The Chhattisgarh High Court has reaffirmed the fundamental principle that jurisdiction cannot be conferred by judicial direction, particularly in wage disputes. The judgment clarifies that claims under the Minimum Wages Act or Payment of Wages Act must be adjudicated exclusively by labour authorities, not Sub-Divisional Magistrates, and that orders passed without jurisdiction are void ab initio. This ruling carries significant implications for employers, employees, and legal practitioners dealing with wage-related disputes.
Background & Facts
The Dispute
The case originated from a wage dispute between security guards employed by Rama Security Services Agency and their employers, including Kamani Engineering Corporation International Ltd. The security guards, respondents Jay Singh and Ashish Jaiswal, alleged they were paid wages below the prescribed rates and sought arrears along with provident fund contributions. They filed an application before the Sub-Divisional Magistrate (SDM), Ambikapur, in 2012, claiming entitlement under labour laws.
Procedural History
The dispute progressed through multiple forums:
- 2012: Application filed before the SDM, Ambikapur, seeking wage arrears and provident fund contributions.
- 2012: Employers filed a reply denying the allegations and challenging the SDM’s jurisdiction.
- 2013: SDM recorded the statement of the security agency’s manager, who clarified the contractual arrangement between the company and the agency.
- 2014: SDM allowed the claim and directed payment of wages and provident fund contributions with interest.
- 2014: Appeal before the District Magistrate, Surguja, was dismissed.
- 2014: Writ petition (WPS No. 1558/2014) filed before the Chhattisgarh High Court challenging the SDM’s order.
- 2024: Single Judge disposed of the writ petition by remanding the matter to the SDM for fresh adjudication.
- 2024: Writ appeal filed before the Division Bench challenging the remand order.
Relief Sought
The appellants sought the quashing of the SDM’s order and the remand order passed by the Single Judge, arguing that the SDM lacked jurisdiction to adjudicate the dispute under labour laws. They contended that the remand perpetuated an illegality and that the dispute should have been resolved by the Labour Commissioner or Labour Court.
The Legal Issue
The central question before the Court was whether the Sub-Divisional Magistrate had the jurisdiction to adjudicate a wage dispute under the Minimum Wages Act or Payment of Wages Act, and whether an order passed without jurisdiction could be sustained or remanded for fresh adjudication.
Arguments Presented
For the Appellants
The appellants argued that:
- The SDM lacked inherent jurisdiction to entertain the application under the Minimum Wages Act or Payment of Wages Act, as such disputes fall exclusively within the domain of labour authorities.
- The remand order passed by the Single Judge was unsustainable, as it perpetuated an illegality by directing the SDM to re-examine the matter despite the clear lack of jurisdiction.
- The SDM’s order was void ab initio and could not be cured by remand, as jurisdiction cannot be conferred by judicial direction.
- On merits, the respondents failed to substantiate their claim with cogent evidence, rendering the SDM’s order unsustainable.
For the Respondent/State
The State contended that:
- The Single Judge’s order was legal and well-reasoned, and the remand was justified in the interest of justice.
- No interference was warranted, as the remand allowed for a fresh examination of the jurisdictional issue.
The Court's Analysis
The Court undertook a rigorous examination of the principle of jurisdiction and its implications for wage disputes. It relied on the settled legal position that an order passed by an authority without jurisdiction is void ab initio and cannot be sustained or cured by remand. The Court observed:
"It is a well-settled proposition of law that when an authority acts without jurisdiction, the order so passed is void ab initio and non est in the eyes of law. Such an order cannot be sustained on any ground, nor can the defect of lack of jurisdiction be cured by an order of remand. Jurisdiction cannot be conferred upon an incompetent authority either by consent of parties or by judicial directions."
The Court further held that the Sub-Divisional Magistrate does not derive jurisdiction under the Minimum Wages Act or Payment of Wages Act to adjudicate wage disputes. Such disputes must be resolved by the competent authority under labour laws, such as the Labour Commissioner or Labour Court. The Court noted that the Single Judge’s remand order, despite recognizing the SDM’s lack of jurisdiction, was patently erroneous and perpetuated an illegality.
On merits, the Court found that the respondents’ claim was unsupported by cogent evidence. The SDM had recorded a finding that the applicants failed to establish their entitlement, yet proceeded to allow the application. This approach was held to be unsustainable in law.
The Verdict
The writ appeal was allowed. The Court set aside the remand order dated 12.02.2024 passed by the Single Judge in WPS No. 1558 of 2014, as well as the original order passed by the Sub-Divisional Magistrate and the appellate order passed by the District Magistrate. The Court clarified that this order would not preclude the respondents from pursuing their remedies before the competent forum under labour laws.
What This Means For Similar Cases
Jurisdiction Is Non-Negotiable
The judgment reaffirms that jurisdiction is a threshold issue that cannot be overlooked or conferred by judicial direction. Practitioners must:
- Challenge the jurisdiction of authorities like Sub-Divisional Magistrates in wage disputes at the earliest opportunity.
- Argue for quashing orders passed without jurisdiction, as they are void ab initio and cannot be cured by remand.
- Direct clients to the appropriate forum, such as the Labour Commissioner or Labour Court, for adjudication of wage-related claims.
Evidence Is Critical in Wage Disputes
The Court’s observation that the respondents’ claim was unsupported by cogent evidence underscores the importance of:
- Documentary proof of wage payments, such as salary slips, bank statements, or employment contracts.
- Contractual clarity in agreements between employers and security agencies, particularly regarding wage disbursement.
- Substantiating claims with material evidence before labour authorities to avoid adverse findings.
Remand Orders Must Be Scrutinized
The judgment highlights that remand orders must be carefully scrutinized, particularly when they direct adjudication by an authority lacking jurisdiction. Practitioners should:
- Oppose remand in cases where the original authority lacked jurisdiction, as it perpetuates an illegality.
- Cite this judgment to argue against remand orders that seek to confer jurisdiction on incompetent authorities.
- Seek quashing of such orders to prevent prolonged litigation and ensure disputes are resolved by the correct forum.
