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Khadi and Village Industries' Commission Vs. B. Satyanarayana (30.01.1985 - BOMHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtMumbai High Court
Decided On
Case NumberW.P. No. 444 of 1984
Judge
Reported in(1985)87BOMLR182; (1995)IIILLJ481Bom; 1985MhLJ390
ActsPayment of Wages Act, 1936 - Sections 1(4) and 1(5); Bombay Shops and Establishment Act, 1948 - Sections 4 and 38(1)
AppellantKhadi and Village Industries' Commission
RespondentB. Satyanarayana
Appellant AdvocateM.L. Dudhat and ;P.K. Dhakephalkar, Advs.
Respondent AdvocateT. Ramkrishna, Adv.
DispositionPetition dismissed
Excerpt:
.....and village industries commission having its office at parle, suburb of bombay. the fact that the state government has in exercise of the powers conferred upon it under section 4 of the bombay shops and establishment act exempted the central branch offices of the khadi and village industries commission from the provisions of the shops and establishment act does not make the shops and establishment act itself inapplicable to those offices. the notification which has already been issued under section 38 of the shops and establishment act, 1948 does not become ineffective by the subsequent insertion of entry no. 236 in schedule ii of the shops and establishment act, 1948.;the applicability of the payment of wages act 1955, having become a legal fact from 1st april 1955 cannot cease to..........act. it was pointed out to the authority that in exercise of the powers conferred upon the state government by section 4 of the shops and establishments act, the state government has exempted the establishment of the commission from certain provisions of the act. the fact that the establishment of the commission was exempted from certain provisions of the act did not, according to the authority, make the act itself inapplicable, the payment of wages act also becomes applicable by virtue of the notification issued under section 38(1) of the shops and establishments act. consistent with this view, the authority held that the respondents application was maintainable and should proceed on merits. it is against this order of the authority that the commission has come to this. court.....
Judgment:

Jahagirdar, J.

1. The petitioner is the Chief Executive Officer of the Khadi and Village Industries' Commission, having its office at Vile Parle, a suburb of Bombay. If the Payment of Wages Act is applicable to the establishment of the Commission, he would be a person responsible for the payment of wages within the meaning of that Act. The respondent is an employee in the said establishment.

2. The respondent filed an application under the Payment of Wages Act contending that the petitioner has deducted from his salary certain amounts and that the said deduction is in contravention of Section 7 of the said Act. He, therefore, prayed in that application, numbered as P.W.A. 307 of 1983, for a direction for the payment of wages illegally deducted from his salary by the petitioner. Among the grounds on which the petitioner resisted the claim of the respondent was that the Payment of Wages Act itself is not applicable to the establishment of the petitioner and, therefore, an application under Section 15 of the said Act could not He.

3. The Authority under the Payment of Wages Act was invited to decide the question of the jurisdiction first before deciding the claim of the respondent on merit. By his judgment and order dated 31st December 1983 that Authority under the said Act held that the Act did apply to the establishment of the petitioner and, therefore, the respondent's application was maintain-able. While doing so the Authority noticed that admittedly the petitioner's establishment is an establishment within the meaning of the Bombay Shops and Establishments Act, 1948. The Authority also noticed that under Section 38(1) of the Shops and Establishments Act, the then Government of Bombay had issued a notification making the Payment of Wages Act applicable to all the establishments governed by the Shops and Establishments Act. It was pointed out to the Authority that in exercise of the powers conferred upon the State Government by Section 4 of the Shops and Establishments Act, the State Government has exempted the establishment of the Commission from certain provisions of the Act. The fact that the establishment of the Commission was exempted from certain provisions of the Act did not, according to the Authority, make the Act itself inapplicable, the Payment of Wages Act also becomes applicable by virtue of the notification issued under Section 38(1) of the Shops and Establishments Act. Consistent with this view, the Authority held that the respondents application was maintainable and should proceed on merits. It is against this order of the Authority that the Commission has come to this. Court under Article 227 of the Constitution of India.

4. Mr. Dudhat, the learned Advocate appearing in support of the petition, has shown to me what according to him is an initial mistake committed by the Authority. The Authority has in his judgment referred to certain notification pursuant to which the Commission was exempted from certain provision of the Bombay Shops and Establishment Act. Mr. Dudhat points out that sometime in the year 1978 a fresh entry has been made in Schedule II of the Shops and Establishment Act and this entry at Serial No. 236 exempts the Khadi and Village Industries Commission's Central Branch Offices in the State of Maharashtra from all the provisions of the Act. According to Mr. Dudhat, if the attention of the Authority had been drawn to this entry, at Serial No. 236 in Schedule II, then the Authority would have come to a different conclusion.

5. In order to understand the contention raised on behalf of the petitioner both in the Court below and before me, certain legal provisions ought to be necessarily noted. The Payment of Wages Act, 1936 applies in the first instance to the payment of wages to persons employed in any factory and to persons employed otherwise than in a factory upon any railway by a railway administration. Obviously, therefore, the establishments covered by such laws as the Shops and Establishment Act were not covered by the provisions of the Payment of Wages Act. Sub-section (5) of Section 5 of the Payment of Wages Act provides that the State Government may extend the provisions of the Payment of Wages Act or any of them to the payment of wages to any class of persons employed in any industrial establishment or in any class or group of industrial establishment: Admittedly, this has not been done. Looking to the provisions of the Payment of Wages Act, therefore, it is not possible to hold that the said Act governs the Central Branch Offices of the Commissions.

6. Now we turn to Section 38 of the Bombay Shops and Establishment Act which provides that notwithstanding anything contained in the Payment of Wages Act, 1936, the State Government may by a notification published in the official gazette direct that the said Act shall in such local areas as may be specified in the notification apply to all or any class of establishment or to all or any class of employees to which or to whom the Shops and Establishment Act for the time being applies. In exercise of the powers conferred by this Section, the Government of Bombay issued a notification bearing No. GNDD-729/48 dated 3rd of March 1955 (published in the Bombay Government Gazette, Part IV-B, page 817) directing that the Payment of Wages Act shall with effect from 1st of April 1955 apply to all the establishments in the local areas specified in the schedule appended to the said notification. The area within the limits of Greater Bombay finds mention in the schedule. Thus it is clear that by virtue of the aforesaid notification the provisions of the Payment of Wages Act became applicable to the establishment of the Commission in Greater Bombay.

7. However, it is the contention of the petitioner that by virtue of a notification dated 28th June 1978 issued by the State Government under Section 4 of the Shops and Establishment Act, the establishment and offices of the Commission in the State of Maharashtra are exempted from all the provisions of the Shops and Establishment Act. Earlier similar notifications had been issued exempting the offices of the Commission from some only of the provisions of the Act, but with effect from 1978, as has been rightly pointed out by Mr. Dudhat, the central offices of the Commission are exempted from all the provisions of the Act. Section 4 of the Shops and Establishment Act states that notwithstanding anything contained in the Act the provisions of the Act mentioned in the third column of Schedule II shall not apply to the establishments, employees and other persons mentioned against them in the second column of the said Schedule. This was the original provision in the Act itself, but power has been given by the proviso to Section 4 that the State Government may by notification published in the Official Gazette add to, or omit, or alter any of the entries of the said Schedule subject to such conditions as may be specified in such notification. In other words, certain classes of establishments may be added to the Schedule, may be deleted or entries may be added in such a way that if some exemption has been given from some provisions of the Act, that exemption may be extended to the other provisions of the Act, or if at one time exemption has been given from all the provisions of the Act that exemption having been withdrawn in respect of certain provisions of the Act. Despite, therefore, an entry may be added in the Schedule, the power to modify the same continues to vest in the State Government under the proviso to Section 4 of the Shops and Establishment Act.

8. Now to the argument of Mr. Dudhat. Mr. Dudhat says that Entry No. 236 inserted in Schedule II by valid exercise of the powers vested in the State Government under Section 4 states that the Central Branch offices of the Commission in the State of Maharashtra are exempted from all the provisions of the Act. According to him, this means that the Shops and Establishment Act itself is no longer applicable. If this is so, then despite the notification which has been issued by the State Government under Section 38(1) of the Shops and Establishment Act the provisions of the Payment of Wages Act, which, are, applicable by that notification, ceases to apply to the Central Branch offices of the Commission. The argument proceeds on the basis that if exemption is granted from all the provisions of the Act, the Act itself ceases to be applicable.

9. In my opinion, this is a misplaced argument. The question of giving exemption arises only when the Act is applicable. If the Act itself is not applicable, there is no question of granting exemption. The fact that the State Government thought it fit to issue a notification exempting the Central Branch Offices of the Commission from all the provisions of the Act necessarily meant that the Act applied and that is why there is need for exemption from its provisions. By inserting an entry by virtue of the powers conferred upon the State Government under Section 4, such as the one at Serial No. 236 in Schedule II, it cannot be said that the Act has ceased to be applicable to the Central Branch of the Commission. What has been done is that the Central Branch offices of the Commission in the State of Maharashtra have been relieved from the obligations under the Act and similarly the employees in the said offices have been divested of all the rights which would otherwise have accrued to them under the provisions of the Shops and Establishment Act. The applicability of the Act itself continues and that continues not because by notification is issued by the Government but because the Central Branch offices of the Commission are establishments within the meaning of the Shops and Establishments Act. It has not been suggested, as indeed it could not be, that by virtue of the provisions contained in Section 1 of the Shops and Establishment Act read with the definition of 'establishment', the Central Branch offices of the Commission are not governed by the provisions of the Shops and Establishment Act. In my opinion, therefore, the fact that the State Government has in exercise of the powers conferred upon it under Section 4 of the Act exempted the Central Branch offices of the Commission from the provisions of the Act does not make the Act itself inapplicable to the said offices.

10. An alternative argument was also advanced by Mr. Dudhat. This argument is that when the Central Branch Offices of the Commission are exempted from all the provisions of the Shops and Establishment Act, it necessarily, means that those offices are exempted also from the provisions of Section 38. If it is so, then the notification issued under Section 38 bringing the establishments covered by the Shops and Establishment Act within the purview of the Payment of Wages, Act will cease to have any effect. The argument is unacceptable. The notification under Section 38(1) has been issued as early as in 1965. I have already held that the Act itself does not cease to apply to the offices of the Commission despite the entry No. 236 in Schedule II of the Act. If this is so, the applicability of the Payment of Wages Act, which has become a legal fact earlier, cannot cease to exist by the later exemption granted by the State Government under Section 4 of the shops and Establishment Act.

11. To test the proposition advanced by Mr. Dudhat one may again look at Section 4 and particularly the proviso to that Section. If the argument of Mr. Dudhat is accepted that by virtue of Entry No. 236 in Schedule II all the provisions of the Shops and Establishment Act are made inapplicable, then naturally Section 4 also would be inapplicable. If this is so the proviso to Section 4 also would become inapplicable. Carried to its conclusion, this argument must divest the State Government of all its powers to delete Entry No. 236. I would regard this as absurd that by inserting entry No. 236 in the IInd Schedule the State Government has disabled itself from all time to come from bringing back the Central Branch offices of the Commission into the fold of the Shops and Establishment Act. Similar logic underlies the argument that the provisions of Section 38 also have ceased to apply and all actions taken under Section 38 should come to an end. But Mr. Dudhat fairly concedes that a proper construction which will not lead to an absurdity as pointed out by me above must be made and so made it should be held that the power to add, alter or delete the entries is not taken away from the Entry No. 236, but all other provisions must be held to be inapplicable. For reasons which I have already mentioned above as far as Section 38 is concerned, I am not willing to accept the proposition that the notification which has already been issued under Section 38 became ineffective by the subsequent insertion of Entry No. 236 in Schedule II of the Act. Moreover, I am also inclined to think that the exemption which is granted is an exemption from the various liabilities or obligations which are imposed upon the establishments or the owners of the same. The exemption is not from those Sections such as Sections 4 and 38 which bestow powers upon the State Government. There is no question of exempting the offices of the Commission from the provision of Section 38. Section 38 provides for a power which vests in the Government. It does not bestow any power on an establishment nor does it impose any obligation upon any establishment. I am, therefore, of the opinion that considering all the appropriate provisions and the notifications referred to above, the Central Branch offices of the Khadi and Village Industries' Commission in the State of Maharashtra continue to be governed by the provisions of the Payment of Wages Act.

13. In the result, this petition must fail. Rule is discharged with costs.


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