A transferred statutory authority loses jurisdiction and cannot pronounce reserved orders absent express authorization.

Respondent No. 2 filed a claim under Section 21(2) of the Delhi Shops and Establishments Act, 1954, alleging non-payment of earned wages for the period from 3 January 2013 to 13 July 2013. He claimed ₹7,01,030 as outstanding wages, along with consequential reliefs

The Deputy Labour Commissioner, South-West District, who was exercising jurisdiction as the Authority under Section 21(1), heard the parties and reserved the matter for orders on 10 April 2015.

He was thereafter transferred on 30 July 2015 from the South-West District to the Delhi Labour Welfare Board and subsequently, on 1 October 2015, to the Delhi Building and Other Construction Workers Welfare Board. Another Deputy Labour Commissioner assumed charge of the South-West District.

Despite the transfer, the former Deputy Labour Commissioner pronounced the impugned order on 8 February 2016, directing the petitioner to pay ₹7,01,030 as unpaid wages, ₹3,00,000 as compensation and ₹10,000 as litigation expenses.

The petitioner challenged the order solely on the ground that the transferred officer lacked jurisdiction to pronounce it.

1. Whether a Deputy Labour Commissioner who was transferred from the district over which he exercised jurisdiction under Section 21(1) of the Act could pronounce an order in a matter reserved by him before the transfer

2. Whether the notification dated 10 August 1998 conferred continuing, territory-wide jurisdiction on the transferred Deputy Labour Commissioner, absent a specific order of denotification or withdrawal

3. Whether the fact that the matter had been fully heard and reserved for orders, or the doctrines of functus officio and de facto authority, could validate the order pronounced after the officer’s transfer

Section 21(1) of the Delhi Shops and Establishments Act, 1954 authorises the Government to appoint an officer to hear and decide claims concerning delayed or unpaid earned wages; the authority must possess valid statutory jurisdiction when the decision is rendered.

The notification dated 10 August 1998 distinguishes between the Labour Commissioner, who has jurisdiction throughout the National Capital Territory of Delhi, and Deputy Labour Commissioners, whose authority is linked to the respective districts under their charge.

The Court applied the principles of cessante ratione legis cessat ipsa lex and functus officio, holding that once the officer’s statutory authority ceases and a successor assumes charge, the outgoing officer cannot continue adjudicating the matter without an express statutory or administrative authorisation.

Relying on Nainesh Sanghvi v. State of Maharashtra, the Court held that the successor may decide the matter on the existing record, with further hearing if necessary, but the final decision must be rendered by an officer possessing jurisdiction on the date of decision.

The decisions in Karan v. State (NCT of Delhi), B.D. Sharma v. State of NCT of Delhi, Narinder Khullar v. Param Dev Chopra and Parvesh Mann v. State (NCT of Delhi) were distinguished because they involved express transfer-order directions permitting transferred judicial officers to pronounce reserved judgments.

The de facto doctrine was held inapplicable because the challenge concerned absence of jurisdiction on the date of the order, and not a subsequent defect in the officer’s appointment or title.

The Court found that the Deputy Labour Commissioner’s authority under Section 21 was territorially connected to his office and charge over the South-West District, rather than being a personal or continuing power retained merely because he remained within the Labour Department.

Upon his transfer and replacement, jurisdiction over the district vested in the successor officer. The absence of any provision, notification or transfer-order direction permitting the transferred officer to pronounce reserved orders was decisive.

The fact that arguments had concluded and the matter had been reserved did not preserve jurisdiction, since the final adjudicatory act had to be performed by an authority validly empowered on the date of decision.

The Court therefore rejected the respondents’ reliance on judicial-transfer precedents, as those cases rested on express administrative directions preserving the predecessor judge’s power to pronounce reserved judgments.

It also rejected the de facto doctrine because the officer had ceased to possess the relevant statutory jurisdiction when the order was made.

The impugned order was accordingly set aside, and the matter was remanded to the competent Authority under Section 21 of the Act for fresh adjudication in accordance with law.

The competent Authority was directed to endeavour to dispose of the matter expeditiously, preferably within three months from receipt of the judgment.