1968 (12) TMI 105 - SC - Companies Law

Summary

Issues Involved:
1. Maintainability of the application under Section 15(2) of the Payment of Wages Act.
2. Jurisdiction of the Authority under the Payment of Wages Act to determine liability for retrenchment compensation.
3. Entitlement of employees to claim compensation under Section 25FF of the Industrial Disputes Act.

Detailed Analysis:

1. Maintainability of the Application:
The first issue addressed was whether the application under Section 15(2) of the Payment of Wages Act was maintainable given the revocation of the company's license. The Authority initially held that it had jurisdiction to entertain the application. However, the High Court later ruled that Section 15 of the Payment of Wages Act did not apply to such claims and that the proper forum was a Labour Court under Section 33C(2) of the Industrial Disputes Act. This decision was challenged in the present appeal.

2. Jurisdiction of the Authority:
The core question was whether the Authority under the Payment of Wages Act had jurisdiction to determine the liability for retrenchment compensation before the amount was ascertained under Section 33C(2) of the Industrial Disputes Act. The appellant argued that the amended definition of 'wages' under the Payment of Wages Act included compensation payable under Section 25FF of the Industrial Disputes Act, thus conferring jurisdiction on the Authority. Conversely, the respondents contended that the Authority had limited jurisdiction, confined to matters explicitly specified in the Payment of Wages Act, and that claims under the Industrial Disputes Act should be determined by the appropriate tribunal established under that Act.

3. Entitlement to Compensation:
The third issue involved the entitlement of employees to claim compensation under Section 25FF of the Industrial Disputes Act. The respondents argued that since the employees' services were not interrupted by the transfer and the terms and conditions of their employment remained unchanged, they were not entitled to compensation. The Authority would have to determine whether there was any interruption in employment, whether the conditions of service were less favorable, and whether the new employer was liable for compensation in case of future retrenchment. The Supreme Court noted that such an inquiry would involve complex questions of fact and law, which were beyond the scope of the Authority's limited jurisdiction under Section 15(2) of the Payment of Wages Act.

Conclusion:
The Supreme Court concluded that the Authority under the Payment of Wages Act did not have jurisdiction to entertain claims for retrenchment compensation under Section 25FF of the Industrial Disputes Act, especially when such claims were disputed and required detailed inquiry into facts and law. The proper forum for such claims was the Labour Court under Section 33C(2) of the Industrial Disputes Act, which had the necessary jurisdiction and procedural mechanisms to handle such disputes. Consequently, the appeal was dismissed, and the High Court's decision was upheld.