Shri B. P. Hira, Works Manager, Central
Railway, Parel, Bom Vs. Shri C. M. Pradhan  Insc 75 (8 May 1959)
SINHA, BHUVNESHWAR P.
CITATION: 1959 AIR 1226 1960 SCR (1) 137
Overtime Wages-Claim by employees in railway
factoryValidity-Factories Act, 1948 (LXIII of 1948), SS. 2(1),59The Bombay
Shops and Establishments Act, 1948 (Bom. 79 of 1948). SS. 4, 70.
These appeals by special leave arose from
applications made by the respondents, who were employed as timekeepers in the
time office of the Central Railway Workshop and Factory, Parel, Bombay,
claiming payment of overtime wages under the Payment of Wages Act, 1936 (4 of
1936). The case of the respondents was that they were workers within the
meaning of S. 2(1) of the Factories Act, 1948 (LXIII Of 1948) and as such were
entitled to overtime wages under s. 59 of the said Act. Alternatively, they
urged that even if they were not workers within the meaning of S. 2(1) of the
said Act, they would nevertheless be entitled to overtime wages under the s. 59
by reason Of s. 70 of the Bombay Shops and Establishments Act, 1948 (Bom. 79 of
1948). The validity of the claim on both the grounds was disputed by the
The Authority under the Payment of Wages Act
found that only four of the respondents, who were required to do the work of
progress timekeepers, could claim the status of workers within the meaning Of
S. 2(1) Of the Factories Act and the rest were merely employees of the
workshop, but the Authority accepted the alternative case made by the respondents
and directed the appellant to file a statement showing the overtime wages due
to each of the respondents and ordered it to pay the same.
Held, that the Authority was right in the
view that it took Of S. 70 Of the Bombay Shops and Establishments Act, 1948,
and its decision must be affirmed.
On a proper construction Of S. 70 Of the Act
it is clear that the first part of the section excludes a factory and its
employees from the operation of the Act; but the second part makes the relevant
provisions of the Factories Act applicable to them. The non-obstante clause in
the section shows that the employees in a factory, although they might not be
workers within the meaning Of S. 2(1) of the Factories Act, are entitled to
claim overtime wages as provided for by that Act.
It is not correct to say that S. 4 Of the
Bombay Shops and Establishments Act, 1948, has the effect of excluding the
operation Of S. 70 Of the Act. Section 4 applies only to establishments and not
to factories; but even if it applied, to factories 18 138 that cannot
materially affect the application Of s. 70 which is intended to operate notwithstanding
the other provisions of the Act.
Consistently with its policy, the Act, which
provides for overtime wages for employees in all establishments, provides for
overtime wages for employees in factories as well by making the relevant
provisions of the Factories Act applicable to them.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos.131 to 304 of 1957.
Appeals by special leave from the judgments
and order dated October 19, 1955 and January 31, 1956, of the Authority under Payment
of Wages Act, Bombay, in Applications Nos.
950-961, 963-967, 970-989, 992, 994-1013,
1015-1016, 10491050 and 11510-11511 and 11513-11517 of 1955 respectively.
M.C. Setalvad, Attorney-General for India, R.
Ganapathy Iyer and R. H. Dhebar, for the appellants.
Purshottam Tricumdas and G. N. Srivastava,
for the respondents in all the appeals except C. A. No. 186 of 1957.
1959 May 8. The Judgment of the Court was
delivered by GAJENDRAGADKAR J.-This group of 174 appeals by special leave
arises from the several applications made against Mr. B. P.
Hira, Works Manager, Central Railway Workshop
and Factory, Parel, Bombay (hereafter called the appellant) by the employees at
the said factory (hereafter called the respondents) under the Payment of Wages
Act, 1936 (IV of 1936) claiming payment of overtime wages since 1948. All these
applications were heard by the Payment of Wages Authority, Bombay, as companion
matters and they have been disposed of by a common judgment. The main judgment
has, however, been delivered by the said Authority in the application filed by
Mr. C. M. Pradhan (hereafter called the respondent) which gives rise to Civil
Appeal No. 131 of 1957 before us. We would, therefore, deal with this appeal in
particular and our decision in this appeal will govern the rest of the appeals
in this group.
139 In his application made before the
Payment of Wages Authority the respondent alleged that he had been employed in
the factory called the Central Railway Workshop and Factory, Parel, Bombay, and
that he had not been paid overtime wages due to him from April 1, 1949, to
September 30, 1954. The respondent claimed that the delay made by him in filing
the present application should be condoned because jointly with his co-workers
he had been in correspondence with the railway administration in regard to the
said payment of overtime wages since, 1948 and that the claim made by him and
his colleagues had been finally rejected by the railway administration on
August 31, 1954. His case was that he had filed the present application soon
thereafter and so the delay made by him ,in making the claim before the
Authority should be condoned. The Authority heard the parties on the; question
of delay and held that the delay only in respect of the claim for the period
after May 1953 should be condoned. In the result the claim for overtime wages
for the period prior to May 19, 1953, was rejected on the preliminary ground of
delay whereas the claim. for the period subsequent to the said date was
considered on the merits.
The respondent's case was that he was
entitled to the overtime wages for work on such Sundays when he was not given a
holiday within three days prior to or three days subsequent to the Sundays on
which he worked. The appellant conceded that the respondent had not been given
a holiday within the three days prior to or the three days subsequent to the
Sundays on which he had worked as required by s. 52 of the Indian Factories Act.
The respondent alleged that he was a worker within the meaning of s. 2, sub-s.
(1) of the said Factories Act (LXIII of 1948) and as such he was entitled to
overtime wages under s 59 of the said Act.
Alternatively he urged that even if he was
not a worker within the meaning of s. 2(1) of the said Act, he would
nevertheless be entitled to overtime wages under the said s. 59 by reason of s.
70 of the Bombay Shops and Establishments Act, 1948 (Bom. 79 of 1948)
(hereafter called the Act).
Thus the claim for 140 overtime wages was
made by the respondent on two alternative grounds.
The appellant disputed the validity of this
claim. It was urged on its behalf that the respondent was not a worker under s.
2(1) of the Factories Act and that s. 70 of the Act did not justfy the claim
alternatively made by the respondent for overtime wages.
The Authority considered the evidence led
before it in respect of all the repondents for overtime wages. It appears that
these respondents are employed by the appellant in the time office of the Parel
Workshop and not in the factory itself. The duties of these timekeepers are to
maintain initial records of attendance of workshop staff, to prepare pay-sheets
for them to maintain their leave accounts, to dispose of final settlement cases
of the said staff and to maintain records for statistical information.
The Authority held that the time office where
the timekeepers work is an integral part of the factory and so it came to the
conclusion that the timekeepers are employed in the factory called the Central
Railway Workshop and Factory, Parel, Bombay.
The Authority then examined the question as
to whether the timekeepers are workers within the meaning of s. 2(1) of the Factories
Act. Evidence showed that four timekeepers, are required to do the work of
progress timekeepers. This work consists in preparing the progress time-sheets
and operation time-sheets of machine-shop staff working on various jobs dealing
with the production of railway spare parts. The Authority was disposed to take
the view that having regard to the nature of the work assigned to the progress
timekeepers they must be held to be persons employed in work incidental to, or
connected with the manufacturing process or the subject of the manufacturing
process and as such they are workers within the meaning of s. 2(1) of the Factories
Act. In the result, the finding made by the Authority was that timekeepers are
employees of the workshop, but are not workers under the Factories Act; while
the progress timekeepers can claim the status of workers under the said Act.
141 The Authority then considered the
respondent's argument that even if he was not a worker under the Factories Act
he was neverthless entitled to claim the benefit of s. 59 of the said Act by
virtue of s. 70 of the Act. The Authority accepted this contention and held
that, even if the respondent was not a worker under the Factories Act, s. 70 of
the Act entitled him to claim overtime wages under s. 59 of the Factories Act.
That is why the Authority ordered that the respondents would be entitled for
the period 19-51953 to 30-9-1954 to overtime wages at double the ordinary rate
for the Sundays on which they worked when they were not given a a holiday on
one of the three days immediately preceding or after the said Sunday. The
appellant was accordingly directed to file a statement showing the overtime
wages to which the several respondents were entitled and orders were passed on
each one of the applications directing the appellant to pay the respective
amounts to. each one of the respondents. -It is against these orders that the
appellant has filed the present group of appeals by special leave.
The first point which has been urged before
us by the learned Attorney-General on behalf of the appellant is that the
Authority was in error in holding that the progress timekeepers are workers
under s. 2(1) of the Factories Act.
A worker under s. 2(1) means a person
employed directly or through any agency, whether for wages or not, in any
manufacturing process, or in cleaning any part of the machinery or premises
used for manufacturing process, or in any other kind of work incidental to, or
connected with, the manufacturing process, or the subject of the manufacturing
process; and the manufacturing process under s. 2(k) means any process for
inter alia (1) making, altering, repairing, ornamenting, finishing, packing,
oiling, washing, cleaning, breaking-up, demolishing or otherwise treating or
adapting any article or substance with a view to its use, sale, transport,
delivery or disposal. It is clear that the duties of the progress timekeepers
do not fall within the first part of a. 2(k). The Authority has however, 142
held that the said duties can be treated as incidental to, or connected with,
the manufacturing process or the subject of manufacturing process; it is the
correctness of this finding that is challenged by the appellant.
On the other hand, Mr. Purshottam, for the
respondents, argues that the Authority was in error in holding that the
timekeepers are not workers under s. 2 (1). His contention is that the
expression "incidental to, or connected with, the manufacturing process
" is wide enough to include not only the cases of the progress timekeepers
but the cases of all timekeepers as a class. It is true that the finding of
the.Authority in respect of the timekeepers is against the respondents; but Mr.
Purshottam says that he is entitled to support the final order passed by the
Authority on the additional ground that the time. keepers, like the progress
timekeepers, are workers under s. 2(1) and as such they are entitled to claim
overtime wages under s. 59 of the Factories Act.
The final decision of the Authority is,
however, based on the view that under s. 70 of the Act the respondents would be
entitled to overtime wages under s. 59 of the Factories Act even if they are
not workers under s. 2(1). That being so, we think it is necessary first to consider
the correctness of this view. If the conclusion of the Authority on the scope
and effect of the provisions of s. 70 of the Act is correct, then it would be
unnecessary to consider whether the timekeepers and the progress timekeepers
are workers under s. 2(1) of the Factories Act.
We would, therefore, deal with that question
It appears that there are three statutes
which pro. vide for the payment of extra wages for overtime work. The proviso
to s. 71 (c) of the Indian Railways Act (IX of 1890) lays down that the
exempted railway servant specified in it shall be paid for overtime at not less
than one and a quarter times his ordinary rate of pay. This provision has been
subsequently amended by Act 59 of 1956, which makes the rate for overtime one
and one-half times the ordinary rate of pay; but it is common ground that we
are not 143 concerned with the amended provision in these appeals since the
respondents' claim is for. a period prior to the date of the amendment. It is
suggested by the appellant that the respondents are railway servants under s. 3
(7) of the said Act, and as such they may be entitled to make a claim for
overtime wages under the said proviso; but the respondents have not made, and
do not wish to make, a claim under the said provision; and so the question as
to the application of the said section need not detain us. If the construction
placed on s. 70 of the Act by the Authority is correct, the claims of employees
who are working in a factory in the State of Bombay would be governed by that
provision; this position is not seriously disputed before us.
Section 59 of the Factories Act also deals with
the question of extra wages for overtime. It provides for the payment of wages
in respect of overtime work at the rate of twice the ordinary rate of wages.
This benefit is, however, available only to persons who are workers within the
meaning of s. 2(1) of the said Act Since we are dealing with the case on the
assumption that the respondents are not -workers under s' 2(1) it follows that
s. 59 by itself would not be applicable to them.
The Bombay Shops and Establishments Act,
1948, is the third statute which makes a provision for the payment of extra
wages for overtime work. Section 63 of the Act deals with this topic. Section
63(1) provides for the payment of overtime work at the rate of 1-1/2 times the
ordinary rate of wages in the case of employees in any establishment other than
a residential hotel, restaurant, or eating-house, whereas sub-s. (2) provides
for wages for overtime at the rate of twice the ordinary rate of wages in
respect of employees in a residential hotel, restaurant or eating house,
subject to the other conditions specified in the said section. It is clear that
this section does not apply to the respondents because they are employees in a
factory and not in any of the establishments enumerated in its two subsections.
144 The respondents' case, however, is that
by virtue of s. 70 of them. Act the provisions of the Factories Act, including
a. 59, are extended to the cases of all employees in factories, and so they are
entitled to claim wages for overtime under the said section of the Factories
Act. This contention has been upheld by the Authority. It is not disputed by
the appellant that the Bombay Legislature was competent to prescribe for the
extension of the provisions of the Factories Act to employees in the factories
within the territory of the State of Bombay; and since sanction for this
legislation has been duly obtained from the Governor General of India on
January 3, 1949(1), no question about any repugnance between the provisions of
s. 70 and those of the Factories Act can possibly arise. Thus the validity of
the said section is not in dispute; and so the only point which calls for our
decision is one of construction: Does s.
70 supplement the provisions of the Factories
Act by extending them to all employees in factories like the respondents though
they are not workers under s. 2(1) of the said Act ? Before dealing with this
point it is necessary to refer briefly to the broad features of the Act. The
Act no doubt is a piece of beneficent social legislation intended to serve the
cause of labour welfare. It has been passed in order to consolidate and amend
the law relating to the regulation and conditions of work and employment in
shops, commercial establishments, residential hotels, restaurants, eating-houses,
theaters, other places of public amusements and entertainments and other
establishments. Section 2, sub-ss. (3), (4) and (27) define respectivly the
establishment, commercial establishment and shop. The definitions of commercial
establishment and shop exclude inter alia factory. Establishment is defend as
meaning a shop, commercial establishment, residential hotel, restaurant,
eating-house, theatre or other place of public amusement are entertainment to
which the Act applies and includes such other establishment as the State
Government may by notification in the official gazette declare (1) Published in
the Bombay Government Gazette, Part IV, dated 11-1-1949.
145 to be, an establishment for the purposes
of this Act. It would be noticed that the definition of establishment is very
wide, and it does not purport to be exhaustive because it expressly empowers
the State Government to include within its purview by notification other
establishments not specified in it. Section 2, sub-s. (6) defines an employee as
meaning a person wholly or principally employed in, and in connection with, any
establishment, and includes an apprentice but does not include a member of the
employer's family. This definition shows that the Act intends to confer the
benefit of its provision on all persons who fall within the wide definition of
the expression " Employee ".
It is necessary at this stage to refer to the
definition of "factory" under the Act. Section 2(9) defines a factory
as meaning any premises which is a factory within the meaning of cl. (m) of s.
2 of the Factories Act or which is deemed to be a factory under s. 85 of the
Now s. 2(m) of the Factories Act defines a
factory as meaning any premises including the precincts thereof " (i)
whereon ten or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is
being carried on with the aid of power, or is ordinarily so carried on, or (ii)
whereon twenty or more workers are working, or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is
being carried on without the aid of power, or is ordinarily so carried on, but
does not include a mine subject to the operation of the Mines Act, 1952 (XXXV
of 1952), or a railway running shed; " and s. 85 confers authority on the
State Government to extend the definition of factory to other places subject to
the requirements specified in the said section. It is common ground that the
place where the respondents are employed is a factory under s. 2(m) of the Factories
Act, and so it satisfies the definition of s. 2(9) of the Act.
19 146 The scheme of the Act shows that it
deals separately with shops and commercial establishments (ch. 111),
residential hotels, restaurants and eating-houses (ch., IV) and theaters and
other places of public amusement (ch. V). Separate provisions are made to
regulate these different establishments having regard to the special needs of
each one of them. There are, however, general provisions applicable to and
regulating all the establishments alike and these are found in chs. VI to IX.
It is significant that with the exception of s. 70, no other section of the Act
deals with factories.
We have already noticed that in defining
" commercial establishment " and " shop " respectively the
Act has expressly excluded " factories " from the said expressions.
It is true that the definition of "
establishment " does not expressly exclude factory; but it is plain that
factory is treated by the Act as separate and distinct and there can be no
doubt that the provisions in the Act which apply to establishment are not
intended to, and do not, apply to factories. In other words, though the
definition of " establishment " is wide enough, it does not include
factory for the purposes of the Act. It is conceivable that a kitchen attached
to an establishment like a residential hotel may satisfy the definition of
factory; but it seems to us that such an adjunct of an establishment is prima
facie not intended by the Act to be treated apart and separately from the main
establishment itself, and so it would be taken as a part of the establishment
and be governed by the provisions of the Act in relation thereto. The factory
where the respondents are employed is not connected with, much less an inseparable
adjunct of, any establishment, and so this academic aspect of the matter which
was incidentally posed before us by the learned Attorney-General need not be
pursued any further in the present appeal.
The conclusion of the Authority has been
challenged by the appellant on the ground that s. 70 on which it is based
cannot be invoked by the respondents. In support of this argument reliance is
placed on s. 4 of the Act. Section 4 provides that notwithstanding anything
contained in the Act its provisions mentioned 147 in the third column of sch.
11 shall not apply to the establishments, employees and other persons mentioned
against them in the second column of the said schedule. The proviso to this
section authorises the State Government to add to, omit or alter any of the
entries in the said schedule in the manner indicated( by it. It is urged that
the establishment of any railway administration is mentioned as sr. no. 5 in
sch. II and the entry against it in col. 3 of the said schedule shows that the
provisions of the Act are inapplicable to the said establishments. If the
establishment in question is exempted from the application of all the
provisions of the Act, how can s. 70 be said to apply to it? asks the learned
Attorney-General. It is obvious that s. 4 mentions and applies only to
establishments and it has no application to factories; and we are dealing with
employees in a factory. Indeed as we have already observed, no provision of the
Act except s. 70 applies to factories and so it would not be legitimate to base
any argument on the assumption that s. 4 is applicable to the present case.
Incidentally the learned Attorney-General
suggested, though faintly, that the establishments mentioned at sr. nos. 1 to 6
in col. 2 of sch. II are wider than and different from the establishment as
defined by s. 2(8). We do not think that this suggestion is well-founded. There
can be no doubt that s. 4 grants exemptions to the said establishments from the
application of the provisions mentioned in col. 3 of sch. II; and that itself
postulates that but for the exemption thus granted the provisions of the Act
would have applied to them. Indeed the scheme of sch. 11 shows that whereas all
the provisions of the Act are made inapplicable to the establishments and
offices enumerated at sr. nos. 1 to 6 including 6(a) to 6(k), in regard to the
others which are enumerated at sr. nos. 7 to 55 it is only some provisions of
the Act specified in col. 3 that are excluded.
In other words, the remaining sections not so
specified would apply to them. If that is so, they must be and are
establishments under s. 2(8) of the Act.
148 In this connection it must be borne in
mind thatís. 2(8) empowers the State Government to include by notification any
office or institution within the definition of establishment; and so the
inclusion of any such office or institution in col. 2 of sch. 11 would make it
-an establishment under the Act, and as such it would be governed by it subject
of course to the corresponding entry in col. 3. That is why we think that the
suggestion of the learned Attorney-General as to the denotation and character
of establishments enumerated in sr. nos. 1 to 5 in col. 2 of sch. 11 cannot be
accepted. All the offices, establishments and other institutions mentioned in
col. 2 of sch. II are and must be held to be establishments under s. 2(8).
In regard to the argument that the operation
of s. 4 excludes the application of s. 70 we have held that s. 4 applies only
to establishments and not to factories. But even if s. 4 is assumed to be
applicable to factories, we do not think it would materially affect the
application of s. 70. The plain object underlying s. 70 and its context
emphatically point out that it is intended to operate independently of the
other provisions of the Act and in that sense it stands apart from them. It is
this aspect of the matter which is clarified by the Legislature by laying down
in s. 70 that nothing in the Act shall be deemed to apply to any persons
employed in the factory. That, however, anticipates the argument on the
construction of s., 70. Let us therefore, cite the said section and construe
Section 70 provides that nothing in this Act
shall be deemed to apply to any person employed in or within the precincts of a
factory and the provisions of the Factories Act shall, notwithstanding anything
in the said Act, apply to such person. This section consists of two parts. The
first part makes it clear that no provision in the Act shall be deemed to apply
to the persons specified in it. The Legislature knew that in fact the Act
contained no provision which in terms or expressly applies to any such person;
but in order to remove any possible doubt it has provided that no provision in
the Act shall even by inference or fiction be deemed to apply to them. In other
words this clause 149 is intended to clarify the position that though factory
has been defined by s. 2(9) of the Act, no provision of the Act is intended to
be applied to a factory or employees in. it.
Having clarified this position the second
part of the section extends the application of the Factories Act to the said
It would have been possible for the
Legislature to include in the present statute all the relevant provisions of
the Factories Act and make them applicable to factories as defined by s. 2(9);
but apparently the Legislature thought that the same object can be achieved by
enacting the second part of s. 70. This part provides that the provisions of
the Factories Act shall apply to the persons in question notwithstanding
anything contained in the said Act. The said Act contains the provision by
which workers are defined under s. 2(1), and it necessarily involves the
consequence that the relevant provision about the payment of overtime wages
applies only to workers as defined and not to employees in factories who are
not workers. It is in reference to this provision that s. 70 has provided that
notwithstanding the said provision the relevant provisions of the Factories Act
will apply to persons employed in a factory. The non-obstante clause in s. 70
thus serves the purpose of clarifying the position that the Factories Act is made
applicable to employees in factories and that they are not governed by any of
the provisions of the Act. This conclusion is obviously consistent -with the
policy of the Act. It has itself made provision for the payment of overtime
wages to employees in all establishments by s. 63;
and it has made applicable inter alia the
relevant provisions of the Factories Act in regard to employees in factories.
That is the view which the Authority has taken, and in our opinion its validity
or correctness is not open to doubt.
In the result the orders passed by the
authority are confirmed and the appeals are dismissed with costs in one set.