P.C. AGGARWALA versus PAYMENT OF WAGES INSPECTOR, M.P. AND ORS.

Citation: [2005] SUPP. 3 S.C.R. 514 · Decided: 26-09-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
B 
P.C. AGGARWALA 
v. 
PAYMENT OF WAGES INSPECTOR, M.P. AND ORS. 
SEPTEMBER 26, 2005 
[ARIJIT PASA YAT AND H.K. SEMA, JJ.) 
Payment of Wages Act, 1936-Sections 3 and 15-Madhya Pradesh 
Industrial Relations Act, 1960-Section 3-Factories Act, 1948-Section 
C 2(n)-Factory-Payment of Wages-Liability for-Concept of occupier 
provided in Section 2(n) of Act of 1948, as well as its amendment in year 
1987, is not applicable to Act of 1936, as amended in year 1964 by Section 
3 of State Act-Under Section 3 of the State Act only a person named as 
Manager of Factory and employer jointly, is made liable, and if a Director 
of Company owning the Factory was not so named, he could not be made 
D liable-Even otherwise also, Act of 1936 has statutorily not fcxed any liability 
on the Directors of Company-Companies Act, 1956-Sections 5 and 291. 
Interpretation of statutes-Reference versus incorporation of provision 
of one statute into another-Reference brings in subsequent amendment to 
provision-In case of incorporation, any subsequent amendment/repeal of 
E provision does not affect the incorporated provision. 
Appellant is director of a Company owning certain factories that had 
ceased production. Inspector under Payment of Wages Act, 1936 filed an 
application under Section 15 thereof before concerned Magistrate for 
F directions to Factory Manager and Directors of the Company for payment of 
wages for various periods. Factory manager replied to the notice contending 
inter alia that only he was responsible for payment of wages under the above 
Act, and no notice could be issued to Directors. However, authorities under 
the Act held the Directors personally liable to pay the wages, and this view 
was upheld by the High Court. Hence the present appeal. 
G 
H 
Appellant contended that the provisions of the Act of 1936 and 
amendment in Section 3 in the year 1964 by Madhya Pradesh Industrial 
Relations Act, 1960 were not considered by High Court. It was further 
contended that High Court erroneously proceeded on the basis that concept 
514 
P.C.AGGARWALAv.PAYMENTOFWAGESINSPECTOR,M.P. 
515 
of occupier, as introduced by amendment in year 1987 to Section 2(n) of A 
Factories Act 1948 was incorporated in Section 3 of the Act of 1936. 
Allowing the appeal, the Court 
HELD I. There is no provision in Payment of Wages Act, 1936 like 
Section 2(n) of the Factories Act, 1948. Sections 3 and 15 of the former, as B 
amended by Section 3 of Madhya Pradesh Industrial Relations Act, 1960, with 
effect from year 1964 only can apply to the fact situation of the present case. 
These do not even by implication bring in the concept of occupier. (529-B-C) 
JK. Industries and Ors. v. Chief Inspector of Factories and Boilers and 
· Ors., [1996) 6 SCC 665, held inapplicable. 
C 
2. The amendment to Section 2(n) of Factories Act, 1948 in the year 
1987 does not apply to Madhya Pradesh Industrial Relations Act, 1960. If 
there is mere reference to a provision without incorporation, then unless a 
different intention appears it has to be considered as reference to the provision. D 
If a provision is incorporated in another, any subsequent amendment or even 
its repeal would not affect the provision as incorporated in the latter Statute. 
(530-G; 531-AJ 
Mriyappa v. State of Karanataka, (1988] 3 SCC 276, relied on. 
Minister of Housing and Local Govt. v. Hartnell, 11965) l All ER 490 E 
(HL), referred to. 
3.1. As the High Court has proceeded to hold the Directors liable by 
introducing the expression 'occupier' which expression is used in the 
Factories Act and not in the Payment of Wages Act, 1936, the basic premises 
on which the High Court proceeded are dearly untenable. Therefore, on a F 
plain reading of the language of the governing statute, it cannot be held that 
the Directors had any personal liability. (535-C-D) 
Employees and State Insurance Corporation, Chandigarh v. Gurdial 
Singh and Ors., (1999) Supp. 1 SCC 204, followed. 
Employees State Insurance Corporation v. S.K. Aggarwal and Ors., 
(1998[ 6 SCC 288 and Indian Oil Corporn. ltd v. Chief Inspector of Factories, 
AIR (1988) SC 2456, relied on 
3.2. Under Section 3 of the Payment of Wages Act, 1936, as amended 
G 
by Section 3 of Madhya Pradesh Industrial Relations Act, 1960, the liability H 
516 
SUPREME COURT REPORTS [2005] SUPP. 3 S.C.R. 
A is cast on a person who has been named as Manager of the Factory and the 
employer jointly. Therefore, in order to find out whether the Director
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