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Sundaram Finance Ltd., Represented by Its Secretary and Chief Accountant Vs. the State of Tamil Nadu, Represented by the Secretary, Department of Labour and Employment and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Reported in(1981)1MLJ301
AppellantSundaram Finance Ltd., Represented by Its Secretary and Chief Accountant
RespondentThe State of Tamil Nadu, Represented by the Secretary, Department of Labour and Employment and anr.
Cases ReferredMadras v. The Government of Tamil Nadu
Excerpt:
.....as well as to a commercial establishment. therefore, the same premises cannot be at the same time a shop as well as a commercial establishment'.head note (c) reads as follows: (4) chambers of commerce and industries'.according to the learned counsel, the petitioner's concern is a financial institution and therefore the authorities did not intend that institutions like the petitioner would be covered by the word 'shop' in the notification. however, the learned counsel urged that the services that are rendered by an establishment shop to fail within the mischief of the word 'shop' must be personal services rendered in the premises of the establishment shop itself. the evidence on record clearly establishes that the applicant is conducting business and is rendering service to its..........to refer to the meaning given in one dictionary cited by mr. devanathan to show that the word shop has different shades of meaning and is not confined to a place where goods are stored and sold by retail dealers. in mitra's legal and commercial dictionary the meaning of the word 'shop' is given thus: shop : shop includes any premises where any retail trade or business is carried on including the business of a barber or hairdresser, and retail sales by auction, but excluding the sale of programmes, catalogues and other similar sales at theatres. shop means any premises where goods are sold either wholesale or by retail or both whole-sale and by retail and includes a laundry, a hair cutting saloon and other places where services are rendered to customers. the ordinary meaning of.....
Judgment:
ORDER

S. Padmanabhan, J.

1. The question that arises for cone sideration in this writ petition is whether the petitioner, M/s. Sundaram Finance Limited-Madras, is a 'shop' within the meaning of the Notification No. 1088, Labour and Employment dated 26th December, 1976(hereinafter referred to as the Notification). Mr. Devanathan strenuously contended that the word 'shop' would not take in establishments like M/s. Sundaram Finance Limited which are purely commercial establishments. The learned counsel drew my attention to the definition of the word 'shop' in the Tamil Nadu Shops and Establishments Act, 1947 which definition excludes commercial establishment from its ambit. He also referred to certain dictionaries as regards the meaning of the word 'shop'.

2. In New India Maritime Agencies Private Limited, Madras v. The Government of Tamil Nadu and another W. P. No. 4077 of 1977. I have had occasion to consider the scope and width of the expression 'shop' as used in the Notification. In that case, the question arose whether the office of certain steamship agents who acted as shipping agents for booking cargo on behalf of foreign steamship companies, would fall within the meaning of 'shop' as found in the Notification. It was contended before me that the word 'shop' should be understood as a place where goods are normally bought and sold. After referring to the various decisions on the interpretation of welfare legislation it is observed as follows : 'The following principles emerge from the above decisions. (I) In the construction of a social legislation the Courts ought to give the words or a section in the statute a liberal interpretation in order to see that the relief contemplated by the statute shall not be denied to the class intended to be relieved.

If a word or section in a remedial statute is capable of two constructions that construction should be preferred which advances the poiicy end purpose of the Act and is more beneficial to those for whose benefit the Act may have been pass d. If there is any doubt the doubt should be resolved in favour of the beneficiary.

The liberal construction must flow from the language used. The Court ought not to place an unnatural interpretation on the words contained in an enactment. There is no presumption that protection of widest amplitude must be deemed to have been conferred upon those for whose benefit the legislation may have been enacted.

The rule does not militate against the plain meaning rule and has no application when two constructions are not fairly open and the words of the enactment are reasonably capable of only one construction.

On a reference to the dictionary meaning of the word 'shop' as found in some of the standard dictionaries and two decisions of the Kerala High Court it was held that the word 'shop' has different shades of meaning and that it not only referred to a place where goods were sold, but also a place where services were rendered. Accordingly, it was held that the office of the shipping agents in that case was a shop falling within the mischief of the word 'shop' in the Notification.

3. Mr. Devanathan, canvassed the correctness of the decision in W. P. No, 4077 of 1977. The learned counsel drew my attention to the word 'shop' in some of the dictionaries. It will be sufficient to refer to the meaning given in one dictionary cited by Mr. Devanathan to show that the word shop has different shades of meaning and is not confined to a place where goods are stored and sold by retail dealers. In Mitra's Legal and Commercial Dictionary the meaning of the word 'shop' is given thus:

Shop : Shop includes any premises where any retail trade or business is carried on including the business of a barber or hairdresser, and retail sales by auction, but excluding the sale of programmes, catalogues and other similar sales at theatres. Shop means any premises where goods are sold either wholesale or by retail or both whole-sale and by retail and includes a laundry, a hair cutting saloon and other places where services are rendered to customers. The ordinary meaning of the word shop is that it is a place where goods are stored and sold by retail dealers and not a stall or an open space.

4. In Random House Dictionary of the English Language, College Edition, page 1216, the meaning of the word 'shop' is given as follows:

Shop (1) a retail store, espa, small one, (2) a small store or department in a large store selling a specific or select type of goods, (3) the workshop of a craftsman or artisan, (4) any factory, office or business, (5) one's trade, profession or business as a subject of conversation or preoccupation.

5. From the above, it is clear that as already observed in W. P. No. 4077 of 1977 the word shop has different shades of meaning and includes even an office or a place of business.

6. Mr. Devanathan cited the decision in Ram Chancier v. State AIR 1963 Punjab 148. I am unable to see how the said decision in any way supports the learned counsel. There the matter arose under the Punjab Shops and Commercial Establishments Act. The petitioner in that case was a salesman of a tea company. The company had taken on rent a godown where tea was stocked. This depot was a part so to say of the entire business activity of the company. Its function was to act as a Storehouse for the goods and the keeping of necessary books for the purpose. The books could be written at the depot or by the salesman at home. No sale of goods took place at the depot nor the depot was used in connection with a shop. No services were rendered to any one or more customers. At best the depot was a godown-cum-office and the depot-holder was marely an employee of the company, in these circumstances, the question arose whether the depot was a commercial establishment. Head Note B to the decision reads as follows: 'One element is common to both the expressions 'shop' and 'commercial establishment', namely, that there have to be premises wherein, in the case of a commercial establishment any business, trade or profession is carried on for profit and in the case of a shop where any trade or business is carried on or where services are rendered to customers. The carrying on of trade or business or profession necessarily has to have a close and intimate connection with the premises. The other requirement is that what should be carried on in those premises is trade or business or rendering of services to customers in the case of a shop, and in the case of a commercial establishment a trade or business or profession has to be carried on for profit. If the element of tendering service is eliminated, the remaining two elements, that is carrying on of trade of business are common both to a shop as well as to a commercial establishment. But a shop according to the definition does not include a commercial establishment. Therefore, the same premises cannot be at the same time a shop as well as a commercial establishment'. Head note (C) reads as follows:

The word 'shop' is to be taken to mean a premises where trade or business Is carried on in the shape of buying and selling of goods at the spot. It is rather axiomatic that in all trades it is the buying or selling which is going on in one form or the other in praesenti and in future or even on speculativs basis. But in a shop the buying and selling is at the premises or in other words on the spot for cash consideration or may be barter, or on credit. The significant factor is the availability of the goods, there and then and so also of services. The crux of the definition of the word shop in Section 2(cxxv)is that the business or trade vis-a-vis the shop is the actual buying and selling of goods and that must take a place in the premises.

The Full Bench was concerned with the definition of Shop and Commercial Establishments Acts. The said decision is not applicable to the facts of this case.

7. The next case cited by the learned counsel viz., Public Prosecutor v. Shanmugham Pillai (1960) M WN 265 : (1959) 2. LLJ 802. is also a case,' where a Bench of this Court was concerned with the meaning of the term 'shop' to be given under the Madras Shops and Establishments Act.

8. The other decisions cited by the teamed counsel are only for purpose of supporting the proposition of law that words which are not defined in a statute and which are in every day use must be construed in their popular sense meaning that sense which people conversant with the subject-matter with which the statute is dealing would attribute to it. No exception can be taken to the proposition of law advanced by the learned counsel.

9. The learned counsel then drew my attention to a circular dated 25th August, 19/7 issued by the Dy. Administrative Officer (OB & M & DESK), Employees' State Insurance Corporation, New Delhi to all Regional Directors. In that circular certain guidelines have been given to decide the nature of the establishments which would be covered by the word shop. In that circular it is stated : 'Shop may be understood to mean any premises where goods are sold either by retail or wholesale or where sale of services to customers takes place and includes any office, store room, godown, or warehouse whether in the same premises or elsewhere used in connection with such trade or business of sale of goods or services. The expression shop should not include : (1) Hotels, restaurants, departmental canteens/ stores exclusively meant for the benefit of the employees, clubs. (2) Educational institutions, hospitals and dispensaries, doctor's clinic including X-ray clinics and pathological laboratories, office of the auditors and solicitors-chartered accountants, firm of engineers and architects rendering technical advice. (3) Banks, stock and share exchanges, insurance companies, brokers dealing with shares, debentures etc., firms doing money lending business. (4) Chambers of Commerce and Industries'. According to the learned counsel, the petitioner's concern is a financial institution and therefore the authorities did not intend that institutions like the petitioner would be covered by the word 'shop' in the Notification. As against this Miss Radha Srinivasan, the learned counsel for the respondents drew my attention to another circular No. P-11/ 21st April, 1979 Ins. Desk-I dated 3rd December, 1979 wherein the attention of the Regional Directors have been drawn to the fact of the Kerala High Court judgment in Kerala State Financial Enterprises Ltd. v. E. S. I. Corporation. This circular has been issued in variation of the circular dated 25th August, 1977 which was very heavily relied upon by Mr. Devanathan to show that firms doing money lending business were not intended by the department to be covered by the Act. In the circumstances, I do not think that a reference to the circulars can be of any help in deciding the question.

10. Admittedly, the petitioner renders service to its customers by advancing monies to purchase motor vehicles on hire-purchase. The moneys are advanced on the security of the motor vehicles themselves. The learned counsel was not in a position to dispute the fact that rendering of such services form the main part of business activity of the petitioner. However, the learned counsel urged that the services that are rendered by an establishment shop to fail within the mischief of the word 'shop' must be personal services rendered in the premises of the establishment shop itself. The learned counsel was not in a position to convince me with any binding authority that such services should be personal services rendered on the spot. The learned counsel then advanced an argument that no services are rendered by the petitioner in its premises. The service of Sending moneys on hire-purchase according to the counsel is done by its canvassing agents outside the premises. However, after a discussion on the modus operandi adopted by the petitioner in advancing loans on hire-purchase and after being confronted with the position that those canvassing agents had only authority to canvass business for the petitioner and had no power in themselves to advance moneys, the learned counsel did not pursue the argument further.

11. The question whether the Kerala State Financial Enterprises Limited, a public Sector undertaking, is a shop came up for consideration in M. F. A No. 434 of 1978 before the Kerala High Court. Kadar, J., speaking for the Bench observed as follows:

It has come out in the evidence of P. W. 1 that the applicant (Kerala State Financial Enterprises Limited) is conducting chitties and they are also advancing money to its customers to purchase articles on hire purchase agreements. The evidence on record clearly establishes that the applicant is conducting business and is rendering service to its customers for remuneration and that this is a shop coming within the notification issued under Section 1(5) of the Act by the Government of Kerala.

12. I therefore do not find any grounds to re-consider the decision rendered by me in (New India Martine Agencies (Private) Limited, Madras v. The Government of Tamil Nadu, represented by the Secretary, Department of Labour and Employment, Madras and Anr. W.P.No. 4077 of 1977 On the facts of this case, I have no hesitation in holding that the petitioner's establishment falls within the meaning of the word 'shop' in the Notification.

13. In the result, the writ petition fails and is dismissed. There will be no order as to costs.


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