to such extent, and in  such manner, as may be prescribed."  

Section 15(3) of the Act with the proviso reads as  follows:  "(3) When any application under sub-section(2)  is entertained, the authority shall hear the  applicant and the employer or other persons  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  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 twenty-five rupees in the latter, and  even if the amount deducted or the delayed  wages are paid before the disposal of the  application, direct the payment of such  compensation, as the authority may think fit,  not exceeding twenty-five rupees :      -

Provided that no direction for the 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, such  that the person responsible for the payment of  the wages was unable, though exercising  reasonable diligence, to make prompt payment,  or

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

Section 18 of the Adhiniyam reads as follow: "18. Recovery of wages \026 The wages of an  employee, if not paid as provided by or  under this Act, shall be recoverable in the  manner provided in the Payment of Wages  Act, 1936, as if the same wages were  payable under that Act."

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It is to be noted that the original amount of  Rs.1,000/- was fixed under Section 1(6) with effect from  15.10.82, it has been increased to Rs.1600/- .  There is  also no dispute that at the relevant point of time the  applicant was getting more than Rs.1500/-.

It is only a mechanism for recovery of wages and  because the Adhiniyam has application to any employee  that does not automatically bring him under the umbrella  of the Act.

It has to be noted that the heading of Section 18 of  the Adhiniyam is "recovery of wages". It only provides that  once an employee under the Adhiniyam is not paid the  procedure for recovery under the Act is to be adopted. Once  Section 1(6) of the Act applies, the nature of the job is  irrelevant. Whether the field Officers are workmen or not is  really of no relevance in view of Section 1(6) of the Act.   Section 15 of the Act is relatable only to claim under the  Act.  The entitlement for compensation is only under the  Act and there is no scope for compensation under the  Adhiniyam. The compensation has to be worked out in  terms of Section 15 of the Act.  There cannot be a claim  both under Section 15 of the Act and Section 18 of the  Adhiniyam.   

Learned counsel for the respondent submitted that  proviso to Section 15(3) cannot be pressed into service  because the dispute is relatable to amount payable.  In this  case the LIC disputes the entitlement.  We find the plea to  be without any substance. The question of payability of an  amount arises only when somebody is entitled to an  amount.  The proviso makes it clear that when there is no  bona fide dispute about the amount payable, compensation  cannot be awarded.   

In this case, undisputedly there is dispute about the  entitlement of the claimant.  The matter is pending before  the High Court.  Therefore, the High Court’s view holding  the claimant to be entitled to compensation is clearly  untenable.  Accordingly, the amount awarded as  compensation is set aside.  However, we find that pursuant  to the directions given a sum of Rs.1,28,000/- has been  deposited and a sum of Rs.60,000/- has been withdrawn  by the legal heirs of the claimant.   

Though we have hold that proviso to Section 15(3) has  application, considering the fact that the amount has been  withdrawn, we direct that there shall not be any recovery.  It is made clear that these directions shall not in any way  affect the decision in the second appeal.

The appeal is allowed.