Lt.Col. E.V.Krishnan vs State Of Kerala
2022 Latest Caselaw 12375 Ker

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                           PRESENT
        THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
  FRIDAY, THE 23RD DAY OF DECEMBER 2022 / 2ND POUSHA, 1944
                   WP(C) NO. 22622 OF 2012
PETITIONERS:

    1     LT.COL. E.V.KRISHNAN
          CHAIRMAN AND MANAGING DIRECTOR,
          POORNAM INFO VISION(PVT) LTD.,
          V.C. VALLEY APARTMENTS,
          P.B. NO. 5400, CSEZ.P.O.
          COCHIN-682037.
    2     GEORGE.M.J.
          ACCOUNTS AND ADMINISTRATIVE MANAGER,
          POORNAM INFO VISION,(PVT) LTD.,
          V.C. VALLEY APRTMENTS,
          P.B. NO. 5400, CSEZ.P.O.
          COCHIN-682037.
          BY ADVS.
          SRI.N.SUKUMARAN (SR.)
          SRI.N.K.KARNIS
          SRI.S.SHYAM


RESPONDENTS:

    1     STATE OF KERALA
          REPRESENTED BY ITS SECRETARY TO
          LABOUR DEPARTMENT SECRETARIAT,
          THIRUVANANTHAPURAM-695001.
    2     DISTRICT LABOUR OFFICER (ENFORCEMENT)
          ERNAKULAM, KAKKANADU,
          COCHIN-682030.
    3     ASSISTANT LABOUR OFFICER
          ERNAKULAM 1ST CIRCLE, KAKKANAD,
          COCHIN-682030.
    4     THE TAHSILDAR (RR)
          KANAYANNOOR TALUK OFIFCE,
 W.P.(C) No.22622/12                -:2:-


              ERNAKULAM, COCHIN-682011.


              SRI.ASHOK M.CHERIYAN,ADDL.ADVOCATE GENERAL
              SRI.K.A.NOUSHAD, GOVT. PLEADER



       THIS     WRIT   PETITION   (CIVIL)   HAVING   COME   UP   FOR
ADMISSION ON 24.11.2022, THE COURT ON 23.12.2022 DELIVERED
THE FOLLOWING:
 W.P.(C) No.22622/12                     -:3:-




                                                                       "C.R."

                      BECHU KURIAN THOMAS, J.
                     -----------------------------------------
                       W.P.(C) No.22622 of 2012
                     ----------------------------------------
                Dated this the 23rd day of December, 2022

                                  JUDGMENT

Can the Inspector appointed under the Kerala Industrial

Establishments (National and Festival Holidays) Act, 1958 adjudicate

and decide the quantum of wages payable as compensation as per the

provisions of the Act? The above question inter-alia arises for

consideration in this writ petition.

2. Petitioners are the persons in control of M/s. Poornam Info

Vision Pvt. Ltd. They are aggrieved by the order issued under the

Kerala Industrial Establishments (National and Festival Holidays) Act,

1958 (for short 'the Act'), imposing an amount of Rs.48,72,678/-

towards double the rate of wages allegedly payable to the employees

for working on three national and eight festival holidays. Petitioners

also challenge the show-cause notices issued and the revenue

recovery proceedings initiated against them personally.

3. First petitioner is the Chairman and Managing Director of a

100% export oriented unit, providing services allegedly of an

intellectual nature to its counterpart in the United States of America.

Second petitioner is its Administrative Manager. According to the

petitioners, the unit is situated in the Cochin Special Economic Zone

and is duly licensed under the Commissioner of Customs.

4. The issue that has arisen for consideration stems from an

inspection by the Assistant Labour Officer on 02.11.2010 consequent

to which, several irregularities under various labour legislations were

noticed, including those under the Act and by Ext.P4 notice,

petitioners were directed to rectify the said violations. It is pertinent to

mention that one of the anomalies noticed was non-payment of double

the rate of wages to the employees for working on national and

festival holidays and to give compensatory off to the employees.

5. In the reply submitted, petitioners pleaded that there were

no violations as noticed in the inspection note and that though the Act

as such is not applicable to them, leave under various heads was

granted to the employees. Thereafter, a show-cause notice was issued

by the third respondent on 21.03.2011, directing the petitioners to

pay additional wages to the employees for working on national and

festival holidays and also to produce the register and records and to

show cause why prosecution proceedings and other legal steps should

not be launched against the petitioners.

6. On 04.04.2011, petitioners submitted an explanation stating

that the various statutes specified in the show-cause notice were not

applicable to their establishment and requested to drop the proposal

to prosecute them.

7. Pursuant to the aforesaid explanation, the impugned order

Ext.P9, styled as a show-cause notice dated 25.04.2011 was issued,

stating that the employees who had worked on national and festival

holidays were not provided with double wages and compensatory off

and hence there is a violation of section 5(2) of the Act. Petitioners

were also directed to pay double the rate of wages to the employees

amounting to Rs.48,72,678/-, whose details and the calculations were

annexed with the same. Consequent to the above order/show-cause

notice, revenue recovery proceedings have been initiated as Ext.P12

and Ext.P12(a), proposing to recover the same from the properties of

the petitioners personally.

8. A counter affidavit was filed by the third respondent,

primarily contending that Ext.P9 is only a show-cause notice and that

no final orders have been issued. It was also stated that no objection

to the rate of calculation or the quantum of the amount mentioned in

the statement have been made and that since the petitioners did not

dispute the amount claimed, the third respondent initiated revenue

recovery steps.

9. The first respondent, on the other hand, filed a counter

affidavit stating that Ext.P9 is a final order and that the Inspector has

the power to do all that is required for the purpose of the Act and

since the payment as directed was not forthcoming, the revenue

recovery proceedings were resorted to.

10. Sri. N.Sukumaran learned Senior Counsel assisted by

Sri.S.Shyam, learned counsel for the petitioners contended that the

entire proceedings leading to Ext.P9 and the consequential revenue

recovery proceedings are ex-facie without authority, vitiated by malice

in law and therefore void under law. Learned Senior Counsel also

submitted that the third respondent did not have any authority to

enter into a process of adjudication or to arrive at the quantum

allegedly payable by the petitioners towards wages under the Act for

allegedly working during holidays. Learned counsel also contended

that the Inspector under the Act is not vested with any authority to

adjudicate on the quantum payable and if at all any quantum is

payable as contemplated under the Act, only the employees could

have initiated proceedings in accordance with law. He further

emphasized that till date, no application had been filed by any

employee claiming wages for allegedly working on national and

festival holidays, which itself indicates that the adjudication and the

determination of quantum by the Inspector, as seen in Ext.P9, is an

illegal and arbitrary exercise. It was further pointed out that the

revenue recovery proceedings initiated against the petitioners

personally, is also ex-facie illegal since the liability, if any, at the most,

is only that of the company and not that of the petitioners personally.

11. Sri.K.A.Noushad, learned Government Pleader referred to

the various statutory provisions of the Act and submitted that being a

beneficial legislation, a liberal interpretation ought to be adopted. It

was submitted that the object of the statute was to ensure the grant

of national and festival holidays to persons employed in industrial

establishments in the State and to pay wages at twice the rate in case

the employee works on such holidays. Viewed in the above

perspective, it was contended that the Inspector being vested under

section 7 to exercise all such powers as an officer for carrying out the

purpose of the Act, he was entitled to issue an order in the nature of

Ext.P9, quantifying the amounts due from the petitioners'

establishment.

12. Sri.Ashok M.Cheriyan, learned Additional Advocate General

assisted by Sri.K.A.Noushad and Adv. Sabeena P.Ismail contended that

the revenue recovery proceedings have been initiated as per the

provisions of section 5(4) of the Act and that petitioners are not

entitled to raise a challenge in this proceeding against Ext.P9. It was

submitted that if at all petitioners want to question the proceedings

their remedy is to follow the procedure contemplated under section 70

of the Kerala Revenue Recovery Act, 1968 (for short 'the RR Act') and

make the entire payment under protest and thereafter contest the

demand. In support of the said contention, learned Additional

Advocate General relied upon the unreported decision in Jaya

Chandran v. The Managing Director, Kerala State Coir

Corporation Ltd. and Others (W.P.(C) No.11184 of 2010). It was

also argued on behalf of the respondent that by virtue of the principle

of the doctrine of implied power, it could be presumed that the Act has

conferred upon the Inspector power to do all such acts as are

necessary for carrying out the purposes of the Act, including the

power of issuing an order quantifying the amount due to an employee.

Reliance was placed upon the decision in Bidi, Bidi Leaves and

Tobacco Merchants' Association, Gondia and Others v. State of

Bombay AIR 1962 SC 486, in support of the contention on the

doctrine of implied power.

13. I have considered the rival contentions.

14. Since the learned Senior Counsel for the petitioner confined

his submissions to the question of jurisdiction or authority of the third

respondent to issue Ext.P9 and the validity of the revenue recovery

proceedings, the question of applicability of the Act to the petitioners'

establishment is not being considered, and the said question is left

open.

15. To appreciate the contentions advanced, it is pertinent to

glance at the scheme and a few provisions of the statute under

consideration. The object of the Act, as is seen from the preamble is

as follows:

"An Act to provide for the grant of National and Festival holidays to

persons employed in industrial establishments in the State of Kerala. "

16. Section 3 of the Act states that every employee shall be

allowed in each calendar year a holiday of one whole day on the 26th

January, 15th August, the 1st May and 2nd October and nine other

holidays each of one whole day for such festivals as the Inspector

may, in consultation with the employer and the employees, specify in

respect of any Industrial Establishment. Section 4A of the Act,

stipulates that notwithstanding anything contained in section 3, an

employer may, by notice in writing, require any employee to work on

any holiday allowed under that section. However, section 5 of the Act

states that an employee shall be entitled to be paid wages for each of

the holidays allowed under section 3, whether or not the employer

required him to work on that holiday. Section 5(2) states that if an

employee works on any holiday allowed under section 3, he shall be

entitled to twice the wages and to avail himself of a substituted

holiday on any other day. Section 5(4) stipulates that any amount due

to an employee under this Act shall be recoverable as arrears of land

revenue under the Revenue Recovery Act.

17. Section 7 deals with the powers of Inspectors, and since the

same is relevant for the case, the same is extracted as below:

S.7. Powers of Inspectors .-Subject to any rules made by the Government in this behalf, an Inspector may, within the local limits for which he is appointed,-

(a) enter, at all reasonable times and with such assistants, if any who are persons in the service of the Government or of any local authority as he thinks fit, to take with him, any place which is or which he has reason to believe is, an industrial establishment;

(b) make such, examination of the premises and of any prescribed registers, records and notices and take on the spot or otherwise, the evidence of such person as he may deem necessary for carrying out the purposes of this Act.

(c) exercise such other powers as may be necessary for carrying out the purposes of this Act:

Provided that no one shall be required under this section to answer any question or give any evidence tending to incriminate himself.

18. The contention raised on behalf of the Government is that

the Inspector is entitled to adjudicate/quantify the wages liable to be

paid to the employee and the source of power can be traced to section

7(c) of the Act.

19. As mentioned earlier, Section 5(2) of the Act creates a right

upon the employee to receive twice the wages if he works on a holiday

and also to receive a substituted holiday. The amount due to an

employee can be recovered as arrears of land revenue under the

Revenue Recovery Act. However, quantifying the amount due to an

employee or adjudicating on the right of a person to be entitled to a

particular sum and the corresponding obligation of another person to

pay a certain quantified sum, are matters that are required to be

decided after considering competing claims. Nowhere in the Act has

the Legislature conferred such a power of adjudication or a power of

quantifying the amount due to an employee on the Inspector. Specific

powers have been stipulated, as can be exercised by the inspector.

When specific powers of inspection and verification have been

conferred on the inspector, without any power of adjudication, the

intention of the legislature is explicit. As the term Inspector itself

suggests, he is entitled to inspect, identify and even file complaints.

His power stops with that, and it cannot be extended to confer the

power of adjudication.

20. Adjudication can be carried out by an authority vested with

powers of adjudication. Without specific conferment, the court cannot

read into a statute the power of adjudication as conferred upon an

Inspector. It is trite law that the authority created by a statute has to

act within the four corners of the statute and therefore, such power of

adjudication cannot be read into section 7(c) of the Act. Reference can

be made to the decisions in B.M.Malani v. Commissioner of

Income Tax and Another [(2008) 10 SCC 617] and M.P. Wakf

Board v. Subhan Shah by LR's and Others [(2006) 10 SCC 696].

21. The contention, relying upon the principle of the doctrine of

implied powers, though impressive at first blush, on closer scrutiny, I

find myself unable to accept the said principle as applying to the

circumstances of the present case. There are limitations to the

doctrine. The doctrine of implied powers applies when the legislature

has conferred a right upon an authority to do a particular thing; then

and only then, can all powers essential or indispensable to carry out

the said function be implied to be available to such an authority. In

other words, when there is a specific conferment of an express power

of a substantive nature upon an authority, ancillary powers can be

read into such an express grant. Moreover, only a fair and reasonable

power alone can be read into the statute by resorting to the doctrine

of implied power. Further, such a power can be implied only when the

statute becomes incapable of compliance or a dead letter. Liberal

reliance upon the said doctrine to confer power, even of an

adjudicatory nature, upon an inspector can lead to drastic

consequences.

22. In fact in the decision in Bidi, Bidi Leaves and Tobacco

Merchants Association, Gondia v. State of Bombay (AIR 1962 SC

486), relied upon by the respondent themselves, it is observed in

paragraph 20 as follows " This doctrine can be invoked in cases "Where an

Act confers a jurisdiction it also confers by implication the power of doing all

such acts or employing such means, as are essentially necessary to its

execution (Maxwell on Interpretation of Statutes, 10th ed., p. 361)". In

other words, the doctrine of implied powers can be legitimately invoked

when it is found that a duty has been imposed or a power conferred on an

authority by a statute and it is further found that the duty cannot be

discharged Or the power cannot be exercised at all unless some auxiliary or

incidental power is assumed to exist. In such a case,, in the absence of an

implied power the statute itself would become impossible of compliance. The

impossibility in question must be of a general nature so that the

performance of duty or the exercise of power is rendered impossible in all

cases. It really means that the statutory provision would become a dead

letter and cannot be enforced unless a subsidiary power is implied."

23. In view of the above, I am of the considered opinion that

the Inspector appointed under the Act is not conferred with the power

of adjudication.

24. In this context it is relevant to mention that an employee

who claims that he is entitled to double the wages for having worked

on a holiday has the option to move the Labour Court under section

33C(2) of the Industrial Disputes Act, 1947 or the civil court in

accordance with law. It is not a situation where he is left without any

remedy and once an adjudication is done, recourse to the Revenue

Recovery Act is also permissible as per section 5(4) of the Act. The

contention that merely because the power of revenue recovery is

conferred under the statute, the same indicates conferment of power

of adjudication on the Inspector is stretching the language and intent

of the Act beyond permissible limits.

25. Apart from the above, section 70 of the Revenue Recovery

Act deals with the process for recovery of amounts due. The Act by

itself does not create any new right and the person who is initiating

the revenue recovery can only recover the amounts that are legally

due. Reference in this context can be made to the decision in State of

Kerala and Others v. V.R.Kalliyanikutty and Another [(1999) 3

SCC 657]. When amounts have not been legally quantified or when

there is no corresponding adjudication, a remedy of recourse to the

Revenue Recovery Act is not permissible. The following observations

are pertinent: "The Kerala Revenue Recovery Act does not create any new

right. It merely provides a process for speedy recovery of moneys due.

Therefore, instead of filing a suit, (or an application or petition under any

special Act), obtaining a decree and executing it, the bank or the financial

institution can now recover the claim under the Kerala Revenue Recovery

Act. Since this Act does not create any new right, the person claiming

recovery cannot claim recovery of amounts which are not legally recoverable

nor can a defence of limitation available to a debtor in a suit or other legal

proceeding be taken away under the provisions of the Kerala Revenue

Recovery Act."

26. The decision in Jaya Chandran v. The Managing

Director, Kerala State Coir Corporation Ltd. and Others (W.P.(C)

No.11184 of 2010) is distinguishable on the facts itself. In the said

case, there was no dispute on the amount since a cheque was already

issued, which on presentation was dishonoured and instead of

initiating proceedings under section 13A of the Negotiable Instruments

Act, 1887, the Inspector notified under section 71 of the Revenue

Recovery Act proceeded to recover the amounts so due, from the

defaulter. The principles referred to in the facts of the said case

cannot be made applicable to the present case where the amount due

has not been quantified by any person authorised under law.

27. Apart from the above, Ext.P12 and Ext.P12(a) revenue

recovery proceedings have been initiated against the personal

property of the petitioners. First petitioner is the Managing Director

while the second petitioner is the Administrative Manager. They cannot

be proceeded against personally for the alleged liability of the

company. On this reason also, Ext.P12 and Ext.P12(a) are liable to be

quashed.

28. In view of my finding on the lack of jurisdiction for the third

respondent to issue Ext.P9, I quash Ext.P9 notice/order and all

proceedings pursuant thereto. Consequently, the revenue recovery

proceedings initiated as Ext.P12 and Ext.P12(a) shall also stand

quashed.

The writ petition is allowed to the above extent.

Sd/-

BECHU KURIAN THOMAS JUDGE vps

APPENDIX

EXT.P1 TRUE COPY OF THE CERTIFICATE ISSUED TO POOMAM INFO VISION PVT. LTD. DTD 14.2.2002

EXT.P2 TRUE COPY OF THE LICENCE ISSUED BY THE COMMISSIONER OF CUSTOMS, COCHIN DTD 14.3.2017 TO POOMAM INFOR VISION PVT. LTD.

EXT.P3 TRUE COPY OF THE CERTIFICATE ISSUED UNDER ISO 9001 TO POOMAM INFO VISION PVT. LTD.

EXT.P4 TRUE COPY OF THE NOTICE OF INSPECTION PREPARED BY THE 3RD RESPONDENT DATED 2.11.2010

EXT.P5 TRUE COPY OF THE INTERIM REPLY SUBMITTED BY THE 2ND PETITIONER TO EXT.P4 DTD 8.11.2010

EXT.P6 TRUE COPY OF THE DETAILED REPLY SUBMITTED BY THE 2ND PETITIONER TO EXT.P4 DTD 15.11.2010

EXT.P7 TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE 3RD RESPONDENT TO THE 1ST PETITIONER DTD 21.3.2011

EXT.P8 TRUE COPY OF THE REPLY ISSUED BY THE 2ND PETITIONER TO EXT.P7 DTD 4.4.2011

EXT.P9 TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE 3RD RESPONDENT TO THE PETITIONERS DTD 25.4.2011

EXT.P10 TRUE COPY OF THE REPLY SUBMITTED BY THE 2ND PETITIONER TO EXT.P9 DATED 3.5.2011

EXT.P11 TRUE COPY OF THE SUMMONS ISSUED IN S.T.CASE NO.2551 OF 2011 TO THE 1ST PETITIONER

EXT.P11(A)TRUE COPY OF THE SUMMONS ISSUED IN S.T.CASE NO.2551 OF 2011 TO THE 2ND PETITIONER

EXT.P11(B)TRUE COPY OF THE SUMMONS ISSUED IN S.T.CASE NO.2551 OF 2011 TO POOMAM INFO VISION (PVT.) LTD.

EXT.P12 TRUE COPY OF THE NOTICE ISSUED BY THE 4TH RESPONDENT TO THE 1ST PETITIONER DTD 12.9.2012 (SERVED ON THE 1ST PETITIONER ON 24.9.2012)

EXT.P12(A)TRUE COPY OF THE NOTICE ISSUED BY THE 4TH RESPONDENT TO THE 2ND PETITIONER DTD 12.9.2012 (SERVED ON THE 2ND PETITIONER ON 24.9.2012)

EXT.P13 TRUE COPY OF THE OBJECTION TO EXT.P12 SUBMITTED BY THE 2ND PETITIONER DTD 26.9.2012