1. Rule. Heard finally with consent of counsel for the parties.
2. The petitioner is aggrieved by the order dated 3rdDecember, 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.
3. 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. 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 and 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.
4. 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 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 and General Mazdoor [2001-I-LLJ 1413], the judgment of learned Single Judge in Kiran Industrial Premises Co-op. Society Ltd., Vs. Janata Kamgar Union and others [2001 I CLR 1046], as affirmed by the Division Bench in Shantaram Pandurang Jadhav and 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. and others, decided at the Principal Seat on 11thFebruary, 2008 and the Judgment in Writ Petition No. 2457 of 2006 [Maharashtra State Electricity Board Karmachari Sah. Pat Sanstha and another Vs. Smt. Nanda Arvind Mutkure]; decided on 20th August, 2015.
5. 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 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.
6. I have heard the learned counsel for the parties at length and I have given due consideration to their respective submissions.
7. 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 948 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 meanings assigned to them in the Maharashtra Shops and 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.
8. 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 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 and 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 and 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 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.
9. 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 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 Coop. 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 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:-
[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 Cooperative 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 interest accrued thereon.
[c] Rule is made absolute in aforesaid terms, leaving the parties to bear their own costs.