1. This is an appeal against the decision of Kantawalla, J., in Miscellaneous Petition No. 399 of 1963. The appeal involves a question as to the interpretation of S. 5 of the Bombay Shops and Establishments Act, 1948. The question arises upon the following facts.
2. G. R. Rao Brothers, the appellants, constitute a firm and carry on a tailoring business at Dadar, Bombay. They are being prosecuted in the Court of the Presidency Magistrate, Twelfth Court, Bandra, Bombay, upon the complaint of respondent 2, the Inspector appointed under the Bombay Shops and Establishments Act, and filed sometime in July 1963 (none of the parties has been able to give this Court the exact date although protracted arguments were addressed). According to the complaint, the appellants had not maintained a register of employment in form J or H prescribed by the rules made under the Bombay Shops and Establishments Act in respect of certain named employees. The offence was detected on 15 June, 1963. The appellants were charged with the contravention of S. 52(f) of the Bombay Shops and Establishments Act, read with rule 20 of the Maharashtra Shops and Establishments Rules, which prescribe that every employer or manager of a shop or commercial establishment shall maintain a register of employment in form H, provided that where the opening and closing hours and period of interval for rest are ordinarily uniform, the employer or manager may maintain such register in form J.
3. Before the complaint could come up for trial, the firm moved this Court by a petition under Art. 226 of the Constitution alleging that the complaint could not be proceeded with against them; that the proceedings instituted against them should be quashed and the respondents should be asked to forbear from taking any steps pursuant to the complaint. To the petition there were four respondents, namely, the State of Maharashtra, the Inspector himself and two labour unions. The two labour unions were not initially parties but were added at later dates. The Maharashtra Tailoring Workers' Union, respondent 3, was joined on 12 November, 1963, and the Bombay Labour Union, respondent 4, was joined on 30 April, 1965, upon their respective applications. At that stage the petition before the learned single Judge had been heard for a considerable time.
4. The attempts of the workers in the tailoring trade to get a better deal for themselves have had a chequered past. Suffice it to say that they all failed on the ground that having regard to the terms and conditions of work in the trade, there was lacking the essential element of control and therefore there was not established the necessary relationship of employer and employee. Government was, therefore, moved to take recourse to the 'deeming provisions' in the Act which create the usual flotation whereby persons and establishments not governed by the Act are deemed to be so governed after Government issues a notification in that behalf. Such a notification was issued by the State Government on 9 January, 1963, under its powers under S. 5(1) of the Act. It is at Ex. C to the petition. Prior to this notification there were other proceedings taken against the appellants which may be briefly mentioned. Firstly, the employers were charged under S. 52 read with rule 18(1). On 23 July, 1957, the partners of the firm were fined but only in respect of one employee. They were acquitted in respect of their other employees it being expressly held that they were not 'employees' within the meaning of the Act [vide Criminal Case No. 181 of 1957 by the Presidency Magistrate, Fifth Court, Bombay, Para. 7, of the judgment]. Next, one of the unions representing the workers, namely, the Bombay Tailoring Association, filed an application to recover 'weekly-off' wages on 8 December, 1958 before the Authority under the Payment of Wages Act. That proceeding also terminated in favour of the appellants and by the judgment it was held that the workers in respect of whom the complaint was filed were not their employees and that the necessary element of control, which was essential to be established before they could be said to be employees of the appellants, was absent. The decision of the Authority under the Payment of Wages Act is at Ex. B. Against another decision of a criminal Court acquitting the appellants' firm the State had come up in appeal to this Court, but the judgment of acquittal was upheld and the appeal was dismissed on similar grounds. This was in Criminal Appeal No. 803 of 1959 dated 22 October, 1959, by a Division Bench of this Court. Against the decision of the Authority under the Payment of Wages Act a Special Civil Application No. 249 of 1963 came to be moved in this Court. That application came up for hearing before a Division Bench of this Court (to which I was a party) on 19 April, 1965, and the Division Bench remanded the matter for further enquiry by the authority upon a question of fact, viz., whether the employees named in the original application were, upon the evidence, 'employees' of the appellants' firm. We are informed that those proceedings terminated against that particular tailoring establishment, but the judgment has not been filed. It is clear that in this trade it was difficult to establish by evidence the actual existence of the relationship of master and servant.
5. It was the appellants' case that the notification, dated 9 January, 1963, came to be issued as a result of these decisions and no sooner was the notification issued, than the present complaint came to be filed, and no sooner was the complaint filed than the petitioners raised preliminary objections which being decided against them they have come to this Court.
6. It was the case of the appellants that the workers in respect of whom the complaint has been filed were not their employees within the meaning of that term under the Act. They alleged that most of the tailoring establishments maintain one or two persons who are called cutters and who do the essential part of the work in the making of a garment, but, in addition to these cutters, these establishments entrust the work or job of stitching the garments to several other persons known as stitchers. These stitchers are really not tailors and cannot be described as tailors, inasmuch as they merely stitch the clothes according to the markings indicated by the cutters. The stitchers carry out the work given to them either at their places of residence or for their convenience they come to the establishment or to the portion of the premises provided for them by the tailoring establishments and carry out the stitching work there. The stitchers who work on the premises of the tailoring establishments do not do their work pursuant to any terms of employment but merely with the permission of the owners of the establishments and for the sake of their own convenience. The sewing machines, implements and accessories are supplied by the tailoring establishments, for which the stitchers pay rent to the establishments. There is no obligation on the stitchers to attend the establishments each day; nor is there any obligation on the part of the alleged workers to carry out any particular work. The appellants further alleged' They are free to come and go when they like and as they like and to do as much or as little work as they like.' Moreover, these stitchers can in the course of any month or week take work from one or more establishments at the same time. In order to show the want of control over these alleged employees the appellants also alleged that the stitchers may sometimes leave their job unfinished or half-done if they so choose. Even for alterations that may be necessitated by bad workmanship, the stitchers can refuse to effect the necessary alterations if they are not paid extra for making the alterations. They alleged that as a result of these terms upon which the alleged employees were working, they could not be said to be employees within the meaning of S. 2(6) of the Act; therefore they could not be deemed to be employees within the meaning of S. 5(2) of the Act.
7. The terms upon which it is alleged the so-called employees worked, were denied by the Inspector, respondent 2, in his affidavit-in-reply dated 15 April, 1964. He denied that in respect of the tailoring establishments the stitchers carry out the work or perform the job either at their places of residence or for their convenience they come to the establishments or to the portions of the premises provided for them by the tailoring establishments. He alleged that in most of the tailoring establishments the stitchers work regularly in the tailoring establishments under the control and supervision of the owners of such establishments and are employees within the meaning of S. 2(6) of the Bombay Shops and Establishments Act. He denied that the stitchers were independent contractors or that there was no contract of service between the stitchers and the owners of the tailoring establishments. He generally added at the end of Para. 9 of his affidavit-in-reply that he denied each and every allegation and contention made in Para. 3 of the petition which was contrary to or inconsistent with what was stated in his affidavit. To the same effect are the affidavit-in-reply on behalf of the two labour unions, respondents 3 and 4.
8. Upon these pleading it was contended before the learned single Judge that, in the first place, the workers were not employees at all, but were independent contractors and that the basic requirement of the Act was that these persons must be employees without which the provisions of the Act would not be attracted - not even S. 5 with its deeming provisions. That contention has been negatived and the learned single Judge has held that assuming that the alleged employees were only independent contractors, there is no reason why S. 5 and the notification under it should not apply to them. The same arguments have been advanced before us in appeal so far as the notification dated 9 January, 1963, is concerned.
The notification, dated 9 January, 1963, is issued under S. 5(1) of the Act and runs as follows :
'In exercise of the powers conferred by Sub-section (1) of S. 5 of the Bombay Shops and Establishments Act, 1948 (Bom. 79 of 1948), the Government of Maharashtra hereby declares a person working as tailor on piece-rates wages in the premises of an establishment to be a person to whom the provisions of the said Act applicable in relation to persons employed in shops [except the provisions of S. 14 and Sub-section (1) of S. 63 thereof] shall apply with effect from 1 February, 1963.'
9. It was urged by Sri Sorabji that it was basic to the applicability of the Act that any person or persons to whom the Act is made applicable should fall within the definition of 'employee' and that is so whether we consider the deeming provisions in S. 5 or any other provisions of the Act. Therefore, it is not open to Government to declare by a notification under S. 5 any person, whatever the nature of his function and regardless of the terms of his alleged employments, to be a person to whom the Act applies.
10. Next Sri Sorabji has urged that even assuming that this notification could be validly issued under the provisions of the Act the notification itself postulates certain conditions pre-requisite to its operation and the essential condition, amongst others, is that the person working as a tailor should be working 'on piece-rate wages.' It was argued that the word used is 'wages' and that necessarily involves the relationship of an employer and an employee and a contract of employment under which the wages are to be paid. The notification has thus misfired. It was to be one under S. 5(1) and it was intended to take the aid of the 'deeming provisions' thereof, but by the use of the word 'wages' it lays down a condition where the full impact of the deeming provisions is curtailed. Therefore it was urged that the notification does not carry the matter much farther than if the provisions of the Act had directly applied.
11. Thirdly, it has been urged that the Act, and particularly the provisions of Ss. 5(1) and 5(2) read with the notification, create a discrimination against the tailoring establishments and should be declared void under Art. 14 of the Constitution. Lastly, it was urged that in any event the decision of the Authority under the Payment of Wages Act in Proceeding No. 227 of 1960 dated 18 June, 1960 would constitute res judicata in the present proceedings and that therefore it was not open to the respondents to urge, in view of the findings given by the Authority under the Payment of Wages Act, that these workers were still the employees of the appellants. We shall presently advert to the detailed reasoning by which each one of these contentions is sought to be supported.
12. Before we deal with the points argued we must say a word regarding the pleadings in this case which were strongly attacked by Sri Sorabji. We have reproduced the allegations the appellants made in Para. 3 of their petition as to the nature and the details of the work of the employees in the appellants' firm. Counsel urged that these allegations have not been specifically denied and must be deemed to have been admitted. The Inspector under the Act, respondent 2, has replied to them in Para. 9 of his affidavit. What he has denied is that the stitchers cannot really or truly speaking be described as tailors. He has denied that there is no relationship of master and servant between the owner of the establishments and the stitchers. He has denied that they are really independent contractors or that there is no contract of service with them. He has denied that in most of the tailoring establishments the stitchers carry out the work or perform the job given to them either at their places of residence or for their convenience they come to the establishments or to the portions of the premises provided for them by the tailoring establishments and carry out the stitching work therein. Then he had added :
'I say that in most of the tailoring establishments the stitchers regularly work in the establishments under the control and supervision of the owners of such establishments and are employees within the meaning of Clause (6) of S. 2 of the Bombay Shops and Establishments Act, 1948.'
13. It is quite clear from this pleading that it was the case of respondent 2 that these stitchers do regular work in the establishments and are under the control and supervision of the owners of such establishments. We shall show presently that it is precisely this control and supervision which is the hall-mark of an employee. Over and above this statement, respondent 2 has also alleged that these persons 'are employee within the meaning of Clause (6) of S. 2 of the Bombay Shops and Establishments Act, 1948.' These are denials which are sufficient in our opinion to counter the allegations made in Para. 3 of the petition. But once respondent 2 alleged that his case was that these persons were employees within the meaning of S. 2(6) of the Act, it seems to us that he had made his position absolutely clear to the appellants. No such objection was taken before the learned single Judge. It was possible for the appellants to have taken that objection and if they had taken it in time, respondent 2 could have clarified any want of detail. The appellants themselves could have also clarified the pleadings if they had any doubt by asking interrogatories or by asking for particulars. No such steps were taken and we think that it is somewhat late at the stage of appeal to complain that the allegations were not controverted in detail.
14. The learned single Judge considered this point and has held that though most of these allegations were not specifically dealt with, it was denied that in most of the establishments stitchers carry out the work to be performed by them either at their residence or for the convenience of the stitchers they go to the premises of the owners of the establishments or to portions of the premises provided by the tailoring establishments and carry out the stitching work there. The learned single Judge also pointed out that it was affirmatively stated in the affidavits that in most of the tailoring establishments the stitchers regularly worked in the establishments under the control and supervision of the respective owners of the establishments and that, therefore, they were the employees within the meaning of the Act. We are in agreement with this finding of the learned single Judge. We do not think that upon the pleadings it can be said either that there is no denial or that there is a vague denial leading to the conclusion that the respondents must be deemed to have admitted the facts alleged in Para. 3 of the petition.
15. On a question of strict pleadings we may here point out that upon the crucial issue as to whether the stitchers were the employees of the appellants' firm or not, there is no specific allegation in the petition whatever that any stated persons were not such employees. The allegation is about the general class of cutters and stitchers. The allegations in Para. 3 of the petition are made only regarding the general class of stitchers, but it is not alleged that the five workers in respect of whom the complaint was lodged were not their employees. If we were to apply the strict standard of pleadings upon which so much emphasis was placed, we should think that the vagueness is, in the first place, inherent in the allegations in the petition itself and reject such a pleading. The respondents, therefore, can hardly be blamed for the vagueness, if any, in their replication.
16. In this connexion counsel referred to the decision in Badat & Co. v. East India Trading Company : 4SCR19 , where the Supreme Court adopted the Statement of law in Tildesley v. Harper (1878) L. R. Ch. D. 403 of Fry, J., as follows :
'... In my opinion it is of the highest importance that this rule of pleading should be adhered to strictly, and that the Court should require the defendant, when putting in his statement of defence, and the plaintiff, when replying to the allegation of the defendant, to state the point of substance, and not to give formal denials of the allegations contained in the previous pleadings without stating the circumstances ...'
17. The Supreme Court then went on to observe that although the rule in England is inflexible and there is no proviso to it as is found in the Code of Civil Procedure, still in Bombay on the original side of the High Court, they expect the same precision in pleadings except in exceptional circumstances. We are bound by this principle, but the defect in the instant case, if any, flows, not so much from any lacuna in the affidavits-in-reply of the respondents, as from the general nature of the allegations made in the petition itself. There is no reference to the particular case of the five employees who were the persons in respect of whom the complaint was filed. It seems too late to throw out the petition on that ground in this appeal.
Then we turn to the arguments based upon the provisions of the Act, and particularly the provisions of S. 5 of the Act under which the notification dated 9 January, 1963, was issued. Section 5 runs as follows :
'5. (1) Notwithstanding anything contained in this Act, the State Government may, by notification in the official gazette, declare any establishments or class of establishments to which, or any person or class of persons to whom, this Act or any of the provisions thereof does not for the time being apply, to be an establishment or class of establishments or a person or class of persons to which or to whom this Act or any provisions thereof with such modifications or adaptations as may in the opinion of the State Government be necessary, shall apply from such date as may be specified in the notification.
(2) On such declaration under Sub-section (1), any such establishment or class of establishments or such person or class of persons shall be deemed to be an establishments or class of establishments to which, or to be an employee or class of employees to whom, this Act applies and all or any of the provisions of this Act with such adaptation or modification as may be specified in such declaration, shall apply to such establishment or class of establishments or to such employee or class of employees.'
18. The two sub-sections of S. 5 are obviously inter-related. Sub section (1) deals with the power of the State Government to declare by notification any establishment or class of establishments or any person or class of persons to be an establishment or class of establishments or a person or class of persons to which or to whom the Act or any of its provisions shall apply. Consequent upon such a declaration, the consequences indicated in Sub-section (2) automatically follow, even though the Act did not apply to them before. On such declaration any such establishment or class of establishments or such person or class of persons 'shall be deemed to be an establishment or class of establishment to which, or to be an employee or class of employees to whom, this Act applies ...' It is at once clear that Sub-section (2) creates a fiction by the use of the words 'shall be deemed to be.' It is now settled law that by the use of these words it is clearly implied that the establishment or class of establishments or the employee or class of employees deemed to be an establishment or class of establishments or a person or class of persons under the Act is in reality and in essence not an establishment or class of establishments or a person or a class of persons falling within the Act. Sri Sorabji is right when he urged that unless and until a valid notification under Sub-section (1) of S. 5 of the Act is first issued, the penal provisions of the section cannot arise and therefore he was at considerable pains to urge that the notification, which was issued under Sub-section (1) of S. 5, in the instant case was not a notification in compliance with the provisions of Sub-section (1) of S. 5 at all and the ground upon which he advanced that contention was that having regard to the purpose and object of the Act and also to its several provisions, the concept of employer and employee or of employment is basic and fundamental. Unless, therefore, it is first shown that there is the relationship of an employer and employee or of employment, any notification issued under Sub-section (1) of S. 5 of the Act which would result in those alleged employees being deemed to be employees would be bad and son we turn to consider the other provisions of the Act to which our attention was invited.
The preamble of the Act refers to the purpose for which it was brought into force. It is in the following terms :
'Whereas it is expedient to consolidate and amend the law relating to the regulation of conditions of work and employment in shops, commercial establishments, residential hotels, restaurants, eating-houses, theatres, other place of public amusement or entertainment and other establishments and for certain other purposes hereinafter specified; ...'
19. What Sri Sorabji emphasized was the object : 'regulation of conditions of work and employment.' He, therefore, contends that it is fundamental to a proper construction of the provisions of the Act that there must be, in the first instance, employment or work. He has also pointed to the same concept running as a connecting thread in all the other provisions of the Act. In the definition, Cls. 2(6) and 2(7), the words 'employee' and 'employer' are defined :
'Employee' means 'a person wholly or principally employed, whether directly or through any agency, and whether for wages or other consideration, in or in connexion with an establishment ...'
20. Certain other categories are included in this clause but with them we are not directly concerned. 'Employer' is defined in S. 2(7) and means 'a person owning or having ultimate control over the affairs of an establishment.' In both the definitions undoubtedly the concept of employment is implicit. In both the definitions also the concept of employment is used in the context of 'an establishment.' 'Establishment' is defined in S. 2(8) to mean
'a shop, commercial establishment, residential hotel, restaurant, eating-house, theatre or other place of public amusement or entertainment to which this Act applies and includes such other establishment as the State Government may, by notification in the official gazette, declare to be an establishment for the purposes of the Act.'
21. It will be noticed that 'commercial establishment' is included in the definition and several other establishments. Each one of these categories is defined in S. 2 and is separately dealt with in the operative provisions of the Act. 'Establishment' is defined in S. 2(2); 'commercial establishment' in S. 2(4); 'residential hotel' in S. 2(24), 'restaurant' or 'eating-house' in S. 2(25) and 'theatre' in S. 2(29).
22. It is undoubtedly true to say that having regard to each one of these definitions, each category of establishment is such that some kind of work or employment must take place there. To that extent we are in agreement with the contention of counsel that the concept of an employment, or the employee and employer relationship is implicit in these definitions. Similarly, S. 4, which deals with the exemption of establishments or employees from the provisions of the Act and gives the State Government a power to add, omit or alter any of the entries in Sch. II in which the exemptions are stated.
23. If one turns now to the provisions of the Act, its main provisions are also designed to cover each one of the classes or categories contemplated in definition of 'establishment' to which we have just referred. Chapter III, Ss. 10 to 18, deals with shops and commercial establishments. Chapter IV, Ss. 19 to 25, deals with residential hotels, restaurants and eating-houses. Chapter V, Ss. 26 to 31, deals with theatres or other places of public amusement or entertainment. Between these three chapters are exhausted the main categories in the definition of 'establishment' and detailed provisions are made with regard to each one of those categories. Then follow certain general provisions as to the employment of children, young persons and women Chap. VI, Ss. 32 to 34A. Chapter VII, Ss. 35 to 38A, deals with leave with pay and payment of wages. Certain provisions as to health and safety are dealt with in Chap. VIII, Ss. 39 to 42A. Chapter IX makes provision for the enforcement of the provisions of the Act. Chapter X, Ss. 52 to 61, deals with offences and penalties. Chapter XI, Ss. 62 to 72, deals with miscellaneous and supplemental provisions. It is no doubt true that having regard to the provisions of Chaps. III, IV and V, the particular establishments dealt with in the provisions of those chapters have relation to the concept of employment or, as it is stated in the preamble 'work and employment.' The question, however, which arises for our determination is a question which depends, not upon the provisions of those chapters, but upon the terms of S. 5 under which the notification impugned in the present case was issued.
24. We have already reproduced the provisions of S. 5 and it is to be noticed that the anxiety of the legislature was to give unobstructed operation to its provisions by the opening clause 'Notwithstanding anything contained in this Act ...' This non obstante clause implies that the provisions of S. 5 shall be given effect to irrespective of the other provisions of the Act.
25. The next and the important consideration is the wording of Sub-section (1) of S. 5. We are in the present case not concerned with an establishment or class of establishments, but with person or class of persons and so shorn of inapplicable verbiage, Sub-section (1) of S. 5 would read as follows :
'Notwithstanding anything contained in this Act, the State Government may, by notification in the official gazette, declare any ... person or class of persons to whom, this Act or any of the provisions thereof does not for the time being apply, to be ... a person or class of persons ... whom this Act or any provisions thereof with such modifications or adaptation as may, in the opinion of State Government, be necessary shall apply from such date as may be specified in the notification.'
26. It is significant that the legislative drafts-man deliberately used the words 'any person or class of persons' in marked contrast with employee or class of employees used in the rest of the Act. In order to see why he used those words, it is necessary to turn to the definition of 'employee' in S. 2(6). There 'employee' means 'a person wholly or principally employed ...' Therefore, on the definition of 'employee' two principal ideas arise : There must be 'a person' and he or she must be 'employed.' It is not without much significance that we find that the draftsman used in S. 5(1) only the word 'person' and did not refer to the concept of employment at all. It is patent that he thereby intended that so far as the notification under S. 5(1) is concerned, it did not require the concept of employment for its operation. We point this out as a precaution which the legislative draftsman took in addition to prefacing the entire provision with a non obstante clause.
27. But, then, counsel has urged that we must have regard to the other portions of Sub-section (1) of S. 5 which in analysing the section as above we have deliberately omitted. It is argued that 'person' or 'class of persons' is in a certain juxta-position and the context influences the interpretation. The words are :
'declare any establishment or class of establishments to which, or ny person or class of persons to whom, this Act or any of the provisions thereof does not for the time being apply, to be an establishment or class of establishments or a person or class of persons to which or whom this Act or any provisions thereof ... shall apply.'
28. The argument is that implicit in the definition of 'establishment' is the concept of employment or of the employer-employee relationship and since in the same breath the legislature has used the expression 'any person or class of persons' also the concept of employment or of the employer-employee relationship is not excluded. We do not think that we can accept this inter-pretation. Whatever may be the position regarding the expression 'establishment or class of establishments,' it is clear that the expression 'any person or class of persons' is in sharp contrast to the definition of 'employee' in S. 2(6) and the concept of employment implicit in that definition was deliberately dropped in making the provision of Sub-section (1) of S. 5. We may also say that so far as the expression 'establishment or class of establishments' is concerned, in view of the nature of that definition, we can appreciate the difficulty of the draftsman in referring compendiously to all the several categories of establishments dealt with in the definition. Therefore he may have used the same expression as is used in S. 2(8), relying upon this circumstance, that the entire provisions of S. 5(1) are prefaced by the non obstante clause. Thus whatever may be the difficulty created by the terms of the definition in S. 2(8), that difficulty will not come in the way of the operation of Sub-section (1) of S. 5.
29. Next, counsel invited our attention to the distinction between the provisions of S. 2(8) and the provisions of S. 2(6). He suggested that there was a crucial difference in so far as the definition of 'establishment' in S. 2(8) includes 'such other establishment as the State Government may, by notification in the official gazette, declare to be an establishments for the purposes of this Act' but there is no such inclusion in S. 2(6). Now, it has been rightly pointed out that in the definition of 'employee' there is no such inclusive clause and therefore it may be that the legislature intended that the definition of 'employee' (with the concept of employment implicit in it) would alone apply wherever it is so used, but that so far as the word 'establishment' is concerned, the State Government was given the power to declare an establishment for the purposes of this Act and thereby include within the term 'establishment' something which did not strictly fall within the meaning of that definition. Upon the view which we take, we need not however go into this distinction for, in our opinion, both Ss. 2(6) and 2(8) would be excluded in a consideration of the provisions of S. 5(1) because of the opening words of the Sub-section (1) 'Notwithstanding anything contained in this Act.'
30. Another argument which remains to be dealt with is the contention based upon the words both in Sub-section (1) and (2) of S. 5 'to which or ... to whom this Act or any of the provisions thereof does not for the time being apply.' Relying on the words 'for the time being' occurring in this clause, it has been urged that Sub-section (1) of S. 5 gives the State Government a power to declare a person or class of persons to whom the Act shall apply only if to that person or class of person any of the provisions of the Act do not 'for the time being' apply. Counsel asked why were the words 'for the time being apply' used The reason according to him is that the legislature was contemplating a class of persons to whom the Act would normally not be applicable but may be applied. Therefore it is said that the Act is only for the time being applicable. These words therefore contemplate a class such as is not contemplated in the definition of 'employee' given in S. 2(6) but to whom the Act will not apply. He referred in this connexion to the provisions of S. 1, Sub-secs. (4) and (5); S. 2, Sub-section (8) and S. 4 and suggested that the words 'for the time being apply' occurring in S. 5(1) refer back to those sections. None of these sections are concerned with the concept of employment. The words 'does not for the time being apply' were used in S. 5(1) to cover cases arising only under these sections and they give a clue to the interpretation of the section.
31. If we turn to the provisions of S. 1(5), we find that the State Government is given power by a notification to direct that all or any of the provisions of the Act shall come into force in such local areas having a population of less than twenty-five thousands as may be specified in the notification. The idea behind the provisions of Sub-section (4) of S. 1 was that normally the Act was first of all to come into force in the local area specified in Sch. I and the State Government was given power to apply the Act to specified areas and there a classification was established of local areas having a population of twenty-five thousand and more and local areas having a population of less than twenty-five thousand. In both the cases the State Government was given power to direct by notification that all or any of the provisions of the Act shall come into force. Now, the expression 'all or any of the provisions of this Act' would clearly justify the State Government in applying the Act to the establishments contemplated in the definition of 'establishment' and referred to in Chaps. III, IV and V not merely establishment-wise, but employee-wise, that is to say, the State Government has undoubtedly got the power to apply the provisions of the Act only to some employee in an establishment and not to others. Therefore, even having regard to these provisions the power to apply the Act in one and the same establishment to some employees and not to others is clearly there. If that power is there, then the words in Ss. 5(1) and 5(2) 'any person or class of persons to whom this Act or any of the provisions thereof does not for the time being apply' acquire a different meaning. Included in the words 'does not for the time being apply' would also be some employees in one and the same establishment to whom the Act is not applied by the notification of the State Government. Those words, therefore, would not necessarily indicate that the concept of employment is totally excluded.
32. We have already indicated that, in our opinion, the non obstante clause with which Sub-section (1) of S. 5 opens is plenary. Sri Sorabji has however urged that even such non obstante clause cannot get rid of all the basic requirements of the law, i.e., the fundamental requirements that there must be employment or of the employer-employee relations and in this respect he has relied upon the decision of the Supreme Court in Devadasan v. Union of India : (1965)IILLJ560SC ; Express Newspaper v. Somayajulu : (1963)IILLJ385SC and Hariprasad Shivshankar Shukla v. A. D. Divelkar 1957 I L.L.J. 243.
33. The case in Devadasan v. Union of India : (1965)IILLJ560SC was the case of a notification regarding communal representation in the Central Services and reservation of vacancies for scheduled castes and scheduled tribes. There was a provision made which has been referred to in the judgment as the 'carry forward' rule by which if for two successive years no candidate from amongst the scheduled castes and tribes was found to be qualified for filling any of the reserved posts, then subject to certain conditions the vacancies and the reservation were carried forward in subsequent years. We need not go into the details of those provisions. But the challenge to those provisions in that case was under Art. 16(4) of the Constitution. Article 16(4) begins with the words 'Nothing in this article shall prevent the State from making any provision for the reservation of appointments ...' It was the construction of this opening clause of Art. 16(4) with which the Supreme Court was, inter alia concerned in that case. That clause was invoked in defence of that notification. The Supreme Court held that it was no doubt true that effect must be given to the express words of Art. 16(4), but
'... that does not mean that the provision made by the State should have the effect of virtually obliterating the rest of the article, particularly Cls. (1) and (2) thereof. The overriding effect of Clause (4) on Cls. (1) and (2) could only extend to the making of a reasonable number of reservation of appointments and posts in certain circumstances. That is all.' 1965 II L.L.J. 570
34. The Supreme Court was in that case dealing with a provision which was more or less in derogation of the fundamental rights mentioned in Arts. 16(1) and 16(2) of the Constitution, and all that they had to determine were the limitations upon those fundamental rights imposed by Art. 16(4). In the present case the petition is different. We are construing an enactment which is, in items, for the regulation of work. It is undoubtedly a piece of legislation for social amelioration. The constructions of the two provisions would therefore be founded upon different considerations. But even assuming that the statute here is in pari materia, the provisions of Sub-section (1) of S. 5 do not indicate that the operation of the non obstante clause should in any manner be limited. After all, what was the object sought to be achieved by the provisions of Sub-section (1) of S. 5 It is clear that the legislature, with a view to improving the conditions of work and employment in shops and establishments, made detailed provisions with regard to specific establishments which it defined in great detail in the several clauses of S. 2. Having made those provisions, the legislature was faced with the possibility that some analogous establishments (we do not use that word herein terms of the definition in the Act) may still remain to whom the benefit of the provisions of the Act would be denied. Therefore the legislature resorted to the fiction created by Sub-section (2) of S. 5 but with only this salutary safeguard that the power was to be exercised by the State Government after the issue of a notification in the official and after Government was satisfied that the Act or any of its provisions did not for the time being apply to such an establishment. It is for this reason therefore that this power of the Sate Government was deliberately and expressly made unobstructed by the use of the non obstante clause. We do not think that having regard to the object and purpose of this enactment, we can whittle down the full amplitude of that clause. Indeed, it seems to us that giving it the fullest effect would best serve the carrying out of the purpose of this social legislation.
35. The other authority relied upon in Express Newspapers v. Somayajulu : (1963)IILLJ385SC (vide supra) is the well-known decision under the Working Journalist Industrial Disputes Act, which settled the ambit of the definition of 'working journalist' given in S. 2(b) of that Act. There the Supreme Court was not concerned with any non obstante clause, such as is to be found in Sub-section (1) of S. 5 of the Bombay Shops and Establishments Act. In that case all that fell to be determined was the artificial extension of the meaning of the words 'working journalist' by the final clause of the definition which included certain categories in the definition. It was an inclusive definition which fell to be construed and not any non obstante clause such as we find in S. 5(1). Therefore, we do not think that the principle of that decision can be attracted in the present case. This is clear from the reasoning in Col. 2 at p. 283 of the A.I.R. report.
36. The case of Hariprasad Shivshankar Shukla v. A. D. Divelkar 1957 I L.L.J. 243 also was not concerned with the interpretation of any non obstante clause. In that case the Supreme Court was concerned with a claim for retrenchment compensation by workers of an industry which had been declared closed and the Supreme Court held that the word 'retrenchment' had acquired no special meaning so as to include a discharge of the workmen on a bona fide closure of an industry. Sri Sorabji relied on this case to urge that where there is a basic concept found underlying the entire provisions of an Act, that basic concept must be given effect to as in the Supreme Court case. He urged that the basis of the decision in Hariprasad Shukla case 1965 I L.L.J. 363 (vide supra) was that there must be an industry and therefore an industry, which is closed down, is not an industry at all and in that context the concept of retrenchment cannot into play. While the principle is clear, it seems to us that it can hardly apply in the present case. We have shown that we are not concerned with the basic concept underlying the enactment, namely, the Bombay Shops and Establishments Act, at all. It may be that there is a basic concept of employment in the Act, but by its express provisions by the incorporation of a fiction created by the 'deeming provision,' something is statutorily included in the concept of an employee which obviously is not there in the definition. In such a case we do not think that we can allow, in the face of the express provisions, the principle laid down in the Supreme Court case to take effect, even assuming that it applies.
37. Lastly, it was urged by Sri Sorabji that if this is the construction, which is put upon the provisions of S. 5, then the entire scheme of the Act, and particularly its main provisions, became incapable of application. He pointed to several section, namely, Ss. 8, 15 and 17 read with S. 2(20), 18 read with S. 2(19), the following sections in Chap. VII - 35, 36 and 52 and Ss. 62 and 65 read with rule 20 and form J. Undoubtedly, if by application of the deeming provisions, certain categories of workers (we use that expression not as defined in any Act, but in its widest sense for want of generic word) do not fall or cannot take advantage of several of the provisions of the Act, it does not follow that we should construe the clear provisions of S. 5 as not to include such persons. There is in the Act itself an indication that the legislature was alive to such a contingency arising and made provisions for such a contingency both in Sub-section (1) as well as in Sub-section (2) of S. 5 by the use of the words 'with such modifications or adaptations as may in the opinion of the State Government be necessary' in Sub-section (1). Therefore, if by the creation of this fictional class of employees several of the provisions of the Act cannot in their terms apply, the State Government has been given the power by the notification which they are empowered to issue to indicate which of those provisions may apply with such modifications or adaptations as in the opinion of the State Government may be necessary. Upon the issue of a notification under Sub-section (1), again the consequences indicated in Sub-section (2) would arise and here, again, the law has provided that
'On such declaration ... such person or class of persons shall be deemed to be ... an employee or class of employees to whom this Act applies'
and all or any of its provisions 'with such adaptations or modification as may be specified in such declaration shall apply ... to such employee or class of employees.' By the conferment of this power of modification and adaptation the very difficulty which Sri Sorabji has pointed out is met. We do not think, therefore, that the scheme of the Act would become unworkable if the construction which we have placed upon S. 5 is adopted.
38. The impugned notification, therefore, in our opinion, does not contravene any basic or fundamental principle adumbrated in the Act, nor is it contrary to the main spirit or purpose of the Act. So far as the provisions of the Act are concerned, the notification is a valid notification.
39. Then we turn to the second and more plausible contention raised upon the terms of the notification itself. We have already reproduced that notification. The crucial words are
'hereby declares a person working as a tailor on piece-rate wages in the premises of an establishment to be a person to whom the provisions of the Act ... shall apply.'
The emphasis in this part of the argument is upon the word 'working' and upon the word 'wage.' It is urged that the declaration is composed of five ideas, viz.,
(1) a person,
(3) as a tailor,
(4) on piece-rate wages, and
(5) in the premises of an establishment.
40. The concept of work establishes the employer-employee relationship relationship and the terms or contract of employment. Secondly, it is urged that the use of the word 'wages' is decisive. The word 'wages' is defined in S. 2(30) as meaning 'wages as defined in the Payment of Wages Act, 1936.' Undoubtedly, if the notification is issued under an Act and relying upon its provisions, any word in the notification should normally have the same connotation as a definition of that word in the Act. Therefore, Sri Sorabji urged that we must turn to the provisions of the Payment of Wages Act to see what is implicit in the use of the word 'wages.' The term 'wages' is defined in S. 2(vi) as meaning
'all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work in such employment and includes ...'
41. We are not concerned here with the inclusive definition, but with the parent definition. Undoubtedly, in this definition the concept of employment is included as well as the relationship of employer and employee, for it speaks of 'remuneration', 'if the terms of employment,' 'were fulfilled' and also speaks of 'remuneration payable to a person employed in respect of his employment or of work done in such employment.' So far we are in agreement with the contention of Sri Sorabji that normally it is this definition which would apply. But the application of a definition like this or relying upon the provisions of S. 2(30) of the Bombay Shops and Establishment Act S. 2(vi) of the Payment of Wages Act, would have, in our opinion, a somewhat disastrous effect upon the provisions of S. 5 of the Bombay Shops and Establishments Act itself. We have already construed that provision and we have shown that by the creation of the fiction in Sub-section (2) of S. 5 it was intended to include in the class of employees a category which by the definition thereof in the Act would not be so included. New the notification is issued for that very purpose, namely, to attempt to include in the class of employees a set of persons who would normally be not included in the definition of 'employee' and yet we are being asked to construe that notification in such a manner as to suggest that the deeming provision could never apply to those persons for whose benefit that notification was initially issued. We do not think that we can construe the notification, therefore, in that light, for it will defeat the very purpose for which the notification is issued.
42. Section 20 of the Bombay General Clauses Act requires that where by any Bombay Act a power to issue a notification is conferred, then expressions used in the notification, if it is made after the commencement of the Bombay General Clauses Act (which was passed in 1940) shall,
'unless there is anything repugnant in the subject or context, have the same respective meanings as in the Act conferring the power.'
43. It is clear from his provision that the law requires that we should give the same respective meaning to the word 'wages' used in the notification as is given in the Act conferring the power to issue the notification but is expressly made subject to the overriding condition 'unless there is anything repugnant in the subject or context.' We cannot imagine a greater repugnancy than the one which is sought to be made out upon the word 'wages' in the notification. Were we to give that meaning which S. 2(30) of the Bombay Shops and Establishments Act read with S. 2(vi) of the Payment of Wages Act indicates, we would make the notification nugatory and deprive it of all sensible meaning. It seems to us rather that the draftsman of this notification inadvertently used the word 'wages' without applying his mind to the effect of it in the light of the definition contained in the Payment of Wages Act read with S. 2(30) of the Bombay Shops and Establishments Act. We would, therefore, in this context and relying upon the provisions of S. 20 of the Bombay General Clauses Act, hold that the word 'wages' was not used in the strict sense in which it is used in S. 2(30) of the Bombay Shops and Establishments Act read with S. 2(vi) of the Payment of Wages Act but in a loose sense to imply 'remuneration.' The learned single Judge, also felt that in his normal powers of construction of a notification he could not possibly give the word 'wages' used in the notification that meaning which it carries by the provisions of this Act, but that it should mean 'piece-rate basis.' The word 'basis' would be rather too wide, in our opinion, and we think that in context in which it is used, we would construe that the word 'wages' is used in a generic sense to imply remuneration. Subject to this we think that the learned single Judge was right in his interpretation of the notification.
44. That this is the proper construction to be put upon the terms of the notification is also clear, having regard to the general principles of construction. In Income-tax Commissioner v. S. Teja Singh : 35ITR408(SC) the Supreme Court held that it is a rule of interpretation well-settled that in construing the scope of a legal fiction it would be proper and even necessary to assume all those facts on which alone the fiction can operate and they referred to the decision of the House of Lords in England in East End Dwellings Company Ltd. v. Finsbury Borough Council 1952 A.C. 109 where the principle is stated at p. 132 as follows :
'If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it.'
45. Were we to rely even upon this general principle of construction, apart from S. 20 of the Bombay General Clauses Act, we should come to the same conclusion, namely, that the word 'wages' in the notification was used in a general sense of 'remuneration' and nothing more. It does not carry the specified connotation given to it by S. 2(30) of the Bombay Shops and Establishments Act read with S. 2(vi) of the Payment of Wages Act.
46. There then falls to be considered the challenge to the Act and the notification under Art. 14 of the Constitution. Here the effect was merely to rely upon an admission in the pleadings. It was states in Para. 11(b) of the petition and Para. 13 thereof that in promulgating the notification, respondent 1, viz., the State of Maharashtra, has invidiously singled out the tailoring establishments alone for the application of the deeming provisions of the said Act to them and persons who are similarly engaged and paid in other trades as stated in the petition and do the work under similar conditions and circumstances are excluded from the provisions of the said Act. It is, therefore, alleged that respondent 1 has discriminated against the tailoring establishments. The same plea is reiterated in the appeal before us in grounds 40 and 41. Sri Sorabji has urged that there was no sufficient traverse of these allegations in the petition and that therefore upon the admission the contention must be upheld. The allegations in Para. 11(b) of the petition have been met in Para. 15 of the affidavit-in-reply of the Under Secretary to the Government, dated 20 July 1964, and the denial is in these terms :
'With reference to ground (b) in Para. 11 of the petition I deny that establishments such as those of goldsmiths, cobblers, watch repairers and potters are similarly situated as tailoring establishment as suggested in the said ground (b). I deny the correctness of the other submissions, contentions and allegations contained in the said ground (b).'
47. What was urged against this replication was that it is vague and does not show how the other establishments referred to are not similarly situated as the tailoring establishments. If it is only a matter of vagueness, we think that the pleading upon which this replication followed is by no means less vague. We have already shows what has been stated in Para. 11(b) of the petition. No particulars were given, nor were any facts stated, to show how the discrimination arose and what it consisted of. Therefore, we are not surprised that the replication was in equally general terms. We do not think that we can sustain this contention and upon that view we hold that neither the Act nor the notification is hit by Art. 14 of the Constitution.
48. The last contention has been that the decision of the Payment of Wages Authority in its judgment dated 18 June 1960, Ex. B to the petition, operates as res judicata in the present proceedings. Were we to confine ourselves strictly to the principle enunciated in S. 11 of the Code of Civil Procedure, and to the several requirements of that section, it will be found, that they are not fulfilled, for instance as to the jurisdiction of the Court and as to the finality of the decision. But Sri Sorabji has relied upon three decisions of the Supreme of the Supreme Court to urge that even apart from the provisions of S. 11 of the Code of Civil Procedure, the matter would be res judicata under certain circumstances.
In Raj Lakshmi Dasi v. Banamali Sen : 4SCR154 the principle was thus stated :
'In order successfully to establish a plea of res judicata or estoppel by record it is necessary to show that in a previous case a Court, having jurisdiction to try the question, came to a decision necessarily and substantially involving the determination of the matter in issue in the later case. It was at one time a matter of doubt whether the determination of a Court to which a matter had been referred by the Collector was such a decision and that was resolved by the judgment of the Privy Council in Ramachandra Rao v. Ramachandra Rao A.I.R. 1922 P.C. 80 which decided that where a dispute as to the title to receive the compensation had been referred to the Court, a decree thereon not appealed from renders the question of title res judicata in a suit between the parties to the dispute.'
49. In Pandit M. S. M. Sharma v. Dr. Shree Krishna Sinha : 1SCR96 also it has been held that the general principles of res judicata applied and the case cited above was referred to with approval. These cases were all once again approved of in a Full Bench decision in Gulabchand v. State of Gujarat : 2SCR547 , after referring to Raj Lakhmi Dasi case : 4SCR154 (vide Supra), the Supreme Court pointed out that the principle underlying res judicata is applicable in respect of a question which had been raised and decided after a full contest, even though the first tribunal which decided the matter may have no jurisdiction to try the subsequent suit or even though the subject-matter of the dispute was not exactly the same in the two proceedings. It would be noticed that these are two of the several ingredients referred to in S. 11 of the Code of Civil Procedure and to that extent the principle laid down is of wider application than the stricter rule contained in S. 11. But even here what their lordships pointed out is that the principle will apply even though the subject-matter of the dispute was not exactly the same in the two proceedings. So far as we are aware, there is no decision which has said that res judicata will be applicable even though the subject-matter of the two decisions is different. Indeed upon the facts of the case before us that is practically the position here. The decision of the Authority under the Payment of Wages Act is at Ex. B and it was, of course, given in respect of nine persons, of whom five were mentioned in the complaint, but the decision also related to the question of their working on piece-rate basis and raised a common objection that they were not employees of the appellant-firm. The question arose in that case upon a claim for weekly-off wages. In the present case it arises upon a prosecution launched for not maintaining certain necessary registers. But what, in our opinion, is the crucial difference is that the entire decision before the Authority under Payment of Wages Act was given upon the terms of the definition contained in S. 2 and irrespective of any consideration arising under S. 5 and irrespective of any consideration arising under S. 5. Until the decision of the Authority under the Payment of Wages Act was arrived at, there was no such notification as has been issued subsequently and which is the subject-matter of the controversy before us. By that notification the question whether the employees fell within the definition or not became irrelevant and what had to be considered was whether they were declared to be deemed employees, and if so, whether they were rightly so declared. That was a question which was never before any Court, much less before the Authority under the Payment of Wages act, in the order passed on 18 June 1960. The classification of deemed employees by S. 5(2) is, as we have shown, a unique provisions in the Bombay Shops and Establishment Act and in the previous decision that provision did not come up for consideration, nor did the notification which is now impugned before us. We think, therefore, that the subject-matters of that litigation and the litigation before us were wholly different, so radically different that it is impossible to hold that the decision upon one subject-matter would bind in coming to decision upon the other subject-matter. In our opinion, the principles laid down by the Supreme Court do not supply to the facts of the present case. We are unable therefore to hold that the decision of the Authority under the Payment of Wages Act is res judicata in the present proceedings. We would, therefore, be entitled to look into the matter afresh.
50. Looking at it from any point of view, it seems to us that the claim made on behalf of the employers in the present proceedings is a claim which would, if accepted, go contrary to the very purpose and object of the Act. It would also defeat the very purpose for which the notification was issued under S. 5(1). In our opinion, the notification was validity issued, having regard to the provisions of the Act. It is not unconstitutional under Art. 14, nor upon its terms can we hold that it does not apply to the cases of the five persons who are mentioned in the complaint.
51. In the result, we uphold the decision of the learned single Judge and dismiss the appeal. The proceedings before the criminal Court will now be proceeded with further and decided with the utmost despatch.
52. On the question of costs, the petition, as originally constituted, was only against respondent 1 and 2, namely, the Sate of Maharashtra and the Inspector, Shops and Establishments, Bombay Municipal Corporation. These were proper and necessary parties. Their costs must be paid by the appellants-petitioners. So far as respondents 3 and 4 are concerned, namely, the two rival labour unions, they joined at a later stage, each upon its own application to intervene in the proceedings. So long as the Inspector appointed under the Bombay Shops and Establishments Act was a party, he is the officer entitled to safeguard the interests of labour and we do not, therefore, think that both these unions served any particular useful purpose in claiming to be joined in these proceedings. It was urged that whatever may have been the position in the Original Court, in appeal at least they have have been made respondents by the present appellants and that, therefore, they should get their costs of this appeal. We do not think that in this respect we can make any distinction. They asked to be joined before the learned single Judge and the appellants, therefore, had no option but to make them party-respondents in appeal. The appellants could not properly have omitted them, otherwise they would have run the risk of their appeal being improperly constituted. In the circumstances, therefore, we do not think that these two unions, respondents 3 and 4, are entitled to any order for costs in their favour.