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Judgment
Uday Sinha, J.—These three writ applications have been heard together, as the parties are identical, although not the points to be
considered. They have been heard one after another and will be determined by this Judgment. Cr. W.J.C. No. 13 of 1973--
In this application petitioner no. 1 is Secretary of Motipur Zamindari Company Private Limited and petitioner no. 2 is Farm Manager of the said
Company. Petitioner no. 3 happens to be a Director of the same Company. A complaint was filed on 13-6-1972 by the Labour Inspector-cum-
Inspecting Officer under the Minimum Wages Act before the Subdivisional Magistrate, Muzaffarpur wherein it was alleged that in the course of
inspection by the complainant on 16-12-1971, he had found the provisions of the Minimum Wages Act being observed in their breach. The breach
consisted in non-display of minimum fixed wages and summary of the Minimum Wages Act. This, according to the Inspecting Officer, constituted
contravention of Section 18(2) of the Minimum Wages Act read with Rule 22 made thereunder. The second contravention consisted in the fact
that labourers had been working in the farm for 8 to 10 days, but they had not been given wage slips, in contravention of Section 18(3) of the Act
and Rule 26(2) of the Rules. The third contravention consisted in the fact that the petitioners failed to produce muster-roll, overtime register,
papers relating to penalty and deductions from the salary although they had been asked to do so by letter dated 9.2.1972. Thus the Company
contravened Section 18(1) of the Act and Rule 19(2)(a) of the Rules. On receipt of the prosecution report the Sub-divisional Magistrate took
cognizance of offences u/s 22A of the Minimum Wages Act. Being aggrieved by the order of the learned Magistrate dated 14.6.1972, the
petitioners have moved this Court for quashing the entire proceeding pending before the trial court.
The functions of the Motipur Zamindari Company, of which the petitioners are the office bearers, were to run farms as well as to collect rent
from tenants. The work of collection of rent came to an end in 1953 when the Zamindari of the Company vested in the State of Bihar pursuant to
the enactment of the Bihar Land Reforms Act 1950. The petitioners have averred that in 1962 the Company sold way its entire agricultural farm to
Motipur Sugar Factory Private Limited by a registered sale deed dated 28.11.1972 and since then the entire agricultural operations of the
erstwhile farms of Motipur Zamindari Company were being carried on by Motipur Sugar Factory Private Limited. Thus by 1962 this Zamindari
Company neither had any zamindari nor any agricultural farm and all that remained was the business of brickklin, Surkhi grinding, construction and
letting out buildings on hire and money-lending. In unmistakable terms it has been stated in paragraph 6 of the writ petition that the Zamindari
Company had no agricultural farm department. The workmen of the Motipur Zamindari Company had formed a Trade Union under the name and
style of Motipur Zamindari Company Mazdoor Union. In 1957 an industrial dispute was raised by the workmen. Reference was, therefore, made
by the State Government referring the dispute to the Industrial Tribunal u/s 10(1) of the Industrial Disputes Act. One of the moot points referred
for adjudication by the Industrial Tribunal was in regard to the wage structures of the workmen employed in the Company. The Industrial Tribunal
gave its award fixing wages for workmen on 31-1-1963. In 1967 again an industrial dispute cropped up and the State Government again referred
the matter to the Industrial Tribunal (Reference No. 77 of 1967). The first question referred for adjudication in this case was whether the scales of
wages of the workmen of Motipur Zamindari Company needed revision. The other question was in respect of linking deafness allowance of the
workmen with costs of living index. The award of the Industrial Tribunal was published on 1-7-1968. The dispute between the workmen and the
Company was agitated before the Supreme Court which modified the award in some particulars. The award subject to modifications by the
Supreme Court is still in force. The position in this regard has not been disputed by the respondents. On these facts learned counsel for the
petitioners has contended that the minimum rates of wages fixed under the Act do not apply to the Motipur Zamindari Company by virtue of the
provisions contained in Section 3(2A) of the Minimum Wages Act (hereinafter called ''the Act'') and, therefore, the complaint filed by respondent
no. 1 through the Labour Inspector for contravention of Section 18 of the Act is unfounded and the cognizance taken thereupon is illegal and
without jurisdiction.
Section 3(2A) of the Act upon which reliance has been placed on behalf of the petitioners, leaving out the irrelevant words, reads as follows:--
Where in respect of an industrial dispute relating to the rates of wages payable to any of the employees employed in a scheduled employment, any
proceeding is pending before a Tribunal--under the Industrial Disputes Act, 1947--or an award made by any Tribunal,--is in operation, and a
notification fixing or revising the minimum rates of wages in respect of the scheduled employment is issued during the pendency of such proceeding
or the operation of the award, then, notwithstanding anything contained in this Act, the minimum rates of wages so fixed or so revised shall not
apply to those employees during the period in which the proceeding is pending and the award made therein is in operation--
The contention of the petitioners has been that an award made under the Industrial Disputes Act in regard to the Zamindari Company was in
operation and, therefore, the minimum rates of wages fixed by the State Government had no application to this Company. In my view, the
submission urged on behalf of the petitioners is sound and any other view to the contrary is absolutely unsustainable. Learned counsel appearing on
behalf of that State, therefore, did not contend that the petitioners were bound to pay in accordance with the minimum rates of wages fixed by the
State Government. The complaint in respect of contravention of Section 18(2) read with Rule 22 as alleged in the complaint was, therefore,
misconceived. To that extent the petitioners could not be held to have contravened the provisions of the Minimum Wages Act.
The next contravention alleged to have been committed by the petitioners was in relation to non-supply of wage slips to 10 labourers. The
contention of the petitioners is that the minimum rates of wages not being applicable to this Company, there was no obligation to furnish wage slips
to the workmen. The contention on behalf of the State, however, is that although Section 3(2A) of the Act exempts a Company from paying in
accordance with the rates of wages fixed by the Government, where an award is in operation, it does not give carte blanche to a Company to
ignore the entire provisions of the Act. The purpose of the Act is to ensure minimum wages to all workmen coming within the purview of the Act.
This purpose is effectuated by system of controls. Those controls are to be found in the Rules framed under the Act. The Bihar Minimum Wages
Rules 1951 framed under the Act has made certain provisions to this regard which are contained in Chapter IV. Rule 21 lays down the time and
conditions of payment of wages and the deductions permissible from wages. Rule 22 prescribes that the minimum wages fixed under the Act must
be displayed by every employer in Hindi and in a language understood by majority of the workers at a conspicuous place. Rule 22 may not come
into play in the present case, since the Zamindari Company was governed by an award and not by minimum rates of wages. But there are other
provisions which every employer is bound to carry out those provisions. The submission made on behalf of the State is attractive, but seems to be
lacking in substance, if we look to the preamble of the Act and the definitions of the words ''employer'' and ''employee'' therein. The preamble to
the Act states as follows:
An Act to provide for fixing minimum rates of wages in certain employment.
Whereas it is expedient, to provide for fixing minimum rates of wages in certain employments:
It is hereby enacted as follows:--
(1) This Act may be called the Minimum Wages Act, 1948.
The expression ''employer'' has been defined, leaving out the irrelevant words as follows:
''employer'' means any person who employs, whether directly or through another person,........one or more employees in any scheduled
employment in respect of which minimum rates of wages have been fixed.
Similarly the expression ''employee'' has been defined in Section 2(1) of the Act as follows:--
''employee'' means any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical, in a scheduled
employment in respect of which minimum rates of wages have been fixed:--
Section 22 lays down the penalty in consequence of contravention of the Act and the Rules. Section 22 also is in the same terms. It reads as
follows:--
Any employer who--(a) pays to any employee less than the minimum rates of wages fixed for that employees'' class of work,--
It will, therefore, appear from the preamble as well as the definitions of expressions ''employer'' and ''employee'' and the contents of Section 22
that the rigors of the Act are meant to be applied only in those cases where minimum rates of wages have been fixed. The provisions which are
meant to effectuate the driving purpose of the Act will not be enforceable in those cases where an award is in operation. Learned counsel
appearing for the State contended that such an interpretation of the contents of the Act would set at naught the very purpose for which the Act was
enacted, I regret, I cannot accede to this submission. If an effective award is in operation, the award itself will govern the rights of the workman
and liabilities of the Management. If the terms of the award are disregarded or observed in their breach, the Management will be liable under the
Industrial Disputes Act and will be subject to the sanctions provided therein. In my view, therefore, the workmen concerned will not be left without
any remedy. I am definitely of the view, therefore, that the Minimum Wages Act 1948 did not apply to the Motipur Zamindari Company and,
therefore, the cognizance taken against the petitioners for contraventions of the provisions of the Act was illegal and without jurisdiction. The order
of the learned Magistrate dated 14.6.1972 contained in Annexure 4 is, therefore, quashed.
Cr. W.J.C. No. 14 of 1973:--
This application is for quashing by an appropriate writ the order of the Subdivisional Magistrate, Muzaffarpur dated 31.1.1973 whereby
cognizance was taken of offences having been committed by the petitioners u/s 13(2) of the Industrial Employment (Standing Orders) Act, 1946
for contravention of Clause 14 of the Industrial Standing Orders applicable to the Motipur Sugar Factory Private Limited (hereinafter called ''the
Company''). The order of the learned Magistrate taking cognizance has been annexed to this application. Petitioner No. 1 was the Secretary of the
Company holding general power of attorney and petitioner no. 2 was the factory manager. The facts, not in controversy, which gave rise to the
filing of this application are that there is an operative Standing Order in terms of Section 3(4) of the Industrial Employment (Standing Orders) Act,
1962 (hereinafter called ''the Act''). The Standing Order in question applies to workmen in all sugar factories in Bihar. Clause 14 (Annexure 1)
thereof provides for furnishing wage slips to workman in the sugar factory. The Chini Mill Mazdoor Sabha having made a complaint to the Labour
Officer, Muzaffarpur to the effect that wage slips were not being given to the workers, the Labour Officer called upon the Manager of the factory
by letter dated 5.5.1972 for giving his comments in regard to the complaint of the Chini Mill Mazdoor Sabha. The Company replied that wage
slips were being supplied to the workers, but the printed wage slip forms had exhausted and orders for printing the same could not be placed in
time on account of the oversight of the dealing assistant. It was also stated therein that wage slip forms would be supplied soon when they would
be received from the press. The letter of the management was a virtual admission of the delinquency on the part of the Company in regard to non-
furnishing of wage slips. The then Labour Officer, therefore, filed the complaint dated 29.12.1972 against the petitioners in respect of
contravention of Section 13(2) of the Act for infringement of Clause 14 of the certified standing orders. Cognizance of the offence alleged to have
been committed was taken, as stated earlier, on 31-1-1973. By the same order all the petitioners were summoned to take their trial. The
petitioners, therefore, moved the present application.
The factual position, therefore, on the basis of which the law must be applied is that the Company failed to furnish wage slips to the workmen as
required by Clause 14 of the Standing Order. Learned counsel for the petitioners contended that the prosecution of the petitioners was
misconceived, since they had not committed any offence. It was contended that there can be no prosecution for breach of standing order in regard
to a matter which is not included in the Schedule of the Act Since providing wage slips was not a matter specified in the Schedule, non-compliance
of Clause 14 was not punishable in terms of Section 13 of the Act. Section 2(g) of the Act states that ""standing order, means rules relating to
matters set out in the Schedule"". The Schedule contains 11 items. The preamble of the Act provides that the Act was for requiring employers in
industrial establishment formally to define conditions of employment under them. The occasion for the enactment was spelt in the following words:-
-
Whereas it is expedient to require employers in industrial establishments to define with sufficient precision the conditions of employment under them
and to make the said conditions known to workmen employed by them.
It is hereby enacted as follows:--
The sanction for the non-implementation of the provisions of the Act to be found in Section 13(2) of the Act which lays down that an employer
who does any act in contravention of the standing orders finally certified under the Act shall be punishable with fine. I would straightway concede
that providing wage slips to workmen is not a matter which would fall within any of the matters enumerated in items 1 to 10 of the Schedule. Item
11 does not come into play because the Rules made by the State Government do not prescribe anything about furnishing wage slips. The question,
however, remains is the Schedule conclusive of the matter or can any other matter be included within the Standing Orders agreed between the
Management and the workmen and certified by the State authorities. In my view, there is nothing to preclude the Management from prescribing
some thing in the Standing Orders which is beneficial to the workmen. Furnishing of wage slips to workmen is no doubt a beneficial arrangement to
workmen as it gives them timely warning of the amount that they are about to receive. In that background it has to be seen whether there is any
sanction behind the provisions for providing wage slips as contained in Clause 14 of the Standing Orders.
The occasion for the enactment of the Industrial Employment (Standing Orders) Act was provided by the fact that in any industrial
establishments the conditions of employments were not always uniform and sometimes even not given in writing which led to considerable
confusion, ultimately resulting in industrial disputes. The Legislature, therefore, passed the Act making it obligatory for industrial establishments to
reduce to writing the conditions of employments and get them certified as provided in the Act. Originally, the jurisdiction of the certifying officer
was limited to ascertaining whether the Standing Orders submitted for certification conformed to the model standing orders. In 1956, however, the
Act was radically amended and thereafter the Certificate Officer or the appellate authority was saddled with the duty also of adjudicating the
fairness or reasonableness of the provisions of any standing orders. The certifying authority, therefore, was required to be satisfied that the standing
orders were fair and reasonable. Thus the objects of the Act were to require employer to define with certainty the conditions of service in their
establishment by reducing them to writing and to get them compulsorily certified. The object further is that the certifying authority should also
adjudicate upon the fairness and reasonableness of the standing orders uninfluenced by the attitude of workmen in particular circumstances.
For the purpose of coming to the conclusion whether the inclusion of a matter not directly connected with the matters enumerated in the
Schedule to the Act, it will be useful to bear in mind the observation of Shelat, J. in (1) Management Shahdara (Delhi) Saharanpur Light Railway
Co. Ltd. Vs. S.S. Railway Workers'' Union, where it was observed that--""The Act is a beneficent piece of legislation."" In my view, therefore, if the
Management has no objection to certain matters being included in the standing orders, and if its inclusion is accepted by the workmen as well as
the certifying officer, I see no reason why the Act should be so interpreted as to strike off that clause in the standing orders. It must be accepted on
all hands that providing wage slips to workmen is a beneficent act. In terms of the scheme of the Act the provisions regarding wage slips fin Clause
14 must have been given in the draft by the Management or fit may have found place after the objection of the workmen which was certified by the
certifying officer. The furnishing of wage slips, therefore, became a condition of the employment although it was a matter not directly connected
with the subjects enumerated in the Schedule. But I see no reason for restricting the parties to the standing order to its inclusion. If the Management
was of the view that that clause was hurting it or that it was unnecessarily included in, the standing orders, it was open to it to get it modified by a
regular application in terms of Section 10(2) of the Act. Thus the Management was not aggrieved by Inclusion of Clause 14, the workmen were
not aggrieved and the certifying officer had no objection. That being the situation, the submission on behalf of the petitioners now after they had
been prosecuted for violation of the standing orders u/s 13(2) of the Act, it did not lie in their mouth to contend that the inclusion of provision
regarding furnishing of wage slips was ultra vires the Act. Learned counsel for the petitioners placed reliance upon the case of (2) Workmen of
Lakheri Cement Works Ltd. V. Associated Cement Companies Ltd. (38 Indian Factories Journal, 342, which is equivalent to 20 F.L.R. 243) for
the proposition that wage slips cannot be a subject matter for provision in the standing orders. Reliance was also placed upon (3) Rohtak Hissar
District Electricity Supply Co. Ltd. Vs. State of Utter Pradesh and Others, . I regret, the authorities relied upon by learned counsel for the
petitioners have no bearing upon the question under consideration. Those were cases where the point for consideration was whether certain
matters should be included within the standing orders. Those writ applications were directed against the orders of certifying officers including
certain miners in the standing orders. If the Management had objected to the inclusion of provision for furnishing of wage slips before the certifying
officer, the answer unmistakably would be that they could not be included in the standing orders. But the case under consideration is one where a
matter should not have been included in the standing order has been included as a fact and has been acted upon by the parties. The two situations,
in my view, are quite different and, therefore, the Supreme Court cases relied upon by learned counsel for the petitioners could be of no assistance.
I am of the view that matters not strictly falling within the purview of the Industrial Employment (Standing Orders) Act can also be included within
the standing orders of a Company or factory if the parties contend to do so. It is well known that the Act applies only to workmen and not to non-
workmen. A question arose in (4) Tata Iron and Steel Co. Ltd. Vs. Sudhir Chandra Sarkar, where the provisions relating to non-workmen could
be included in the Standing Orders of the Tata Iron and Steel Co. Untwalia, as he then was, observed as follows:--
Not only impliedly the plaintiffs of both the cases had agreed to be governed by these Standing Orders but, expressly they claim to be so governed
and the defendant Company did not dispute this fact. I would, therefore, over rule the contention of the learned Advocate-General that the Works
Standing Orders having been framed and adopted in accordance with Central Act 20 of 1946 could apply to the plaintiffs only if they plead and
prove that they were workmen within the meaning of that Act, and hold that the Standing Orders applied to them.
If the Standing Orders can be applied by mutual consent even to non-workmen, I see no reason why provisions for furnishing of wage slips, by
mutual agreement could not be included in the Standing Orders of the Motipur Sugar Factory Private Limited.
I am, therefore, not inclined to accept the proposition urged on behalf of the petitioners that the provisions for furnishing of wage slips in the
Standing Orders were ultra vires and on that score the petitioners could not be proceeded against for contravention of Section 13(2) of the Act.
Section 13(2) clearly lays down that any employer doing any act in contravention of the Standing Orders finally certified under this Act shall be
punishable with fine. The Management has certainly failed to comply with Clause 14 of the Standing Orders and, therefore, they were liable to be
proceeded against for contravention of Section 13(2) of the Act.
The question, however, remains if all the petitioners would be liable for the infraction of the law. Petitioner no. 1 was the Secretary and
petitioner no. 2 the Works Manager. They were, therefore, clearly incharge of the Management and responsible to the Company. In the absence
of any averment in the complaint that petitioners 3 to 6 were responsible to the owner for supervision or control of the industrial establishment, it
would be difficult to resist the submission on their behalf that they cannot be criminally prosecuted, Section 13 makes the employer liable for the
infringement of the provisions of the Act. ''Employer'' has been defined in Section 2(d) of the Act [leaving out clauses (i) and (ii)] as the owner of
the establishment to which this Act for the time being applies and includes in any other industrial establishment, any person responsible to the owner
for the supervision and control of the industrial establishment. The complainant had, therefore, to state in the complaint that petitioners 3 to 6 were
responsible to the owner for the supervision and control of the industrial establishment. In my view, therefore, the complaint against them was
misconceived and the processes issued against them by the learned Magistrate was without any jurisdiction. A similar view was taken in (5)
Rabindra Nath Dutt alias R.N. Dutta and others versus State of Bihar and others (1971 B.L.J.R. 1005) where the prosecution was quashed on the
ground that the complaint did not state in specific terms which of the Directors/Partners were responsible for the management of the Company.
I would, therefore, allow the application of petitioners 3 to 6. The application of petitioners 1 and 2, however, must be dismissed.
Cr. W.J.C. No. 15 of 1973.
The petitioners in this case are same as those in Cr. W.J.C. No. 14 of 1973, being the office bearers and Directors of the Motipur Sugar
Factory Private Limited (hereinafter called as ''the Factory''). They are being prosecuted for contravention of the provisions of the Bihar Shops and
Establishments Act, 1953 (Bihar Act 8 of 1954). A complaint having been filed in respect of those contraventions by Shri Ram Nandan Prasad,
the then Labour and Inspecting Officer, Muzaffarpur on 4-7-1972, cognizance of those offences was taken by the Subdivisional Magistrate by
order dated 6-7-1972 (Annexure-4). It was alleged in the complaint that the complainant had visited the weighing centre of the Factory at
Muzaffarpur on 10-1-1972 at 4.30. P.M. The contraventions alleged in the complaint were as follows:--
(i) The weighing centre had not been registered as an establishment in terms of Section 3(1) of the Act read with Rule 6 of the Bihar Shops and
Establishments Rules 1955.
(ii) Notice of weekly closure had not been displayed in terms of Section 12(1) of the Act read with Rule 11 (Form VI) of the Rules.
(iii) Notice of weekly holiday for the employees as laid down in Rule 12 (Form VII) had not been displayed.
(iv) Sixteen persons were found working in the establishment, but in terms of Rule 13 (Form VIII) their periods of work had not been displayed
which was the contravention of Rule 13.
The petitioners have, therefore, filed this application for quashing their prosecution.
The petitioners have contended that the weighing centre not being an establishment, was not registrable under the Act. According to them, it
was only a weighing centre and, therefore, not an establishment. Another fact relevant in this connection is that earlier in 1957-58 also, the question
of registration of this weighing centre had been raised and after the matter was contested the then Inspecting Officer, Muzaffarpur dropped the
matter. It was, therefore, contended through their show cause dated 12-2-1972, addressed to the complainant Shri Ram Nandan Prasad that the
weighing centre was not an establishment as contemplated under the Act.
Learned counsel for the petitioners has contended that in view of the provisions contained in Rule 3(7) of the Bihar Shops and Establishments
Rules, the Labour Officer had no jurisdiction to file complaint for the alleged transgression. Rule 3(7) is in the following terms:--
In the event of any doubt or difference of opinion between an employer and the Inspecting Officer, as to the liabilities of registration of the
establishment and payment of the fees therefor, the Inspecting Officer shall refer the matter to the Chief Inspecting Officer whose decision shall be
final. Provided that the Chief Inspecting Officer, either suo motu or on the application made by any person aggrieved by the said decision, may
review his decision after giving notice to the person concerned and giving him a reasonable opportunity of being heard.
The Rule quoted above clearly shows that in case of dispute or difference between the employer and the Inspecting Officer in regard to the
liabilities of registration of an establishment, a reference has to be made to the Chief Inspecting Officer. The existence of the dispute between the
employer and the Inspecting Officer is apparent from the letter to the Labour Inspecting Officer (Annexure-2). Having regard to the fact that a
dispute had arisen earlier in 1957-58 which had been dropped, a fact mentioned in Annexure-2 itself, the Inspecting Officer had no jurisdiction to
rush to file a complaint on his own. He should have made a reference to the Chief Inspecting Officer. In that view of the matter, the filing of the
complaint was clearly misconceived. The prosecution of the petitioners must, therefore, be held to be illegal and without jurisdiction.
Learned counsel for the petitioners had raised other contentions as well, but in the view that I have taken on the point, discussed above, it is
not necessary to advert to those submissions.
This application, therefore, also must be allowed. The complaint and the order taking cognizance (Annexure-3 and 4) are, therefore, hereby
quashed. For the reasons, stated above. Cr. W.J.C. Nos. 13 and 15 of 1973 are allowed and the impugned annexures in the respective cases,
mentioned above, are quashed. Cr. W.J.C. No. 14 of 1973 is allowed as far as petitioners 3 to 6 are concerned and the complaint and the order
taking cognizance as against them are quashed. This application (Cr. W.J.C. No. 14 of 1973) is dismissed as far as petitioners 1 and 2 are
concerned.
S. Sarwar Ali, J.
I agree.