the Dvisional Engineer, G.I.P. Railway, v. Mahadeo Raghoo and Another

Judgment

~ . S.C.R .. SUPREME.COUR~ REPORTS lant also should have got the benefit of the doubt.· At this stage, it is not out of place to mention: one fact. It appears from the evidence of the Investigating Officer, P.W. 14, that in the course· of th~ irivesti-. gation the prosecuting authorities were of the opinion that the murder in this case was to be attributed.• to the prosecution witness, ·Ram Bhawan, P.W. 4, and not to the appellant, and that in their view even the evidence as against Ram Bhawan was not sufficient to put him on trial for the murder. Doubtless such· an opinion of the prosecuting authorities has no · relevancy in the case and should · not have .been placed on the record in this case. But when we have. to consider the desirability or otherwise of retrial, we need not shut our eyes to these features of .the ·case. which have been brought on the record.

In the cir~ cumstances mentioned above we do not consider that the interests of justice require that any retrial should be ordered. We accordingly .direct that there shall· be no retrial. . In the result, the convictions of the appellant .under sections 307 and 302 of the Indian Penal Code and the sentences therefore are hereby set aside. But his conviction under section 148 of the Indian Penal Code is maintained as also the sentence of two. year~. and a half in respect thereof. This appeal is accordingly allowed partially to the extent indicated above. Appeal partially allowed.' ' THE DIVISIONAL ENGINEER, G.LP. RAILWAY MAHADEO RAGHOO AND ANOTHER;· . [VJYIAI:" .. BosE, JAGANNADHADAs, VEJ>T:\(ATARAMA. A:YYAR. and B.. P. SINHA JJ.] Payment of Wages Act, 1936 (IV of 1936), s."2·(;i}-Wages- Houf~ rent allowance.,.-'rJlhether falls•r,vithin. the <irfinition .of·wages under the Act-Rule 3(i) of the statutor.y R_ules framed.by the Government-Legal effect thereof.

The Railwa{ Board under the 'Ministry of Railw~~s of fhd Government of India introduced a scheme with effect 1frori:l<tb:e'. 1st Suraj Pal The State of Uttar fradesh Jagannadhadas J. March 2 ig55 - The bivisional Engin~er;. G./._P. Rail]IJay v; .. Mahadeo Raghoo and another r 19551 · 4. Novem~er .1947 granting compensatory (city) allowance ar:.d house ren~. allowances at certain rates to certain Railway employees (in~ eluding the 1st respondent who wa_s, ~ rajlway einployee since 1945) stationed at specified head~quarters. The first respondent. drew this allov.;ance along with his salary up io the 18th August 1948, when he was offered by the Government, quarters· .<:uitable to his post, but he refused to occupy the same and the house rent allowance was stopped from the date of his refusal to occupy the quarter offered to him. Rule,}(i). of the., Statutory Rules framed· by the Government arid Pllt ihto effect On 1st November 1947 runs as follows : .

"Th.e ho'use rent allo~a~ce ~in not be admissible to those who occupy a'.ccommodation pto'.vided by Government or those to whom acCommodation has been offered by Governine'nt. but Who. have refused" . . Held," ·tllat the house ient alloWance is adn1issible only so long as an employee is stationed <it one of the specified places and has not been offered Government qllarters. T.he rules distitictly provide that the allowance will not be· admissible to those who occupy· Government .quar.ters or. _thos·e to whom such quarters have been off~red but who have refused to take advantage of the offer. Once an employee Of the descl-iption given above has beeri offered stlita~le hoUse accommodation and he has refused it, he ceases t9 be eniitled to the house rent allowance and that allowance ceaSes to be "wages" within the meaning bf the. definition in s. 2(vi) of the Act because it is no more payable under the terms of the contract.

The grant Of house rent .allowance does not create an indefeasible. right in. the employee at .all· places wherever he may· be posted and in all, ~ircumstances, irrespective of whether or not he has Peen offered Coverllme~t qu<irters. CIVIL . APPEL!,ATE JuRISDICTION : Civil Appeal No. 208 of 1952. Appeal by Special Leave from the Judgment and Order dated the· 28th day of September 1951 of the Authority under the Payment of Wages Act, Bombay in Application No. 500 of 1951. M: C. Setalvad, Attorney-General for India ( G. N. Joshi, Porus A. Mehta and' P. G. Go'k,hale, with him), for the appellant. /. B. Dadachanji, M. V. /ayakar and · Rajinder , Narain; for respondent No. l; . 1755.. March ~- The Judgi;nent ·of,. the;. C!>urt was .leliverec!-hy - J S.C.R. SINHA J.-This is an appeal by special leave from the orders dated the 28th September 1951 passed by the 2nd respondent, the Authority appointed under section 15(1) of the Payment of Wages Act (IV of 1936), (which hereinafter will be referred to as the Act) allowing the 1st respondent's claim for house rent allowance as part of his wages.

In this case the facts are not in dispute and may shortly be stated as follows : The 1st respondent . is a gangman in the employ of the Central Railway (which previously used to be known as the G.I.P. Rly.), since April 1945. At that time his wages were · Rs. 18 per month plus dearness allowance. With effect from the 1st November 1947 the Railway Board under the Ministry of Railways of the Government of India introduced a scheme of grant of compensatory (city) allowance and house rent allowance at rates · specified in their memorandum No. E47 CPC/14. This scheme was modified by the Railway Board's letter No. E47 CPC/14 dated 1st December 1947. As a result of this scheme certain railway employees· stationed at specified headquarters were , eligible for the allowance aforesaid at certain specified rates. The 1st respondent thus became entitled to the allowance of Rs. 10 per month.

This allowance the 1st respondent drew along with his salary until the 18th August 1948 when he was offered by the Government, quarters suitable to his post, but he refused to occupy the same. On his refusal to occupy the quarters offered ·by the Government, the house rent allowance was stopped with effect from the 19th August 1948. On the 8th June 1951 the 1st respondent put in his claim before the Authority for Rs. 290 on the ground that the appellant,· the Divisional Engineer, G.l.P. Rly., who was the authority responsible under section 4 of the Act for payment of wages, had stopped payment of house rent allowance to him from the 19th Augu:>t · 1948. The claim covered the period the 19th August 1948 to the 18th January 1951 at the rate of Rs. 10 per month. ·The appellant appeared before the Authority ;ind by his written statement" contested the claim · on tl1e ground that the house rent allowance 'which was The Divisional Engineer, G.I.P • Railway M ahadeo Raghoo and anothd Sinha J. The Divisional· Engineer, G./.P '

Railway Ma~adeo Raghoo and another Sinha J. 134S [1955] the .. subject ·matter . of the claim was- -not "wages" within the meaning of -section- Z(vi) of· the- Act. It was, therefore, submitted by the appellant who wa; the opposite party before the · authority that .it had no jurisdiction to entertain the claim which should be dismissed in limine. It was further pleaded that the claim was inadmissible on the ground that there had been no illegal deduction •from the respondent's wages inasmuch as the respondent had been allotted railway quarters of a suitable type and as he· had refused to occupy those quarters, he was ·not entitled under the rules to any house rent allowance. Alternatively, it was further - pleaded by the · appellant that so much of the· claim ' as related to a period precedirig six months immediately· before the date of the application was· time-barred under the first proviso to section 15 (2) of the Act.

The Authority. condoned the delay and that parf of the order condoning the delay is not in controversy before us. On the issues thus joined between the· parties the Authority came ·to the conclusion that the house rent allowance was "wages" as · defined .in the Act, that as a matter of fact, accommodation was -offered to the 1st respondent and he refused. it; but that ·even so, the appellant was not entitled to withhold - the -. house rent allowance. - Accordingly· the claim for · Rs. · 290 was allowed by. the Authority.

The short point to be decided in .this case is whether the ·house rent ·allowance· claimed by . the· 1st·· · respondent came within the purview of the definition -of "wages" contained in the· Act There being no difference on-· questions of ·fact ·between the parties, the answer -to the question raised · must depend upon ·the construction -to· be placed - upon: the· following 1ii:aterial portion of-the· definition of. '.'wages" in· ~ectiori •2(vi) of the Act :~ "'Wages~ means all ~emunerition, capable-'of -be. ing' •expressed, in· terms :of money,; which--would; if the terms of .the -contract ofemployment;•express'.-ot implied,- ·,Were .Julfilled;• be payable,• .Whether . conditionally. upon . the·, regular ,attendance,_ good-w,ork .or conduct or -,othc;r;: behay~our. rof ·the person employed or .-oth~rc wise, 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 v:1J:µe 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 State Government .......... · Shorn of all verbiage, "wages" are remuneration payable by an employer to his employee for services rendered according to the terms of the contract between them.

The question then arises, what are the terms of the contract between the parties. When the 1st respondent's employment under the railway administration represented by the appellant began, admittedly he was not entitled to any such house rent allowance. As already indicated, the scheme for payment of house rent allowance was introduced with effect from the 1st November 1947 when the rules were framed, admittedly under sub-section (2) of section 241 of the Government of India Act, 1935, by the Governor-General. Those rules were amended subsequently. We are here concerned with the amendment made by the Railway Board by its letter No. E47CPC/ 14 dated the 1st December 1947, particularly rule 3(i) whiCh'is in these terms :- "The house rent allowance will not be admissible to those .. who occupy accommodation provided by Government. m those to whom -accommodation has been offered by Government but who have refused it". - It has. been argued .on behalf of the appellant that the terms -of the· contract between the parties -include the rule· quoted above and -that therefore the position in law is that there is no absolute right · in the 1st respondent to claim the house -rent allowance; in other wor.ds, it .is -contended. that _there is a .c~ndition · precede.nt, to th~, claim for .house re11t allow~mce being admissible,. nawely, ~hat th~ employee~ should. ,~e ~posted at on<: oL ~()se. places,,_(' like ..

Boi;nbay,, .Calcutta, The -Divisional Engineer, G.J.P. Railway Mahadeo Raghoo and another ,Sinha J. The .Divisional ·Engineer, G.J.P. Rililway Mahadeo Raghao and another Sinha J. [1955] Madras, etc., before the claim for house rent, allowance could arise and. that there is a condition subsequent, namely, that. the employee posted at any one of those places will cease to be entitled to the allowance if either the Government provides accommodation to the employee in question or the employee refuses to occupy the accommodation so offered to him. On the other hand, it has been argued on behalf' of the 1st respondent that the employee's right to the allowance accrues as soon as he has fulfilled the terms of the contract of employment including regular attendance, good work. or conduct and his other behaviour in terms of the definition of "wages" as contained . in the. Act.

It was also argued on. beha)f of the 1st res~ pondent that the terms of the definition have to be construed consistently. with the provisions of sections 7 and 11 of the Act; that rule 3(i) quoted above is inconsistent with some of tl1e terms of the definition of "wages" and the provisions · of sections 7 and 11 and that in any event, if rule 3(i) aforesaid .were to be ·considered as a part of the terms of the contract between the. parties, section 23 of· the · Act prohibits an employee from entering into . such a .contract. , as has the effect of. depriving him of his vested rights. · · .

It should be noted at the outset that · the learned Attorney-General appearing on behalf of the appellant has not pressed ·the argument which appears to have been raised in the written statement· of the ap:- pellant and also before the -Authority ·as would appear from the orders passed by him, that clause (a) excluding "the value of any house accommodation" clearly showed that house rent allowance ·was . not included in "wages"· as· defined· in section 2(vi) of the Act. As will presently appear, this . argument proceeds on the unwarranted assumption that house . rent allowance is synonymous with the value of any .house.·accommoda• tion. referred . to in the definition of. "wages" and in section 7 (2) (b) and section 11 of the Act. The answer · to the question whether ·house rent allowance is "wages" may be· 'in the· affirmative if the rules .framed by the department relating . to the grant of. house rent allowance make it compulsory for the S.C.R. SUPREME'

COURT REPORTS employer to grant house rent allowance without anything more : in other words, if the house rent allowance had been granted without any conditions or with conditions~ if any, which were unenforceable in law. But the statutory rules framed by the Government governing the . grant of house rent allowance do not make it unconditional and absolute · in terms. The house rent allowance in the first instance is not admissible to all the employees of a particular dass. It is admissible only to such railway employees . as are posted at specified places in order "to compensate railway servants in certain costlier cities for excessive rents paid by them over and above what they might normally be expected to pay"; nor is such an allowance "intended to be a source of profit" or to ·be "an allowance in lieu of free quarters", as specifically stated in the preamble to the letter No. E47CPC/14, dated 1st December 1947, issued by the Railway Board.

The argument on behalf of the 1st respondent would have been valid if the rules in terms contemplated the grant of house rent allowance to every employee of a particular category but the rules do not make the grant in such absolute terms. The house rent allowance is admissible only so long as an employee is stationed at one of the· specified places and has not been offered Government quarters. The rules . distinctly provide that the allowance will not be ad" missible · to those who occupy Government quarters or to those to whom such quarters have been offered but who have refused to take advantage of the offer. Once an employee of the description given above has been offered · suitable house accommodation and · he has refused it, he ceases to . be entitled to the house rent allowance and ' that allowance thus ceases· to be "wages" within the meaning of the definition in· the Act, because it is no more payable under the terms of the contract.

Iii 'our opinion, it is clear beyond all reasonable doubt that the rule5 which must be included in the terms Of contract b~tween the employer and the employ_ee contemplate that an ,. employee posted at · one The. Divisional Engineer, G.I.P. Railway Mahadeo Ragho1> and another Sinha J. The D'iuisir:mal Engineer, G.J.P. Railway Mahadeo Raghoo and anotMr Binha J. SUPREME COURT REl1QRTS [1955] of the. specmed places would be entitled to horu;e rent allowance; but that as , soon as he. is <>ffered.. Government quarters .for. his .accommodation, .he .. ceases.. to be so entitled, whether he ·,actually, occupies .,or dqes not occupy · the quarters offered to· him. . Hence the grant of house rent ·allowance .does not .create an indefeasible right in the . employee at all , places wherever he may be posted. and in all circumstances, irrespectivs: of whether or not he . has . been .. offered Government quarters..

But it has been argued on behalf of the respondent that such a conclusion would be inconsistent with the provisions of sections 7 and 11 of .the Act.. .We . do not« see any such inconsistency. Section 7 of the Act deals with such:· deductions. as may be made from the wages . as defined in the Act, of .an employee .. Subsection. (2) of section 7 . categorically specifies the heads under which deductions may lawfully be made from wages. Clause ( d) of this sub-section. has reference to "deductions for . house accommodation supplied by the employer", and section .. 11 provides that stich a :deduction shall not be made unless .. the. house accommodation has . been accepted by the. employee and shall not exceed the amount equivalent to the value of ·such · . accommodation.

The definition · of "wages" ·in the Act also excludes . from -.its. operation the value of house ·accommodation · referred. to, in. sections ·"! ·and 11. as aforesaid.· The· legislarnre,, has ,used the expression "value of any . house. accommodation" in· .the ·definition· of '.'wages"-. •as denoting· something which ·can .be: deducted from. ,'.'wages''., The •. c9ne ex, dudes· the. other. .It .is ... thus clear-. that: the.,, definition of "wages" under the:·Act cannot .include :the"value ·of any house accommodation •:supplied: by . the employer to·the employee;. otherwise .jc ... would.· not.be a".legally ·permissible'· deduction'· .from wages. , .

It: isc equally! clea:r that house rent allowance which may . •in:::certain cir'.~umstances .. as "aforesaic\ be includ~d., ,in, "w.~ge,~' is m,>t ,)"he, .. ;~\l;J;I}~; thing. i'S the;; .valu~;,of apy .Ji~¥s~.-.ac, coinm<;>Patipn. ref~w;d to ,in th~ J\qt., Th.at,., h!;ing,,,s9, there i~ n,q : . rcaiidify., .ii),, ,tjie .a,rgup;ient , ftd,vancer.l . on.,.h~-. half of the 1st respondent that rule 3(i) aforesaid is S.C.R. inconsistent . witli . the provisions of sections . 7. and 11 of the Act. ·It remains to consider the last argument advanced on behalf ·of the lst · respondent that section. 23 of the. Act prohibits an employee from relinquishing such a right as is the subject matter of rule 3(i) · quoted above. This argument proceeds on the . assumpti9n that house rent allowance which is a right. conferred on the employee is an absolute right.

It has already been held above that the Act read along with the rules which constitute the terms of the contract between the employer and the employee does not create any absolute right in the employee to the house rent allowance. That being so, there is no question of the employee relinquishing any such · right as is contemplated by section 23. For the reasons aforesaid, the appeal succeeds. The orders passed by the Authority are set aside. Jn the special circumstances of this case there will be no order as to costs. Appeal allowed: . A. V. D'COSTA B. C. PATEL AND ANOTHER. [VIVIAN BosE, ]AGANNADHADAS, VENKATARAMA AYYAR and SINHA JJ.] Payment of Wages Act, 1936, (IV of 1936), Ss. 5, 7, 15(1)(2)- Claim for wages due on account of the introduction of upgrading of persons-Claimant's right to be placed on monthly wages ignored- No delay in payment of wages or deduction of wages alleged-Authority under the Act-Whether had jurisdiction to decide the complaint of the applicant.

The second respondent had been an employee of the Central Railway as a daily rated casual labourer on specified daily wages since 1941. He continued to receive his wages at the specified rate until October 1949. In October 1949 he made an application through an official of the Registered Trade Union-a person permitted by the authority under sub-section (2) of s. 15 of the Payment of Wages Act, 1936-claiming his wages due in respect of six months from May to October 1949. The respondent did not allege delay in the The Divisional Engineer, G./.P. Railway Mahadeo Raghoo and another Sinha J. March 4