M/S Tops Security Ltd v. Tops Detective and Security, Services Ltd, Karamchari Union (Regd)

RAJIV SAHAI ENDLAW, J JANUARY 27, 2014 pp

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 27th January, 2014 + LPA No.407/2013, CM No.1673/2014 (for amendment in appeal) & CM No.9186/2013 (for stay). M/S TOPS SECURITY LTD. ….. Appellant Through: Mr. K.C. Dubey, Adv. Versus TOPS DETECTIVE AND SECUIRTY SERVICES LTD. KARAMCHARI UNION (REGD.) ….. Respondent Through: Mr. Prabhakar, Adv. CORAM :- HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW 1. This intra court appeal impugns the judgment dated 3rd May, 2013 of the learned Single Judge of this Court of dismissal of W.P.(C) No.2771/2013 preferred by the appellant. The said writ petition was preferred by the appellant challenging the order dated 19th January, 2012 of the Authority appointed under the Minimum Wages Act, 1948 allowing the application of the respondent Union under Section 20 of the Act for release of difference of minimum wages and wages paid for the period 1st August, 2005 to 31st January, 2006 and further directing the appellant to pay compensation equivalent to five times the said difference. 2. The counsel for the appellant during the arguments on 2nd December, 2013 confined the challenge to the judgment of the learned Single Judge and resultantly to the order of the Authority, to the quantum of compensation which the appellant has been directed to pay. Notice of the appeal limited to the said aspect was issued to the respondent Union. The counsel for the respondent Union has appeared. We have finally heard the counsels on the appeal. 3. Before coming to the merits of the appeal, it may be mentioned that the appellant has after the order dated 2nd December, 2013 filed CM No.1673/2014 for amendment of the Memorandum of Appeal contending that inadvertently no ground challenging the quantum of compensation which the appellant has been directed to pay has been urged and for formally taking the said ground in the Memorandum of Appeal. We allow the appellant to do so. 4. Notice of the appeal having been issued limited to the aspect of quantum of compensation which the appellant has been directed to pay, need is not felt to discuss the challenge earlier made by the appellant to the applicability of the Act to it and to it being the "employer". 5. The Authority, in its order dated 19th January, 2012, has not given any reason whatsoever for directing the appellant to pay compensation five times the difference between the wages paid by the appellant and the minimum wages which were liable to be paid. 6. Section 20(3)(i) of the Act empowers the Authority to, upon finding the employer to have paid less than the minimum rates of wages direct the employer to pay to the employee the amount by which the minimum wages payable to him exceed the amount already paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess. The Act or the Rules are not found to lay down any guidelines or criteria for determining the quantum of such compensation, i.e. whether it has to be Nil or ten times. 7. The said question is found to have vexed the Courts from time to time. The Division Bench of the Bombay High Court in C.S. Parameswaran Vs. The Authority under the Minimum Wages Act, 1948 for Nandgaon MANU/MH/0193/1968 held, that the Act vests a discretion in the Authority whether to impose penalty or not; this discretion has to be judicially exercised and all the circumstances connected with the matter i.e. non-payment or delayed payment must be taken into account; each case must depend upon the equities of the case; 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 prevented him from implementing the provisions of the Act, all these matters are to be taken into account before any order is made granting compensation in a particular amount. It was further held that the Authority is not bound to grant compensation. 8. The Division Bench of the Patna High Co