Partly allowed

Batco Roadways Corporation, v. 1.R.DEIVANAYAGAM

Madras HC19 Nov 2013WP/17363/1999

Case brief

AI extract

What is this about?

A Madras High Court bench held that an acting transport agent is under Minimum Wages Act but quashed the order imposing 10 times compensation without specific finding of mens rea or prior employee demand, upholding the direction to pay minimum wages.

What did the court decide?

Order setting aside 10 times compensation portion; impugned order upheld in all other aspects. Connected petition closed.

Batco Roadways Corporation, Vs 1.R.DEIVANAYAGAM — Labour and Industrial Disputes | Madras HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED:-19-11-2013

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CORAM:

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THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU

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W.P.No.17363 of 1999 W.P.M.P.No.6 of 2012

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Batco Roadways Corporation rep. by its Partner M.H.Patni 106, Acharappan Street, Chennai. ... Petitioner Versus 1. R.Deivanayagam Assistant Inspector of Labour II II Circle, DMS Complex Chennai 6. 2. The Deputy Commissioner of Labour I (Authority under Section 20 of the Minimum Wages Act) DMS complex, Chennai 6. 3. A.Shakeela Banu 4. C.Nirmala 5. M.Suganthi 6. Mrs.Sumathi 7. M.Anandan ... Respondents

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The Deputy Commissioner of Labour I (Authority under Section 20 of the Minimum Wages Act) DMS complex, Chennai 6.

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(R3 to R7 impleaded as per the order of the court dated 20.12.2010 made in WPMP No. 2809 of 2003 in W.P.No.17363 of 1999)

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Prayer: Writ Petition filed under Article 226 of the Constitution of India for the relief of issuance of writ of certiorari to call for the records of the second respondent dated 30.6.1999 in M.W.Application No.42/98 and quash the order .

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For Petitioner :- Mr.S.Ravindran for M/s.T.S.Gopalan &Co.

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For Respondents :- Mr.N.Sakthivel

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Govt. Advocate for R1 and R2 Mr.R.Parthiban for R4 No appearance for R3, R5 to R7

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O R D E R

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The petitioner is aggrieved against the order passed by the Deputy Commissioner of Labour I who is the authority under Section 20 of the Minimum Wages Act, 1948. Through the said order dated 30.6.1999, the second respondent has observed that the petitioner herein is engaged in public motor transport activities and therefore liable to pay the minimum wages to its employees as contemplated under the provisions of the said Act with 10 times amount of such wage being the compensation to its workers. The said order of the second respondent is challenged in this writ petition mainly on the ground that the business or activities carried out by the petitioner is not coming under the purview of the Minimum Wages Act, more particularly, within the definition and meaning of "Public Motor Transport."

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The case of the petitioner is as follows:-

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(i). The petitioner acts as an agent in Chennai to outstation Cargo carriers who do not have a booking or delivery office at Chennai. The petitioner is having delivery counter and godown and acts as an agent for several companies and cargo carriers. They will send goods meant for consignees in Chennai to the petitioner's godown along with lorry way bill and the same will be received and stored in the petitioner 's godown. The consignee will present his copy of the lorry way bill and after verifying the same with that of the way bill received by the petitioner along with the goods, the petitioner will collect the delivery/ freight charges and issue a receipt. Thereafter the consignee will produce the receipt in the godown and take delivery of the goods. If the consignor books the goods on door delivery basis then the petitioner will arrange for delivery of goods at consignee's place through Tyre cart, Head load, cycle rickshaw or tempo and the charges for such door delivery would be debited to the concerned transporter's account . The petitioner does not own any motor vehicle . The petitioner does not book any cargo for any onward transmission to any destination nor the petitioner has any booking office outside Chennai for booking cargo. Thus, the only service rendered by the petitioner is to act as an agent to the transport carriers and provide storage space for receiving the goods meant for consignees in Chennai. Thus, the activities carried out by the petitioner will not fall under the definition of Public Motor Transport.

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(ii). The petitioner's godown and its office are commercial establishments within the meaning of Section 2(3) of the Tamil Nadu Shops and Establishments Act, 1947. It is not a motor transport undertaking and thus is not governed by the provisions of the Motor Transport Workers Act, 1961. The petitioner complies with the requirement under the Tamil Nadu Shops and Establishments Act, 1947. The petitioner pays its employees wages not less than the minimum wages prescribed by the Government of Tamil Nadu for employment in Shops and Commercial Establishments. On 12.12.1997 the first respondent visited the petitioner's establishment and stated that

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five employees working in the office were paid the wages less than the minimum wages fixed by the Government for employment in public motor transport. Though the petitioner disputed such liability , the first respondent moved the second respondent under Section 20 of the Minimum Wages Act, 1948, by filing an application seeking for a direction to pay the minimum wages to the petitioner's employees. The second respondent after hearing the petitioner and also after considering the rival pleadings and submissions concluded that the employees working under the petitioner are engaged in a work connected with Public Motor Transport and consequently the work carried on by the petitioner would fall within the scope of public transport. Accordingly, a direction was issued to pay the minimum wages to its employees with 10 times of wages as compensation. 3. Mr.S.Ravindran, learned counsel appearing for the petitioner submitted as follows:-

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The Government of Tamil Nadu issued G.O.Ms.No. 625 Labour and Employment Department dated 25.5.1995 whereby minimum wages payable to the classes of employees in Public Motor Transport have been revised. The petitioner does not own any transport and it is only an agent owning the godown for cargo carriers. Therefore, neither the petitioner is a public motor transport nor its activities can be brought under the said definition. The term "Public Motor Transport" is not defined under the Minimum Wages Act, 1948. Therefore, it has to go with the literal meaning. The Minimum Wages Act, 1948 is made applicable to different establishments through different notifications issued by the Government now and then. The petitioner's activities would fall under the definition of establishments and commercial establishments and therefore their activities are covered only under the Tamil Nadu Shops and Establishments Act, 1947. Under sub-section (16) of Section 2 of the Tamil Nadu Shops and Establishments Act, 1947 the definition of "shop" includes "godowns and ware houses" Thus, the activities of the petitioner cannot be termed as a public motor transport. Even the definition made under Section 2(g) of the Motor Transport Workers Act, 1961 in respect of the term "motor transport undertaking" shall not bring the activities of the petitioner within the said meaning. Therefore, the impugned action of the respondents 1 and 2 are totally without jurisdiction as the activities of the petitioner are outside the scope and ambit of the Minimum Wages Act, 1948. At any event, the imposition of 10 times of wages payable as compensation is totally unwarranted without there being any justifiable reason under Section 20(3) of the Minimum Wages Act, 1948. Such power is conferred on the authority to be used only as a discretionary power. In support of his submissions, the learned counsel relied on the following decisions:-

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1954 (2) LLJ 694 (Kalidas Dhanjibhai Vs. State of Bombay)

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2009 (1) LLN 814 (Management of Bailey Hydropower (Private) Ltd., Vs. Deputy Commissioner of Labour -II and another)

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2013 (4) LLN 714(Madras) (United Labour Federation Vs.

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Government of Tamil Nadu)

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Mr.R.Parthiban, learned counsel appearing for the fourth respondent submitted as follows:-

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The petitioner is doing a business or trade. The Minimum Wages Act, 1948 was introduced in the public interest. Under section 2(g) of the Minimum Wages Act, 1948 the term "scheduled employment" has been defined as an employment specified in the Schedule, or any process or branch of work forming part of such employment. Thus, the petitioner will fall under the definition of Section 2(g) of the Minimum Wages Act. Under Schedule to the Minimum Wages Act, 1948, Sl.No.11 at Part I deals with employment in Public Motor Transport and certain other activities inserted by different standing orders out of which employment in loading and unloading in other Goods sheds, godowns, warehouses etc., are also brought under the scope of the Minimum Wages Act, 1948. Once the activities of the petitioner are covered udder the Tamil Nadu Shops and Establishments Act, 1947 automatically the same is covered under the Minimum Wages Act. The learned counsel in support of his submissions relied on the decisions reported in 1968 (1) LLJ 750 ( Union of India Vs. Authority under the Minimum Wages Act and Others) and 1995 (3) Supp. LLJ 49 (Militant Security Bureau Pvt. Ltd., and Another Vs. B.R.Heher and Another).

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In reply to the above submissions made by the learned counsel for the fourth respondent, Mr.Ravindran, the learned counsel for the petitioner submitted that notification applying to godowns is not the notification applied to the petitioner. Moreover all the employees of the petitioner are clerical staff whereas the godowns referred to under the Schedule covers the employees engaged in loading and unloading. Therefore, the same cannot be applied to the petitioner's case.

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Learned Additional Government Pleader appearing for the respondents 1 and 2 submitted that the petitioner has admitted that they are engaged in Transport operation. The object stated under the partnership deed marked as Ex.P3 shows that they own transport and engage in such activities.

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Based on the respective pleadings of the parties as well as their submissions, the following are the issues that arise for consideration in this writ petition.

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(a) Whether the business activities carried on by the petitioner would fall within the meaning of "public motor Transport" to attract the provisions under the Minimum Wages Act, 1948 ?

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(b) If the activities of the petitioner falls within such term, whether imposition of 10 times damages on the petitioner under Section 20 (3) of the Minimum Wages Act is warranted under the facts and circumstances of the present case ?

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It is claimed by the petitioner that the activities that are being carried out at their business premises do not fall within the meaning and definition of "public motor transport ". According to the petitioner they act as an agent at Chennai for the outstation cargo carriers, who do not have a booking or delivery office in Chennai. According to them, only a clerical job is being carried out at the working place and no transportation of the goods takes place either to Chennai or to the places out side Chennai. These are the crux of the contentions raised in the affidavit filed in support of the writ petition.

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The learned counsel for the petitioner also submits that in the absence of any specific definition for the term "public motor transport " under the Minimum Wages Act, 1948, only a literal meaning has to be given for the said term. He relied on the recent decision of a learned single Judge of this Court reported in 2013 (4) LLN 714(Madras) (United Labour Federation Vs. Government of Tamil Nadu), wherein the learned Judge has considered the terms "automobile manufacturing industry" and "automobile industry" and found that the expression "Automobile Industry" will include even the industry manufacturing accessories and components of automobiles whereas the expression "automobile manufacturing industry" is understood to mean an industry which manufactures automobiles alone. Paragraphs 33 and 34 of the above said decision of the learned single Judge are extracted hereunder:-

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"33. With the above broad Principles of Interpretation in mind, let us now proceed to interpret the expression "automobile manufacturing industries". The Dictionary meaning of the word 'automobile' is 'a Car'. The term "automobile" is used in a broader sense to mean any vehicle propelled by a motor and run on land, except, trains. It is also the popular understanding that automobile industry means an industry relating to automobiles. This includes automobile transport, automobile service and sales, etc. Even from the recommendations made by the Labour Commissioner, referred to above, it could be seen that the Commissioner has also used the expression 'automobile industry' in a broader sense to mean the industries engaged in the manufacture of passenger cars, commercial vehicles, trucks, military vehicles, two wheelers, auto components like Dashboard Instruments, Assembly Flywheel, Alternators, Suspension etc. Thus, the expression 'automobile industry' will include even the industry manufacturing accessories and components of

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automobiles. But, while submitting the draft notification, the Commissioner, instead of using the expression 'automobile industry', has restricted the same by inserting the word 'manufacturing' in between the words "automobile"and "industry".

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Now, let us ascertain as to what the ordinary, natural and popular meaning of the expression 'automobile manufacturing industry' is ? For this purpose, we need to know as to how, the term 'automobile manufacturing industry' is understood and used in common parlance. As we have already noticed, the I.D. Act is a device to protect the interest of workmen and also the industrial peace so that the output from the industry is well maintained and that the economy of the country flourishes. In view of the said position, we have to see, as to how, a workman will understand the expression 'automobile manufacturing industry' and use the same. In general, the working class are either illiterates or semi-literates. They cannot be expected to know the circumstances under which the Government has used the expression in the statute. Thus, it is the common man's understanding of the provision that matters. In my view, if a common man is asked as to what is his understanding of the expression "automobile industry" certainly, he will say that any industry relating to or connected to automobiles. Similarly, if any common man of ordinary prudence is asked, as to what is his understanding of the expression "automobile manufacturing industry", I am sure, he will say that it is an industry which manufactures automobiles in full shape. In my considered view, an ordinary workman will not say, out of his understanding, that the expression "automobile manufacturing industry" will include an industry which manufactures automobile components also. Therefore, in common parlance, undoubtedly, the expression "automobile industry" will include automobile components manufacturing also whereas, the expression "automobile manufacturing industry" is understood to mean an industry which manufactures automobiles alone. This is the only natural ordinary meaning which can be given to the expression "automobile manufacturing

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industry".

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. 10. The learned counsel for the petitioner also invited my attention to the Oxford dictionary meaning of the term 'public motor transport " as follows:-

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"Public" means Connected with ordinary people in Society in general "Motor" means A devise that uses electricity/petrol gas etc., to produce movement and makes a machine, vehicle, boat, etc., work "Transport" means A system for carrying people or goods from one place to another using vehicles/roads etc., 11. There is no quarrel about the above said aspects of the matter. Admittedly, the term "public motor transport " is not defined under the Minimum Wages Act, 1948. Thus, a literal meaning has to be drawn from the aid of a dictionary. As could be seen from the meaning available under the dictionary, the term "public motor transport" has to be defined as a system for carrying people or goods from one place to another using vehicles/roads and such activities having connection with ordinary people in Society. Therefore, the engagement of vehicles or a devise that uses electricity/ petrol gas etc., to produce movement for carrying people or goods from one place to another is essential to attract the definition of "Public Motor Transport".

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In this case when we consider the factual aspect of the matter, though the petitioner contends that they are not owning any transport vehicles of their own, however, admits that they engage in delivering the goods at the consignee's place either through tyre cart, head load, cycle rickshaw or tempo by collecting charges for such door delivery. Hence the usage or engagement of vehicles for carrying goods is admitted by the petitioner. Such usage or engagement of the vehicles need not necessarily be of their own source. More over, a perusal of the deed of partnership entered between the partners of the petitioner firm would also show that the objects and the nature of business of the petitioner firm includes transportation of goods by engaging of own lorries and lorries of other owners on freight payment basis of leasing out the vehicles on commission basis. Clause 3 of the partnership deed is extracted hereunder:-

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"3. That the objects and the nature of business of the firm shall be that of Transportation of goods by engaging of own lorries and lorries of other owners on freight payment basis or leasing out the vehicles on commission basis. The business

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of the firm shall also be that of transport agents, motor contractors etc., for the purpose of carrying on transportation of goods to and from place to place and to different places in the State of Tamil Nadu and/or in any other states in India. "

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Thus, from the very object of the partnership business of the petitioner, it is clear that they intend to engage in transportation of goods by engaging vehicles.

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As rightly contended by the learned counsel appearing for the fourth respondent, the term 'scheduled employment" as defined under Section 2(g) of the Minimum Wages Act, 1948 would indicate that it is not the employment specified in the Schedule alone would fall within such definition. On the other hand, any process or branch of work forming part of such employment would also fall within such definition. For proper appreciation, Section 2(g) of the Minimum Wages Act, 1948 is extracted hereunder:-

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"2. Interpretation-

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(g) "scheduled employment" means an employment specified in the Schedule, or any process or branch of work forming part of such employment; "

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Therefore, when such activities of the petitioner undoubtedly show that they are engaged in transportion of goods which fact is supported by their own partnership deed as well as through their admission, certainly such business activities of the petitioner would fall under Sl.No.11 of Part I of the Schedule to the Minimum Wages Act, 1948. No doubt, even though the modified insertion of the activities viz., "employment in loading and unloading in godowns" may not be strictly applicable to the petitioner's case as contended by the petitioner's counsel, still the definition under Section 2(g) of the "scheduled employment" would show that such narrow interpretation cannot be given in view of the presence of the specified phrase "or any process or branch of work forming part of such employment ". Even though it is contended by the petitioner that all the employees are only clerical cadre, I find no material evidence is placed to establish such contention. Even assuming so, I found that Section 2(g) definition is wider enough to include even those persons and hence the petitioner cannot escape from the liability. Therefore, the reliance placed on by the learned counsel for the petitioner in United Labour Federation case to contend that common parlance meaning has to be taken for the phrase "public motor transport" in fact justifies the contention of the respondents as I discussed supra.

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The other decision relied on by the learned counsel for the petitioner is reported in 1954 (2) LLJ 694 (Kalidas Dhanjibhai Vs. State of Bombay). In the said case, the Apex Court has considered as to whether an establishment can be held to be a shop within the meaning of Section 2(27) of the Tamil Nadu Shops and Establishments Act, 1947 by taking into consideration of the factual aspects of the matter and the business activities carried on by the concerned person therein. The Apex Court has found that where an owner of an establishment does not do business of buying or selling on the premises or render services to the customers but manufacture spare parts in respect of orders procured from local customers such establishment cannot be held to be a shop within the meaning of Section 2(27) of the said Act. I find no relevance of the above said decision to the facts and circumstances of the case.

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It is also to be noted at this juncture that the petitioner was prosecuted for not registering under the Motor Transport Workers Act, 1961. The petitioner pleaded guilty before the 16th Metropolitan Magistrate Court, Chennai and paid the fine for not registering themselves under the above said Act. The above said fact is also admitted by the petitioner himself as M.W.2 before the second respondent. The relevant admission made by the petitioner has been extracted by the second respondent in his order and for the purpose of appreciating such factual aspect, the same is extracted once again hereunder:-

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"nkYk; vjph;kDjhuh; epWtdk; g';fhspahd jpU/ghl;yp (k/rh 2) jdJ rhl;rpaj;jpy; fPHf;fz;lthW Twfpwhh;/

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btspa{upypUe;J tUk; ruf;Ffis vdJ fpl';fpy; ,wf;fp itj;Jtpl;L. gpd;dh; mtw;iw cupath;fSf;F blyptup bra;tJ , e;epWtdj;jpd; bjhHpy; MFk;/ ghh;l;ofs; j';fs; ,lj;jpw;nf te;J blyptup bfhLf;FkhW nfl;Lf; bfhz;lhy;. mnefkhf if tz;o. jiyr;Rik K:yk; mDg;g[nthk;/ rpwpa mst[ blk;ngh. kpdp ntd;. yhup K:yk; mDg;gptpl;L mjw;fhFk; bryit. bghUis mDg;gpath;fSf;Fg; gw;W vGjg;gLfpwJ/ bghUis mDg;gpath;. tPl;oy; bghUisf; bfhLf;FkhW Fwpg;gpl;oUe;jhy;. mjw;fhd thfdk; Vw;ghL bra;J mDg;g[nthk;/ nlhh; blyptup bfhLf;Fk;nghJ. thfdj;jpy; bghUSld; v';fs; epWtd CHpah; xUth; cld; bry;thh;/ bghUis xg;gilj;jJk;. mjw;F Mjhukhf $p rp apd; gpd;dhy; ifbaGj;J bgw;W tUthh;/" vd;W Twpa [s;shh;/ nkYk; Twifapy;. yhup fk;bgdpfspypUe;J "Topay" vd;W nghl;L yhhp urPJ tUk;/ mjpy; nghf;Ftuj;J fl;lzj;ij bghUisg; bgWgth; v';fsplk; brYj;jp tpl;L ruf;if vLj;Jr; bry;thh;/ ,t;ntiyf;fhf yhup fk;bgdp v';fSf;F fkpcd; tH';Ffpwhh;fs;/ btspa{hpypUe;J tUk; ruf;Ffis ,wf;f Vw;w

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Rik J}f;Fnthiu eh';fs; itj;Js;nshk;"/ vd;Wk; k/rh/2 rhl;rpakspj;Js;shh;/ vdnt vjph; kDjhuu; bghUs; nghf;Ftuj;jpy; gy gzpfis bra;fpwhh; vd;gJ bjspthfpwJ/"

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No doubt, the learned counsel for the petitioner submits that mere pleading by the petitioner will not automatically confer the jurisdiction under the Minimum Wages Act. Certainly, nobody can confer jurisdiction on an authority under a particular enactment, if otherwise, such authority is not having such jurisdiction under such enactment at all. But pleading guilty of a particular offence based on the factual allegations made against such person is totally under a different circumstances and the same cannot be equated with the conferment of jurisdiction on an authority who is otherwise not having such jurisdiction. Here in this case, the allegations are made and charge is framed against the petitioner that they have not complied with as per the terms of Motor Transport Workers Act, 1961. This factum of framing of charge is not disputed. On the other hand, they admitted the charge/offence which was levelled based on certain factual aspects of the matter and consequently pleaded guilty before the court of law and paid the fine. Such conduct of the petitioner cannot be brushed aside simply for the reason that mere pleading will not automatically confer the jurisdiction. Pleading guilty is not only an admission of the offence but also the 'stated facts' therein leading to commission of such offence. Therefore, I am of the view that learned counsel for the petitioner is not justified in contending that mere pleading will not automatically confer the jurisdiction under the Minimum Wages Act, 1948. Moreover, the authorities have not acted based on the mere pleading alone. On the other hand, the other aspects have also been considered and a finding is rendered to bring the petitioner under the definition of "public motor transport" Therefore, I find that the contention of the petitioner on this aspect is totally unsustainable.

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The next decision relied on by the learned counsel is reported in 2009 (1) LLN 814 (Management of Bailey Hydropower (Private) Ltd., Vs. Deputy Commissiner of Labour -II and another) where the learned single Judge of this Court has quashed the imposition of 10 times of amount as damages, as not sustainable. A perusal of the above said decision would show that one of the issue that arose for consideration before the learned Judge was as to whether awarding penalty of 10 times of arrears was by proper exercise of discretion or not. In answering the said issue, the learned Judge held at paragraphs 68 to 72 as follows:-

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Next question falling for consideration, does it warrant levy of penalty of ten times. Whether first rspondent -minimum wges authority was justified indirecting payment of outer limit amount of compensation,

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i.e. Ten times, the difference in wages. Under S.20(3) of M.W Act, outer limit is in ten times difference in wages payable.

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69.Clauses (i) and (ii) of S.20(3) of the Act read as follows:

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"(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 actually paid together with the payment of such compensation as the authority may think fit, not exceeding ten times the amount of such excess.

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(ii) In any other case the payment of the amount due to the employee 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 incases where the excess or the amount due is paid by the employer to the employee before the disposal of application."

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These clauses make a distinction between the cases where the employer pays to the employee on his own the amounts due to him before the disposal of the claim petition and where they are paid on the direction of the authority. The authority can award, under this section;

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(a) the amounts due to the employee and

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(b) compensation

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Under this section the authority can award compensation only when he finds that the employer has not paid the minimum wages in full as notified by the Government. If he finds that the employer does not have to pay anything more to the claimant employee, no compensation can be awarded to the employee by the authority.

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It was to the discretion of the authority to award compensation or not and what the amount of compensation should be . The discretion has to be judiciously exercised and all the circumstances connected with the matter, that was, non-payment or delayed payment, must be taken into account. There may be cases where the employer may not be at fault, there may be some difficulties in his way or there may be some cause which

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prevented him from implementing the provisions of the Act. All these matters are to be taken into account before an orderis made granting compensation of a particular amount (vide 1969 (18) F.L.R. 358 (Bom) C.S.Parameswaran V. Authority under Minimum Wages Act.)

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Awarding compensation is a matter that should be considered on merits. It cannot be awarded without any rhyme or reason. Ten times is the outer limit. Such maximum limit can be awarded where the authority was of the view that the employer has paid less wages than the prescribed maximum and had done so in spite of demands from employees or any officer or the authority. (Vide AIR 1968 Pat. 90) (G.S.Dugal and Company (Private) Ltd., Vs.Labour Inspector (Central), Ranchi)"

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From the above said decision, it is clear that awarding of compensation cannot be made without any rhyme or reason. The authority must get satisfied that the employer has paid less wages than the prescribed minimum wages in full in spite of demands from employees or any officer or the authority. In this case, it is seen that no employee of the petitioner had ever come before the court and made such demand and only the inspecting authority under the Minimum Wages Act, 1948 while inspecting the petitioner's premises, has found that the employees therein are not being paid the minimum wages and consequently filed an application before the second respondent as discussed supra. Therefore, in my considered view, there is no demand from the employees and there is no clear cut finding that there was a demand earlier made before the authorities concerned by the employees which has not been done by the petitioner. The second respondent has mechanically imposed compensation of 10 times without there being any specific finding warranting such imposition. Thus, I am of the view that the second respondent is not justified in imposing 10 times arrears as compensation payable to the employees. It is represented by the learned counsel for the petitioner that in pursuant to the interim order passed by this Court, the petitioner is paying the minimum wages to its employees all along.

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Section 20(3) of the Minimum Wages Act 1948 deals with payment of compensation not exceeding 10 times of the amount. For better appreciation, the same is extracted hereunder:-

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"20 Claims - (3) When any application under sub-section (2) is entertained, the Authority shall hear the applicant and the employer, or give them an opportunity of being

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heard, and after such further inquiry, 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

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(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;

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(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. "

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From the perusal of the above said provision, it is seen that such payment of compensation is not automatic or mandatory and on the other hand, it is only at the discretion of the authority, such liability has to be fastened on the employer. Thus, the authority while exercising such discretionary power has to give finding about its necessity. Even assuming that such necessity arose for consideration, then also it is not that in all cases 10 times of wages has to be fixed as compensation since that being the maximum limit. Therefore, in effect, the compensation contemplated under Section 20(3) is in the form of penal in nature and for such purpose, I am of the view that unless the failure on the part of the employer is coupled with malice or mens rea on the part of the employer, the same cannot be imposed automatically. There must be a clear finding by the authorities on this aspect. Recently, a Division Bench of this Court wherein I was a party, in a decision made in W.A.Nos. 1639 and 1640 of 2011 dated 13.11.2013 considered the scope of 14B of the Employees Provident' Funds and Miscellaneous Provisions Act, 1952, which provision deals with the power to recover the damages under the said Act . After following a decision made by another Division Bench reported in 2010 (4) LLN 706 (Regional Provident Fund Commissioner II, Employees' Provident Fund Organisation Madurai Vs. Sree Visalam Chit Funds Ltd.,) it was held therein that to attract Section 14B to levy damages, such liability cannot be fixed automatically without there being a specific finding that failure to pay the contribution was attributable to the 'mens rea' or 'actus reus' on the part of the employer. The relevant paragraph Nos. 18 and 20 of the above decision are extracted hereunder:-

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"18. A perusal of the above said decision would show that the same came to be rendered even after discussing the decision

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relied on by the learned counsel for the respondents herein reported in AIR 1998 SC 688 (cited supra) also. Thus, it is seen that 'mens rea' or 'actus reus' is absolutely necessary and should be proved for levying damages under Section 14B. ...

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.......... ......... .... 20. Thus, from the reading of the above decision of the Apex Court, it is very clear even from the language used under Section 14B that the competent authority "may" recover such damages from the employer. The word used "may" would indicate that the power conferred under section 14B is only the discretionary power. Even such discretionary power cannot be exercised in the absence of 'mens rea' or 'actus reus' on the part of the employer to contravene the statutory provision. ...."

¶90

Learned counsel for the fourth respondent relied on the decision reported in 1995 (3) Supp. LLJ 49 (Militant Security Bureau Pvt. Ltd., and Another Vs. B.R.Heher and Another) wherein the Bombay High Court has held at paragraph 6 as follows:-

¶91

" 6. In the facts and circumstances of this case, which are undoubtedly not only unusual but are peculiar, the submissions advanced by Mr. Patil will have to be upheld. Mr. Patil is justified in pointing out that regardless of the deployment of one or two persons at each building, that the totality of employees vis-a-vis the petitioner No. 1 company would give rise to the relationship of master and servant between the petitioners and those employees. It is quite irrelevant as to how many of them are posted at which part of the city in so far as the petitioner No. 1 would come within the definition of "establishment" as defined under the Shops & Establishments Act and would, therefore, come within the ambit of Item 17 of Part I of the Schedule to the Minimum Wages Act. In this view of the matter, it will have to be held that the Minimum Wages Act is applicable to the establishment of the petitioners."

¶92

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¶93

The other decision reported in 1968 (1) LLJ 750 ( Union of India Vs. Authority under the Minimum Wages Act and Others) is also the decision of the Bombay High Court wherein the Bombay High Court has held that in the absence of any special meaning given to the expression"road" the literal meaning is to be preferred to any special meaning. I find no relevance of the above said decision to the facts and circumstances of the present case.

¶94

Considering all these facts and circumstances, the writ petition is allowed in part by setting aside the order of the second respondent insofar as the portion of the order directing payment of 10 times of arrears of minimum wages as compensation is concerned. In all other aspects, the impugned order is upheld. Consequently, the connected M.P. is closed. No costs.

¶95

Sd/ Asst.Registrar /True Copy/ Sub.Asst.Registrar krr/ To 1. R.Deivanayagam Assistant Inspector of Labour II II Circle, DMS Complex Chennai 6. 2. The Deputy Commissioner of Labour I (Authority under Section 20 of the Minimum Wages Act) DMS complex, Chennai 6. 1 cc to Government Pleader, Sr. 59974 1 cc to M/s.T.S. Gopalan & Co,. Sr 59683 W.P.No.17363 of 1999 SKV (CO) KR 29/11

¶96

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Batco Roadways Corporation, v. 1.R.DEIVANAYAGAM

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Batco Roadways Corporation, v. 1.R.DEIVANAYAGAM

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