On 5th October, a bench of the Delhi High Court consisting of Justice Pratibha M. Singh, held that as per Section 1(2) of the Delhi Shops and Establishments Act, 1954, the Act extends to the whole of the Union Territory of Delhi. On the basis of this it stated that when the registered office of the a Company is situated in Delhi then it falls within the definition of a “commercial establishment” in terms of Section 2(5) of the Act and hence claims related to wages under Section 21 of the Act can, therefore, be entertained by the Authority which is located in Delhi, under the Delhi Shops and Establishments Act, 1954.

Facts of the case:

The present petition has been filed challenging the impugned order dated 27th January, 2021 passed by the Deputy Labour Commissioner under The Delhi Shops and Establishments Act, 1954. By the impugned order, the Authority under the Act has held that, in view of the fact that the Claimant/Respondent No.3 herein was drawing his salary from the registered office of the Petitioner Company situated in Delhi, so also considering the Consultancy Agreement dated 18thMay, 2018, the jurisdiction in the matter would continue with the Authority under the DSE Act, 1954.

The short question that has been arisen in this matter is whether the Authority under the Delhi Shops and Establishments Act, 1954 can exercise the jurisdiction to decide the claim of the Employee.

 

Contention of the petitioner:

Mr. Ujjawal Jha, ld. Counsel appearing for the Petitioner Company has made the following submissions:

  1. It was urged that a reading of paragraph 3 of Employee’s claim petition itself, that after the Consultancy Agreement dated 18thMay, the Employee was given a permanent job at the post of architect, vide Appointment Letter dated 19th July, 2015. Thus, the said consultancy Agreement was no longer applicable.
  2. It was submitted that a cogent reading of provisions under Section 1, Section2(5) & Section 2(9) of the DSE Act, 1954 makes it clear that that every place where the company would have an office would be a separate establishment. Since the office where the Employee was working was situated in Noida, the DSE Act, 1954 would not have any applicability, inasmuch as the said Act does not extend beyond the Union Territory of Delhi.
  3. It was contended that even if the Consultancy Agreement is taken into consideration, the application of the DSE Act, 1954 cannot be extended to the establishment located in Uttar Pradesh.
  4. It was also contended that he concedes to the fact that the salary slips issued to the
  5. Employee mention the registered office of the Petitioner Company situated in Delhi, but clarifies that it is merely for the purpose of reporting to tax authorities, and has nothing to do with the Employee or the establishment under the DSE Act, 1954.

 

Contention of the respondent:

  1. Mr. Abdullah Tanveer, ld. Counsel appearing for Respondent No.3/Employee submitted that the registration of the Noida office of the Petitioner Company under the Uttar Pradesh Shops and Establishments Act, 1962 is irrelevant as the same was granted to the Petitioner only on 1st December, 2016, whereas the Employee had joined the Petitioner Company as a Consultant on 18th May, 2015 and thereafter, as a permanent employee at the post of architect on 19th
  2. Reliance is placed upon Sections 2(5), 2(7), 2(8), 2(9) and 2(17) of the DSE Act, 1954 to emphasise that the definitions of commercial establishment, employee, employer, establishment and occupier are broad enough to confer jurisdiction upon the July, 2015 itself, that is, prior to the said registration. Thus, the said registration would be of no avail in this matter.
  3. Mr. Gautam Narayan, ld. ASC for GNCTD has submitted that, at the outset, the Authority under the DSE Act, 1954 situated in Delhi, would have jurisdiction in the present case. He further submitted that the Authority at the place of registration of establishment cannot be the only Authority which can exercise jurisdiction.
  4. Ms. Roy, ld. Counsel appearing for the Employee submits that the intention of the parties was always was to submit any disputes arising between the parties from or in relation to the Consultancy Agreement to the courts of competent jurisdiction in New Delhi, inasmuch as the same is contained in Clause 9 of the Consultancy Agreement.

Observation and judgement of the court:

The following observation has been made by the following observation:

  1. It is also the admitted position on record that the Petitioner Company has its registered office in Delhi. TDS certificates which were issued to the Employee were issued with the Delhi address of the company. The salary slips of the Employee also bear the Delhi address of the registered office.
  2. The judgment in Bhandari Builders (supra) is clear to the effect that the Delhi Shops and Establishments Act, 1954 is a social welfare legislation which was meant to provide a quick remedy to those employees who may be wishing to seek outstanding wages from their employers.
  3. However, under the facts and circumstances of the present case, the registered office of the Company is in Delhi. There is not a single document on record to show that the Employee was working exclusively at the corporate office of the Petitioner Company in Noida, Uttar Pradesh.

Thus, it was held that as per Section 1(2) of the Delhi Shops and Establishments Act, 1954, the Act extends to the whole of the Union Territory of Delhi. Since the registered office of the Petitioner Company situated in Delhi falls within the definition of a “commercial establishment” in terms of Section 2(5) of the Act, claims related to wages under Section 21 of the Act can, therefore, be entertained in the facts of this case by the Authority which is located in Delhi, under the Delhi Shops and Establishments Act, 1954.

The court further directed the Delhi Shops and Establishments Act, 1954 to proceed further to adjudicate upon the claims of the Employee, and decide the same on merits.

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