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Civil Appeal No. 1 of 1962, decided on 17th April 1963.

(On appeal from the judgment and order of the High Court of West Pakistan, Lahore, dated the 27th April 1959 in Civil Revision No. 114 of 1957).

, S. 2 (vi)‑"Wages-" Does not necessarily mean "earned wages"‑Employee ready and willing to render service but employer not giving employee opportunity to render such service (employee suspended during inquiry under charge‑sheet but re‑instated by decree of Court)‑Entitled to wages for period of suspension‑Railway Administration not electing to make any order in one of the modes of R. 2044, Pakistan Railway Establishment Code, Vol. II‑Employee entitled to full wages [Arvind Mills Limited v. K. R. Gadgil A I R 1941 Born. 26 considered.]

Purpose‑To compel employers to make prompt and full payment of wages to certain class of workers.

Point not taken in written statement or before Authority under Payment of Wages Act (IV of 1936)‑Not allowed to be taken in Revision before High Court "in absence of proper materials.

S. 15(2) provisos 1, 2‑Limitation for application for payment of wageslllegal removal from service‑Time taken in getting removal declared illegal by Civil Court and securing order for re‑instate ment‑Sufficient reason for condonation of delay.

M. B. Zaman Assistant Advocate‑General (Nasim Hassan Shah Advocate Supreme Court with him) instructed by Iftikhar‑ud -Din Ahmad Attorney for Appellant.

Respondent in person.

Karam Elahi Chouhan Advocate Supreme Court: Amicus curiae.

Date of hearing : 17th April 1963.

The main question raised in this appeal by special leave is: Whether a Railway employee who was illegally removed from service and who obtained a declaration concerning his illegal removal from a competent Court could claim wages for the period he was kept out of employment by the employer's illegal order by a petition to the Authority mentioned in the Payment of Wages Act, 1936.

This question arises in this way. The respondent Muhammad Sharif was working as a Booking Clerk in the North Western Railway at Gujrat. A charge was framed against him on account of certain irregularities and eventually he was discharged from service with effect from 30th June 1953. In a suit filed by him he obtained a declaration from a competent Civil Court, on the 9th June 1955, that his removal from service was illegal and that he continued to be an employee of the Railway Administration. The Railway Administration did not file any appeal against the said judgment and decree of the Civil Court. The Divisional Personnel Officer, Lahore then passed the following order on the 29th September 1955: ‑

"The orders of your removal from service issued by this office letter of even number dated the 1st July 1953, are hereby cancelled and you are hereby directed to report for duty to the Station Master Gujrat, immediately."

As notwithstanding repeated demands he was not paid his salary for the period from 30th June 1953, when he was dis charged from service until, 29th September 1955, when in conse quence of his having obtained a declaration that the discharge was illegal, he was restored to his post, he filed a petition under section 15 of the Payment of Wages Act before the appropriate authority namely the Deputy Commissioner of Gujrat for recovery of Rs. 3,006 being the arrears of his salary for the said period. The petition was resisted by the Railway Administration on the grounds that the claim was not for wages' since during the period in question the employee did no work; that the claim was barred by time; and that under the conditions of his service the period of absence was to be treated as extraordinary leave without pay'. The Authority allowed his claim to the extent of Rs. 2,858/8 and the said order was upheld in appeal by the Additional District Judge and in revision by a learned Single Judge of the High Court of West Pakistan. The Railway Administration then obtained special leave to appeal from this Court.

In view of the importance of the question involved in this appeal Mr. Karam Elahi Chauhan, at our request, appeared as amicus curiae to present the case for the public servant. The respondent Mr. Muhammad Sharif appeared in person. The learned Assistant Advocate‑General represented the Railway Administration.

Now the claim of the employee was made on the basis that he continued to be in employment during the relevant period viz. from 30th June 1953 to 29th September 1955. The answer of the Administration to the claim was that the employee never worked or attended the office of the respondent during the period for which he has claimed wages.' On the above pleading an issue directly and substantially arose in the case namely "Whether the applicant is entitled to wages claimed by him or for any period whatsoever."

In view of the order of the Divisional Personnel Officer, Lahore, dated 29th September 1955, it is not and cannot be urged that during the relevant period the employee was not in the employment of the Railways.

The learned Assistant Advocate‑General has contended that as he did not work during that period he was not entitled to any wages and in support of his contention he relied on the decision of an Indian High Court in the case of Arvind Mills Limited v. K. R. Gadgil (A I R 1941 Bom. 26). In the above case the facts were as follows:

In the Mills some of the workers were paid by the piece and some by time. The Mill authorities introduced a scheme for paying a bonus to workmen. In the case of workmen paid by the piece the scheme was that any workman who turned out within a week a number of pieces set opposite the quality of the cloth in a published list would be paid a bonus of four annas for each week of six days. In the case of time workers the scheme was that the workers were employed for a haphta, which meant a time period of sixteen days, at certain remuneration, and the scheme provided that a bonus of a specified amount would be paid to any worker who attended throughout the whole of the haphta. If he was absent for any day of the first eight days, he lost half the bonus; and if he was absent for any day of the other eight days, he lost the rest of the bonus. The scheme was introduced in order to encourage regular and quick work. The workers claimed the bonus under the scheme as part of their wages. Their con tention was that 'wages' under the Payment of Wages Act included 'potential wages'. The question before the Court, therefore, was Whether the definition of 'wages' included potential wages. In that context the epithet 'earned wages' was used in antithesis to 'potential wages,' in order to bring out the difference between the two more clearly. No doubt some observations in the above case may lead one to think that the 'wages' under the Act is confined to 'earned wages'. We are however, unable to agree with the learned Judges in their views. We see no such qualification in the wide terms of the definition of 'wages', nor, any ground for limiting its application.

In order to appreciate this question fully it will be necessary to look at the purpose of the Payment of Wages Act and also to its general provisions. The Preamble says, the purpose of the Act is 'to regulate the payment of wages to certain class of persons employed in the industry'. Further the application of the Act was restricted to wages payable in respect of a wage period which over such wage period averaged Rs. 200 a month or less.

Section 3 makes every employer responsible 'for the payment to persons employed by him of all wages required to be paid under the Act'. Section 4 provides for fixation of wage period, which shall not exceed one month in any case. Section 5 deals with the time of payment of wages. Section 6 provides for wages to be paid in current coins or currency notes'. Section 7 lays down that the wages of an employed person shall be paid to him without deduction of any kind except those authorised by or under the Act. Section 8 mentions conditions and limitations subject to which fines may be imposed and the procedure for imposing such fines. Sections 9 to 13 empower the employer to make certain kinds of deductions from the wages of the em ployees and also lays down limits of such deductions. Section 14 provides for appointment of Inspectors for carrying out the purposes of the Act. Section 15 makes provisions for the appoint ment of the Authority 'to hear and decide, for any specified area, all claims arising out of deductions from the wages or delay in payment of wages, of persons employed or paid in that area'.

From the above it is clear that the main purpose of Payment of Wages Act (hereinafter referred to as 'the Act') is to compel employers to make prompt and full payment of wages to certain class of persons employed by them. The Act also lays down various periods after the end of which wages must be paid to the employee and also sets out the various permissible deductions, which the employer is entitled to make from the wages of the employee. Under section 15 of the Act jurisdiction is conferred upon the Authority to hear and decide all claims arising out of deductions from the wages or delay in the payment of wages. If the employer makes delay in payment of wages or makes unauthorised deductions from the wages, the Authority may compel him to pay the full wages. This brings us to the question what is 'wages' under the Act. 'Wages' is defined under section 2 (vi) as follows: ‑

"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, whether conditionally upon the regular attendance, good work or conduct or other behaviour of the person employed or otherwise, to a person employed in respect of his employment or of work done in such employment ; and 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, but does not include‑

(a) the value of any house accommodation, supply of light, water, medical attendance or other amenity, or of any service excluded by general or special order of the Provincial Govern ment ;

(b) any contribution paid by the employer to any pension fund or provident fund ;

(c) any traveling allowance or the value of travelling concession ;

(d) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment ; or

(e) any gratuity payable on discharge.

The expression if the terms of the contract of employment express or implied were fulfilled' means that there should be a subsisting contract of employment and that the relationship of master and servant must exist between the parties. Further the definition emphasises the fact that wages' is remuneration payable to the employee if the terms of the contract were fulfilled. From the above it is clear that when a claim is made by an employee on the ground of alleged illegal deduction or alleged delay in payment of wages the Authority concerned will have to consider several relevant facts namely, (i) whether the claimant is an employee; and (ii) if so, whether the terms of the contract have been fulfilled. Here we may mention that in a subsisting contract of employment there are certain obligations upon the employer and also upon the employee and also certain rights as between them. These obligations generally are that the employer is bound to pay wages and the employee is bound to serve. There may, however, be cases where the employee without rendering service may be entitled to his remuneration. For example where the employee would be ready and willing to render service and yet may not do so because the employer, for some reason does not give him opportunity to render that service. In such a case the mere fact that the employee is not given work or cannot render service to employer will not derogate from the right to receive wages from the employer.

It also appears from the amplified portion of the definition that some emphasis has been laid on the expression any sum payble to such person by reason of the termination of the employment . This shows that any sum which is payable by reason of the termination of the employment is also wages for the purpose of the Act. Therefore, when the service of an employee is terminated without notice, in such a case the sum, which is payable to him in lieu of notice will be considered as wages though he may not render any service during that month. Enough has been said to show that the definition of wages' cannot be confined to earned wages' only, and that the claim of the respondent would thus be clearly covered by the definition in the Act.

The facts of this case however, present no difficulty. The order of removal from service was cancelled and the claimant was reinstated to his old post. Thus the relationship of the employer and employee was not in dispute. As the employee was all along challenging the legality of the order of his removal from service, it could be said that he was all along ready and willing to render service to his employer. Hence the Authority rightly held that the mere fact that the employee was not given work by the employer will not derogate his right to receive wages.

It is true that the contract of service of a Railway employee is subject to the rules laid down in the Pakistan Railway Establishment Code, Volume 11. Rule 2044 which deals with the question of pay after reinstatement is in these terms

"When the suspension of a railway servant is held to have been unjustified or not wholly justifiable; or

when a railway servant who has been dismissed, removed or suspended is re‑instated;

the Revising or Appellate Authority may grant to him for the period of his absence from duty---

(a) if he is honourably acquitted, the full pay to which he would have been entitled if he had not been dismissed, removed or suspended and, by an order to be separately recorded, any allowance of which he was in receipt prior to his dismissal, removal or suspension ; or

(b) if otherwise, such proportion of such pay and allowances as the Revising or Appellate Authority may prescribe.

In a case falling under clause (a), the period of absence from duty will be treated as a period spent on duty. In a case falling under clause (b), it will not be treated as a period spent on duty unless the Revising or Appellate Authority so direct."

The Railway Administration, however, did not elect to make any order under this rule after re‑instatement of the employee. In these circumstances the Authority was justified to hold that the claimant was entitled to the payment of full wages for the relevant period.

It was next contended that the respondent's absence during the period in question should be treated as extraordinary leave within the meaning of rule 2126 of the Pakistan Railway Establish ment Code, Volume II. The said rule is as follows:

‑(a) Extraordinary leave may be granted in special circumstances (1) when no other leave is by rule admissible, or (2) when other leave being admissible, the railway servant concerned applies in writing for the grant of extraordinary leave. Such leave is not debited against the leave account. No leave‑salary is admissible during such leave.

(b) The authority which has the power to sanction leave may grant extraordinary leave as in clause (a) in combination with, or in continuation of, any leave that is admissible, and may commute retrospectively periods of absence without leave into extraordinary leave. "

No such ground was taken in the written statement or even before the Authority. Nor any evidence either oral or docu mentary, was led in support of this contention. This contention was raised for the first time in revision before the High Court and the High Court was, therefore, justified in overruling this objection in the absence of proper materials.

We are also unable to accede to the contention that this respondent was not entitled to the benefit of the Payment of Wages Act. Subsections (4) and (6) of section 1 of the Act are in these terms:

"It applies in the first instance to the payment of wages to persons employed in any factory and to persons employed (otherwise than in a factory) upon any railway by a railway administration or, either directly or through a sub contractor, by a person fulfilling a contract with a railway administration."

"Nothing in this Act shall apply to wages payable in respect of a wage‑period which, over such wage -period, average two hundred rupees a month or more."

The basic pay of this respondent was Rs. 76 per month, i.e. much below Rs. 200, and hence it was conceded before the High Court that the provisions of the Act could apply to this respondent as his monthly wages averaged below Rs. 200 per month. In these circumstances the learned counsel has not pressed this point. It was lastly contended that the claim was barred by limita tion. The first proviso to subsection (2) describes limitation and says that every such application shall be presented within 6 months from the date on which the cause of action accrues. The second proviso lays down further that any application may be admitted after the said period of 6 months when the applicant satisfies the Authority that he had sufficient cause for not making the application within such period. On the 9th June 1955, the claimant obtained a declaratory decree from the Civil Court that his removal from service was illegal. The order of re‑instate ment was passed on the 29th September 1955, and the claimant rejoined his post on 30th September 1955. As the Railway Administration failed to pay arrears of his salary, he filed a petition under section 15 of the Payment of Wages Act on 5th December 1955. The Authority being of the opinion that the limitation should run from the date of the declaratory decree, held that the present application was filed in time. The High Court however, took the view that the claimant had sufficient cause for not making the application within the period mentioned in the first proviso and that his case was, therefore, covered by the second proviso to subsection (2) of section 15 of the Act.

The learned counsel has found it difficult to urge that the claimant could have filed the petition before getting the order of his removal set aside by a competent Court. If he had filed a petition soon after his dismissal, it would have been surely resisted on the ground that no contract subsisted between the parties and that the Authority was not entitled to enter into the question of legality or illegality of the order removing him from service. The respondent soon after his re‑instatement filed this petition. Thus the statutory bar prescribed was removed when it was shown that there was sufficient cause in not making the said application within the prescribed period and hence no question of limitation would arise in this case.

For the reasons stated above we see no force in this appeal and it is accordingly dismissed. As the respondent has appeared in person we make no order as to costs.

A.H. Appeal dismissed.

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