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Delhi High CourtIndian Cases

Mittal Engineers And Contractors vs The Chief Secretary Govt. Of Nct Of Delhi … on 22 August 2006

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Delhi High Court
Mittal Engineers And Contractors vs The Chief Secretary Govt. Of Nct Of Delhi … on 22 August, 2006
Author: Shiv Narayan Dhingra
Bench: Shiv Narayan Dhingra

Shiv Narayan Dhingra, J.

Page 3018

1. By this writ petition petitioner, a contractor, has challenged the order of Competent Authority dated 31.7.2001 under Minimum Wages Act(for short ‘the Act’) whereby the Authority directed the petitioner to pay compensation of Rs. 4,63,980/- i.e. two times the minimum wages within 30 days of the receipt of the order.

2. Briefly stated the facts are that an inspection of the establishment of the petitioner was done by Labour Inspector on 26.9.1999 and Labour Inspector found that the wages being paid to 19 workmen of establishment were less than the wages payable under the Notification of Minimum Wages. As per his calculation the amount less paid to these 19 workers was to the tune of Rs. 2,31,990/-. The petitioners after the inspection of the Labour Inspector, paid the difference between the amount already paid and amount payable under minimum wages notification to the workmen in the presence of the principal employer. However, Labour Inspector filed an application before Competent Authority under Section 20(2) of the Act, without knowing that the difference in wages had already been paid, seeking direction of the Competent Authority to the petitioner for payment of difference of wages amounting to Rs. 2,31,990/-.

3. During the proceedings petitioner produced proof of payment of differential amount to the workmen and the Authority observed that in view of the payment of differential already having been made to the employees, no claim as filed by the applicant was in existence. However, the Authority went on to assess the compensation and observed that taking into account the economic injury Page 3019 and financial loss caused to the employees, compensation to the tune of Rs. 4,63,980/- two times the differential wages should be imposed on the petitioner and directed that this compensation be deposited.

4. The petitioner has challenged this order of the Competent Authority on the ground that the order was illegal for want of jurisdiction. The payments had been made to the workers as far back as on 8.8.1999, much before the filing of application by Inspector in March 2001. When the application was filed under Section 20(2) of the Act, there was no default in payment of minimum wages to the workmen as observed by the Authority. Secondly the application made before the Competent Authority was barred by limitation and there was no prayer made for condensation of delay. Neither any reason or sufficient cause was available for condoning the delay but still the authority condoned the same. Once the Competent Authority had concluded that all the concerned employees had been paid difference of wages before filing of the application, the Authority had no jurisdiction to pass the impugned order.

5. I have heard counsel for the petitioner. None appeared for the respondent.

6. Section 20 of the Act provides for filing a claim application either by employee himself or by legal practitioner or any official of registered trade union or by an inspector or person acting with the permission of the Authority for a direction of payment of minimum wages under the Act. Section 20 of the Act reads as under:

20. (1) The appropriate Government may, by notification in the Official Gazette, appoint [any Commissioner for Workmen’s Compensation or any officer of the Central Government exercising functions as a Labour Commissioner for any region, or any officer of the State Government not below the rank of a Labour Commissioner or any] other officer with experience as a Judge of a Civil Court or as stipendiary Magistrate to be the Authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages [or in respect of the payment of remuneration for days of rest or for work done on such days under Clause (b) or Clause (c) of Sub-section (1) of Section 13 or of wages at the overtime rate under Section 14,] to employees employed or paid in that area.
(2) [Where an employee has any claim of the nature referred to in Sub-section (1), the employee himself, or any legal practitioner or any official of a registered trade union authorised in writing to act on his behalf, or any Inspector, or any person acting with the permission of the Authority appointed under Section (1), may apply to such Authority for a direction under Sub-section (3):

Provided that every such application shall be presented within six months from the date on which the minimum wages [or other amount] became payable: Provided further that any application may be admitted after the said period of six months when the applicant satisfies the Authority that he had sufficient cause for not making the application within such period.
[(3) When any application under Sub-section (2) is entertained, the Authority shall hear the applicant and the employer, or give them an Page 3020 opportunity of being heard, and after such further enquiry, if any, as it may consider necessary, may, without prejudice to any other penalty to which the employer may be liable under this Act, direct—-
(i) in the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess,
(ii) in any other case, the payment of the amount due to the employee, together with the payment of such compensation as the Authority may think fit, not exceeding ten rupees, and the Authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application.] (4) If the authority hearing any application under this section is satisfied that it was either malicious or vexatious, it may direct that a penalty not exceeding fifty rupees be paid to the employer by the person presenting the application.
(5) Any amount directed to be paid under this section may be recovered
(a) if the Authority is a Magistrate, by the Authority as if it were a fine imposed by the Authority as a Magistrate, or
(b) if the Authority is not a Magistrate, by any Magistrate to whom the Authority makes application in this behalf, as if it were a fine imposed by such Magistrate.
(6) Every direction of the Authority under this section shall be final.
(7) Every Authority appointed under Sub-section (1) shall have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), for the purpose of taking evidence and of enforcing the attendance of witnesses and compelling the production of documents and every such authority shall be deemed to be a Civil Court for all the purposes of Section 195 and Chapter xxxv of the Code of Criminal Procedure, 1898 (5 of 1898).
7. A perusal of Clause 20(2) shows that it envisages that when an application is made in respect of an employee or employees before Competent Authority, the claim for non-payment of minimum wages is still surviving. No application can be made before the Competent Authority if the employer has already paid, on demand or on notice, the minimum wages as prescribed to the employees. Section 20(3)(i) gives power to the competent authority to impose compensation on the defaulting employer, but this power can be exercised only when the competent authority passes an order of payment of differential amount or if the differential amount is paid by employer during pendency of proceedings. The competent authority has no power to order payment of compensation when the differential amount has been paid before making of application to competent authority.

8. The application before the Competent Authority has to be made within a period of six months unless there is sufficient cause which prevented the making of an application within 6 months and the Competent Authority allows the making of the application after expiry of 6 months.

Page 3021

9. It is admitted case that the petitioner had paid difference of wages as assessed by the inspector on 8.4.1999 itself to the employees. The inspector made application before the Competent Authority under Section 20(2) of the Act in March 2001. Not only the application was highly belated but the application itself was not maintainable. Application could have been made by the inspector only if the petitioner had not paid the difference in the wages after it was pointed out by the inspector. Once the inspector had pointed out to the petitioner that the workmen were not being paid in accordance with the minimum wages notification and the petitioner paid the difference, no cause of action for making the application before Competent Authority survived. The Competent Authority had come to the conclusion that wages has been paid to the employees as claimed by the petitioner, much before the filing of the application. After coming to this conclusion, the only thing that could be done by the Competent Authority was to dismiss the application as infructuous. Competent Authority proceeded to assess the compensation as if the application made before it was a validly made application. The application made before the Competent Authority was not a validly made application as it was made by the inspector without verifying the facts and without even giving any notice to the petitioner. Had the applicant/inspector bothered to check with the petitioner or with the employees, he would have come to know that the wages had already been paid.

10. I consider that the Competent Authority had no jurisdiction to entertain the application in respect of the differential wages which had already been paid. Even if it had entertained, it had no power to impose compensation. The Competent Authority could not proceeded to assess the compensation for non- payment of minimum wages. The order of the Competent Authority is without jurisdiction and the same is liable to be quashed.

11. Accordingly, the order dated 31.7.2001 of the Competent Authority is quashed.