Gujarat High Court
State Of Gujarat vs Sthanakvasi Jain Mota Sangh And Ors. on 25 July, 1990
Equivalent citations: (1992)1GLR19, (1995)IIILLJ519GUJ
JUDGMENT Vaidya, J.
1. The question of importance that arises for consideration in these two acquittal appeals is "whether the provisions of the Minimum Wages Act, 1948 (for short 'the Act') and the Rules made thereunder, viz. Gujarat Minimum Wages Rules, 1961 (for short 'the Rules') are applicable to any philanthropic institutions like the one in the instant case carrying on exclusively charitable activities of distributing the foodgrains through a fair price shop run by it to fellow members of the community and that too at cheaper rates without any profit motive"?
2. To briefly summarise the prosecution case, Mr. S.R. Bodat, Minimum Wages Inspector, Rajkot, on 30-10-1980 visited the fair price shop run by Sthanakvasi Jain Mota Sangh (for short accused No. 1- Sangh) situated at 9, Diwanpara, Rajkot. At that time Shri J.M. Doshit, President of the said accused No. 1-Sangh (for short-accused No. 2) was present. On making on the spot inspection, it was found out that the accused No. 1-Sangh had contravened certain provisions under the Rules - to mention few of them such as of (i) Not displaying notice containing the minimum rates of wages fixed together with the abstracts from the Act and the Rules made thereunder and names and addresses of the Inspector etc. etc. under Rule 22; (ii) Extra wages for over-time not paid under Rule 25(1); (iii) Not maintaining a register showing overtime payments under Rule 25(2); (iv) Not maintaining a register of wages under Rule 26(1); (v) Not issuing wages slips to its workers under Rule 26(2); (vi) Not maintaining inspection-book under Rule 26A; and (vii) Not providing card in Form No. V-A to employees under Rule 26B - which are offences under Section 18 punishable under Section 22 of the Act. On making further inquiries from the pay-register, it was found put that two of its employees, viz., (i) Dhirajlal Dharshi who was preparing the bills and (ii) Chandulal Nyalchand who was Tolat, i.e., Weighman were paid less than the minimum wages due. Dhirajlal Dharshi was paid Rs. 240/- p.m. instead of Rs. 300/- p.m. while Chandulal Nyalchand was paid Rs. 155/- p.m. instead of Rs. 250/- p.m. Now each of tne aforesaid contraventions noticed by the Minimum Wages Inspector were immediately noted down by him in the inspection note at Ex. 8 a copy of which was hand.ed over to the accused No. 2. The record also further discloses that the accused No. 2 has submitted his reply dated 20-11-1981 qua the inspection note Ex. 8 dated 30-10-1980, pointing out that no part of the accused No. 1 - Sangh was registered under the Bombay Shops and Establishments Act, 1948 (For short 'S & E Act') and therefore the Act and the Rules made thereunder were not applicable to them. On the basis of these facts, Mr. Bodat, Minimum Wages Inspector filed a complaint on 24-11-1981 before the learned J. M. F. C. at Rajkot against the accused Nos. 1 and 2 for the offences alleged above, which came to be registered as Criminal Cases Nos. 1139 of 1981 and 1140 of 1981.
3. At trial, both accused denying their guilt challenged every prosecution on the ground that the Act and the Rules made thereunder were not applicable to them as the fair price shop run by accused No. 1 Sangh was neither a 'shop' nor a 'commercial establishment' within the definition meaning of the provisions of S & E Act. It was further contended by the accused that no other units of the accused No. 1-Sangh were registered under the S. & E. Act.
4. The prosecution in order to prove its case has mainly relied upon the evidence of Mr. S.R. Bodat, Minimum Wages Inspector (P.W. 1, Ex. 7) and the documentary evidence consisting of (i) Inspection note Ex-8; (ii) Reply dated 20-11-1981 Ex. 9 submitted by accused No. 2 and (iii) the complaint dated 6-10-1980 made to the Labour Officer by Mehta Chandulal Nyalchand working as Tolat in the shop of accused No. 1- Sangh making a grievance that he was not paid his legal dues.
5. The Trial Court accepting the defence contentions acquitted the accused. Thus, aggrieved by the impugned judgment and order of acquittal, the State has preferred present two appeals against the same.
6. Mr. D.K. Trivedi, the learned A.P.P. appearing for the appellant State attacking the finding of the Trial Court, viz., "that the Act and the Rules made thereunder were not applicable to the facts and circumstances of the case and therefore the accused were entitled to be acquitted" submitted that the same being patently perverse and illegal, deserves to be quashed and set aside. The learned A.P.P. further submitted that taking into consideration the fact that the accused No. 1-Sangh was taking services from its employees on the basis of the monthly remuneration, there did exist relationship of 'employer and employee' in between them within the definition meaning of Sections 2(e) and 2(i) of the Act. It was further submitted by the learned A.P.P. that merely because for whatever reasons the fair price shop run by the accused No.l-Sangn was not got registered under the S & E Act, that by itself cannot entitle it to claim any exemption from the application of the Act. According to the learned A.P.P. Entry No. 16 appended to Schedule Part-I of the Act read with the definition meaning of word 'commercial establishment' as defined in Section 2(4) of the S & E Act clearly brings the present two cases within the ambit and purview of the Act. It was further submitted by the learned A.P.P. that the Minimum Wages Act, 1948 being a beneficial labour piece of legislation, bearing in mind the principle of liberal and beneficial construction, the same could not have been viewed or interpreted in any other manner save and except the way it improved, enhanced and safeguarded overall interests of working classes by holding that the Act in question was applicable to both the accused. On the basis of the above submissions, the learned A.P.P. finally urged that since the Trial Court has committed an obvious and patent error in misinterpreting the scope and applicability of the Act and the Rules made thereunder, these two appeals deserve to be allowed by further passing order of conviction and sentence against the accused.
7. Countering the above submissions Mr. Mehul Shah, the learned Advocate appearing for the respondents submitted that merely because to some extent the relationship of 'employer and employees' as defined in Sections 2(e) and 2(i) of the Act was established, that by itself was not sufficient to attract the provisions of the Act. According to Mr. Shan, there were four major hurdles lying in the way of applicability of the Act, which unless they are crossed, the Act could not be made applicable. Those four hurdles, according to Mr. Shah, are (i) that the Schedule Part-I appended to the Act does not contain within its fold any specific entry which can be said to be applicable to the employment in fair price shop in question, (ii) that the so-called fair price shop wherein foodgrains distribution activity was carried on by the accused No.l-Sangn was not a 'commercial establishment' but it was merely a centre or a place for distribution of food-grains created with a view to provide a succour to the needy members of Jain community at a low price from the donations received from the donors; (iii) that the element of profiteering which is essentially a motivating force in every trade and commerce activities was patently absent in this particular case; and (iv) that since no part of the accused No. 1- Sangh was registered under the S & E Act, the provisions of the Act and Rules thereunder were not applicable to them. Thus, according to Mr. Shan, running of a fair price shop being merely a part of social, religious obligation and humanist activity Kumbly performed by the accused No. 1-Sangh the same cannot be treated or equated with 'trade', 'commerce' or 'business'. Mr. Shah finally urged that since the overall view taken by Trial Court cannot be said to be unjust and unreasonable, no case was made out by the appellant-State to interfere with the impugned judgment and order of acquittal.
8. Now in order to properly appreciate and answer the point at issue raised above in para 1 of this judgment and rival contentions in the said regards made at the Bar, it is necessary first of all to have a look at the relevant provisions of the Act and S.&E. Act, having a direct bearing on the point. The Act starts with an introductory note, to quote "An Act to provide for fixed minimum rates of wages in certain employments". Section 2 of the Act reads as under:
"Section 2(e) 'employer', means any person who employs, whether directly or through another person, or whether on behalf of himself or any other person, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, and includes, except Sub-section (3) of Section 26 -
(i) in a factory where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person named under. Clause (f) of Sub-section (1) of Section 7 of the Factories Act, 1948 (63 of 1948) as manager of the factory;
(ii) in any scheduled employment under the control of any Government in India in respect of which minimum rates of wages have been fixed under this Act, the person or authority appointed by such Government for the supervision and control of employees or where no person or authority is so appointed, the head of the department;
(iii) in any scheduled employment under any local authority in respect of which minimum rates of wages have been fixed under this Act, the person appointed by such authority for the supervision and control of employees or where no person is so appointed, the chief executive officer of the local authority;
(iv) in any other case where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person responsible to the owner for the supervision and control of the employees or for the payment of wages.
Section 2(g) 'scheduled employment' means an employment specified in the schedule or any process or branch or work forming part or such employment.
Section 2(h) 'wages' means all remuneration, capable of being expressed in terms of money which would, if the terms of the contract of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment (and includes house rent allowance), but does not include -
(i) the value of-
(a) any house-accommodation, supply of light, water, medical attendance, or
(b) any other amenity or any service excluded by general or special order of the appropriate Government;
(ii) any contribution paid by the employer to any Pension Fund or Provident Fund or under any scheme of social insurance;
(iii) any travelling allowance or the value of any travelling concession: (iv) any, sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (v) any gratuity payable on discharge.
Section 2(i) 'employee' means any person who is employed for hire or reward to do any work. Skilled or unskilled, manual or clerical, in a scheduled employment in respect of which minimum rates of wages have been fixed; and includes an out-worker to whom any articles or materials are given out by another person to be made up, cleaned, washed, altered, ornamented, finished, repaired, adapted or otherwise processed for sale for the purpose of the trade or business of that other person where the process is to be carried out either in the home of the out-worker or in some other premises not being premises under the control and management of that other person, and also includes an employee declared to be an employee by the appropriate Government, but does not include any member of the Armed Force of the (Union)."
8.1. At the fag end of the Act is appended Schedule Part-I which contains the list of several entries of scheduled employments. The Entry No. 16 which came to be added by the Minimum Wages (Gujarat Amendment) Act, 1961, reads under:
Entry No. 16:- Employment in any shop or commercial establishment other than that covered under any of the other entries in this schedule:
Explanation'-- For the purpose of this entry, the expression 'shop and 'commercial establishment'shall have the meanings respectively assigned to them in the Bombay Shops and Establishments Act. 1948.
8.2 Similarly, Section 2 of the Bombay Shops and Establishments Act, 1948, reads as under:
"Section 2(4) 'commercial establishment' means an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession and includes a society registered under the Societies Registration Act, 1860, and charitable or other trust, whether registered or not, which carries on (whether for purpose of gain or not,) any business, trade or incidental or an ancillary thereto but does not include a factory, shop, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment.
Section 2(8) 'establishment' means 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 purpose of this Act.
Section 2(27) 'shop' means any premises where goods are sold, either by retail or wholesale or where services are rendered to customers and includes an office, a store room, godown, warehouse or work place, whether in the same premises or otherwise (mainly used) in connection with such trade or business but does not include a factory, a commercial establishment, residential hotel, restaurant, eating house, theatre, or other place, of public amusement or entertainment.
9. Now coming down to the main task of appreciating the applicability of the Act and the Rules made thereunder to the facts and circumstances of these cases, right at the outset, it must be stated that the submissions made by the learned A.P.P. have considerable force and the same deserve to be accepted. In the instant case, the accused No. 1-Sangh was indisputably running a fair price shop distributing foodgrains to the fellow members of the community with the help and services of two employees, who were paid monthly salaries. Now this fact by itself establishes one thing beyond any manner of doubt that there did exist a relationship of an employer and employee between accused No. 1-Sangh on the one hand and two of its employees on the other hand. Once this factually indisputable relationship of an employer and employee is examined in the light of the terms 'employer' and 'employee' as defined above in Sections 2(e) and 2(i) of the Act, it is very clear that the same falls within the purview of the Act. In fact, this part of the submission of the learned A.P.P. has not been seriously challenged before this Court.
10. Now turning to the four main contentions raised (in above para-7 of this judgment) by Mr. Shah, the learned Advocate for the respondents at the very outset it may be statqd that what at the first sight appeared to be quite attractive; while closely scrutinising, they are found to be without any substance. First of all, it is not correct to say that Schedule Part-I does not contain any entry under which the employment of two workers working in a fair price shop run by accused no. 1-Sangh is not covered. It appears that somehow the parties and the Trial Court quite surprisingly have failed to take notice of Entry No. 16 appearing in the said Schedule, which is reproduced hereinabove in para 8.1 of this judgment. The bare reading of the said Entry No. 16 makes it abundantly clear that it was residuary in nature covering all sorts of employments as (scheduled employments) which otherwise were not specifically referred to in any other entries. Thus, the said Entry No. 16 in its overall general sweep duly covers up an employment even in the fair price shop run by the accused No. 1-Sangh. Not only that, but taking into consideration the explanation appended below the said Entry No. 16, the same leaves no room for any conceivable argument that can be raked up to keep the applicability of the Act and the Rules made thereunder at some distance under the spacious pretext that the activities carried on by the accused No. 1 -Sangh did not fall within the purview of the 'scheduled employment' on the count that it was not the 'commercial establishment' etc. In view of all these, it is not possible to accept the submission of Mr. Shah that the Schedule Part-1 appended to the Act did not contain any entry which does not cover employment of workers engaged in distribution of the foodgrains activities carried on by the accused No. 1-Sangh. Thus, as discussed above, once the relation of 'employer' and 'employee' between No. 1-Sangh and two of its employees as well as the fact that their employment was a 'scheduled employment' falling within the purview of Entry No. 16 of the schedule, is established, there is nothing thereafter which can prevent the application of the Act and the Rules to the facts and circumstances of the present case.
10.1. Similarly, turning the second submission of Mr. Shah, the same has also no substance whatsoever in view of an unambiguous meaning given to the word 'commercial establishment' as defined in Section 2(iv) of the S & E Act. On reading the said definition, it is very clear that any business or trade carried on even by a charitable or other trust for the purpose of gain or not is also squarely covered under it. It is true that the words business and trade are not defined anywhere in the Act. But in practice, we know well that they mean exchange of goods with goods, with money or with labour etc. Now referring to the facts of this case, it is indisputable that the accused No. 1-Sangh in exchange of money were selling foodgrains to its needy customers. In this view of the matter, the fair price shop run by the accused No. 1-Sangh can certainly be deemed to be a 'business or 'trade' and thereby the same clearly fell within the purview of the word commercial establishment. Thus, once the activity of the fair price shop run by the accused No. 1-Sangh though a charitable institution is found to be a commercial establishment within the definition meaning of Section 2(iv) of S & E Act, the question of gaining the profit is of no consequence. Under the circumstances, the argument that because the accused No. 1-Sangh was a charitable institution carrying on a philanthropic activity of distributing the foodgrains at a cheaper rates to the needy section of the community, may be by way of some social, religious or humanistic activity that will not certainly come in the way of applicability of the Act.
10.2. Now turning to the third submission of Mr. Shah that as the element of profiteering which is essentially a motivating force in any business or trade activity was patently absent in this particular case, the Act was not applicable, it may be stated that the same is also devoid of any merit, in view of the clear-cut meaning of the word 'commercial establishment' given in Section 2(iv) of the S & E Act as discussed above in para 10.1 of this judgment. Even otherwise, it may be pointed out that the aforesaid submission of Mr. Shah has no substance. The ordinary dictionary meaning of the word 'profit' is an advantage, gain or benefit. It does include the financial and monetary benefit obtained from the use of capital or series of transactions by way of difference between the income from the sale proceeds and purchase price and/or overall costs of production. That is one way of looking at the meaning of the word profit. Now in cases wherein the employer utilises or exploits the services of any employee in any of its employment by paying him less than his real legal dues, then to the said extent, the difference created by way of actual payment of wages and withholding or paying less than the legal dues clearly creates a margin of advantage, benefit which can certainly fall within the fold of the word profit as there being a marked advantage of a pecuniary gain to the said extent to the employer. Under such situation, it is not possible to agree with Mr. Shah that the charitable activity of distributing of foodgrains to the fellow members of the community was without any profit. Thus, once it is proved that the concerned employment fell within the purview of (i) 'commercial establishment ; (ii) 'scheduled employment' and (iii) by paying the employees less than the minimum dues, the situation operation is clear enough to take in its fold the accused No. l- Sangh within the range of the applicability of the Act. One simply fails to understand as to how one needy weaker section of the society can be taken care of at the cost, expenses and exploitation of the interest of the other none too enviable weaker section of the society, viz., worker. If with the aid and assistance of the donation one weaker section of the society can be taken care of why not with the aid and assistance of the said donation equal care cannot be taken of poor workers by paying them fair, adequate and legitimate dues prescribed under the Act. Undoubtedly, the activity carried on by the accused No. 1 -Sangh in helping out the needy section of the community by distributing the foodgrains at the cheaper rate is an ideal act of charity, highly appreciable and worth following, however, while doing the said activity, if in the same breath inadvertently even, other needy section of the society is ignored, exploited or even given cause for grievance, then it is difficult to conceive as to how one charitable act can be reconciled with another uncharitable act. It hardly requires to be told that the philanthropy is a divine virtue and the same is indivisible and cannot bear for a moment any discriminatory act. There is no virtue which can suffer any discrimination between man and man. And what ultimately the labour Legislations aims at (?) except to remand the employers to be just, soft and human to its poor workers by taking care of their working conditions and paying them the minimum wages. If that is the situation, no honest charitable institution can ever have any grievance in complying with such a human act aiming at the social justice.
10.3. Turning to the fourth and last submission of Mr. Shah, it may be stated that merely because the accused No. 1-Sangh did not volunteer itself to get its fair price shop registered under the S.&E. Act and/or for whatever reasons the law enforcing authority under the said Act also failed to discharge its statutory duty to take appropriate legal steps to make the S & E Act applicable to them, that certainly cannot enable the accused to claim any immunity or exemption from the application of the Act and the Rules made thereunder. To accept the submission of Mr. Shah will simply mean to permit a person to take advantage of his own illegal act. This simply cannot be accepted. May be because the accused bona fidely believed that the particular Act and the Rules made thereunder were not applicable to them, but then the applicability of the Act and the Rules made thereunder neither depend upon the belief of any person howsoever bona fide it may nor upon the soft and sweet eyed inaction on the part of the law enforcing agencies. Thus, merely because the accused No. 1 -Sangh or any of its constituent parts were not registered under the S & E Act, that can never be a barrier to the applicability of the Act once it is found that the acts and circumstances or the instant case clearly warrant the applicability of the Act and the Rules. In this view of the matter the fourth submission of Mr. Shah having no substance, deserves to be rejected and is rejected.
11. In view of the aforesaid discussion, the Trial Court was obviously wrong in holding that the provisions of the Act and the Rules were not applicable to both the accused.
12. Now once the hurdle of non-appli-
cability of the Act and the Rules is crossed over, the next question that remains to be considered is whether there is sufficient evidence on the record to pass the necessary order of conviction ana sentence against the respondents. In this regard, it may be stated that the prosecution has examined Mr. S.R. Bodat, M. W. Inspector (P.W. 1, Ex.7), who in support of his say, has produced inspection-note at Ex.8 made at the time of the inspection of accused No. 1-Sangh. The cross-examination of this witness is directed to the limited point, i.e., applicability of the Act and the Rules. So far as the allegations regarding the contravention of the Rules made in the inspection note at Ex. 8 are concerned, it may be pointed out that the same have remained unchallenged. Not only that, but there is not even a whisper or suggestion in the cross- examination of this witness that the accused have been falsely framed up with some ulterior motive. In this view of the matter, the prosecution having brought home the charge against the accused, they are ordered to be convicted for the same.
13. As regards the sentence, Mr. Shah submitted that out of sheer bona fide mistake regarding the applicability of the Act and the Rules, some of its provisions inadvertently came to be contravened. Mr. Shah while giving assurance to this Court on behalf of the respondents further submitted that in future, due care will be taken by them to see that the relevant provisions of the Act and the Rules are duly respected and complied with. He under the circumstances submitted that taking into consideration the peculiar facts and circumstances of the case, the respondents may not be visited with any sentence. As against the above, the learned A.P.P. quite fairly submitted that the State was not keen for imposing any sentence or fine as such as its primary goal of getting an important decision regarding applicability of the Act and the-Rules has been obtained in its favour. It was mainly for this reason that the State was constrained to prefer these two appeals as a test case. However, the learned A.P.P. hastened to add that this order of no fine should not be taken as a precedent in future, in similar types of cases as but for the fact that these two cases were by way of test cases, he would have surely insisted upon the maximum sentence of fine to be imposed on the respondents as the alleged contravention cannot be taken lightly. This fair submission of the learned A.P.P. is quite appreciable. It may be pointed out that the matter of sentence can never be a matter of precedents and therefore to that extent the worry of the learned A.P.P. is unfounded.
14. In the result, these two appeals are partly allowed. Both accused in each of the two cases under appeal are held guilty and stand convicted for the alleged offences with which they came to be tried. Taking into consideration the submission made by the learned A.P.P., no order of sentence is passed.