Bombay High Court
Tantrik Shikshan Karmachari ... vs The Assistant Commissioner Of ... on 16 September, 2016
Bench: A.S. Chandurkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
Writ Petition No.3239 of 2015
Tantrik Shikshan Karmachari
Sahakari Pat Sanstha Maryadit,
Regd. No. N.G.P./B.N.K./129/1966,
Office : Industrial Training Institute,
Shraddhanand Peth,
Nagpur, through its Secretary
Purushottam Marotrao Milmile. ..... Petitioner.
Versus
1. The Assistant Commissioner
of Labour-cum-Authority
under the Minimum Wages Act,
1948,
O/o The Labour Commissioner,
Civil Lines, Nagpur.
2. The Inspector,
Authority under the Minimum
Wages Act, 1948, Shops &
Establishments O/o the Labour
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Commissioner,
Civil Lines, Nagpur.
3. Vijay son of Ajabrao Falke,
aged about Major,
occupation - service,
resident of Industrial Training
Institute, Shraddhanand Peth,
Nagpur.
4. Prabhakar Rahate,
aged about Major,
occupation - service,
resident of Industrial Training
Institute, Shraddhanand
Peth, Nagpur. ..... Respondents.
*****
Mr. V. P. Marpakwar, Adv., for the petitioners.
Ms. Tajwar Khan, Asstt. Govt. Pleader for respondent nos.1 and
2.
Mr. S.W. Sambre, Adv., for respondent no.3.
*****
CORAM : A.S. CHANDURKAR, J.
Date when arguments
were concluded : 12th August, 2016
Date when judgment
is pronounced : 16th September, 2016
J U D G M E N T:
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01. Rule. Heard finally with consent of counsel for the parties.
02. The petitioner is aggrieved by the order dated 3rd
December, 2014 passed by the Asstt. Commissioner of Labour in
exercise of powers under the Minimum Wages Act, 1948 [for short "the
Act of 1948"]. By the said order, the petitioner has been directed to
pay minimum wages to the respondent nos. 3 and 4.
03. The facts giving rise to the present Writ Petition are that the
petitioner-Society is duly registered under the provisions of the
Maharashtra Co-operative Societies Act, 1960. This Society, as per its
bye-laws, is functioning on 'No profit; No loss' basis. Its object is to
advance loans to its members who comprise of employees working
with the Industrial Training Institutes. The respondent nos. 3 and 4
claim to be in employment with the Society and, according to them,
they were not being paid wages as per the Act of 1948. The said
respondents, therefore, on 8th January, 2013 moved the Asstt.
Commissioner of Labour under the provisions of Section 20 (1) of the
Act of 1948 with a prayer that they be paid wages in accordance with
the Act of 1948.
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In response to the notice issued by the said authority, the
petitioner took the stand that it was not a commercial establishment
as defined by provisions of Section 2 (4) of the Maharashtra Shops &
Establishments Act, 1948 [for short "the said Act"]. According to the
petitioner, the provisions of the Act of 1948, therefore, were not
applicable to it and the said authority had no jurisdiction to entertain
the claim for payment of minimum wages. By the impugned order, the
respondent no.1 allowed the application moved by the respondent nos.
3 and 4 and directed payment of minimum wages along with
compensation. Being aggrieved, the present Writ Petition has been
filed.
04. Shri V.P. Marpakwar, the learned counsel for the petitioner,
submitted that the petitioner-Society was not a commercial
establishment on the basis of which it could be directed to pay
minimum wages under the Act of 1948 to the respondent nos. 3 and 4.
He submitted that the Society was catering to the needs of its
members who were employees of the Industrial Training Institutes.
The Society was working on a 'No profit; No loss' basis. It was merely
advancing loans to its members. The activities carried out by the
Society could not be treated to be the activities of an industry and,
therefore, no such direction could have been issued by the respondent
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no.1. The learned counsel referred to the provisions of Section 2 (4) of
the said Act as well as the provisions of Section 2 (g) so also the
Schedule - Part-I, Item 17 of the Act of 1948, to support the stand as
taken. According to him, though this plea was specifically raised in the
reply filed before the respondent no.1, the same was not given its due
consideration. Without prejudice, it was submitted that the direction
to pay compensation was also unjustified in the facts of the present
case. He, therefore, submitted that the impugned order was liable to
be set aside, as the respondent nos. 3 and 4 had the remedy of
approaching the Co-operative Court for redressal of their grievances.
He sought to support his submissions by relying upon the judgment of
the Hon'ble Supreme Court in Management of SOM Vihar
Apartment Owners Housing Maintenance Society Ltd. Vs.
Workmen C/o. Indian Engineering & General Mazdoor [2001-I-LLJ
1413], the judgment of learned Single Judge in Kiran Industrial
Premises Co-op. Society Ltd., Vs. Janata Kamgar Union &
others [2001 I CLR 1046], as affirmed by the Division Bench in
Shantaram Pandurang Jadhav & others Vs. Kiran Industrial
Premises Co-op. Soc. Ltd. [2007 III CLR 418], the Judgment of
learned Single Judge in the case of Shamim Ahmed Siddique Vs.
Society Ltd. & others, decided at the Principal Seat on 11th
February, 2008 and the Judgment in Writ Petition No. 2457 of 2006
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[Maharashtra State Electricity Board Karmachari Sah. Pat
Sanstha & another Vs. Smt. Nanda Arvind Mutkure]; decided on
20th August, 2015.
05. On the other hand, Shri S.W. Sambre, the learned counsel
for the respondent nos. 3 and 4 vehemently opposed the aforesaid
submissions. According to him, the respondent no.1, after considering
the entire controversy, had rightly come to the conclusion that the
petitioner-Society was a commercial establishment and hence could be
directed to pay minimum wages to the said respondents. According to
him, the documents on record indicate that the petitioner-Society was
earning profits and the claim made on behalf of the petitioner that it
was running on 'No profit; No loss' basis was not correct. He submitted
that since the year 2012, the demand for minimum wages was being
made by the respondent nos. 3 and 4; but this demand was ignored by
the Society. He sought to distinguish the judgments relied upon by the
learned counsel for the petitioner, on the ground that the facts of those
cases were distinct from the facts of the present case. In fact, he
submitted that the jurisdiction of the respondent no.1 was being
sought to be challenged for the first time before this Court in the
present proceedings. He also justified the direction to pay
compensation considering the delay on the part of the petitioner in
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paying the amount of minimum wages. He, therefore, submitted that
the Writ Petition was liable to be dismissed.
Ms. Tajwar Khan, learned Asstt. Govt. Pleader appeared for
respondent nos. 1 and 2.
06. I have heard the learned counsel for the parties at length
and I have given due consideration to their respective submissions.
07. Since the principal challenge raised on behalf of the
petitioner is to the jurisdiction of the Asstt. Commissioner of Labour to
entertain the claim for payment of minimum wages, as made by the
respondent nos. 3 and 4, it would be necessary to consider the
relevant statutory provisions at the inception. Section 2 (g) of the Act
of 1948 defines "Scheduled Employment" to mean an employment
specified in the Schedule to the Act of 1948. Section 27 of the Act of
1948 empowers the State Govt. to include any employment in either
Part of the Schedule. Part-I of the Schedule to the Act of 1948, in so
far as the same is applicable to the State of Maharashtra, indicates, as
per Entry No.17, the employment in any shop or commercial
establishment other than an employment in any bank or an
employment included in any other entries. As per the Explanation
thereto, the expressions "shop" and "establishment" would have the
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meanings assigned to them in the Maharashtra Shops &
Establishments Act, 1948.
As per provisions of Section 2 (4) of the said Act, a
commercial establishment has been defined. In so far as Societies are
concerned, a Society registered under the Societies Registration Act,
1860, has been included therein.
08.
Reference can now be made to the ratio of the decisions
relied upon by the learned counsel for the petitioner, as the same take
into consideration the aspect of a Co-operative Society being an
industry. In Management of SOM Vihar Apartment Owners Housing
Maintenance Society Ltd. [supra], the question that arose for
consideration was whether the workmen engaged with the housing
Society could be treated as workmen under the Industrial Disputes Act,
1947. The Hon'ble Supreme Court held that a Society wherein
personal services are rendered to its members and such society is
constituted only for the purposes of such members, services of persons
engaged by the society would not make the activity an industry or
such persons workmen. On that count, the Award made by the
Industrial Tribunal came to be set aside. In Kiran Industrial Premises
Co-operative Society Ltd. [supra], a Society registered under the
provisions of the Maharashtra Co-operative Societies Act, 1960, had
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employed two clerks and four watchmen. This Society had two
hundred members who were owners of industrial units. The concerned
workmen alleging that they were not getting wages as per the Act of
1948 approached the Industrial Court by filing a Complaint invoking
the provisions of Schedule-IV, Item 9 under the Maharashtra
Recognition of Trade Unions & Prevention of Unfair Labour Practices
Act, 1971. The prayer was to pay minimum wages as per the Act of
1948. After considering Item 17 of Part-I to the Schedule to the Act of
1948, it was observed that such a Co-operative Society in which the
workmen were employed could not be treated to be a commercial
establishment or an industry to attract the provisions of the Act of
1948. It was noted that the receipts of the Society could be in excess
of its expenditure, but that was not the test to hold that such Society
was a commercial establishment. On that count, the Complaint came
to be dismissed.
This Judgment of learned Single Judge was challenged in an
appeal before the Division Bench. The Division Bench in Shantaram
Pandurang Jadhav & others [supra], after referring to the judgment of
the Hon'ble Supreme Court in Management of SOM Vihar Apartment
Owners Housing Maintenance Society Ltd . [supra], affirmed the view of
the learned Single Judge and observed that when employees were
engaged by a Co-operative Society for the purpose of rendering
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personal service to the members of the Society, its activities could not
be termed as an industry. This decision of the Division Bench was
thereafter considered and applied by another learned Single Judge in
Shamim Ahmed Siddique [supra].
From the aforesaid decisions, it can be seen that the Hon'ble
Supreme Court as well as the Division Bench of this Court have held in
clear terms that in case of a Society that is constituted only for the
purposes of rendering services to its members, its activities could not
be treated to be the activities of an industry and the employees
therein cannot be treated as workmen. The facts in Kiran Industrial
Premises Co-op. Society Ltd. [supra] are somewhat identical, as in said
case also, there was a prayer for grant of wages as per the provisions
of the Act of 1948. The legal position, therefore, stands settled that a
Co-operative Society formed for rendering services to its members
could not be said to be conducting an activity having the character of
"industry."
09. If the aforesaid legal position is applied to the facts of the
present case, it can be seen that the petitioner-Society, which is
registered under the provisions of the Maharashtra Co-operative
Societies Act, 1960, comprises of members who are employees of
Industrial Training Institutes. Its object is merely to advance loans to
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its members. Even if it is assumed that its receipts exceed its
expenditure, that by itself would not bring the Society within the
purview of the expression "industry". Moreover, the same cannot be a
commercial establishment as defined by the provisions of Section 2 (4)
of the said Act.
In fact, learned Single Judge in Kiran Industrial Premises Co-
op. Soc. Ltd. [supra] had found it appropriate to direct the State Govt.,
to consider the issue of such employees of Co-operative Societies and
to amend the statutory provisions so as to include them within the
expression "Commercial Establishments." However, the Division Bench
in appeal set aside this direction, on the ground that there was no such
jurisdiction with the Court to issue the same.
10. The petitioner-Society in its reply to the proceedings
initiated by the respondent nos. 3 and 4 had taken a specific stand
that it was not a "commercial establishment" under Section 2 (4) of
the said Act. The respondent no.1 proceeded to exercise jurisdiction
on the ground that the receipts of the petitioner-Society exceeded its
expenditure and, therefore, it was a "commercial establishment" as
per the provisions of the said Act. The respondent no.1 in the
impugned order, however, has failed to take into consideration the
aforesaid legal position. In that view of the matter, it will have to be
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held that the impugned order has been passed by the respondent no.1
in proceedings over which it had no jurisdiction to entertain, thus,
making out a case for interference. The impugned order is, therefore,
clearly unsustainable in law and is liable to be set aside.
11. As a sequel to aforesaid discussion, the following order is
passed:-
ORDER
[a] The order passed by the respondent no.1 dated
03rd December, 2014 in Recovery Case No. 5 of
2013 is quashed and set aside. It would be
open for the respondent nos. 3 and 4 to avail the
remedy available under the Maharashtra Co-
operative Societies Act, 1960, if so advised.
Needless to state that the impugned order has
been set aside on account of lack of jurisdiction
of the respondent no.1 and this Court has not
examined the correctness of the findings recorded
on the facts of the case.
[b] The amount deposited by the petitioner-Society in
this Court shall be repaid back to it along with
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interest accrued thereon.
[c] Rule is made absolute in aforesaid terms, leaving
the parties to bear their own costs.
Judge
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