Embargo U/S 70 Of Karnataka Cooperative Societies Act Not Attracted If Minimum Wages Not Paid To Workers: Karnataka High Court

Further, it has said that Section 70 of the Karnataka Co-operative Societies Act, 1959 does not impose any embargo on an authority under the Minimum Wages Act to consider the claim.

A single judge Justice Suraj Govindaraj made the observation while dismissing a petition filed by the society seeking to declare the order passed dated 27-10-2021 passed by the authority, by which it directed the society for payment of minimum wages to the workmen.

The primary contention of the society challenging the order was that the authority under the Minimum Wages Act has no jurisdiction and/or authority to decide any dispute and/or claim made by the workmen as regards the Co-operative Society in view of the amendment which has been brought about to Section 70 of the Karnataka Co-operative Societies Act, 1959 in the year 2000.

Subsequent to the said amendment, any dispute as regards any claim of an workmen/ employee as regards wages or otherwise would have to be referred to the Registrar for decision and no Civil or Labour or Revenue Court or Industrial Tribunal shall have the jurisdiction to entertain any suit or other proceedings in respect of such dispute.

The workmen opposed the plea contending that Minimum Wages Act, 1948 is a Special Enactment, which has been enacted with the purpose and intent of securing the wages of a workmen and being a Special Enactment, the same would have to be given preference over the Karnataka Co-operative Societies Act, 1959 and/or the amendment made thereto and as such. The workmen cannot be deprived of the mechanism prescribed under the said enactment.

The bench noted that Section 70 of the Act deals with a dispute which are to be referred to the Registrar for a decision which includes in terms of Section 70(1)(c) of the Act, dispute between the Society, any officer, agent or employee. Any such dispute shall be referred to the Registrar for decision and no Civil, Labour or Revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute.

Then referring to the Statement of Objects and Reasons of the Minimum Wages Act the bench observed “There is no justification for payment of wages less than the minimum wages and further that an organisation which pays less than minimum wages have no right to exist.”

Thus it opined “The dispute which has been referred to in Section 70 of the Act cannot cover the non-payment of wages under the Minimum Wages Act, inasmuch as there is no dispute which requires determination.”

It added “It is only the implementation of the Minimum Wages Act, which is required to be done. In the event of the employer making payment of minimum wages, no order needs to be passed. However, in the event of the employer not making payment of minimum wages, there would be a direction required to be issued to the employer to make payment of the minimum wages.”

Remarking that the context of dispute which has been used in Section 70 of the Act is different from a claim for minimum wages which is the case in the present matter. The bench said “In the present case, the claim is for minimum wages in a scheduled employment, the minimum wages being notified by the Appropriate Government. If the said payment is not made, then a claim for recovery of the amount could be made under the Payment of Wages Act, 1936.”

Accordingly it dismissed the petition and upheld the order of the authority and said “The workmen are entitled to work out their remedy before the appropriate forum.”

Case Title: Indian Coffee Workers Cooperative Society Limited And The Senior Labour Inspector & Others

Case no: WRIT PETITION NO. 22751 OF 2021

Citation: 2023 LiveLaw (Kar) 67

Date of Order: 07-02-2023

Appearance: Somashekar, Advocate for petitioner.

AGA Bhoje Gouda T Koller For R1 to R3.

Senior Advocate K. Subba Rao for Advocate L. Muralidhar Peshwa for R4 TO R13.