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Abburi Chalamayya Vs. Andhra Pradesh State Represented by C. Krishnamurthy Asst. Ins. of Labour, Sompeta - Court Judgment

LegalCrystal Citation
SubjectService;Criminal
CourtAndhra Pradesh High Court
Decided On
Case NumberCriminal Revn. Case Nos. 127 to 130 of 1964 and Criminal Revn. Petn. Nos. 121 to 123 of 1964
Judge
Reported inAIR1968AP108; 1968CriLJ442; [1968(16)FLR228]; (1968)IILLJ493AP
ActsAndhra Pradesh (Andhra Area) Shops and Establishments Act, 1947 - Sections 2, 2(3), 2(5), 2(6), 2(12), 3, 4, 4(1), 5, 5(12), 6, 7, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 45(1), 46, 47, 48, 49, 49(1), 49(2), 50, 51, 52 and 53; Madras Shops and Establishments Act, 1947 - Sections 2; Punjab Trade Employees Act, 1940 - Sections 2(1), 2A and 7(1); Factories Act, 1934; The Madras Shops and Establishments Rules, 1948; Andhra Pradesh (Andhra Area) Shops and Establishments Rules - Rules 11(5), 16, 16(7), 16(9), 16(11), 16(12) and 18; Code of Civil Procedure (CPC), 1908
AppellantAbburi Chalamayya
RespondentAndhra Pradesh State Represented by C. Krishnamurthy Asst. Ins. of Labour, Sompeta
Appellant AdvocateD.V. Reddipanthulu and ;D. Srirama Sastry, Advs.
Respondent AdvocatePublic Prosecutor
Disposition Petition dismissed
Excerpt:
.....clause (5) of section 2 of the act, a duty was cast upon him to maintain the prescribed registers and records and display the prescribed notices, and as admittedly the petitioner had failed to do so, he was liable to be punished under rule 18 of the rules framed under section 49 of the act. the act imposes corresponding duties on 'employers'.the manager of a bank, such as the petitioner, is by definition both an employer as well as person employed. in other words, persons employed in a managerial capacity do not get the benefits conferred on employees under the act by reason of the exemption enacted by section 4(1) (a), but they are nevertheless liable to discharge the duties enjoined on employers by the various provisions of the act and the rules on pain of incurring penalties for..........mr. srirama sastry contended that inasmuch as the petitioner is both an 'employer' and a 'person employed' by the combined effect of clauses (5) and (12) of section 2 of the act, he is entitled to the exemption granted by section 4(1) (a) of the act and none of the provisions of the act apply to him because he is a person employed in a commercial establishment in a position of management, and admittedly the state government has not withdrawn the exemption by issuing a notification under section 5 of the act. in support of his contention the learned advocate relied strongly on the judgment of sharfuddin ahmed, j. adverted to supra. 7. on the other hand, the contention of the learned public prosecutor, appearing for the state, was as follows: the object of the act is to confer.....
Judgment:

Basi Reddy, J.

1. These criminal revision cases have been referred to a Full Bench because of the general importance of the question involved in them, which pertains to the liability of a Branch Manager of a Co-operative Bank 'inter alia' to maintain the prescribed registers, and turns on the true construction of Section 4(1) (a) read in the light of Clauses 5 and 12 of Section 2 of the Madras Shops and Establishments Act, 1947 now called 'The Andhra Pradesh (Andhra Area) Shops and Establishments Act, 1947' (hereinafter referred to as 'the Act'). Before the Divisional Bench which referred this matter to the Full Bench, the correctness of the decision of a learned single Judge of this Court (Sharfuddin Ahmed, J.) touching the above point in Public Prosecutor v. Sundaradara Rao, 1963-2 Andh W. R. 125 was challenged by the learned Public Prosecutor. We may also mention that Mohamed Mirza, J. doubted the correctness of the above decision in his order dated 29-6-1966 (AP), referring Criminal Appeal No. 617 of 1964 to a Bench. That appeal too has been placed before us and our judgment in this batch of revision cases will govern that case also.

2. The petitioner in all these revision cases is one A. Chalamayya, who is stated to be the Manager of the Tekkali Branch of the Srikakulam Co-operative Central Bank Ltd., and he has been convicted and sentenced to pay a fine of Rs. 2 in each of the four cases for infringement of one or other of the rules framed under the Act. The rule said to have been violated in the first of these cases is Rule 16(9) which provides for the maintenance by every employer of a register for the holidays and leave granted to persons employed in his establishment. The second case concerns the breach of Rule 11(5) which requires the maintenance of a register of wages. The third case relates to the contravention of Rule 16(12) which enjoins the exhibition of a notice in a conspicuous place of the establishment, specifying the name and address of the establishment and the name and residential address of the employer. The fourth case pertains to the infraction of Rule 16(1) which requires every employer to maintain a register of employment in the prescribed form.

3. The facts concurrently found by the Courts below and not challenged before us, are the following: The petitioner is the Manager of the Tekkali Branch of the Srikakulam Co-operative Central Bank. He is the representative of the head office and is the head of the Branch at Tekkali, There are besides himself, a clerk, a cashier and a peon in the establishment. On 8-8-1962, P. W. 1 (Sri C. Krishna Murthy), who was then the Assistant Inspector of Labour, Sompeta, inspected the Tekkali Branch of the Co-operative Central Bank. He found the petitioner in charge of the Bank. None of the registers prescribed by the rules were maintained by the petitioner. There was no employment register, there was no wage register and the leave register was not maintained from 1-1-1962 to the date of inspection. No notice was put up showing the name and address of the establishment and the residential address of the employer. According to P W. 1, the petitioner took a defiant attitude disowned his liability to maintain the registers and questioned the authority of P. W. 1 to inspect the Bank and ask for the production of the registers. Subsequently P. W. 1 launched the present prosecution

4. The plea of the petitioner was that although he was working as the Manager of the Tekkali Branch of the Bank, the Directorate of the Bank was the employer and that the head office at Srikakulam maintained all the necessary registers.

5. Both the courts below rejected the plea of the petitioner as untenable because he made no attempt to substantiate it and they held that inasmuch as the petitioner is an 'employer' within the definition of that term in Clause (5) of Section 2 of the Act, a duty was cast upon him to maintain the prescribed registers and records and display the prescribed notices, and as admittedly the petitioner had failed to do so, he was liable to be punished under Rule 18 of the rules framed under Section 49 of the Act.

6. On behalf of the petitioner, Mr. Srirama Sastry contended that inasmuch as the petitioner is both an 'employer' and a 'person employed' by the combined effect of Clauses (5) and (12) of Section 2 of the Act, he is entitled to the exemption granted by Section 4(1) (a) of the Act and none of the provisions of the Act apply to him because he is a person employed in a commercial establishment in a position of management, and admittedly the State Government has not withdrawn the exemption by issuing a notification under Section 5 of the Act. In support of his contention the learned Advocate relied strongly on the judgment of Sharfuddin Ahmed, J. adverted to supra.

7. On the other hand, the contention of the learned Public Prosecutor, appearing for the State, was as follows: The object of the Act is to confer certain benefits on employees that is to say, on 'persons employed' in certain establishments. The Act imposes corresponding duties on 'employers'. The manager of a Bank, such as the petitioner, is by definition both an employer as well as person employed. No doubt Section 4(1) (a) says that 'nothing contained in this Act shall apply to persons employed in any establishment in a position of 'management': but what is really means is that only such of those provisions of the Act as are applicable to employees that is to say, those provisions which confer benefits on employees, do not apply to persons employed in a managerial capacity, but such persons are not exempted from the operation of those provisions which govern employers, that is to say, those provisions which cast certain duties and impose certain obligations on employers. In other words, persons employed in a managerial capacity do not get the benefits conferred on employees under the Act by reason of the exemption enacted by Section 4(1) (a), but they are nevertheless liable to discharge the duties enjoined on employers by the various provisions of the Act and the rules on pain of incurring penalties for failure to do so. In short, not all the provisions of the Act but only some of them are applicable to persons employed in a position of management. That is the proper interpretation of Section 4(1) (a), and the view taken by Sharfuddin Ahmed J. in 1963-2 Andh W. R. 125 requires reconsideration.

8. Before examining the rival contentions, we think it necessary to give a conspectus of the Act and the rules. The Act was passed with the avowed object of regulating the conditions of work of employees in certain establishments and to make provision for matters affecting them, such as hours of work and holidays, payment of wages, health and safety. The preamble of the Act recites that it is expedient to provide for the regulation of conditions of work in shops, commercial establishments, restaurants, theatres and other establishments and for certain other purposes. Chapter I which bears the heading 'Preliminary' contains certain definitions and exemptions and we will presently refer to those which are material. Chapters II and III (Sections 7 to 16) enable the State Government to fix the opening and closing hours of shops, commercial establishments, restaurants etc. Suitable limits relating to daily and weekly hours of work, intervals for rest and spread-over of periods of work and rest have also been fixed. Provision has also been made for granting to persons employed compulsory holiday of one day in a week and if required by Government, an additional half-holiday also in a week. Chapter IV (Sections 17 and 18) prohibits the employment of children who have not completed 14 years and the employment of young persons i.e., persons who have completed 14 years but are under 17 years, before 6 A. M. and after 7 P. M. The daily and weekly hours of work for women and young persons have also been fixed. Chapter V (Sections 20 to 24) contains provisions designed to secure the health and safety of the staff, and Chapter VI (Sections 25 to 28) provides for the grant of annual holidays with pay to them. The provisions of Chapter VII (Sections 29 to 41) are intended to ensure prompt payment of wages and the prohibition of unauthorised deductions from wages Chapter VIII (Sections 42 to 44) makes provision for the appointment of Inspectors by the Government and empowers any Inspector at all reasonable hours to enter into the premises of an establishment and examine the registers and records. Suitable penalties have been prescribed in Chapter IV (Sections 45 and 46) for contravention of the various provisions of the Act. Section 45(1) provides that any employer who contravenes any of the provisions of Sections 7, 9 to 11, 13 to 23, 25, 26, 29, to 41 and 47 shall be punishable for the first offence with fine which may extend to Rs. 25 and for a second and subsequent offence with fine which may extend to Rs. 250. Section 46 prescribes a penalty extending upto Rs. 250 on any person who wilfully obstructs any Inspector in the exercise of any power conferred on him under the Act or any person lawfully assisting any person in the exercise of such power or who fails to comply with any lawful direction made by an Inspector.

9. Chapter X (Sections 47 to 53) contains miscellaneous provisions and among them it is necessary to notice Sections 47 and 49. Section 47 provides that subject to the general or special orders of the State Government, an employer shall maintain such registers and records and display such notices as may be prescribed. Section 49(1) empowers the State Government to make rules to carry out the purposes of the Act, while Sub-section (2) says that in making a rule under Sub-section (1), the State Government may provide that a contravention thereof shall be punishable with fine which may extend to Rs. 50.

10. Now we go back to Chapter I which comprises Sections 2 to 6. Section 2 defines the various terms which are used in the Act and we need take note only of such of those definitions as are material for our purpose. Sub-section (3) of Section 2 defines 'commercial establishment' thus:

'commercial establishment' means an establishment which is not a shop but which carries on the business of advertising, commission, forwarding or commercial agency, or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock company, bank, brokers' office or exchange and includes such other establishment as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.'

Sub-section (6) says:

' 'establishment' means a shop, commercial establishment, restaurant, eating-house, residential hotel, theatre or any place of public amusement or entertainment and includes such establishment as the State Government may by notification declare to be an establishment for the purposes of this Act.'

Sub-section (5) defines the term 'employer' thus:

'employer' means a person owning, or having charge of, the business of an establishment and includes the manager, agent or other person, acting in the general management or control of an establishment.'

Sub-section (12) defines a 'person employed' and Clause (iii) of that Sub-section says that the expression means 'in the case of a commercial establishment other than a clerical department of a factory or an industrial undertaking, a person wholly or principally employed in connection with the business of the establishment, and includes a peon.'

11. Then we come to Section 4 which deals with exemptions and Sub-section (1) which is material, reads as follows:

'4. (1) Nothing contained in this Act shall apply to--

(a) persons employed in any establishment in a position of management;

(b) persons whose work involves travelling; and persons employed as canvassers and caretakers;

(c) establishments under the Central and State Governments, Local authorities, the Reserve Bank of India, the Federal Railway Authority, a Railway Administration operating a federal railway, and cantonment authorities;

(d) establishments in mines and oilfields;

(e) establishments in bazaars in places where fairs or festivels are held temporarily for a period not exceeding fifteen days at a time:

(f) establishments which, not being factories within the meaning of the Factories Act, 1934, are, in respect of matters dealt with in this Act, governed by a separate law for the time being in force in the State.' Sub-section (2) is not material.

12. Section 5 enables the Government to apply the Act to exempted persons or establishments and runs as follows:

'Notwithstanding anything contained in Section 4, the State Government may, by notification, apply all or any of the provisions of this Act to any class of persons or establishments mentioned in that section, other than those mentioned in Clauses (c) and (f) of Sub-section (1), and modify or cancel any such notification.'

13. The rules made by the State Government are called The Madras Shops and Establishments Rules, 1948. The rules provide inter alia for cleanliness, ventilation and precautions against fire in the various establishments covered by the Act, the manner of calculating rates of wages and the imposition of fines on employees, and inspection of the establishments by Inspectors. Rule 16 provides for the maintenance of registers and records, and the display of notices and lays down the manner in which that has to be done. Amongst the registers which are required to be maintained in the prescribed form are a register of wages, a register of holidays and leave granted to the employees and a register of employment showing the number of persons employed, the opening and closing hours of the establishment and the extent of overtime worked by each employee during the month. It is necessary to notice Rule 16(7) which says that in any register or record which an employer is required to maintain under these rules, the entries relating to any day shall be made on such day. Sub-rule (11) of Rule 16 lays down that an employer shall maintain a visit book which shall be in the custody of the employer or any person duly authorised by him and shall be kept always in the business premises and shall be produced on demand by the Inspector. Rule 18 penalises any person who contravenes any of the provisions of the rules and says that on conviction such person would be punishable with fine which may extend to Rs. 50.

14. It will be seen that the petitioner in the present case, who is the Branch Manager of a Bank and is in general management and control of the establishment, comes within the definition of 'employer' in Section 2(5) and is also 'a person employed in a position of management' as envisaged by Section 4(1)(a). It was common ground that the petitioner occupies a dual position and the arguments before us proceeded on that footing.

15. This takes us to the contentions raised on behalf of the petitioner and the State. As noticed above, the contention of the learned Public Prosecutor was that the words 'nothing contained in this Act' occurring in Section 4(1), with reference to persons employed in any establishment in a position of management, should be understood in a restricted sense so as to take in only such of those provisions in the Act as would apply and are appropriate to, persons employed. We find it difficult to construe Section 4(1)(a) in the manner suggested by the learned Public Prosecutor. We see no justification for giving such a narrow connotation to the expression 'nothing contained in this Act' and construe it to mean 'some of the things contained in the Act.' We see no reason to depart from the firmly established rule of construction that words should be interpreted in their natural and plain meaning unless that would lead to absurdity or repugnancy. The further fact that a breach of some of the provisions of the Act entails penal consequences, renders the argument of the learned Public Prosecutor even less persuasive. We, therefore, hold that in so far as the petitioner satisfies the requirements of Section 4(1)(a), that is to say, inasmuch as he is a person employed in an establishment in a position of management, none of the provisions in the Act apply to him. The result would be that in that capacity, he is not entitled to the benefits conferred by some of the provisions of the Act, nor is he liable to discharge the duties imposed by the other provisions of the Act.

16. Equally untenable is the contention of Mr. Srirama Sastry on behalf of the petitioner. His argument was that as the petitioner is a person employed in an establishment in a position of management within the meaning of Section 4(1)(a) none of the provisions of the Act apply to him, and he is exempted from the operation of the Act in its entirety, notwithstanding that he, as the manager of the Bank, comes within the definition of 'employer' as envisaged by Clause (5) of Section 2. We are unable to accede to this contention. If this contention were accepted, it would lead to the startling situation that no one need maintain the prescribed registers and records pertaining to establishments of this kind, unless the Government issues a notification under Section 5 in each individual case or class of cases applying the provisions of the Act. The enforcement of the provisions of the Act would then be rendered difficult, if not impossible, because there would be no one to whom the enforcement agency would normally look to for complying with the various provisions of the Act imposing on employers certain duties, which are correlated to the benefits conferred by the Act on employees. A result like this would defeat the object of the enactment, which is a remedial piece of legislation, conceived in the interests of labour. A construction which leads to such a result should be avoided and one which makes the smooth working of the Act feasible, should be adopted.

17. It seems to us that the correct view is that where, as in this case, a person occupies a dual position i.e., he is an employer by reason of his being the manager and is also a person employed in a position of management, although in the latter capacity he is taken out of the purview of the Act by Section 4(1)(a), yet in the former capacity, i.e. as an employer, he is amenable to all the provisions which are applicable to employers. That means that he has to perform all the duties enjoined by the Act and the rules on an employer. Amongst other things, he has to maintain the prescribed registers and records, and display the prescribed notices. In our opinion. Section 4(1)(a) does not control the fasciculus of sections governing employers.

18. We are fortified in our view by a decision of the Supreme Court in Manohar Lal v. The State, : [1951]2SCR671 which throws considerable light on the question before us. One Manoharlal had been convicted by the trial court for the infringement of the provisions of Section 7(1) of the Punjab Trade Employees Act, 1940 and his conviction had been confirmed by the High Court in revision. On a certificate of fitness granted by the High Court the accused appealed to the Supreme Court. The accused was a shopkeeper who owned and ran a shop in the cantonment area of Ferozepore. He had no 'employees' within the meaning of that Act but was assisted by his son in running the shop The shop was divided into two sections in one section, articles of haberdashery were sold; in the other, articles of stationery were sold

19. Section 7(1) of that Act requires that 'Save as otherwise provided by this Act, every shop ............ shall remain closed on a close day'. Sub-section 2(1) says that -- 'The choice of a close day shall rest with the owner or occupier of a shop.......... and shall be intimated to the prescribed authority within, etc.'

20. The accused made the following choice. He elected to close the haberdashery section on Mondays and the stationery section on Saturdays and Rave the necessary intimation to the prescribed authority to that effect.

21. On Monday the 17th May 1948, the son of the accused sold a tin of boot polish to a customer from the haberdashery section of the shop. The accused was present in person at the time of the sale. Since Monday was a close day for the haberdashery section, the accused was prosecuted for the contravention of Section 7 of the Punjab Act.

22. One of the points urged before the Supreme Court was that inasmuch as Section 2A(i) of that Act exempted persons employed in manegerial capacity from the operation of the Act, the accused who was in the shop in that capacity, was not obliged to close the shop as required by Section 7.

23. Section 2A(i) runs thus: 'Nothing in this Act shall apply to--

(i) persons employed in managerial capacity.'

Their Lordships noticed that contention and repelled it in the following manner:

'It was then contended that if a person employed in a managerial capacity cannot be affected by the Act, then the appellant cannot be compelled to close the shop under Section 7. This is also fallacious. It happens in the present case that the owner and the manager are the same but the Act obviously makes provision for a class of case in which they are different The owner is obliged to close the shop one day in a week, though the manager of the shop can work without, for example, having the twenty-four consecutive hours of rest every week which Section 7A enjoins. The appellant's capacity as manager will have to be separated from his character as owner for this purpose, Section 2A(i) does not control Section 7(1).'

24. Similarly in the cases before us, the capacity of the petitioner as a person employed will have to be separated from his character as an employer by reason of his being the manager of the Bank. If this is done, the result we have indicated above would necessarily follow.

25. WE now turn to the decision of Sharfuddin Ahmed, J. in 1963-2 Andh WR 125. The facts of that case were similar to the facts in the instant cases. One Sundaradara Rao was the manager of Sri Krishna Palace, Guntur. He was prosecuted in two cases for the contravention of some of the provisions of Rule 16 of the 'rules framed under the Act. The Magistrate who tried the cases acquitted the accused on the ground that Section 4(1)(a) exempted the accused from the operation of the Act.

26. the State Government preferred two appeals against the said orders of acquittal and the appeals were heard by Sharfuddin Ahmed. J. On behalf of the State it was contended before the learned Judge that as the term 'employer' has been defined to include a 'manager', when the rules impose a liability on the employer to maintain registers and exhibit notices etc. in a particular manner, the manager was also liable for the non-observance of the rules. The learned Judge met that argument thus:

'There would have been no difficulty in holding the manager liable for the maintenance of registers etc. if there was no exemption from the operation of the Act as provided in Section 4 of the Act. Section 4 runs as under:

'Nothing contained in this Act shall apply to--

(a) persons employed in any establishment in a position of management.' Relying on this provision, the Magistrate has held that the respondent, being admittedly a manager, is not on 'employer' as contemplated either in Section 45 or in Rule 18. I think, the finding of the learned Magistrate is consistent with the letter and spirit of the Act, for, under Section 5 the Government is vested with power to apply all or any provisions of the Act to any class of persons who have been exempted under that section. Obviously, the intention of Government by inserting Section 4 was to exempt persons holding the position of a manager or that of a subordinate to him in the management from the purview of the Act. There is no notification under Section 5 to show that the provisions of the Act have been made applicable even to the manager. This interpretation is, no doubt, open to some difficulty but in plain reading it is not possible to place any other construction on Section 4. The same view seems to have been taken by a Bench of the Madras High Court in Standard Vacuum Oil Co., Madras v. Additional Commissioner for Workmen's Compensation. Madras, : (1960)IILLJ108Mad though in some other context. I therefore see no reason to interfere with the finding of the lower Court.

27. With all respect to the learned Judge, we are unable to agree either with his reasoning or with his conclusion. We have pointed out how the various provisions of the Act applicable to employers --which term includes managers -- are not controlled by Section 4(1)(a).

28. We may also observe that the judgment of a Division Bench of the Madras High Court composed of Rajamannar, C. J. and Basheer Ahmed Sayeed J. in : (1960)IILLJ108Mad upon which Sharfuddin Ahmed J. purported to rely dealt with an altogether different point viz., whether the person concerned in that case one Prem Sagar who at the material time was working as an Operations Assistant under the Operations Manager in M/s Standard Vacuum Oil Company, was a person employed in a position of management, within the meaning of Section 4(1)(a) of the Act. The High Court held he was, and issued a writ of certiorari quashing the order of the Commissioner of Labour, who on the evidence placed before him had held contra.

29. The matter was taken in appeal to the Supreme Court, Prem Sagar v. Standard Vacuum Oil Co., Madras, : (1964)ILLJ47SC and their Lordships reversed the decision of the High Court, holding that the latter was not justified in interfering with the order of the Commissioner of Labour, since it did not suffer from any error of law which was apparent on the face of the record. It is material to note that in the course of the judgment, their Lordships observed that it was nobody's case that Prem Sagar was an 'employer' within the meaning of Section 2(5) of the Act.

30. From the foregoing discussion it follows that the convictions of the petitioner are right and the sentences are proper. No other point was pressed before us. In the result all the revision cases fail and are dismissed.


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