Shri Ambica Mills Co., Ltd vs Shri S. B. Bhatt And Another

Supreme Court12 December 1960P.B. Gajendragadkar · K.N. Wanchoo · K.C. Das Gupta

Neutral1960 INSC 263
AIRAIR 1961 SC 970
SCR[1961] 3 SCR 220

Ratio decidendi

The rule this decision rests on

A writ of certiorari under Article 226 of the Constitution may be issued not only to correct illegal exercise of jurisdiction but also to correct errors of law apparent on the face of the record, although not errors of fact. An error of law is apparent on the face of the record when it is self-evident, requiring no elaborate examination of the record, and while no unfailing test can be laid down, judicial experience shows such errors are usually identifiable. Where two contractual clauses apply to distinct categories of persons, and the second clause expressly provides for employees not falling under the first clause, it is a manifest error of law apparent on the face of the record for an appellate authority to hold that the second clause is wholly subject to or dependent upon the first clause. Under Section 15 of the Payment of Wages Act, 1936, the authority has jurisdiction to consider questions incidental to claims arising out of deductions from or delay in payment of wages, and it would be inexpedient to lay down a hard and fast rule limiting this scope. Care must be taken neither to unduly extend nor to unduly curtail such incidental jurisdiction. Whether a particular employee falls within one wage category or another—specifically whether an employee is an operative under an award or occupies a position both higher than an operative and lower than a clerk under a separate wage agreement—is a question so intimately and integrally connected with wages as defined in Section 2(vi) of the Act that it falls squarely within the authority's jurisdiction under Section 15, even where the employee has not been designated by a specific designation corresponding to a wage category but must be determined to fall within a wage category by reference to the duties actually discharged.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 243 of 1959.Appeal by special leave from the judgment and order datedApril 24, 1958, of the Bombay High Court in Special CivilApplication No. 874 of 1958.M. C. Setalvad, Attorney-General for India, G. P. Vyas andI. N. Shroff, for the appellantVithalbhai Patel, S. S. Shukla, C. T. Daru and E.Udayarathnam, for the respondent No. 1.1960. December 12. The Judgment of the Court was deliveredbyGAJENDRAGADKAR, J.-The principal question which this appealby special leave raises for our decision relates to thenature and extent of the jurisdiction conferred on theauthority by s. 15 of the223Payment of Wages Act, 1936 (Act 4 of 1936) (hereafter calledthe Act). This question arises in this way. The appellantShri Ambica Mills Co. Ltd., is a textile mill' working atAhmedabad. Three of its employees named Punamchand,Shamaldas and Vishnuprasad made an application to theauthority under s. 16 of the Act and prayed for an orderagainst the appellant to pay them their delayed wages. Inorder to appreciate the( contentions raised by the appellantdisputing the validity of the respondents' claim it isnecessary to set out the background of the dispute in somedetail. It appears that an award called the StandardisationAward which covered the mill industry in Ahmedabad waspronounced by the Industrial Tribunal on April 21, 1948, inIndustrial Reference No. 18 of 1947. This award fixed thewages for different categories of workers working in thetextile mills at Ahmedabad, but left over the question ofclerks for future decision. Amongst the operatives whosewages were determined by the award the case of hand-folderswas specifically argued before the Industrial Tribunal. TheLabour Association urged that the rate of Rs. 36-9-0 awardedto them was too low and it was pointed out on their behalfthat they did the same work as cut-lookers did in Bombaywhere a head cut-looker was given Rs. 52 and a cut-lookerRs. 42-4-0. On the other hand the mill owners contendedthat the rate should have been fixed at Rs. 34-2-0 insteadof Rs. 36-9-0. The Tribunal found it difficult to decidethe point because enough evidence had not been producedbefore it to show the kind of work that hand-folders weredoing at Ahmedabad; that is why the Tribunal was unable toraise the wage of hand-folders to that of out-lookers inBombay. However, it made a significant direction in thatbehalf in these words: "At the same time", it was observed,"we desire to make it clear that if there are persons whoare doing cut-looking as well as folding, they should bepaid the rate earned by the out-lookers in Bombay". Thisquestion has been considered by the Tribunal in paragraph 16of its award.The question of clerks, the decision of which had beenadjourned by the Tribunal was later considered224by it and an award pronounced in that behalf. However, thesaid award was later terminated by the clerks in 1949, andthat led to an agreement between the Ahmedabad Mill Owners'Association and the Textile Labour Association in the matterof wages payable to clerks. This agreement was reached onJune 22, 1949. Clauses 2 and 5 of this agreement arematerial for the purpose of this appeal. Let us thereforeread the two clauses:"2. That this agreement shall apply to all theClerks employed in the local mills, i.e.,persons doing clerical work, that is those whodo routine work of writing, copying or makingcalculations and shall also includecompounders and assistant compounders who arequalified and who are employed in the localmills.5. A separate scale for those of theemployees who occupy the position lower thanthat of a full-fledged Clerk but higher thanthat of an operative will be provided asunder:-Rs. 40-3-70-EB-4-90-5-105.This scale will be applicable in case ofticket-boy, ticket-checker, coupons-seller,talley-boy, scale-boy, production-checker,thread-counter, cloth-measurer or yard-counter, fine-reporter, cloth/yarn-examiner,department store man, cut-looker and thoseothers who have not been included above butwho can properly fall under the abovecategory."After this agreement was thus reached persons doing the workof cut-lookers began to feel that they were entitled to thebenefit of cl. 5 and some claims were put forth on thatbasis against the employers. Vishnuprasad and Punamchandapplied before the authority (Applications Nos. 39 and 40 of1954) and claimed delayed wages against the appellant on theground that they were entitled to higher wages underparagraph 16 of the award in Reference No. 18 of 1947. Thisclaim was resisted by the appellant. The appellant urgedthat the applications were not maintainable under the Act,that they were barred in view of an arbitration award whichwas then in operation and that on the merits the applicantswere not doing225the work of cut-looking. All these contentions wererejected by the authority. It examined the duties performedby the applicants, and it came to the conclusion that boththe applicants were folders doing cut-looking, andconsequently they were entitled each to Rs. 42-4-0 permonth; in other words, the authority came to the conclusionthat the applicants properly, fell under the categoryspecified in paragraph 16 of the award referred to above andas such they were entitled to recover the difference betweenRs. 36-9-0 per month which was paid to each one of them andRs. 42-4-0 which was due to each one of them. This decisionwas announced on September 2, 1954.On July 11, 1955, the present respondents moved theauthority under s. 16 of the Act. They urged that they weresemi-clerks and occupied a position lower than that of afull-fledged clerk and higher than that of an operative, andas such they were governed by cl. 5 of the agreement andwere entitled to increment provided by the said clause.This claim was resisted by the appellant on several grounds.It was urged that the present applications were barred byres judicata, that the authority had no jurisdiction toentertain the applications, and that on the merits therespondents were not semi-clerks as contemplated by cl. 5 ofthe agreement. On these contentions the authority raisedfour issues. It held against the respondents and in favourof the appellant on issues 1 and 2 which related to the pleaof res judicata and the status of the respondents. In viewof the said findings it thought it unnecessary to decide thetwo remaining issues which dealt with the quantum of amountclaimed by the respondents. It appears that the question ofjurisdiction, though urged in its pleading by the appellant,was not raised as an issue and has not been considered bythe authority. The finding of res judicata was recordedagainst Punamchand and Vishnuprasad. Shamaldas had not madeany previous application and so no question of res judicataarose against his application. His application wasdismissed only on the ground that he could not claim thestatus of a29226semi-clerk. The same finding was recorded against the twoother respondents. It appears that at the trial before theauthority the parties filed a joint Pursis which enumeratedthe duties performed by the respondents in paragraphs 2 to7. The authority took the view that "the duties performed bythem cannot be said to be the duties of persons doing theroutine work of writing, copying and making calculations".In the result it was held that the respondents were governedby the Standardisation Award and did not fall under thesubsequent agreement.This decision was challenged by the respondents before theDistrict Judge who was the appellate authority under theAct. The appellate authority also was asked to consider thequestion of jurisdiction. It examined the relevantprovisions of the Act and held that the authority hadjurisdiction to entertain the applications made before it bythe respondents. On the question of res judicata it agreedwith the finding of the authority, and held that the claimsmade by Punamchand and Vishnuprasad were barred by resjudicata. Similarly, on the question of the status of therespondents it agreed that they were not semi clerks. It isclear from the judgment of the appellate authority that indetermining the status of the respondents, the appellateauthority applied the same test as was invoked by theauthority, and it considered the question as to whether theduties performed by the respondents were similar to theduties performed by clerks. It is obvious that the testsapplied are tests relevant to the employees falling undercl. 2 of the agreement, and since the application of thesaid tests led to the conclusion that the respondents didnot fall under el. 2 the appellate authority held that el. 5was inapplicable to them; in other words, the judgments ofboth the authority and the appellate authority clearly showthat they took the view that el. 2 was wholly determinativeof the issue, and that unless an. employee fell under cl. 2he cannot claim to be covered by any part of the agreementincluding el. 5. That is why the appeals preferred by227the respondents were dismissed by the appellate authority onSeptember 2, 1954.These appellate decisions were challenged by the respondentsby filing a writ petition under Arts. 226 and 227 of theConstitution before the Bombay High Court. The Bombay HighCourt has held that the decision of the appellate authoritywas patently erroneous in law in that it proceeded on theassumption that unless cl. 2 of the agreement was satisfiedcl. 5 would be inapplicable. It also held that the findingconcurrently recorded by the authorities below on thequestion of res judicata against two of the respondents wasmanifestly erroneous. On these findings the High Courtallowed the writ petition filed by the respondents, setaside the orders of the authorities below and sent the caseback to the authority for dealing with it in accordance withlaw in the light of the judgment delivered by the HighCourt. It is against this decision that the appellant haspreferred the present appeal by special leave.The first contention which the learned Attorney-General hasraised before us on behalf of the appellant is that the HighCourt has exceeded its jurisdiction under Arts. 226 and 227in interfering with the decision of the appellate authority.He 'contends that at the highest the error committed by theappellate authority is one of law but it is not an errorapparent on the face of the record, and he argues that itwas not within the competence of the High Court to sit inappeal over the judgment of the appellate authority andexamine meticulously the correctness or the propriety of theconclusions reached by it.The question about the nature and extent of the jurisdictionof the High Courts in issuing a writ of certiorari underArt. 226 has been the subject-matter of several decisions ofthis Court. It is now well settled that the said writ canbe issued not only in case,% of illegal exercise ofjurisdiction but also to correct errors of law apparent onthe face of the record. In this connection it may bepertinent to refer to the observations made by Denning,L.J., in Rex v. Northumberland Compensation Appeal TribunalThe(1) [1952] 1 K.B. 338.228writ has been supposed to be confined to the correction ofexcess of jurisdiction", observed Lord Justice Denning, "andnot to extend to the correction of errors of law; andseveral judges have said as much. But the Lord ChiefJustice has, in the present case, restored certiorari to itsrightful position and shown that it can be used to correcterrors of law which appear on the face of the record eventhough they do not go to jurisdiction". There is no doubtthat it is only errors of law which are apparent on the faceof the record that can be corrected, and errors of fact,though they may be apparent on the face of the record,cannot be corrected [Vide: Nagendra Nath Bora v. TheCommissioner of Hills Division and Appeals, Assam (1)]. Itis unnecessary for us to consider in the present appealwhether or not a certiorari can issue to correct an error offact on the ground that the impugned finding of fact is notsupported by any legal evidence. Thus it would be seen thatthe true legal position in regard to the extent of theCourt's jurisdiction to issue a writ of certiorari can bestated without much difficulty. Difficulty, however, ariseswhen it is attempted to lay down tests for determining whenan error of law can be said to be an error apparent on theface of the record. Sometimes it is said that it is onlyerrors which are self-evident, that is to say, which areevident without any elaborate examination of the merits thatcan be corrected, and not those which can be discovered onlyafter an elaborate argument. In a sense it would be correctto say that an error of law which can be corrected by a writof certiorari must be self-evident; that is what is meant bysaying it is an error apparent on the face of the record,and from that point of view, the test that the error shouldbe self-evident and should not need an elaborate examinationof the record may be satisfactory as a working test in alarge majority of cases; but,, as observed by VenkataramaAyyar, J., in Hari Vishnu Kamath v. Syed Ahmad Ishaque, (2)"there must be cases in which even this test might breakdown because judicial opinions also differ, and an errorthat may be considered by one(1) [1958] S.C.R. 1240.(2) [1955] 1 S.C.R. 1104, 1123.229judge as self-evident might not be so considered byanother". Judicial experience, however, shows that, thoughit cannot be easy to lay down an unfailing test of generalapplication it is usually not difficult to decide whetherthe impugned error of law is apparent. on the face of therecord or not.What then is the error apparent on the face of the( recordwhich the High Court has corrected by issuing a writ ofcertiorari in the present case? According to the High Courtthe construction placed by the appellate authority on cls. 2and 5 of the agreement is patently and manifestly erroneous.The appellate authority held on a construction of the saidtwo clauses that cl. 2 was the determinative clause, andthat unless an employee satisfied the requirements of thesaid clause he could not claim the benefit of cl. 5. Indeciding whether the High Court should have issued the writor not it is necessary to examine the said two clauses. Onlooking at the two clauses it seems to us that theconclusion is inescapable that the error committed by theappellate authority is manifest and obvious. Clause 2applies to clerks employed in the local mills, and as suchit describes the nature of the work which is required to bedone by persons falling under that clause. Clause 5, on theother hand, obviously provides for a separate scale forthose employees who are not clerks nor operatives; these em-ployees occupied a position higher than that of an operativeand below that of a full-fledged clerk. Therefore there isno doubt that persons falling under cl. 5 cannot fall underel. 2, and should not therefore be expected to satisfy thetest prescribed by the said clause. A bare perusal of thelist of employees specified by designation as falling underel. 5 will show that the application of the test which isrelevant under el. 2 would in their case be whollyinappropriate and irrelevant. Therefore, in our opinion,the error committed by the appellate authority was of such amanifest character that the High Court was justified incorrecting the said error by the issue of a writ ofcertiorari. The question involved in the decision of thedispute is not so much of construction of the document as ofgiving effect to the plain terms of the230document. If el. 5 expressly provides for employees ,,notfalling under el. 2, and if that intention is clarified bythe list of designations which fall under el. 5 and yet theappellate authority reads that clause as subject to cl. 2,that must be regarded as an error patent on the face of therecord. It is not a case where two alternative conclusionsare possible; it is a case of plain misreading of the twoprovisions ignoring altogether the very object with whichthe two separate provisions were made. In our opinion,therefore, the contention raised by the learned Attorney-General that by issuing the writ the High Court has exceededits jurisdiction is not well-founded.

That takes us to the second, and in fact the principal, contention which has been seriously argued before us by the learned Attorney-General. He urged that the applications made by the respondents' Union on behalf of the three employees were incompetent under s. 15 of the Act and the authority exceeded its jurisdiction in entertaining them. It is true that this point was not specifically urged before the authority, but it appears to have been argued before the appellate authority and the High Court, and it is this contention which raises the problem of construing s. 15 of the Act. The case for the appellant is that the jurisdiction conferred on the authority under s. 15 is a limited jurisdiction, and it would be unreasonable to extend it on any inferential ground or by implication. The scheme of the Act is clear. The Act was intended to regulate the payment of wages to certain classes of persons employed in industry, and its object is to provide for a speedy and effective remedy to the employees in respect of their claims arising out. of illegal deductions or unjustified delay made in paying wages to them. With that object s. 2(vi) of the Act has defined wages. Section 4 fixes the wage period. Section 5 prescribes the time of payment of wages; and s. 7 allows certain specified deductions to be made. Section 15 confers jurisdiction on the authority appointed under the said section to hear and decide for any specified area claims arising out of deductions 231 from wages, or delay in payment of wages, of persons employed or paid in that area. It is thus clear that the only claims which can be entertained by the authority are claims arising out of deductions or delay made in payment of wages. The jurisdiction thus conferred on the authority to deal with these two categories of claims is exclusive; for s. 22 of the Act provides that matters which lie within the jurisdiction' of the authority are excluded from the jurisdiction of ordinary civil courts. Thus in one sense the jurisdiction conferred on the authority is limited by s. 15, and in another sense it is exclusive as prescribed by s.

22. In dealing with claims arising out of deductions or delay made in payment of wages the authority inevitably would have to consider questions incidental to the said matters. In determining the scope of these incidental questions care must be taken to see that under the guise of deciding incidental matters the limited jurisdiction is not unreasonably or unduly extended. Care must also be taken to see that the scope of these incidental questions is not unduly limited so as to affect or impair the limited jurisdiction conferred on the authority. While considering the question as to what could be reasonably regarded as incidental questions let us revert to the definition of wages prescribed by s. 2(vi). Section 2(vi) as it then stood provided, inter alia, that 'wages' means all remuneration capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment, and it includes any bonus or other additional remuneration of the nature aforesaid which would be so payable and any sum payable to such person by reason of the termination of his employment. It also provided that the word "wages" did not include five kinds of payments specified in clauses (a) to (e). Now, if a claim is made by an employee on the ground of alleged illegal deduction or alleged delay in payment of wages several relevant facts would fall to be considered. Is the applicant an employee of the opponent?;

232 and that refers to the subsistence of the relation between the employer and the employee. If the said fact is admitted, then the next question would be: what are the terms of employment? Is there any contract of employment in writing or is the contract oral? If that is not a point of dispute between the parties then it would be necessary to enquire what are the terms of the admitted contract. In some cases a question may arise whether the contract which was subsisting at one time had ceased to subsist and the relationship of employer and employee had come to an end at the relevant period. In regard to an illegal deduction a question may arise whether the lock-out declared by the employer is legal or illegal. In regard to contracts of service some times parties may be at variance and may set up rival contracts, and in such a case it may be necessary to enquire which contract was in existence at the relevant time. Some of these questions have in fact been the subject-matter of judicial decisions. (Vide: A. R. Sarin v. B. C. Patil (1), Vishwanath Tukaram v. The General Manager, Central Railway, V. T. Bombay (2); and Maharaja Sri Umaid Mills, Ltd. v. Collector of Pali (5)); but we do not propose to consider these possible questions in the present appeal, because, in our opinion, it would be inexpedient to lay down any hard and fast or general rule which would afford a determining test to demarcate the field of incidental facts which can be legitimately considered by the authority and those which cannot be so considered. We propose to confine our decision to the facts in the present case. What are the facts in the present case? The relationship of employer and employee is not in dispute. It is admitted that the three workmen are employed by the appellant, and do the work of bleach-folders. These folders are classified into Uttarnars and Chadhavnars. Indeed, the items of work assigned to these categories of folders are admitted. The appellant contends that the employment of the three workmen is governed by the Award which is in operation, (1) (1951) 53 Bom. L.R. 674. (2) [1957] Bom.L.R. 892. (3) [1960] 11 L.L.J. 364.

233 whereas the respondent Union contends that they are governed by cl. 5 of the subsequent agreement. It is common ground that both the Award and the agreement are in operation in respect of the persons governed respectively by them, so that it is not disputed by the appellant that the persons who are specified by their designation under cl. 5 would be entitled to, the benefit of the said clause and would not be governed by the Award. If an employee is called a cut-- looker by any mill he would naturally fall under cl. 5; in other words, all the specified categories of employees named by designation in that clause would not be governed by the Award though at one stage they were treated as operatives but they would be governed by cl. 5 of the agreement; and if a person bearing that designation applied under s. 15 of the Act his application would be competent. The appellant's argument, however, is that when the last part of el. 5 refers to other employees "who have not been included above but who can properly fall under the above category" no designation is attached to that class, and in such a case it would be necessary to enquire whether a particular employee can properly fall under the said category, and that, it is urged, means that such an employee cannot apply under s. 15 but must go to the industrial court under the ordinary industrial law.

Thus the controversy between the parties lies within a very narrow compass. An employee designated as a cut-looker can apply under s. 15 and obtain relief from the authority; an employee not so designated but falling under the said category by virtue of the work assigned to him, it is said, cannot apply under s. 15 because the authority cannot deal with the question as to whether the said employee properly falls under the said category or not. In our opinion, on these facts, the question as to whether a particular employee is an operative falling under the Award or one who is above an operative and below the clerk falling under cl. 5 is a question which is so intimately and integrally connected with the problem of wages as defined under s. 2(vi) that it would be unreasonable 30 234 to exclude the decision of such a question from the jurisdiction of the authority under s. 15. If a contract of employment is admitted and there is a dispute about the construction of its terms, that obviously falls within s. 15 of the Act. If that is so, what is the difference in principle where a contract is admitted, its terms are not in dispute, and the only point in dispute is which of the two subsisting contracts applies to the particular employee in question.

If the appellant's argument were to prevail it would lead to this anomalous position that if a general contract of employment provides for payment of wages to different categories of employees and describes the said categories by reference to the duties discharged by them, none of the employees can ever avail himself of the speedy remedy provided by s. 15 of the Act. In such a case every time a dispute may arise about the duties assigned to a particular employee before his wages are determined. In our opinion, to place such an artificial limitation on the limits of the jurisdiction conferred on the authority by s. 15 is wholly unreasonable. That is the view taken by the High Court in the present case and we see no reason to differ from it.

The question about the nature and scope of the limited jurisdiction conferred on the authority under s. 15 has been considered by this Court in the case of A. V. D'Costa v. B. C. Patel (1). In that case the scheme of the Act has been examined by Sinha, J., as he then was, who spoke for the majority view, and it has been held that "if an employee were to say that his wages were Rs. 100 per month which he actually received as and when they fell due but that he would be entitled to higher wages if his claims to be placed on the higher wages scheme had been recognised and given effect to, that would not be a matter within the ambit of the authority's jurisdiction. The authority has the jurisdiction to decide what actually the terms of the contract between the parties were, that is to say, to determine the actual wages; but the authority has no jurisdiction to determine the question of potential wages". The Court took the view that the employee's (1) [1955] 1 S.C.R. 1353.

235 complaint in that case fell within the latter illustration. It would thus be seen that according to this, decision the authority has jurisdiction to determine what the terms of contract between the parties are, and if the terms of the contract are, admitted and the only dispute is whether or not a particular employee falls within one category or another, that would be( incidental to the decision of the main question as to what the terms of the contract are, and that precisely is the nature of the dispute between the parties in the present case.

The learned Attorney-General has relied very strongly on the decision of the Bombay High Court in Anthony Sabastin Almeda v. R. M. T. Taylor(1). In that case the employer and the employee went before the Court on the basis of different contracts and the Court held that it was not within the jurisdiction of the authority to decide which of the two contracts held the field, which of them was subsisting, and under which of them the employer was liable to pay wages. It would be clear from the facts in that case that two rival contract,% were pleaded by the parties, according to whom only one contract was subsisting and not the other, and so the question for decision was which contract was really subsisting. We do not propose to express any opinion on the correctness of the view taken by the Bombay High Court on this question. All we are concerned to point out is that in the present appeal the dispute is substantially different. Both contracts admittedly are subsisting. The only point of dispute is: do the three workmen fall within the category of cut-lookers or do they not If they do then cl. 5 applies; if they do not the Award will come into operation. That being so, we do not see how the decision in Almeda's case (1) can really assist the appellant.

In this connection we may point out that it is common ground that in Ahmedabad textile mills do not have a class of employees called cut-lookers as in Bombay. The work of cut- looking along with other kind of work is done by bleach- folders and other (1) (1956) Bom. L.R. 899.

236 folders. That was the finding made by the authority on an earlier occasion when Punamchand and Vishnuprasad had moved the authority under s. 15 of the Act. The learned Attorney- General has strenuously contended that it is unfair to give the same pay to the three workmen who are doing the work of cut-lookers only for a part of the time and were substantially doing the work of bleach-folders; that, however, has no relevance in determining the present dispute. The only point which calls for decision is whether or not the work done by the three respondents takes them within the category of cut-lookers specified under cl. 5, and as we have already pointed out, on an earlier occasion the authority has found in favour of two of the three respondents when it held that they were folders doing cut- looking. If the said finding amounts to res judicata it is in favour of the two respondents and not in favour of the appellant; that is why the learned Attorney-General did not seriously dispute the correctness of the decision of the High Court on the question of res judicata.

In the result the appeal fails and is dismissed with costs. Appeal dismissed.

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