A wages claim filed in 1998 is decided in 2026, and the authority never had jurisdiction to allow it

The Payment of Wages Act assumes an employer and an employee. Where the man guarding the pipeline was engaged by contractors and not by the department, the Assistant Commissioner of Labour had nothing to adjudicate.

The writ petition is numbered 24503 of 2002. It was decided on 18 September 2026 by Justice Laxmi Narayana Alishetty. The order it challenged was passed in October 2002, on a claim first made in 1998, about wages said to be due from 1995.

Who engaged the waterman

The Panchayat Raj Department at Sangareddy maintained a water pipeline. Its case is that the maintenance work was entrusted to contractors under piece-work agreements: the contractors were paid lump sums for executing the work and were responsible for engaging their own personnel.

One contractor was entrusted with the watch and ward of the pipeline from August 1996 to January 1998, and another from January 1998 to April 1999. It was those contractors, the department says, who engaged the second respondent to do the work.

The second respondent’s case was different. He approached the Authority under the Payment of Wages Act, 1936 claiming he had worked as an NMR waterman under the department itself and had been paid at rates lower than the applicable Standard Schedule of Rates, and claimed Rs 40,153 for the period from June 1995 to October 1998.

The department disputed it on two grounds: that he was engaged by the contractors and not by the department, and that the Government had banned the engagement of NMRs with effect from November 1993, so no liability could attach to it.

Claims that kept growing

After 1999 the water supply to the villages concerned was discontinued for want of power. Even so, the second respondent sought wages for the periods that followed.

The department’s grievance about how those claims were handled is set out in the judgment. Later claims were taken up along with the original claim of Rs 1,31,755, rather than being dealt with separately in a way that would have let the department respond to each. The Authority also considered claims relating to the period before October 1998 together with the subsequent ones.

It then allowed the claim and awarded compensation at three times the amount claimed for the period up to July 2002. That award is what the department brought to the High Court.

Three times the amount claimed is not an arbitrary figure: the Act permits the Authority, where it finds wages withheld, to award compensation in addition to the wages themselves, up to a statutory multiple. It is a deliberately punitive provision, which is why the threshold question of whether the respondent was an employee at all mattered so much.

The foundational requirement

The Payment of Wages Act is a summary mechanism. Section 15(2) lets an employed person apply to the prescribed Authority for a direction where wages have been withheld or unlawfully deducted. It does not create a forum for deciding who someone’s employer is; it assumes that relationship and enforces its consequences.

That is where the claim failed. Applying the principles governing the determination of an employer-employee relationship, drawn from the Supreme Court’s decision in General Manager, U.P. Co-operative Bank Ltd, the Court held that the foundational requirement of establishing such a relationship between the department and the second respondent had not been satisfied. The department could not be fastened with liability for the wages of a person its contractors had engaged.

Without that relationship, the Authority had no claim it was competent to entertain. It was, the judgment holds, not justified in entertaining and allowing the claim under Section 15(2), and its order could not be sustained.

Why the writ was entertained at all

A preliminary objection in a case like this is usually that the department should have taken the statutory appeal rather than come to the High Court under Article 226.

The Court answered it with Whirlpool Corporation, in which the Supreme Court, reviewing a line of authority, held that the High Court’s jurisdiction to entertain a writ petition under Article 226 is not affected by the existence of an alternative statutory remedy — particularly where the authority against whom the writ is sought has acted without jurisdiction.

That is precisely the complaint here. The objection was not that the Authority decided the wages question badly, but that it had no jurisdiction to decide it at all in the absence of an employer-employee relationship.

The order

By the time it was decided, the claimant had been pursuing the money for twenty-eight years and the department had been resisting it for twenty-four. Neither the delay nor its cause is discussed in the judgment.

The writ petition was allowed and the order of October 2002 in the Payment of Wages case set aside. Pending miscellaneous petitions were closed, and there was no order as to costs.

The judgment is directed to be marked to the law reporters. Its practical value lies in the jurisdictional point rather than the outcome: where an establishment raises a genuine dispute that the claimant was a contractor’s worker, the Authority under the Payment of Wages Act cannot resolve that dispute as a step towards granting relief, because the relationship is the foundation of its jurisdiction and not one of the questions before it.