IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.01.2010
CORAM:
THE HON BLE MR. JUSTICE K.CHANDRU
W.P.No.15406 of 2000
The Railway Employees Cooperative
Credit Society Ltd., (Reg.No.52/1907)
Southern Railway Office
Chennai 3 represented by
its Secretary .. Petitioner
Vs.
The Joint Commissioner of Labour
Chennai
Labour Welfare Board buildings
6th floor, D.M.S.Compound
Chennai 6 .. Respondents
Prayer : Petition under Article 226 of the Constitution of India praying for a Writ of Certiorari calling for the impugned order of the respondent made in Letter No.B/612/2000 dated 24.8.2000 and quash the same.
For Petitioner :: Mr.R.Muthukumarasamy,
Senior counsel for Mr.A.Jenasenan
For Respondents :: Mrs.C.K.Vishnu Priya, AGP
O R D E R
Heard both sides.
2. It is an irony that a Society run by the Railway workers has chosen to challenge a communication sent by the Labour Department of the State Government. It is a known history that the Railway workers fought for many labour rights over one century. Yet a Society run by them are attempting to deny legal rights by stalling the application of certified Standing Orders to their workers by filing the Writ Petition and getting a stay of the impugned communication for over a decade. The impugned communication sent by the respondent is nothing but a directive to the petitioner to get their Standing Orders certified for their workmen.
3. It is seen from the records that the General Secretary of the All India Multi State Societies' employees Association, Chennai had sent a letter to the state labour department dated 24.1.2000 complaining that the petitioner society had not got a certified standing orders in terms of the Industrial Employment (Standing Orders) Act, 1946 (for short 'Standing Orders Act').
4. The first respondent after seeking the comments from the petitioner society sent the impugned proceedings dated 24.8.2000. The petitioner society was informed that it comes within the control of the state government and that the provisions of the Standing Orders Act will apply to them. They were asked to take appropriate steps to get standing orders certified for their establishment under the Standing Orders Act. It is this communication which is challenged in this Writ Petition.
5. This Writ Petition was filed in the year 2000. It is an abuse of law that the petitioner society did not implead either the trade union functioning in the Society or the persons who made the complaint to the labour department regarding the non-certification of the standing orders. On the contrary they had got an interim stay of the communication on 30.9.2000, which is also continuing over the last 10 years thanks to lethargy of the respondent.
6. A Counter affidavit dated 28.04.2003 has been filed by the respondents justifying the application of the Standing Orders Act to the petitioner society.
7. Mr.R.Muthukumarasamy, learned senior counsel leading Mr. A.Jenasenan, for the petitioner raised the following contentions:
i) Provisions of the Standing Orders Act will not apply to the petitioner Society as it is a multi-state Co.operative society registered under the Multi State Cooperative Societies Act, 1984.
ii) the appropriate Government in respect of such a society is the 'Central Government' and therefore the respondent herein has no jurisdiction to send the impugned communication.
iii) under the Multi-State Cooperative Societies Act, 1984, more particularly under Section 42(2)(e), the Board of Directors of the Society is empowered to deal with making regulations for regulating appointment of employees of the Multi-State Cooperative Society, the scales of pay, allowances and other conditions of service including disciplinary action against such employees. Since the Regulations have been framed by the Board, there was no necessity to make any standing orders certified for their establishment. The existing regulations are satisfactory and are enough to deal with the employees.
(iv) The petitioner was also informed by the authorities at Delhi that they need not get any Standing Orders certified under the Act. But the learned Senior Counsel fairly stated that the petitioner society never obtained any exemption from the Standing Orders Act, 1946 in terms of Section 13-B either from the Central Government or from the Tamil Nadu Government.
8. The question that arises for consideration is whether the impugned communication is legally valid and the petitioner society was obliged to have certified the standing orders for their establishment.
9. The contentions raised by the learned senior counsel for the petitioner does not merit any acceptance. In respect of a multi-state Cooperative society, the appropriate Government is only the State Government as had been held by the Supreme Court vide its judgment in Bharat Coop.Bank (Mumbai) Ltd. vs. Coop.Bank Employees Union reported in (2007) 4 SCC 685. The following passage found in paragraph 30 may be usefully extracted below:
"30. For all these reasons, we have no hesitation in upholding the view taken by the High Court that for the purpose of deciding as to which is the "appropriate Government", within the meaning of Section 2(a) of the ID Act, the definition of the "banking company" will have to be read as it existed on the date of insertion of Section 2(bb) and so read, the "appropriate Government" in relation to a multi-State cooperative bank, carrying on business in more than one State, would be the State Government."
10. The learned senior counsel for the petitioner submitted that the petitioner society is not an industrial establishment coming within the meaning of Section 2(e) of the Standing Orders Act. Even that submission is not valid. Section 2(e)(i) of the Industrial Employment (Standing Orders) Act, 1946 reads as follows:
(e) "industrial establishment'" means
(i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act,1936 (4 of 1936)"
11. Under the Payment of Wages Act, 1936, the State Legislature had introduced an amendment by Tamil Nadu Act 5 of 1959. By the said amendment Section 2(h) of the Payment of Wages Act was substituted and it reads as follows:
"(h) establishment or undertaking which the State Government may, by notification in the official Gazette, declare to be an industrial establishment for the purposes of this Act."
12. By virtue of the power vested under Section 2(h) of the Payment of Wages Act, the State Government has issued the following notification vide G.O.Ms.No.128, Labour Department dated 24.1.1986. The said notification reads as follows:
"No.II (2) LAB/1135/86 . In exercise of the powers conferred by sub-clause (h) of clause (ii) of Section 2 of the Payment of Wages Act,1936 (Central Act IV of 1936), the Governor of Tamil Nadu hereby declares the commercial establishments as defined in clause (3) of Section 2 of the Tamil Nadu Shops and Establishments Act, 1947 (Tamil Nadu Act XXXVI of 1947), employing 20 or more persons as Industrial Establishment for the purpose of the Act."
It is needless to state that the petitioner Society is a commercial establishment within the meaning of Section 2(3) of the Tamil Nadu Shops and Establishment Act, 1947.
13. When once it is held that the petitioner is an "industrial establishment" under the Payment of Wages Act, then automatically Section 2(e)(1) of the Standing Orders Act will get attracted. To get over that legal hurdle, the learned senior counsel submitted that the petitioner is a multi-state cooperative society and the appropriate Government can only be the Central Government. Therefore, the state amendment will have no relevance. Such an argument is not available, in the light of the Supremen Court's decision in Bharat Cooperative Bank (Mumbai)'s case (cited supra). Therefore, there is no illegality or infirmity in the communication sent by the respondent.
14. The learned senior counsel also submitted that Regulations under 42(2)(e) are already applicable to the employees. Hence, there is no necessity to frame any certified standing orders for the establishment. Such a contention is impermissible because insofar as having Certified standing orders are concerned, the provisions of the Standing Orders Act will prevail as it is a special law. The petitioner relying upon the regulations framed by its own Board of Directors and raise it to the level of a statutory regulation cannot be countenanced by this Court. On the contrary if the standing orders apply to an establishment and if the employer do not get a certified standing order, then by virtue of Section 12-A of the Standing Orders Act, the model standing orders framed by the Tamil Nadu Government will apply to the employees of the petitioner society.
15. The purpose of framing Standing Orders came to be considered by the Supreme Court vide its decision in Western India Match Company Ltd., vs. Workmen reported in 1973 (2) LLJ 403. The following passage found in paragraph 10 of the Judgment may be usefully extracted below:-
"10. In the sunny days of the market economy theory people sincerely believed that the economic law of demand and supply in the labour market would settle a mutually beneficial bargain between the employer and the workman. Such a bargain, they took it for granted, would secure fair terms and conditions of employment to the workman. This law they venerated as natural law. They had an abiding faith in the unity (sic) of this law. But the exercise of the working of this law over a long period has belied their faith. Later generations discovered that the workmen did not possess adequate bargaining strength to secure fair terms and conditions of service. When the workmen also made this discovery, they organised themselves in trade unions and insisted on collective bargaining with the employer. The advent of trade unions and collective bargaining created new problems of maintaining industrial peace and production for the society. It was, therefore, considered that the society has also an interest in the settlement of the terms of employment of industrial labour. While formerly there were two parties at the negotiating table, the employer and the workman, it is now thought that there should also be present a third party, the State, as representing the interest of the society. The Act gives effect to this new thinking. By S.4 the officer certifying the standing order is directed to adjudicate upon "the fairness or reasonableness" of the provisions of the standing order. The certifying officer is the statutory representative of the society. It seems to us that while adjudging the fairness or reasonableness of any standing order, the certifying officer should consider and weigh the social interest in the claims of the employer and the social interest in the demands of the workmen...".
While the regulations have been unilaterally framed by the Board, but in framing the Certified Standing Order, the workmen can have a say and the Certifying Officer under the Act is mandated to see its reasonableness before granting his certification.
16. The Supreme Court vide its judgment in Co.operative Central Bank Limited vs. Additional Industrial Tribunal and others reported in 1969 (2) LLJ 698 has held that the bye-laws framed by a society is only in the nature of contract and that cannot curtail the adjudicating authorities under the Industrial Disputes Act to modify those terms. It is necessary to refer to the following passage found in page 707 of the said Judgment.
"....We are unable to accept the submission that the bylaws of a cooperative society framed in pursuance of the provisions of the Act can be held to be law or to have the force of law. It has no doubt been held that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to bylaws of the nature that a co.operative society is empowered by the Act to make. The bylaws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They may be binding between the persons affected by them, but they do not have the force of a statute. In respect of bylaws laying down conditions of service of the employees of a society, the bylaws would be binding between the society and the employees just in the same manner as conditions of service laid down by contract between the parties. In fact, after such bylaws laying down the conditions of service are made and any person enters the employment of a society, those conditions of service will have to be treated as conditions accepted by the employee when entering the service and will thus bind him like conditions of service specifically forming part of the contract of service. The bylaws that can be framed by a society under the Act are similar in nature to the articles of association of a company incorporated under the Companies Act and such articles of association have never been held to have the force of law....". (Emphasis added)
Hence the adjudication by a Labour Court or the Certification of the Standing Orders cannot be subordinated for the bylaws framed by the Board of the petitioner society.
17. Further, the Supreme Court vide its judgment in Life Insurance Corporation of India vs. D.J.Bahadur reported in 1981 (1) SCC 315 has held that if there are two central enactments, even though one central enactment may be a special law for the purpose for which it was established, insofar as the service conditions of workmen are concerned, it is only the labour law that will prevail.
The following passages found in paras 31, 52 and 57 may be usefully extracted below:-
31. If there is no dispute, the ID Act is out of bounds, while the LIC Act applies generally to all employees from the fattest executive to the frailest manual worker and has no concern with industrial disputes. The former is a war measure as it were; the latter is a routine power when swords are not drawn if we may put it metaphorically. When disputes break out or are brewing, a special, sensitive situation fraught with frayed tempers and fighting postures springs into existence, calling for special rules of control, conciliatory machinery, demilitarising strategies and methods of investigation, interim arrangements and final solutions, governed by special criteria for promoting industrial peace and justice. The LIC Act is not a law for employment or disputes arising therefrom, but a nationalisation measure which incidentally, like in any general takeover legislation, provides for recruitment, transfers, promotions and the like. It is special vis-a-vis nationalisation of life insurance but general regarding contracts of employment or acquiring office buildings. Emergency measures are special, for sure. Regular nationalisation statutes are general even if they incidentally refer to conditions of service.
.....
52. In determining whether a statute is a special or a general one, the focus must be on the principal subject-matter plus the particular perspective. For certain purposes, an Act may be general and for certain other purposes it may be special and we cannot blur distinctions when dealing with finer points of law. In law, we have a cosmos of relativity, not absolutes so too in life. The ID Act is a special statute devoted wholly to investigation and settlement of industrial disputes which provides definitionally for the nature of industrial disputes coming within its ambit. It creates an infrastructure for investigation into, solution of and adjudication upon industrial disputes. It also provides the necessary machinery for enforcement of awards and settlements. From alpha to omega the ID Act has one special mission the resolution of industrial disputes through specialised agencies according to specialised procedures and with special reference to the weaker categories of employees coming within the definition of workmen. Therefore, with reference to industrial disputes between employers and workmen, the ID Act is a special statute, and the LIC Act does not speak at all with specific reference to workmen. On the other hand, its powers relate to the general aspects of nationalisation, of management when private businesses are nationalised and a plurality of problems which, incidentally, involve transfer of service of existing employees of insurers. The workmen qua workmen and industrial disputes between workmen and the employer as such, are beyond the orbit of and have no specific or special place in the scheme of the LIC Act. And whenever there was a dispute between workmen and management the ID Act mechanism was resorted to.
......
57. What is special or general is wholly a creature of the subject and context and may vary with situation, circumstances and angle of vision. Law is no abstraction but realises itself in the living setting of actualities. Which is a special provision and which general, depends on the specific problem, the topic for decision, not the broad rubric nor any rule of thumb. The peaceful coexistence of both legislations is best achieved, if that be feasible, by allowing to each its allotted field for play. Sense and sensibility, not mechanical rigidity gives the flexible solution. It is difficult for me to think that when the entire industrial field, even covering municipalities, universities, research councils and the like, is regulated in the critical area of industrial disputes by the ID Act, Parliament would have provided an oasis for the Corporation where labour demands can be unilaterally ignored. The general words in Sections 11 and 49 must be read contextually as not covering industrial disputes between the workmen and the Corporation. Lord Haldane had, for instance, in 1915 AC 885 (891)434 observed that:535
General words may in certain cases properly be interpreted as having a meaning or scope other than the literal or usual meaning. They may be so interpreted where the scheme appearing from the language of the legislature, read in its entirety, points to consistency as requiring modification of what would be the meaning apart from any context, or apart from the general law.
To avoid absurdity and injustice by judicial servitude to interpretative literality is a function of the court and this leaves me no option but to hold that the ID Act holds where disputes erupt and the LIC Act guides where other matters are concerned. In the field of statutory interpretation there are no inflexible formulae or foolproof mechanisms. The sense and sensibility, the setting and the scheme, the perspective and the purpose these help the Judge navigate towards the harbour of true intendment and meaning. The legal dynamics of social justice also guide the court in statutes of the type we are interpreting. These plural considerations lead me to the conclusion that the ID Act is a special statute when industrial disputes, awards and settlements are the topic of controversy, as here. There may be other matters where the LIC Act vis-a-vis the other statutes will be a special law. I am not concerned with such hypothetical situations now."
18. Therefore, in respect of the Industrial Employment (Standing Orders) Act for framing the standing orders relating to service conditions of workmen is the special law occupying the field. The contention that bylaws/regulations framed by the Board under Section 42(2)(e) of the Multi-State Cooperative Societies Act, 1984 or under the subsequent enactment cannot have an overriding effect as held by the Supreme Court in LIC's case (cited supra).
19. The said legal position was reiterated by a Division Bench of this Court in The Tamil Nadu Water Supply and Drainage Board vs. M.D.Vijayakumar reported in 1991 (1) LLJ 260. The following passage found in paragraph 7 may be usefully extracted below:-
"7.....The principles laid down by the Supreme Court in U.P. State Electricity Board vs. Hari Shankar Jain (supra) and Bagianathan, S vs.The Secretary to Government of Tamil Nadu etc. (supra) are applicable to the facts of the present case and we fully agree with the conclusion of the learned Single Judge that the Act of 1946 is a special law vis-a-vis regulations framed under the general law viz., the Tamil nadu Act IV of 1971, and it will prevail over the regulations framed by the respondent-Board in exercise of the powers conferred under Section 73 of the Act IV of 1971. The learned Single Judge also rightly held that the respondent-Board is an 'industrial establishment' within the meaning of Section 2(e)(i) of the Act of 1946, that the regulations framed by the respondent-Board in exercise of the powers under Section 73 of the Act IV of 1971 will not be applicable to the workmen governed by the Act of 1946 and that the disciplinary action taken by the respondent Board against the workmen based on the regulations have to be struck down".
The said decision was upheld by the Supreme Court also.
20. In the light of the above,the contentions raised by the petitioner society cannot be accepted. The Writ Petition is therefore dismissed both on the ground of non-joinder of parties as well as on merits.
21. Since the petitioner society had stalled the application of the standing orders to the workmen in its establishment by filing such frivolous writ petition, the Writ Petition has to be dismissed with costs. Therefore, cost of Rs.5,000/- (Rupees five thousand only) is ordered against the petitioner society. In the present case, the workers are not before this Court. Therefore, the petitioner society is directed to credit the said amount to the Tamil Nadu Labour Welfare Fund created under the Tamil Nadu Welfare Fund Act, 1972 within a period of four weeks from the date of receipt of a copy of this order.
ajr
To
The Joint Commissioner of Labour
Chennai
Labour Welfare Board buildings
6th floor, D.M.S.Compound
Chennai 6
IMPORTANT ISSUES/JUDGEMENTS ON LABOUR, HUMAN RIGHTS AND SOCIAL ASPECTS CAN BE ACCESSED IN THIS BLOG-P.ESAKKIMUTHU,CITU ON "LABOUR"
Wednesday, June 30, 2010
Tuesday, June 22, 2010
PAYMENT OF WAGES (AMENDMENT) ACT 2005
PAYMENT OF WAGES (AMENDMENT) ACT 2005
THE PAYMENT OF WAGES (AMENDMENT) ACT, 2005 NO. 41 OF 2005
[5th September, 2005.]
An Act further to amend the Payment of Wages Act, 1936. BE it enacted by Parliament in the Fifty-sixth Year of the Republic of India as follows:-
1. Short title and commencement.-(1) This Act may be called the Payment of Wages (Amendment) Act, 2005.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. Amendment of section 1.-In section 1 of the Payment of Wages Act, 1936 (4 of 1936) (hereinafter referred to as the principal Act), for sub-section (6), the following sub-section shall be substituted, namely:-
"(6) This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed six thousand five hundred rupees per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify.".
3. Substitution of references to certain expressions by other expression.-Throughout the principal Act, unless otherwise expressly provided for, the expressions "the Central Government or a State Government" and "the State Government", wherever they occur, the expression "appropriate Government" shall be substituted and such other consequential amendments as the rules of grammar may require shall also be made.
4. Amendment of section 2.-In section 2 of the principal Act,- (a) clauses (i), (ia) and (ib) shall be re-numbered as clauses (ia), (ib) and (ic), respectively, and before clause (ia) as so re-numbered, the following clause shall be inserted, namely:-
'(i) "appropriate Government" means, in relation to railways, air transport services, mines and oilfields, the Central Government and, in relation to all other cases, the State Government;'; (b) for clause (v), the following clause shall be substituted, namely:-
'(v) " railway administration" has the meaning assigned to it in clause (32) of section 2 of the Railways Act, 1989 (24 of 1989);'.
5. Substitution of new section for section 3.-For section 3 of the principal Act, the following section shall be substituted, namely:-
"3. Responsibility for payment of wages.-(1) Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed,-
(a) in factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948); (b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments; (c) upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; (d) in the case of contractor, a person designated by such contractor who is directly under his charge; and (e) in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act, the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment.
(2) Notwithstanding anything contained in sub-section (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment.".
6. Amendment of section 7.-In section 7 of the principal Act,-
(a) in sub-section (1), for the words, brackets and figures "sub-section (2) of section 47 of the Indian Railways Act, 1890 (9 of 1890)", the words and figures "the Railways Act, 1989 (24 of 1989)" shall be substituted;
(b) in sub-section (2), in clause (i), for the words, figures and letter "in section 58A of the Indian Income-tax Act, 1922 (11 of 1922)", the words, brackets and figures "in clause (38) of section 2 of the Income-tax Act, 1961 (43 of 1961)" shall be substituted;
(c) in sub-section (4), for the words and figures "the Indian Railways Act, 1890 (9 of 1890)", the words and figures "the Railways Act, 1989 (24 of 1989)" shall be substituted.
7. Amendment of section 8.-In section 8 of the principal Act, in sub-section (6), for the words "sixty days", the words "ninety days" shall be substituted.
8. Amendment of section 15.-In section 15 of the principal Act,-
(i) for sub-section (1), the following sub-section shall be substituted, namely:-
"(1) The appropriate Government may, by notification in the Official Gazette, appoint- (a) any Commissioner for Workmen's Compensation; or (b) any officer of the Central Government exercising functions as,- (i) Regional Labour Commissioner; or (ii) Assistant Labour Commissioner with at least two years' experience; or (c) any officer of the State Government not below the rank of Assistant Labour Commissioner with at least two years' experience; or (d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State; or (e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate, as the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, of persons employed or paid in that area, including all matters incidental to such claims: Provided that where the appropriate Government considers it necessary so to do, it may appoint more than one authority for any specified area and may, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act.";
(ii) for sub-section (3), the following sub-section shall be substituted, namely:-
"(3) When any application under sub-section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further enquiry, 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 three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees: Provided that a claim under this Act shall be disposed of as far as practicable within a period of three months from the date of registration of the claim by the authority: Provided further that the period of three months may be extended if both parties to the dispute agree for any bona fide reason to be recorded by the authority that the said period of three months may be extended to such period as may be necessary to dispose of the application in a just manner: Provided also 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, the person responsible for the payment of the wages was unable, in spite of exercising reasonable diligence; or (c) the failure of the employed person to apply for or accept payment.";
(iii) in sub-section (4), for the words "not exceeding fifty rupees" wherever they occur, the words "not exceeding three hundred seventy-five rupees" shall be substituted.
9. Amendment of section 20.-In section 20 of the principal Act,-
(a) in sub-section (1), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(b) in sub-section (2), for the words "with fine which may extend to five hundred rupees", the words "with fine which may extend to three thousand seven hundred fifty rupees" shall be substituted;
(c) after sub-section (2), the following sub-section shall be inserted, namely:- "(2A) Whoever being required to nominate or designate a person under section 3 fails to do so, such person shall be punishable with fine which may extend to three thousand rupees.";
(d) in sub-section (3), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(e) in sub-section (4), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(f) in sub-section (5), for the words "with fine which shall not be less than five hundred rupees but which may extend to three thousand rupees", the words "with fine which shall not be less than three thousand seven hundred fifty rupees but which may extend to twenty-two thousand five hundred rupees" shall be substituted;
(g) in sub-section (6), for the words "one hundred rupees", the words "seven hundred fifty rupees" shall be substituted.
10. Substitution of new section for section 24.-For section 24 of the principal Act, the following section shall be substituted, namely:- "24. Delegation of powers.-The appropriate Government may, by notification in the Official Gazette, direct that any power exercisable by it under this Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be also exercisable- (a) where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government or by such officer or authority subordinate to the State Government, as may be specified in the notification; (b) where the appropriate Government is a State Government, by such officer or authority subordinate to the State Government as may be specified in the notification.".
11. Amendment of section 26.-In section 26 of the principal Act,-
(a) in sub-section (4), for the words "which may extend to two hundred rupees", the words "which shall not be less than seven hundred fifty rupees but which may extend to one thousand five hundred rupees" shall be substituted;
(b) after sub-section (6), the following sub-section shall be inserted, namely:-
"(7) All rules made under this section by the State Government shall, as soon as possible after they are made, be laid before the State Legislature.". ---- T. K. VISWANATHAN, Secy. to the Govt. of India. {}
THE PAYMENT OF WAGES (AMENDMENT) ACT, 2005 NO. 41 OF 2005
[5th September, 2005.]
An Act further to amend the Payment of Wages Act, 1936. BE it enacted by Parliament in the Fifty-sixth Year of the Republic of India as follows:-
1. Short title and commencement.-(1) This Act may be called the Payment of Wages (Amendment) Act, 2005.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. Amendment of section 1.-In section 1 of the Payment of Wages Act, 1936 (4 of 1936) (hereinafter referred to as the principal Act), for sub-section (6), the following sub-section shall be substituted, namely:-
"(6) This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed six thousand five hundred rupees per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify.".
3. Substitution of references to certain expressions by other expression.-Throughout the principal Act, unless otherwise expressly provided for, the expressions "the Central Government or a State Government" and "the State Government", wherever they occur, the expression "appropriate Government" shall be substituted and such other consequential amendments as the rules of grammar may require shall also be made.
4. Amendment of section 2.-In section 2 of the principal Act,- (a) clauses (i), (ia) and (ib) shall be re-numbered as clauses (ia), (ib) and (ic), respectively, and before clause (ia) as so re-numbered, the following clause shall be inserted, namely:-
'(i) "appropriate Government" means, in relation to railways, air transport services, mines and oilfields, the Central Government and, in relation to all other cases, the State Government;'; (b) for clause (v), the following clause shall be substituted, namely:-
'(v) " railway administration" has the meaning assigned to it in clause (32) of section 2 of the Railways Act, 1989 (24 of 1989);'.
5. Substitution of new section for section 3.-For section 3 of the principal Act, the following section shall be substituted, namely:-
"3. Responsibility for payment of wages.-(1) Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed,-
(a) in factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948); (b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments; (c) upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; (d) in the case of contractor, a person designated by such contractor who is directly under his charge; and (e) in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act, the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment.
(2) Notwithstanding anything contained in sub-section (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment.".
6. Amendment of section 7.-In section 7 of the principal Act,-
(a) in sub-section (1), for the words, brackets and figures "sub-section (2) of section 47 of the Indian Railways Act, 1890 (9 of 1890)", the words and figures "the Railways Act, 1989 (24 of 1989)" shall be substituted;
(b) in sub-section (2), in clause (i), for the words, figures and letter "in section 58A of the Indian Income-tax Act, 1922 (11 of 1922)", the words, brackets and figures "in clause (38) of section 2 of the Income-tax Act, 1961 (43 of 1961)" shall be substituted;
(c) in sub-section (4), for the words and figures "the Indian Railways Act, 1890 (9 of 1890)", the words and figures "the Railways Act, 1989 (24 of 1989)" shall be substituted.
7. Amendment of section 8.-In section 8 of the principal Act, in sub-section (6), for the words "sixty days", the words "ninety days" shall be substituted.
8. Amendment of section 15.-In section 15 of the principal Act,-
(i) for sub-section (1), the following sub-section shall be substituted, namely:-
"(1) The appropriate Government may, by notification in the Official Gazette, appoint- (a) any Commissioner for Workmen's Compensation; or (b) any officer of the Central Government exercising functions as,- (i) Regional Labour Commissioner; or (ii) Assistant Labour Commissioner with at least two years' experience; or (c) any officer of the State Government not below the rank of Assistant Labour Commissioner with at least two years' experience; or (d) a presiding officer of any Labour Court or Industrial Tribunal, constituted under the Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State; or (e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate, as the authority to hear and decide for any specified area all claims arising out of deductions from the wages, or delay in payment of the wages, of persons employed or paid in that area, including all matters incidental to such claims: Provided that where the appropriate Government considers it necessary so to do, it may appoint more than one authority for any specified area and may, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act.";
(ii) for sub-section (3), the following sub-section shall be substituted, namely:-
"(3) When any application under sub-section (2) is entertained, the authority shall hear the applicant and the employer or other person responsible for the payment of wages under section 3, or give them an opportunity of being heard, and, after such further enquiry, 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 three thousand rupees but not less than one thousand five hundred rupees in the latter, and even if the amount deducted or delayed wages are paid before the disposal of the application, direct the payment of such compensation, as the authority may think fit, not exceeding two thousand rupees: Provided that a claim under this Act shall be disposed of as far as practicable within a period of three months from the date of registration of the claim by the authority: Provided further that the period of three months may be extended if both parties to the dispute agree for any bona fide reason to be recorded by the authority that the said period of three months may be extended to such period as may be necessary to dispose of the application in a just manner: Provided also 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, the person responsible for the payment of the wages was unable, in spite of exercising reasonable diligence; or (c) the failure of the employed person to apply for or accept payment.";
(iii) in sub-section (4), for the words "not exceeding fifty rupees" wherever they occur, the words "not exceeding three hundred seventy-five rupees" shall be substituted.
9. Amendment of section 20.-In section 20 of the principal Act,-
(a) in sub-section (1), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(b) in sub-section (2), for the words "with fine which may extend to five hundred rupees", the words "with fine which may extend to three thousand seven hundred fifty rupees" shall be substituted;
(c) after sub-section (2), the following sub-section shall be inserted, namely:- "(2A) Whoever being required to nominate or designate a person under section 3 fails to do so, such person shall be punishable with fine which may extend to three thousand rupees.";
(d) in sub-section (3), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(e) in sub-section (4), for the words "with fine which shall not be less than two hundred rupees but which may extend to one thousand rupees", the words "with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees" shall be substituted;
(f) in sub-section (5), for the words "with fine which shall not be less than five hundred rupees but which may extend to three thousand rupees", the words "with fine which shall not be less than three thousand seven hundred fifty rupees but which may extend to twenty-two thousand five hundred rupees" shall be substituted;
(g) in sub-section (6), for the words "one hundred rupees", the words "seven hundred fifty rupees" shall be substituted.
10. Substitution of new section for section 24.-For section 24 of the principal Act, the following section shall be substituted, namely:- "24. Delegation of powers.-The appropriate Government may, by notification in the Official Gazette, direct that any power exercisable by it under this Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be also exercisable- (a) where the appropriate Government is the Central Government, by such officer or authority subordinate to the Central Government or by the State Government or by such officer or authority subordinate to the State Government, as may be specified in the notification; (b) where the appropriate Government is a State Government, by such officer or authority subordinate to the State Government as may be specified in the notification.".
11. Amendment of section 26.-In section 26 of the principal Act,-
(a) in sub-section (4), for the words "which may extend to two hundred rupees", the words "which shall not be less than seven hundred fifty rupees but which may extend to one thousand five hundred rupees" shall be substituted;
(b) after sub-section (6), the following sub-section shall be inserted, namely:-
"(7) All rules made under this section by the State Government shall, as soon as possible after they are made, be laid before the State Legislature.". ---- T. K. VISWANATHAN, Secy. to the Govt. of India. {}
Monday, June 21, 2010
Saturday, June 19, 2010
Writ challenging Labour Court award for reinstating dismissed workman set aside
The Madras High Court has dismissed a writ petition from a Udhagamandalam-based company challenging the award of the Labour Court, Coimbatore, directing the management to reinstate a workman who was dismissed on July 4, 1997 on charges of misleading it in connection with his conviction by a criminal court for rash and negligent driving.
The management of Rallis India Ltd, Fine Chemicals Division, in the petition contended that a criminal case was registered against the worker (Leon Lenard), who was serving as a driver, for rash and negligent driving. He pleaded guilty before the Judicial Magistrate and was convicted. Subsequently, the management came to know that the worker was involved in an accident in which he had also paid fine in the case.
In that case, according to management, he falsely gave his father's name, and such action was done to mislead the management. A charge memo was given to him by the management. He admitted before an enquiry officer of the company about his conviction. Based on the enquiry officer's report, he was dismissed from service.
The worker filed a claim statement before the Labour Court, which held that there was no infirmity in the enquiry. The court, however, ruled that the punishment of dismissal was disproportionate to the charges levelled against him. During the course of 17 years of service, there was no complaint that he met with any accident.
If the conduct of the worker was not satisfactory during his service, he would not have got two promotions, the Labour Court had said. The court held that the workman was entitled for reinstatement with continuity of service but only with 50 per cent of back wages.
The management contended that the award of Labour Court was erroneous. Having found the workman guilty and accepting the domestic enquiry conducted by management, it was not open to the Labour Court to exercise power under Section 11-A of Industrial Disputes Act.
Also, once a person had committed such a misconduct of suppression of information about his conviction to the management, naturally the employer would refuse to engage him as it had lost confidence in him.
Mr Justice K. Chandru, who heard the writ petition, said that insofar as the contention that management had lost confidence on workman, it must be stated that the Labour Court relied upon two promotion orders given to workman. Hence, the contention of management that it had lost confidence in him could not be accepted. The writ petition would stand dismissed.
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The management of Rallis India Ltd, Fine Chemicals Division, in the petition contended that a criminal case was registered against the worker (Leon Lenard), who was serving as a driver, for rash and negligent driving. He pleaded guilty before the Judicial Magistrate and was convicted. Subsequently, the management came to know that the worker was involved in an accident in which he had also paid fine in the case.
In that case, according to management, he falsely gave his father's name, and such action was done to mislead the management. A charge memo was given to him by the management. He admitted before an enquiry officer of the company about his conviction. Based on the enquiry officer's report, he was dismissed from service.
The worker filed a claim statement before the Labour Court, which held that there was no infirmity in the enquiry. The court, however, ruled that the punishment of dismissal was disproportionate to the charges levelled against him. During the course of 17 years of service, there was no complaint that he met with any accident.
If the conduct of the worker was not satisfactory during his service, he would not have got two promotions, the Labour Court had said. The court held that the workman was entitled for reinstatement with continuity of service but only with 50 per cent of back wages.
The management contended that the award of Labour Court was erroneous. Having found the workman guilty and accepting the domestic enquiry conducted by management, it was not open to the Labour Court to exercise power under Section 11-A of Industrial Disputes Act.
Also, once a person had committed such a misconduct of suppression of information about his conviction to the management, naturally the employer would refuse to engage him as it had lost confidence in him.
Mr Justice K. Chandru, who heard the writ petition, said that insofar as the contention that management had lost confidence on workman, it must be stated that the Labour Court relied upon two promotion orders given to workman. Hence, the contention of management that it had lost confidence in him could not be accepted. The writ petition would stand dismissed.
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WC ACT Amended Notified New name for WC is Employees Compensation Act
Workmen's Compensation Act, 1923 becomes Employees with enhanced compensation limits, full medical expenses reimbursement, case disposal within 3 months, etc..& also applicable to casual & clericals
The Workmen’s Compensation (Amendment) Act. Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the definition of employee includes clerical employees & casual employees also. Further,
the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 & 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed. Hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now, irrespective of limits.
Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
The employee shall be reimbursed the actual (full) medical expenditure incurred by him for treatment of injuries caused during the course of employment.
Time limit for disposal of cases relating to compensation introduced- The Commissioner shall dispose of the matter relating to compensation within 3 months of reference.
Old definition: "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is….
New definition: Section 2 amended
“(dd) “employee” means a person, who is—
(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or
(ii) (a) a master, seaman or other members of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle.
(d) a person recruited for work abroad by a company,and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or
(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been” injured shall, where the employee is dead, include a reference to his dependants or any of them;’;
The Workmen’s Compensation (Amendment) Act. Workmen’s Compensation Act is now Employees Compensation Act, 1923 and the definition of employee includes clerical employees & casual employees also. Further,
the minimum compensation limits on no-fault basis are increased to Rs.1,20,000 & 1,40,000 (erstwhile limits being Rs. 80,000 & 90,000).
under the maximum compensation limit, the monthly wage limit of Rs.4,000/ is removed. Hence, the maximum compensation can go UPTO 50% of Total Monthly Wages now, irrespective of limits.
Funeral expenses limit extended to Rs.5000 (from Rs.2,500)
The employee shall be reimbursed the actual (full) medical expenditure incurred by him for treatment of injuries caused during the course of employment.
Time limit for disposal of cases relating to compensation introduced- The Commissioner shall dispose of the matter relating to compensation within 3 months of reference.
Old definition: "workman" means any person (other than a person whose employment is of a casual nature and who is employed otherwise than for the purposes of the employer's trade or business) who is….
New definition: Section 2 amended
“(dd) “employee” means a person, who is—
(i) a railway servant as defined in clause (34) of section 2 of the Railways Act, 1989 (24 of 1989), not permanently employed in any administrative district or sub-divisional office of a railway and not employed in any such capacity as is specified in Schedule II; or
(ii) (a) a master, seaman or other members of the crew of a ship,
(b) a captain or other member of the crew of an aircraft,
(c) a person recruited as driver, helper, mechanic, cleaner or in any other capacity in connection with a motor vehicle.
(d) a person recruited for work abroad by a company,and who is employed outside India in any such capacity as is specified in Schedule II and the ship, aircraft or motor vehicle, or company, as the case may be, is registered in India; or
(iii) employed in any such capacity as is specified in Schedule II, whether the contract of employment was made before or after the passing of this Act and whether such contract is expressed or implied, oral or in writing; but does not include any person working in the capacity of a member of the Armed Forces of the Union; and any reference to any employee who has been” injured shall, where the employee is dead, include a reference to his dependants or any of them;’;
SUSPENSION CONSTITUTES INDUSTRIAL DISPUTE
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 30..01..2008
Coram:
The Hon'ble Mr. Justice K.CHANDRU
W.P. No. 26665 of 2007
and
M.P. Nos. 1 and 2 of 2007
1. S. Thomas
2. Manali Petrochemicals Ltd.
Technical Employees' Union
Rep. By its General Secretary
(Regd. No. 1178/CPT)
Sathangadu Village
Manali
Chennai .. Petitioners
(P2 impleaded as per order dated
12.12.2007 in M.P. No.3 of 2007)
Vs.
1. The State of Tamil Nadu
Rep. by Secretary to Government
Labour and Employment Department
Fort St. George
Chennai 9
2. The Management of Manali Petrochemicals Ltd.
Rep. by its Managing Director
Ponneri High Road
Manali
Chennai .. Respondents
Petition filed under Article 226 of the Constitution of India seeking for issuance of writ of Certiorarified Mandamus calling for the records from the first respondent relating to the order in G.O. (D) No. 1300 Labour and Employment (A2) Department dated 21.12.2005 confirmed in the order dated 22.2.2007 and quash the said order dated 21.12.2005 confirmed in the order dated 22.2.2007 and direct the first respondent to refer the dispute of continued suspension of the petitioner for adjudication to a Labour Court.
For Petitioner : Mr. S. Ayyathurai
For Respondents : Mr. Ravindran
for M/s T.S. Gopalan & Co.
ORDER
Heard Mr. S. Ayyathurai, learned counsel appearing for the petitioner and Mr. Ravindran, learned counsel representing M/s. T.S. Gopalan, appearing for the respondents and perused the records.
2. The petitioner is a Technician employed by the second respondent company and he was in charge of Boiler duties. He was also elected as Vice President of the Manali Petrochemicals Technical Employees' Union formed in 1993. During 1996, he was made as General Secretary of the said Union. Since the settlement between the Union and the second respondent Management had ended in the December 2000, a new Charter of Demands was placed by the Union before the second respondent. Since the direct talks failed between the parties, a dispute was raised before the Conciliation Officer during the year 2003. It is alleged that in order to pressurize the workers, permanent employees working in the boilers, water treatment plant, Milk of lime plant and Fort Lift Operation were transferred to the main plant and in the place held by them, the second respondent attempted to engage contract workers. The petitioner was transferred from boiler plant to Propylene Glycol Plant which involves in hazarduous operation. Therefore, a dispute was raised against the transfer of permanent employees and the same was referred for adjudication by the Principal Labour Court and it was taken on file as I.D. No. 505 of 2005.
3. However, the second respondent placed the petitioner under suspension by an order dated 22.9.2003 stating that he was guilty of insubordination of the lawful orders of the superiors. An enquiry was conducted and show cause notice dated 25.10.2004 was issued to him. Despite the petitioner replied to the show cause notice, no final orders have been passed for the last three years. Therefore, the Trade Union to which the petitioner belonged, raised an industrial dispute before the Assistant Commissioner of Labour, Chennai 2. Upon a Failure Report being sent by the Officer, the first respondent State Government passed an order in G.O. (D) No. 1300 Labour and Employment Department dated 21.12.2005 refusing to refer the dispute. It is stated in the annexure to the said order that the dispute of temporary suspension cannot be considered as removal from service and since no punishment has been imposed, there is no necessity for the Government to refer the dispute for adjudication. The Trade Union filed an application for reviewing the order by a letter dated 25.12.2006 and the matter was once again taken by the Assistant Commissioner of Labour. Thereafter, the Trade Union was informed by a letter dated 22.02.2007 that there was no necessity to review the earlier order made in G.O. No. 1300 Labour and Employment Department dated 21.12.2005. Instead of the Trade Union challenging the said order, the petitioner in his individual capacity has filed the present writ petition challenging the said order.
4. An objection was taken by the second respondent Management that such a writ petition is not maintainable since the Trade Union has not come forward to file the writ petition and the petitioner cannot raise a dispute in respect of his suspension. To overcome the said objection, the Trade Union, viz., Manali Petrochemicals Ltd. Technical Employees' Union represented by its General Secretary (Regd. No. 1178/CPT) has filed an application in M.P. No. 3 of 2007 to implead themsleves as the second petitioner in the writ petition and the same was ordered by this Court on 12.12.2007. Therefore, the said objection fails.
5. A Division Bench of this Court vide its judgment reported in 1986 (2) L.L.J. 225 [Special Officer of the Management of TUCS Ltd. v. S. Loganathan] dealt with more or less a similar issue. In the aforesaid decision, an Arbitrator was appointed at the instance of the Union and the Management and that subsequently, two individual workers were aggrieved by the Arbitration Award which went against them. Since they were no longer in the Union and the Union was not interested in pursuing the said case, they had filed the writ petition challenging the Award. In paragraph 6 of the judgment, the Division Bench observed as follows:
Para 6: "Thirdly, it is contended by Mr. Dwarakanathan, learned counsel appearing for the first respondent, that the settlement under S. 12(3) on 2nd July, 1977 was duly arrived at the instance of the Union, espousing the cause of the workmen including the two petitioners and the arbitration before the second respondent also having been prosecuted by the Union on behalf of the two petitioners, the two petitioners cannot individually attack the award of the second respondent before this Court. It cannot be disputed that the two petitioners are "the persons affected" and we cannot deny them the right to invoke writ jurisdiction of this Court if there is a warrant for it, impeaching the award of the second respondent. Before us, submissions were made by both counsel with reference to the provisions of the Act enabling representations on behalf of the workmen. We need not necessarily resort to the provisions of the Act enabling the parties to agitate their rights either individually or through Union. Even within the Act individual workmen are enabled to agitate for their cause without reference to the Union. So far as powers of this Court are concerned, they shall always be available at the instance of persons who stand affected by the decisions of an authority like the second respondent. Our attention has not been drawn to any pronouncement which has taken a view contrary to what we have observed above. On the other hand, Miss Anna Mathew, learned counsel for the petitioners drew our attention to a pronouncement of the Supreme Court in Air India v. Nergesh Meerza [1981-II L.L.J. 314] to state that though the cause of the employees was earlier espoused by the Union, yet the individual employees themselves did agitate the matter before the Supreme Court and obtained reliefs. Whatever that be, as we have already pointed out, as persons affected, the petitioners can always invoke the jurisdiction of this Court under Art. 226 of the Constitution of India...."
6. Thereafter, Mr. S. Ayyathurai, learned counsel appearing for the petitioner submitted that the reason given by the Government to decline reference was illegal. The present dispute was raised relating to the prolonged suspension of the first petitioner and the dispute was raised by the second petitioner, which is only the recognised Union functioning in the second respondent establishment. The definition of an industrial dispute provided under Section 2(k) of the I.D. Act is so wide and it takes into account any difference of opinion between the workmen and the Management and, therefore, the scope of the definition cannot be curtailed by any artificial process and the reasoning given in the impugned order is unsustainable. It is not as if only in case of punishment, a dispute can be raised by the workman and even attempt to take disciplinary action can also be raised by a workman.
7. Even otherwise, the learned counsel drew the attention of this Court to the judgment of this Court reported in 1996 (2) L.L.J. 430 in the case relating to Kalyanasundaram, B. v. Labour Court, Madras and another and the relevant passages found in page 432 may be usefully extracted below:
''.... It is contended also that the worker was suspended pending the enquiry, that it was not a case of non-employment at all and that his suspension not being in the nature of punishment inflicted upon the worker, it could not be brought for adjudication as in the present case."
"In so far as the last point is concerned, whether or not suspension was a measure of punishment, I am really unable to see how an industrial dispute cannot arise out of such a direction made by the management. Even suspension amounts to non-employment of a worker and in relation to such non-employment alleged to be devoid of valid reasons, a dispute can be raised. So long as the dispute does not remain an individual dispute but assumes the form of an industrial dispute in which the general body of the workers display an interest, then, it cannot be said that a reference would not be proper. In this case, it is not denied by learned counsel on behalf of the management that all the seven employees are members of respondent 2 union and when respondent 2 union took up the matter before the labour officer for conciliation, it obviously offered clear indication that the union represented the body of the workers in sponsoring the cause of the employee. Though a dispute may start as an individual dispute, it assumes the form of an industrial dispute by the backing which the dispute received from other employees of that concern or by a union in which such employees are members. In this case, there is no doubt that this was the position and the contention that there was only an individual dispute which remained as such right through cannot possibly be accepted."
".... Any act of the employer which involves non-employment of a worker or violation of the terms of service upon which he is employed can give rise to an industrial dispute...."
8. However, per contra, Mr. Ravindran, learned counsel leading M/s T.S. Gopalan & Co. appearing for the respondent brought to the notice of this court the judgment of the Supreme Court in the Regional Director v. Employees' State Insurance Corporation v. Popular Automobiles and others [(1997) 7 SCC 665] and submitted that even though a suspension may be prolonged, that does not bring the relationship of the master and servant to a close and, therefore, there is no industrial dispute, be adjudicated. The learned counsel relied on the passage found in paragraph 9 of the said judgment and the same may be usefully extracted hereunder:
Para 9: "On the aforesaid scheme of this Act, therefore, it becomes very clear that all employees are entitled to get the statutory coverage of the benefits being insured employees and any person employed for wages is to be treated as an employee for the purpose of the Act. Under these circumstances an employee who is admittedly covered by the Act and who is entitled to get the benefits under the Act as insured employee will not cease to be an employee covered by the Act if he is placed under interim suspension pending domestic enquiry on any alleged misconduct by his employer. It is axiomatic to say that during suspension period pending enquiry the employer-employee relationship does not come to an end. It would come to an end only when after enquiry his services on proof of misconduct are ordered to be terminated. Till then he continues to be an employee for all purposes subject to only two consequences flowing from such interim suspension, namely, in the first place the employee will remain prohibited from actually offering his services and discharging his duties as the employer does not want him to do so and secondly during the period of suspension pending enquiry the remuneration payable to the employee will get curtailed and will be treated as subsistence allowance as legally permissible under the rules and which may range from 50% at the lowest to even 100% of the wages at the highest if the suspension continues beyond the requisite period as contemplated by the service rules and regulations concerned. It is also to be kept in view and there is no dispute on this aspect that even during suspension when the employee is being paid subsistence allowance and not full wages he remains entitled to get all the benefits as available to working employees on the same basis as laid down by various provisions of Chapter V. It is not as if a suspended employee gets lesser benefits as compared to a working employee under the provisions of the said chapter. They stand on a par. It is also to be appreciated that subsistence allowance is not to be refunded by the suspended employee whatever may ultimately be the result of the domestic enquiry. Hence only because the total remuneration paid to the suspended employee gets reduced to 50% or to any higher percentage going up to 100% it is not possible to appreciate as to how it can be said that on the amount of subsistence allowance received by him permanently he is not bound to contribute any amount to the Corporation and equally the employer of such a suspended employee is also not bound to make his parallel contribution as per the rates provided under the Act especially when all the benefits of statutory insurance coverage are made available by the Corporation to such a suspended employee...."
9. It is not clear as to how the said passage extracted above, helps the case of the second respondent Management. On the contrary, the question arose for the consideration by the Supreme Court was whether the suspended employee is entitled for the benefits under the ESI Act during the period of suspension and whether any recovery can be made from the Subsistence Allowance and whether the said allowance is also a wage liable for recovery towards subscription of ESI contribution. Further, even on the factual matrix, even after the show cause was given to the first petitioner after an enquiry and the first petitioner having given a reply as early as in the year 2004, it is not known as to what prevented the second respondent from passing appropriate orders. Certainly, such a prolonged suspension can be a subject matter of an industrial dispute.
10. Under Section 7 of the I.D. Act, the Labour Court is empowered to adjudicate disputes on a reference being made to it, in terms of the matters which are listed under the second Schedule prescribed under the Act. Item No. 1 of the Second Schedule reads as follows:
"The propriety or legality of an order passed by an employer under the Standing Orders"
A reading of the said provision read with Second Schedule will clearly show that the Labour Court is empowered to adjudicate even an issue relating to suspension pending enquiry since the said power by an employer has been exercised under the relevant Standing Orders. As the definition of Industrial Dispute under Section 2(k) of the I.D. Act read with Schedule I of the I.D. Act does not give any scope for restricting its scope and application and in the light of the judgment of this Court in Kalyanasundaram's case (cited supra), the impugned order is liable to be set aside.
11. In view of the above, the writ petition stands allowed and the impugned order is set aside. The first respondent is directed to refer the dispute relating to the suspension of the first petitioner for adjudication within a period of four weeks from the date of receipt of a copy of this order to a competent Industrial Tribunal / Labour Court for adjudication. No costs. Connected Miscellaneous Petitions are closed.
gri
To
The Secretary to Government
State of Tamil Nadu
Labour and Employment Department
Fort St. George
Chennai 9.
Dated : 30..01..2008
Coram:
The Hon'ble Mr. Justice K.CHANDRU
W.P. No. 26665 of 2007
and
M.P. Nos. 1 and 2 of 2007
1. S. Thomas
2. Manali Petrochemicals Ltd.
Technical Employees' Union
Rep. By its General Secretary
(Regd. No. 1178/CPT)
Sathangadu Village
Manali
Chennai .. Petitioners
(P2 impleaded as per order dated
12.12.2007 in M.P. No.3 of 2007)
Vs.
1. The State of Tamil Nadu
Rep. by Secretary to Government
Labour and Employment Department
Fort St. George
Chennai 9
2. The Management of Manali Petrochemicals Ltd.
Rep. by its Managing Director
Ponneri High Road
Manali
Chennai .. Respondents
Petition filed under Article 226 of the Constitution of India seeking for issuance of writ of Certiorarified Mandamus calling for the records from the first respondent relating to the order in G.O. (D) No. 1300 Labour and Employment (A2) Department dated 21.12.2005 confirmed in the order dated 22.2.2007 and quash the said order dated 21.12.2005 confirmed in the order dated 22.2.2007 and direct the first respondent to refer the dispute of continued suspension of the petitioner for adjudication to a Labour Court.
For Petitioner : Mr. S. Ayyathurai
For Respondents : Mr. Ravindran
for M/s T.S. Gopalan & Co.
ORDER
Heard Mr. S. Ayyathurai, learned counsel appearing for the petitioner and Mr. Ravindran, learned counsel representing M/s. T.S. Gopalan, appearing for the respondents and perused the records.
2. The petitioner is a Technician employed by the second respondent company and he was in charge of Boiler duties. He was also elected as Vice President of the Manali Petrochemicals Technical Employees' Union formed in 1993. During 1996, he was made as General Secretary of the said Union. Since the settlement between the Union and the second respondent Management had ended in the December 2000, a new Charter of Demands was placed by the Union before the second respondent. Since the direct talks failed between the parties, a dispute was raised before the Conciliation Officer during the year 2003. It is alleged that in order to pressurize the workers, permanent employees working in the boilers, water treatment plant, Milk of lime plant and Fort Lift Operation were transferred to the main plant and in the place held by them, the second respondent attempted to engage contract workers. The petitioner was transferred from boiler plant to Propylene Glycol Plant which involves in hazarduous operation. Therefore, a dispute was raised against the transfer of permanent employees and the same was referred for adjudication by the Principal Labour Court and it was taken on file as I.D. No. 505 of 2005.
3. However, the second respondent placed the petitioner under suspension by an order dated 22.9.2003 stating that he was guilty of insubordination of the lawful orders of the superiors. An enquiry was conducted and show cause notice dated 25.10.2004 was issued to him. Despite the petitioner replied to the show cause notice, no final orders have been passed for the last three years. Therefore, the Trade Union to which the petitioner belonged, raised an industrial dispute before the Assistant Commissioner of Labour, Chennai 2. Upon a Failure Report being sent by the Officer, the first respondent State Government passed an order in G.O. (D) No. 1300 Labour and Employment Department dated 21.12.2005 refusing to refer the dispute. It is stated in the annexure to the said order that the dispute of temporary suspension cannot be considered as removal from service and since no punishment has been imposed, there is no necessity for the Government to refer the dispute for adjudication. The Trade Union filed an application for reviewing the order by a letter dated 25.12.2006 and the matter was once again taken by the Assistant Commissioner of Labour. Thereafter, the Trade Union was informed by a letter dated 22.02.2007 that there was no necessity to review the earlier order made in G.O. No. 1300 Labour and Employment Department dated 21.12.2005. Instead of the Trade Union challenging the said order, the petitioner in his individual capacity has filed the present writ petition challenging the said order.
4. An objection was taken by the second respondent Management that such a writ petition is not maintainable since the Trade Union has not come forward to file the writ petition and the petitioner cannot raise a dispute in respect of his suspension. To overcome the said objection, the Trade Union, viz., Manali Petrochemicals Ltd. Technical Employees' Union represented by its General Secretary (Regd. No. 1178/CPT) has filed an application in M.P. No. 3 of 2007 to implead themsleves as the second petitioner in the writ petition and the same was ordered by this Court on 12.12.2007. Therefore, the said objection fails.
5. A Division Bench of this Court vide its judgment reported in 1986 (2) L.L.J. 225 [Special Officer of the Management of TUCS Ltd. v. S. Loganathan] dealt with more or less a similar issue. In the aforesaid decision, an Arbitrator was appointed at the instance of the Union and the Management and that subsequently, two individual workers were aggrieved by the Arbitration Award which went against them. Since they were no longer in the Union and the Union was not interested in pursuing the said case, they had filed the writ petition challenging the Award. In paragraph 6 of the judgment, the Division Bench observed as follows:
Para 6: "Thirdly, it is contended by Mr. Dwarakanathan, learned counsel appearing for the first respondent, that the settlement under S. 12(3) on 2nd July, 1977 was duly arrived at the instance of the Union, espousing the cause of the workmen including the two petitioners and the arbitration before the second respondent also having been prosecuted by the Union on behalf of the two petitioners, the two petitioners cannot individually attack the award of the second respondent before this Court. It cannot be disputed that the two petitioners are "the persons affected" and we cannot deny them the right to invoke writ jurisdiction of this Court if there is a warrant for it, impeaching the award of the second respondent. Before us, submissions were made by both counsel with reference to the provisions of the Act enabling representations on behalf of the workmen. We need not necessarily resort to the provisions of the Act enabling the parties to agitate their rights either individually or through Union. Even within the Act individual workmen are enabled to agitate for their cause without reference to the Union. So far as powers of this Court are concerned, they shall always be available at the instance of persons who stand affected by the decisions of an authority like the second respondent. Our attention has not been drawn to any pronouncement which has taken a view contrary to what we have observed above. On the other hand, Miss Anna Mathew, learned counsel for the petitioners drew our attention to a pronouncement of the Supreme Court in Air India v. Nergesh Meerza [1981-II L.L.J. 314] to state that though the cause of the employees was earlier espoused by the Union, yet the individual employees themselves did agitate the matter before the Supreme Court and obtained reliefs. Whatever that be, as we have already pointed out, as persons affected, the petitioners can always invoke the jurisdiction of this Court under Art. 226 of the Constitution of India...."
6. Thereafter, Mr. S. Ayyathurai, learned counsel appearing for the petitioner submitted that the reason given by the Government to decline reference was illegal. The present dispute was raised relating to the prolonged suspension of the first petitioner and the dispute was raised by the second petitioner, which is only the recognised Union functioning in the second respondent establishment. The definition of an industrial dispute provided under Section 2(k) of the I.D. Act is so wide and it takes into account any difference of opinion between the workmen and the Management and, therefore, the scope of the definition cannot be curtailed by any artificial process and the reasoning given in the impugned order is unsustainable. It is not as if only in case of punishment, a dispute can be raised by the workman and even attempt to take disciplinary action can also be raised by a workman.
7. Even otherwise, the learned counsel drew the attention of this Court to the judgment of this Court reported in 1996 (2) L.L.J. 430 in the case relating to Kalyanasundaram, B. v. Labour Court, Madras and another and the relevant passages found in page 432 may be usefully extracted below:
''.... It is contended also that the worker was suspended pending the enquiry, that it was not a case of non-employment at all and that his suspension not being in the nature of punishment inflicted upon the worker, it could not be brought for adjudication as in the present case."
"In so far as the last point is concerned, whether or not suspension was a measure of punishment, I am really unable to see how an industrial dispute cannot arise out of such a direction made by the management. Even suspension amounts to non-employment of a worker and in relation to such non-employment alleged to be devoid of valid reasons, a dispute can be raised. So long as the dispute does not remain an individual dispute but assumes the form of an industrial dispute in which the general body of the workers display an interest, then, it cannot be said that a reference would not be proper. In this case, it is not denied by learned counsel on behalf of the management that all the seven employees are members of respondent 2 union and when respondent 2 union took up the matter before the labour officer for conciliation, it obviously offered clear indication that the union represented the body of the workers in sponsoring the cause of the employee. Though a dispute may start as an individual dispute, it assumes the form of an industrial dispute by the backing which the dispute received from other employees of that concern or by a union in which such employees are members. In this case, there is no doubt that this was the position and the contention that there was only an individual dispute which remained as such right through cannot possibly be accepted."
".... Any act of the employer which involves non-employment of a worker or violation of the terms of service upon which he is employed can give rise to an industrial dispute...."
8. However, per contra, Mr. Ravindran, learned counsel leading M/s T.S. Gopalan & Co. appearing for the respondent brought to the notice of this court the judgment of the Supreme Court in the Regional Director v. Employees' State Insurance Corporation v. Popular Automobiles and others [(1997) 7 SCC 665] and submitted that even though a suspension may be prolonged, that does not bring the relationship of the master and servant to a close and, therefore, there is no industrial dispute, be adjudicated. The learned counsel relied on the passage found in paragraph 9 of the said judgment and the same may be usefully extracted hereunder:
Para 9: "On the aforesaid scheme of this Act, therefore, it becomes very clear that all employees are entitled to get the statutory coverage of the benefits being insured employees and any person employed for wages is to be treated as an employee for the purpose of the Act. Under these circumstances an employee who is admittedly covered by the Act and who is entitled to get the benefits under the Act as insured employee will not cease to be an employee covered by the Act if he is placed under interim suspension pending domestic enquiry on any alleged misconduct by his employer. It is axiomatic to say that during suspension period pending enquiry the employer-employee relationship does not come to an end. It would come to an end only when after enquiry his services on proof of misconduct are ordered to be terminated. Till then he continues to be an employee for all purposes subject to only two consequences flowing from such interim suspension, namely, in the first place the employee will remain prohibited from actually offering his services and discharging his duties as the employer does not want him to do so and secondly during the period of suspension pending enquiry the remuneration payable to the employee will get curtailed and will be treated as subsistence allowance as legally permissible under the rules and which may range from 50% at the lowest to even 100% of the wages at the highest if the suspension continues beyond the requisite period as contemplated by the service rules and regulations concerned. It is also to be kept in view and there is no dispute on this aspect that even during suspension when the employee is being paid subsistence allowance and not full wages he remains entitled to get all the benefits as available to working employees on the same basis as laid down by various provisions of Chapter V. It is not as if a suspended employee gets lesser benefits as compared to a working employee under the provisions of the said chapter. They stand on a par. It is also to be appreciated that subsistence allowance is not to be refunded by the suspended employee whatever may ultimately be the result of the domestic enquiry. Hence only because the total remuneration paid to the suspended employee gets reduced to 50% or to any higher percentage going up to 100% it is not possible to appreciate as to how it can be said that on the amount of subsistence allowance received by him permanently he is not bound to contribute any amount to the Corporation and equally the employer of such a suspended employee is also not bound to make his parallel contribution as per the rates provided under the Act especially when all the benefits of statutory insurance coverage are made available by the Corporation to such a suspended employee...."
9. It is not clear as to how the said passage extracted above, helps the case of the second respondent Management. On the contrary, the question arose for the consideration by the Supreme Court was whether the suspended employee is entitled for the benefits under the ESI Act during the period of suspension and whether any recovery can be made from the Subsistence Allowance and whether the said allowance is also a wage liable for recovery towards subscription of ESI contribution. Further, even on the factual matrix, even after the show cause was given to the first petitioner after an enquiry and the first petitioner having given a reply as early as in the year 2004, it is not known as to what prevented the second respondent from passing appropriate orders. Certainly, such a prolonged suspension can be a subject matter of an industrial dispute.
10. Under Section 7 of the I.D. Act, the Labour Court is empowered to adjudicate disputes on a reference being made to it, in terms of the matters which are listed under the second Schedule prescribed under the Act. Item No. 1 of the Second Schedule reads as follows:
"The propriety or legality of an order passed by an employer under the Standing Orders"
A reading of the said provision read with Second Schedule will clearly show that the Labour Court is empowered to adjudicate even an issue relating to suspension pending enquiry since the said power by an employer has been exercised under the relevant Standing Orders. As the definition of Industrial Dispute under Section 2(k) of the I.D. Act read with Schedule I of the I.D. Act does not give any scope for restricting its scope and application and in the light of the judgment of this Court in Kalyanasundaram's case (cited supra), the impugned order is liable to be set aside.
11. In view of the above, the writ petition stands allowed and the impugned order is set aside. The first respondent is directed to refer the dispute relating to the suspension of the first petitioner for adjudication within a period of four weeks from the date of receipt of a copy of this order to a competent Industrial Tribunal / Labour Court for adjudication. No costs. Connected Miscellaneous Petitions are closed.
gri
To
The Secretary to Government
State of Tamil Nadu
Labour and Employment Department
Fort St. George
Chennai 9.
intimation given,not claimed-not deemed delivery-new definition
Equivalent Citation: 2005(1)ALD(Cri)33, IV(2004)BC1, 2004(3)CTC573
IN THE HIGH COURT OF MADRAS
Criminal Appeal No. 352 of 1997
Decided On: 02.04.2004
Appellants: S.S. Ummul Habiba, Proprietor, Alim Auto Supplies
Vs.
Respondent: B. Rajendran
Hon'ble Judges:
R. Banumathi, J.
Counsels:
For Appellant/Petitioner/Plaintiff: M. Ajmal Kahn, Adv.
For Respondents/Defendant: No appearance
Subject: Criminal
Catch Words
Mentioned IN
Acts/Rules/Orders:
Negotiable Instuments Act, 1881 - Sections 138 and 139
Cases Referred:
K. Bhaskaran v. Sankaran Vaidhyan Balan, 1999 (3) CTC 358
Disposition:
Appeal dismissed
Case Note:
(i) Commercial – debt - Sections 138 and 139 of Negotiable Instruments Act, 1881 – only to ensure fairness in business transactions Sections 138 and 139 introduced – fair play and equity is not only required from accused but also from complainant – merely because complainant is holder of cheque he does not stand in a higher position excepting to extent of raising presumption in his favour under Section 139 – by evidence and materials on record presumption stands rebutted – finding of Trial Court that there is 'no legally enforceable debt' is well balanced.
(ii) Presumption of notice – to raise presumption of deemed notice there should be clear averment in complaint that appellant had sent statutory notice on demand intimating dishonour of cheque and that respondents were evading service – in absence of such averment no presumption of deemed notice could be raised – general burden is upon complainant to prove facts constituting sending of notice and deliberate evasion of service of notice by accused.
ORDER
R. Banumathi, J.
1. Complainant in C.C.415/1993 on the file of Judicial Magistrate, Periyakulam is the Appellant. By the Judgment dated 28.8.1996, the Judicial Magistrate, Periyakulam had acquitted the Respondent/accused under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I.Act'). Aggrieved over the order of acquittal, Complainant has preferred this Appeal.
2. Case of Complainant is that he is doing business of selling auto parts under the name and style M/s. Alim Auto Supplies. The accused and his brother one Kanagaraj are having transport business running two lorries under the name and style "M/s. Angala Easwari & Santhi Lorry Services". The accused purchased auto parts from the complainant's shop on credit for both the lorries.
3. As on 20.5.1992, the outstanding credit balance on account of the two lorries was Rs. 24,415. Towards discharge of part of the balance amount, the accused issued Ex.P.1-Cheque for Rs. 24,400 on 30.9.1992 at Periyakulam drawn on State Bank of India, Theni Branch. The Complainant presented the cheque in Lakshmi Vilas Bank, Periyakulam for collection. The cheque was dishonoured for "insufficient funds". The same was intimated to the Complainant by his Bank under Ex.P.2 - Memo on 9.12.1992.
4. On 19.12.1992, the accused issued Ex.P.3-lawyer's notice demanding the amount due on the cheque. The accused intentionally evaded service of the notice and the notice returned to the sender with the endorsement "intimation given; not claimed". Since the accused evaded the service of notice, it must be deemed to be constructive notice and sufficient service of notice on the accused. The accused failed to pay the cheque amount till 15.1.1993. Hence, the Complaint was filed against the accused under Section 138 of N.I.Act.
5. To substantiate the averments in the Complaint, on behalf of the complainant, complainant examined himself as P.W.1. P.W.2 is the Banker of the complainant. Exs.P-1 to P-6 are marked. No oral evidence was adduced on behalf of Respondent/accused. But Exs.D-1 to D-6 were marked on the side of the accused.
6. The defence is that Ex.P.1-cheque was issued as security for the business transaction of Angala Easwari Lorry alone and there is no legally enforceable debt from the accused. Another lorry by name Santhi Lorry Service is owned and run by the brother of the accused namely, Kanagaraj. Amount payable by the accused was already discharged under Exs.D-4 to D-6 and there is no subsisting debt from the accused. Further case of the defence is that the complainant is not right in clubbing the amount to that of the accused even if there is any amount due from Santhi Lorry.
7. Upon consideration of the evidence and materials, the trial Court found:
(i) while A4-Notice was sent to both accused and his brother Kanagaraj, the said Kanagaraj is not shown as accused in the complaint, which fatally affects the complaint;
(ii) that there is no evidence showing the amount payable by the accused and the complainant failed to establish that. Ex.P.1-Cheque was given to prove the legally enforceable debt due from the accused;
(iii) Ex.P.4-statutory notice was returned with an endorsement "intimation given; not claimed" and that the same cannot be construed as constructive notice and there is no sufficient service of notice upon the accused.
On the above reasonings, finding that the essential ingredients of Sections 138 and 142 of N.I.Act are not proved, the learned Magistrate acquitted the Respondent/accused.
8. Aggrieved over the order of acquittal, the Complainant has preferred this Appeal.
9. The learned counsel for the Appellant/Complainant submitted that once the cheque is issued, the presumption under Section 138 of N.I.Act arises and the trial Court erred in finding that there is no legally enforceable debt from the accused. Drawing the attention of the Court to the averments in Ex.P.4 -Notice and the Statement of Accounts maintained by the Complainant, the learned counsel further contended that when the accused is jointly and severally liable to pay the amount due from the joint business of M/s. Angala Easwari and Santhi Lorry Services, the trial Court committed serious error in finding that there is no legally enforceable debt from the accused. Assailing the findings of the trial Court that there is no sufficient notice and placing reliance upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999, the learned counsel further contended that the mere sending of notice to the correct address itself is sufficient compliance of the requirement and the trial Court erred in finding that there was no sufficient notice.
10. In this appeal, though notice was served upon the respondent, the respondent has not entered appearance. His name was printed in the cause list. Though the respondent remains unrepresented, the defence and the contentious points urged by the accused before the trial Court is taken into consideration while appreciating the contentious points urged by the appellant in this appeal.
11. Upon reassessment of the evidence and materials on record, impugned judgment and reasonings for acquittal and submissions of the complainant, the following points arise for consideration in this appeal:
(1) Whether any amount due payable by M/s. Angala Easwari Lorry is proved by the complainant ?
(2) Can the complainant make the claim against the accused (under Ex.P.1 - Cheque) for the amount payable by M/s. Angala Easwari and Santhi Lorry Services claiming the same as the joint business ?
(3) Whether Ex.P-1 is proved to have been issued for legally enforceable debt from the accused ?
(4) Whether the reasonings and the order of acquittal by the trial Court suffer from serious and substantial error warranting interference ?
12. This is an Appeal against the acquittal. Normally in an Appeal against acquittal, the High Court would be very slow to interfere. Unless there are glaring infirmities in the assessment of evidence and the findings suffer from serious and substantial error, this Court would not interfere in the order of acquittal. It is to be seen whether the findings of the Trial Magistrate in acquitting the accused under Section 138 of N.I.Act suffer from such serious infirmity warranting interference.
13. Firstly let us consider the correctness of the findings of the trial Court that there is no legally enforceable debt. Strict liability under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act') can be enforced only when the cheque is issued in discharge of any legally enforceable debt or other liability, partly or wholly. Explanation to Section 138 of the N.I.Act provides that a debt or liability under this Section means only a legally enforceable debt or other liability. To attract the penal provisions under Section 138 of N.I.Act, a cheque must have been drawn by the accused on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability due. That means, the cheque must have been issued in discharge of a debt or other liability wholly or in part.
14. Under Section 139 of N.I.Act, there is presumption, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part of any debt or other liability. But this presumption is only a rebuttable presumption. The presumption so raised under Section 138 of N.I.Act could be rebutted either by direct evidence or from the facts and the circumstances forthcoming.
15. While there may be a debt payable in existence, that alone is not sufficient to prove that the cheque was drawn in discharge of the debt. If the accused substantially proves that there is dispute on the amount payable and that there is no debt in particular, the presumption is rebutted and the accused cannot be held liable.
16. On the evidence adduced, the trial Court found that Ex.P.1-Cheque was not issued for legally enforceable debt thus finding that the presumption is rebutted. It is to be seen whether this finding of the trial Court suffers from any erroneous approach.
17. According to the Complainant, the accused and his brother Kanagaraj are jointly running lorry business by operating two lorries in the names of Angala Easwari and Santhi and that business is the joint business. Further case of the Complainant is that accused issued the cheque - Ex.P-1 (3.9.1992) for Rs. 24,400 towards discharge of the amount due from the joint business. In support of his claim, the Complainant relies upon the averments in Ex.P.4-legaI notice and the joint statement of accounts of Angala Easwari and Santhi enclosed with Ex.P-4. The case of the Complainant is that amount of Rs. 24,415 is payable on the joint account of Angala Easwari and Santhi. Ex.P.4 - Notice was issued to the accused alleging that the accused and his brother Kanagaraj are plying lorries in the name and style of Angala Easwari & Santhi Lorry Services; both of them used to purchase spare parts for their lorries from the Complainant on credit; that the accused and his brother jointly and severally owed a sum of Rs. 24,415 and Rs. 60 as on 20th May 1992 to the Complainant as per the ledger extract annexed with Ex.P-4.
18. Thus the Complaint proceeds on the footing:-
(i) that the lorry business M/s. Angala Easwari and Santhi is the joint business of the accused and his brother Kanagaraj;
(ii) the accused and his brother Kanagaraj jointly and severally owe a sum of Rs. 24,415 for the discharge of which the accused had issued Ex.P.1 - Cheque for Rs. 24,400;
19. The accused denies any joint business between him and his brother Kanagaraj. According to him, he is separately operating Angala Easwari lorry and his brother is separately operating the lorry Santhi. The defence is that amount payable by the accused-Angala Easwari was already discharged by paying the amount which is evidenced from the receipts-Exs.D-4 to D-6. Further case of the defence is that the Complainant is not right in tagging the amount due from Kanagaraj to that of the accused. P.W.1-Complainant was elaborately cross examined on this aspect. The Complainant has not produced any document showing running of joint lorry business by the accused and his brother Kanagaraj. In his cross examination, P.W.1 has also admitted that he has not verified any documents to satisfy himself that the brothers are running joint business. When there is no definite evidence showing joint business of accused and his brother, it is not open to the Complainant to claim the amount from the accused claiming to be the amount due from the joint business.
20. The accused had adduced documentary evidence showing that there is no joint business and joint account and that he made the purchase of auto parts separately for his lorry Angala Easwari. In fact when P.W.1 was cross examined, he has admitted (Editor: The text of the vernacular matter has not been reproduced. Please write to contact@manupatra.com if the vernacular matter is required.)
21. Contention of the accused is strengthened by the production of Exs.D-1 to D-6:
Exs.D-1 & D-2 } showing purchase of spare parts Debit Bills } by Sri Angala Easwari TN59 Z 1814.
*******
Ex.D-3 } issued separately to Sri Angala
Statement of } Easwari Lorry TN59 Z 1814.
the Accounts }
Likewise, Exs.D-4 to D-6 are the bills issued by Alim Auto Supplies -Complainant for receipt of cash from the accused towards part payment from Angala Easwari Lorry - No. TN59 Z 1814. Thus Exs.D-1 to D-6 clearly proves the defence that they are issued to the accused by the Complainant while he is separately dealing with his lorry Angala Easwari.
22. The accused is no way concerned with lorry Santhi owned and separately operated by his brother Kanagaraj. It may be that, like the accused, his brother Kanagaraj might have had dealings with Complainant -Alim Auto Supplies making purchase on credit for his lorry - Santhi and that the amount might be payable by Santhi Lorry. But in the absence of evidence showing that it is the joint business, Complainant cannot claim to tag that amount with that of the accused under the pretext of claiming as the joint business. Excepting the ipse dixit of the Complainant, no other material showing that the business was the joint business and that the brothers had joint account with the Complainant. Considering the same, the trial Court was right in finding that there is no legally enforceable debt.
23. The learned counsel for the Complainant contended that the cheque need not be issued for the personal debt and that the same could be enforced even against the individual debt payable by his brother Kanagaraj. This contention has no merits. As noted earlier, the Complaint and the claim proceeds on the definite footing that the business is the joint business and the amount is due from the joint business. Ex.P.4 - Notice was also issued on the footing that the business is joint business. When the basis of the claim of the Complainant is disproved by the defence and thereby rebutting the presumption under Section 139 of N.I.Act, the Complainant cannot disown his case and adopt the alternative plea on the strength of the defence that the cheque could be enforced even for the amount payable by the brother of the accused. The complainant cannot be allowed to adopt such inconsistent plea of his claim.
24. Only to ensure fairness in the business transactions, Sections 138 and 139 of N.I.Act are introduced. Fair play and equity is not only required from the accused but also of the Complainant. Merely because the complainant is the holder of the cheque, he does not stand in a higher position excepting to the extent of raising presumption in his favour under Sec. 139 of N.I.Act. By the evidence and materials on record that presumption stands rebutted. The finding of the trial. Court that there is 'no legally enforceable debt' is well balanced based on the evidence on record.
25. Ex.P.4 - Notice was sent on 19.12.1992. That notice was returned "intimation served; not claimed". Applying the decision in 1995 (1) L.W.(Crl.) 354, the Trial Magistrate found that Section 138 of N.I.Act does not contemplate constructive notice. The trial Court further found that no notice was served upon the accused as contemplated under Section (b) of Sec. 138 of N.I.Act which would mean that no demand has been made within 15 days from the date of dishonour of the cheque.
26. Assailing the above findings of the trial Court, the learned counsel for the Appellant/Complainant contended that mere issuance of notice is sufficient compliance. In support of his contention, reliance is placed upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999.
27. "Giving Notice" to the drawer in the correct address itself was held to be sufficient in the factual matrix of the case and the same cannot be applied to the case in hand. In my view the return of postal cover as "Intimated-Unclaimed" by itself would not amount to constructive notice when it is not averred by the Complainant in the complaint that the Accused is evading the service. Although, in appropriate cases, deemed service is to be accepted by the Court, such presumption of deemed service is not a matter of course in all cases. To raise the presumption of deemed notice, there should be clear averment in the complaint that the Appellant/Complainant had sent the statutory notice on demand intimating the dishonour of cheque and that the Respondents/Accused were evading the service. In the absence of such averment, no such presumption of deemed notice could be raised.
28. Thus the general burden is upon the Complainant to prove the facts constituting the sending of notice and that there is deliberate evasion of service of notice by the accused. In the instant case, absolutely no averments are made either in the Complaint or in the evidence of P.W.1. Considering the facts of the present case, in my view, it is not an appropriate case to raise such presumption of constructive notice against the accused.
29. The appreciation of evidence and the findings of the trial Court that there is no legally enforceable debt from the accused is based on the evidence on record. The view taken by the trial Court that "there is no presumption of constructive notice" also does not suffer from any serious or substantial error warranting interference.
30. For the reasons stated above, this Appeal is dismissed.
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IN THE HIGH COURT OF MADRAS
Criminal Appeal No. 352 of 1997
Decided On: 02.04.2004
Appellants: S.S. Ummul Habiba, Proprietor, Alim Auto Supplies
Vs.
Respondent: B. Rajendran
Hon'ble Judges:
R. Banumathi, J.
Counsels:
For Appellant/Petitioner/Plaintiff: M. Ajmal Kahn, Adv.
For Respondents/Defendant: No appearance
Subject: Criminal
Catch Words
Mentioned IN
Acts/Rules/Orders:
Negotiable Instuments Act, 1881 - Sections 138 and 139
Cases Referred:
K. Bhaskaran v. Sankaran Vaidhyan Balan, 1999 (3) CTC 358
Disposition:
Appeal dismissed
Case Note:
(i) Commercial – debt - Sections 138 and 139 of Negotiable Instruments Act, 1881 – only to ensure fairness in business transactions Sections 138 and 139 introduced – fair play and equity is not only required from accused but also from complainant – merely because complainant is holder of cheque he does not stand in a higher position excepting to extent of raising presumption in his favour under Section 139 – by evidence and materials on record presumption stands rebutted – finding of Trial Court that there is 'no legally enforceable debt' is well balanced.
(ii) Presumption of notice – to raise presumption of deemed notice there should be clear averment in complaint that appellant had sent statutory notice on demand intimating dishonour of cheque and that respondents were evading service – in absence of such averment no presumption of deemed notice could be raised – general burden is upon complainant to prove facts constituting sending of notice and deliberate evasion of service of notice by accused.
ORDER
R. Banumathi, J.
1. Complainant in C.C.415/1993 on the file of Judicial Magistrate, Periyakulam is the Appellant. By the Judgment dated 28.8.1996, the Judicial Magistrate, Periyakulam had acquitted the Respondent/accused under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I.Act'). Aggrieved over the order of acquittal, Complainant has preferred this Appeal.
2. Case of Complainant is that he is doing business of selling auto parts under the name and style M/s. Alim Auto Supplies. The accused and his brother one Kanagaraj are having transport business running two lorries under the name and style "M/s. Angala Easwari & Santhi Lorry Services". The accused purchased auto parts from the complainant's shop on credit for both the lorries.
3. As on 20.5.1992, the outstanding credit balance on account of the two lorries was Rs. 24,415. Towards discharge of part of the balance amount, the accused issued Ex.P.1-Cheque for Rs. 24,400 on 30.9.1992 at Periyakulam drawn on State Bank of India, Theni Branch. The Complainant presented the cheque in Lakshmi Vilas Bank, Periyakulam for collection. The cheque was dishonoured for "insufficient funds". The same was intimated to the Complainant by his Bank under Ex.P.2 - Memo on 9.12.1992.
4. On 19.12.1992, the accused issued Ex.P.3-lawyer's notice demanding the amount due on the cheque. The accused intentionally evaded service of the notice and the notice returned to the sender with the endorsement "intimation given; not claimed". Since the accused evaded the service of notice, it must be deemed to be constructive notice and sufficient service of notice on the accused. The accused failed to pay the cheque amount till 15.1.1993. Hence, the Complaint was filed against the accused under Section 138 of N.I.Act.
5. To substantiate the averments in the Complaint, on behalf of the complainant, complainant examined himself as P.W.1. P.W.2 is the Banker of the complainant. Exs.P-1 to P-6 are marked. No oral evidence was adduced on behalf of Respondent/accused. But Exs.D-1 to D-6 were marked on the side of the accused.
6. The defence is that Ex.P.1-cheque was issued as security for the business transaction of Angala Easwari Lorry alone and there is no legally enforceable debt from the accused. Another lorry by name Santhi Lorry Service is owned and run by the brother of the accused namely, Kanagaraj. Amount payable by the accused was already discharged under Exs.D-4 to D-6 and there is no subsisting debt from the accused. Further case of the defence is that the complainant is not right in clubbing the amount to that of the accused even if there is any amount due from Santhi Lorry.
7. Upon consideration of the evidence and materials, the trial Court found:
(i) while A4-Notice was sent to both accused and his brother Kanagaraj, the said Kanagaraj is not shown as accused in the complaint, which fatally affects the complaint;
(ii) that there is no evidence showing the amount payable by the accused and the complainant failed to establish that. Ex.P.1-Cheque was given to prove the legally enforceable debt due from the accused;
(iii) Ex.P.4-statutory notice was returned with an endorsement "intimation given; not claimed" and that the same cannot be construed as constructive notice and there is no sufficient service of notice upon the accused.
On the above reasonings, finding that the essential ingredients of Sections 138 and 142 of N.I.Act are not proved, the learned Magistrate acquitted the Respondent/accused.
8. Aggrieved over the order of acquittal, the Complainant has preferred this Appeal.
9. The learned counsel for the Appellant/Complainant submitted that once the cheque is issued, the presumption under Section 138 of N.I.Act arises and the trial Court erred in finding that there is no legally enforceable debt from the accused. Drawing the attention of the Court to the averments in Ex.P.4 -Notice and the Statement of Accounts maintained by the Complainant, the learned counsel further contended that when the accused is jointly and severally liable to pay the amount due from the joint business of M/s. Angala Easwari and Santhi Lorry Services, the trial Court committed serious error in finding that there is no legally enforceable debt from the accused. Assailing the findings of the trial Court that there is no sufficient notice and placing reliance upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999, the learned counsel further contended that the mere sending of notice to the correct address itself is sufficient compliance of the requirement and the trial Court erred in finding that there was no sufficient notice.
10. In this appeal, though notice was served upon the respondent, the respondent has not entered appearance. His name was printed in the cause list. Though the respondent remains unrepresented, the defence and the contentious points urged by the accused before the trial Court is taken into consideration while appreciating the contentious points urged by the appellant in this appeal.
11. Upon reassessment of the evidence and materials on record, impugned judgment and reasonings for acquittal and submissions of the complainant, the following points arise for consideration in this appeal:
(1) Whether any amount due payable by M/s. Angala Easwari Lorry is proved by the complainant ?
(2) Can the complainant make the claim against the accused (under Ex.P.1 - Cheque) for the amount payable by M/s. Angala Easwari and Santhi Lorry Services claiming the same as the joint business ?
(3) Whether Ex.P-1 is proved to have been issued for legally enforceable debt from the accused ?
(4) Whether the reasonings and the order of acquittal by the trial Court suffer from serious and substantial error warranting interference ?
12. This is an Appeal against the acquittal. Normally in an Appeal against acquittal, the High Court would be very slow to interfere. Unless there are glaring infirmities in the assessment of evidence and the findings suffer from serious and substantial error, this Court would not interfere in the order of acquittal. It is to be seen whether the findings of the Trial Magistrate in acquitting the accused under Section 138 of N.I.Act suffer from such serious infirmity warranting interference.
13. Firstly let us consider the correctness of the findings of the trial Court that there is no legally enforceable debt. Strict liability under Section 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act') can be enforced only when the cheque is issued in discharge of any legally enforceable debt or other liability, partly or wholly. Explanation to Section 138 of the N.I.Act provides that a debt or liability under this Section means only a legally enforceable debt or other liability. To attract the penal provisions under Section 138 of N.I.Act, a cheque must have been drawn by the accused on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge in whole or in part, of any debt or other liability due. That means, the cheque must have been issued in discharge of a debt or other liability wholly or in part.
14. Under Section 139 of N.I.Act, there is presumption, unless the contrary is proved, that the holder of a cheque received the cheque for the discharge, in whole or in part of any debt or other liability. But this presumption is only a rebuttable presumption. The presumption so raised under Section 138 of N.I.Act could be rebutted either by direct evidence or from the facts and the circumstances forthcoming.
15. While there may be a debt payable in existence, that alone is not sufficient to prove that the cheque was drawn in discharge of the debt. If the accused substantially proves that there is dispute on the amount payable and that there is no debt in particular, the presumption is rebutted and the accused cannot be held liable.
16. On the evidence adduced, the trial Court found that Ex.P.1-Cheque was not issued for legally enforceable debt thus finding that the presumption is rebutted. It is to be seen whether this finding of the trial Court suffers from any erroneous approach.
17. According to the Complainant, the accused and his brother Kanagaraj are jointly running lorry business by operating two lorries in the names of Angala Easwari and Santhi and that business is the joint business. Further case of the Complainant is that accused issued the cheque - Ex.P-1 (3.9.1992) for Rs. 24,400 towards discharge of the amount due from the joint business. In support of his claim, the Complainant relies upon the averments in Ex.P.4-legaI notice and the joint statement of accounts of Angala Easwari and Santhi enclosed with Ex.P-4. The case of the Complainant is that amount of Rs. 24,415 is payable on the joint account of Angala Easwari and Santhi. Ex.P.4 - Notice was issued to the accused alleging that the accused and his brother Kanagaraj are plying lorries in the name and style of Angala Easwari & Santhi Lorry Services; both of them used to purchase spare parts for their lorries from the Complainant on credit; that the accused and his brother jointly and severally owed a sum of Rs. 24,415 and Rs. 60 as on 20th May 1992 to the Complainant as per the ledger extract annexed with Ex.P-4.
18. Thus the Complaint proceeds on the footing:-
(i) that the lorry business M/s. Angala Easwari and Santhi is the joint business of the accused and his brother Kanagaraj;
(ii) the accused and his brother Kanagaraj jointly and severally owe a sum of Rs. 24,415 for the discharge of which the accused had issued Ex.P.1 - Cheque for Rs. 24,400;
19. The accused denies any joint business between him and his brother Kanagaraj. According to him, he is separately operating Angala Easwari lorry and his brother is separately operating the lorry Santhi. The defence is that amount payable by the accused-Angala Easwari was already discharged by paying the amount which is evidenced from the receipts-Exs.D-4 to D-6. Further case of the defence is that the Complainant is not right in tagging the amount due from Kanagaraj to that of the accused. P.W.1-Complainant was elaborately cross examined on this aspect. The Complainant has not produced any document showing running of joint lorry business by the accused and his brother Kanagaraj. In his cross examination, P.W.1 has also admitted that he has not verified any documents to satisfy himself that the brothers are running joint business. When there is no definite evidence showing joint business of accused and his brother, it is not open to the Complainant to claim the amount from the accused claiming to be the amount due from the joint business.
20. The accused had adduced documentary evidence showing that there is no joint business and joint account and that he made the purchase of auto parts separately for his lorry Angala Easwari. In fact when P.W.1 was cross examined, he has admitted (Editor: The text of the vernacular matter has not been reproduced. Please write to contact@manupatra.com if the vernacular matter is required.)
21. Contention of the accused is strengthened by the production of Exs.D-1 to D-6:
Exs.D-1 & D-2 } showing purchase of spare parts Debit Bills } by Sri Angala Easwari TN59 Z 1814.
*******
Ex.D-3 } issued separately to Sri Angala
Statement of } Easwari Lorry TN59 Z 1814.
the Accounts }
Likewise, Exs.D-4 to D-6 are the bills issued by Alim Auto Supplies -Complainant for receipt of cash from the accused towards part payment from Angala Easwari Lorry - No. TN59 Z 1814. Thus Exs.D-1 to D-6 clearly proves the defence that they are issued to the accused by the Complainant while he is separately dealing with his lorry Angala Easwari.
22. The accused is no way concerned with lorry Santhi owned and separately operated by his brother Kanagaraj. It may be that, like the accused, his brother Kanagaraj might have had dealings with Complainant -Alim Auto Supplies making purchase on credit for his lorry - Santhi and that the amount might be payable by Santhi Lorry. But in the absence of evidence showing that it is the joint business, Complainant cannot claim to tag that amount with that of the accused under the pretext of claiming as the joint business. Excepting the ipse dixit of the Complainant, no other material showing that the business was the joint business and that the brothers had joint account with the Complainant. Considering the same, the trial Court was right in finding that there is no legally enforceable debt.
23. The learned counsel for the Complainant contended that the cheque need not be issued for the personal debt and that the same could be enforced even against the individual debt payable by his brother Kanagaraj. This contention has no merits. As noted earlier, the Complaint and the claim proceeds on the definite footing that the business is the joint business and the amount is due from the joint business. Ex.P.4 - Notice was also issued on the footing that the business is joint business. When the basis of the claim of the Complainant is disproved by the defence and thereby rebutting the presumption under Section 139 of N.I.Act, the Complainant cannot disown his case and adopt the alternative plea on the strength of the defence that the cheque could be enforced even for the amount payable by the brother of the accused. The complainant cannot be allowed to adopt such inconsistent plea of his claim.
24. Only to ensure fairness in the business transactions, Sections 138 and 139 of N.I.Act are introduced. Fair play and equity is not only required from the accused but also of the Complainant. Merely because the complainant is the holder of the cheque, he does not stand in a higher position excepting to the extent of raising presumption in his favour under Sec. 139 of N.I.Act. By the evidence and materials on record that presumption stands rebutted. The finding of the trial. Court that there is 'no legally enforceable debt' is well balanced based on the evidence on record.
25. Ex.P.4 - Notice was sent on 19.12.1992. That notice was returned "intimation served; not claimed". Applying the decision in 1995 (1) L.W.(Crl.) 354, the Trial Magistrate found that Section 138 of N.I.Act does not contemplate constructive notice. The trial Court further found that no notice was served upon the accused as contemplated under Section (b) of Sec. 138 of N.I.Act which would mean that no demand has been made within 15 days from the date of dishonour of the cheque.
26. Assailing the above findings of the trial Court, the learned counsel for the Appellant/Complainant contended that mere issuance of notice is sufficient compliance. In support of his contention, reliance is placed upon K. Bhaskaran v. Sankaran Vaidhyan Balan, MANU/SC/0625/1999.
27. "Giving Notice" to the drawer in the correct address itself was held to be sufficient in the factual matrix of the case and the same cannot be applied to the case in hand. In my view the return of postal cover as "Intimated-Unclaimed" by itself would not amount to constructive notice when it is not averred by the Complainant in the complaint that the Accused is evading the service. Although, in appropriate cases, deemed service is to be accepted by the Court, such presumption of deemed service is not a matter of course in all cases. To raise the presumption of deemed notice, there should be clear averment in the complaint that the Appellant/Complainant had sent the statutory notice on demand intimating the dishonour of cheque and that the Respondents/Accused were evading the service. In the absence of such averment, no such presumption of deemed notice could be raised.
28. Thus the general burden is upon the Complainant to prove the facts constituting the sending of notice and that there is deliberate evasion of service of notice by the accused. In the instant case, absolutely no averments are made either in the Complaint or in the evidence of P.W.1. Considering the facts of the present case, in my view, it is not an appropriate case to raise such presumption of constructive notice against the accused.
29. The appreciation of evidence and the findings of the trial Court that there is no legally enforceable debt from the accused is based on the evidence on record. The view taken by the trial Court that "there is no presumption of constructive notice" also does not suffer from any serious or substantial error warranting interference.
30. For the reasons stated above, this Appeal is dismissed.
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