Karnataka High Court
Subhash Bheendra vs State Of Karnataka on 19 September, 2019
Author: John Michael Cunha
Bench: John Michael Cunha
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 19TH DAY OF SEPTEMBER 2019
BEFORE
THE HON'BLE MR.JUSTICE JOHN MICHAEL CUNHA
CRIMINAL PETITION NO.7983/2016
BETWEEN:
1. SUBHASH BHEENDRA
@ (SUBHAASHIS BHANDRA)
PRESIDENT,
2. SRI SURESH TAMMANNA
@ (SURESH KANNAN)
VICE PRESIDENT-1
3. SRI AMARAESH SIMHADRI
@ (AMARESH SIMHADRI)
VICE PRESIDENT-2
4. SRI VIJAYANTHA KUMAR JHA
@ (VIJAYANT KUMAR JHA)
SECRETARY,
5. SRI AJAYA ARIGE
JOINT SECRETARY,
6. SRI PAVAN KUMAR AGARVAL
@ (PAVAN AGARWAL)
TREASURER
7. SRI PUTHEESHA P K
@ (PRATHEESH P K)
ASSISTANT TREASURER
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ALL ARE EXECUTIVE MEMBERS OF
M/S SMONDO VILLE APARTMENT
OWNERS ASSOCIATION, AND R/AT
SY.NO.55/8, 276/1, 275,
HULIMANGALA VILLAGE,
NEW TOWN, ELECTRONIC CITY,
PHASE-1, BENGALURU - 560 100
...PETITIONERS
(BY SRI MITHUN G. A., ADV.)
AND:
1. STATE OF KARNATAKA
BY ELECTRONIC CITY POLICE STATION,
BENGALURU - 560 028
2. THE SENIOR LABOUR INSPECTOR
STATE OF KARNATAKA
18TH CIRCLE, KARMIKA BHAVANA
DAIRY CIRCLE,
BENGALURU - 560 036
... RESPONDENTS
(BY SRI VIJAYAKUMAR MAJAGE, ADDL. S.P.P., FOR R1
R2- SERVED)
THIS CRIMINAL PETITION IS FILED UNDER SECTION
482 CR.P.C. BY THE ADVOCATE FOR THE PETITIONERS
PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO
QUASH THE ORDER DATED 23.07.2016 OF TAKING
COGNIZANCE IN C.C.NO.8599/2016 PENDING ON THE FILE
OF V MMTC, BENGALURU (ANNEXURE-A) AND THE
COMPLAINT DATED 14.06.2016 (ANNEXURE-B) LODGED BY
THE RESPONDENT NO.2 ETC.
THIS CRIMINAL PETITION COMING ON FOR
ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:
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ORDER
Prosecution is launched against the petitioners for the alleged violation of Section 18(3) of Minimum Wages Act, 1948 and Rules 24(9c), 23, 29(1) and 29(2) of the Minimum Wages (Central) Rules, 1950 (hereinafter referred to as 'the Minimum Wages Act and Rules').
2. The petitioners' are the members of Smondoville Apartment Owners' Association. The complainant-Senior Labour Inspector held a surprise inspection of the apartment of the petitioners' and found certain violations and hence, he filed a complaint petition under Section 200(a) Cr.P.C. read with Section 22(a) of the Minimum Wages Act seeking prosecution of the petitioners for the alleged violations of Section 18(3) and Rules 24(9c), 23, 29(1) and 29(2) of the Act and Rules.
3. Learned counsel for the petitioners submits that the provisions of the Act and Rules are not applicable to the petitioners' Association. The petitioners are neither 'employer' as defined in Section 2(e) of the Act and Rules, -4- nor an 'establishment' as defined in Section 2(i) of the Karnataka Shops and Commercial Establishments Act, 1961 and hence, initiation of criminal proceedings against the petitioners is wholly illegal and abuse of the process of Court.
4. Learned Additional S.P.P.-II, however justified the impugned prosecution contending that the petitioners having entered into a contract with M/s.V.R.Facilities Services and having employed more than 32 employees, they fall within the ambit of the said Act and Rules.
5. I have considered the submissions and perused the records.
6. The term 'employer' has been defined under Section 2 (e) of the Minimum Wages Act, 1948, as under:-
"(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 -5- this Act, and includes, except in 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 -6- 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."
7. Section 18(3) of the Minimum Wages Act, 1948 provides that, "3) The appropriate Government may, by rules made under this Act, provide for the issue of wage books or wage slips to employees employed in any scheduled employment in respect of which minimum rates of wages have been fixed and prescribe the manner in which entries shall be made and authenticated in such wage books or wage slips by the employer or his agent."
8. Whether the Association registered under the Karnataka Registration of Societies Act, 1960, is an 'establishment' within the meaning of Section 2(i) of the -7- Karnataka Shops and Commercial Establishments Act, 1961 or whether the workmen employed are the workmen under the said Act and Rules, came up for consideration of this Court in the Writ Petition Nos.18927 - 18928 of 2013 dated 10.06.2016 and considering the various authorities on the subject, at para Nos.11 and 12, this Court has held as under:
"xxxx The Apartment Owners Association is an Association created for the benefit of the Members of the Association and the so called workmen employed by the Association are rendering only personal services to the Members of the Association. As aforesaid, to attract the provisions of the Act, the essential ingredients of an 'establishment' as set out in Section 2(e) of the Act which contemplates that the activities must be commercial in nature, carried on by the office or Department of the Government or the Local Authority must be satisfied. In the absence of such satisfaction, respondent insisting for compliance of the procedures prescribed under the Act is wholly unsustainable.
12. The registration obtained by the petitioners on a wrong conception under the -8- Karnataka Shops and Commercial Establishments Act, 1961 and further not renewed would not entitle the respondent to harass the petitioners' Association by filing criminal complaint on some flimsy grounds before the Magistrate."
9. It is not the case of the complainant that petitioners herein are a factory, mine, oilfield, plantation, port, railway company or shop. Proceedings are initiated on the premise that the petitioners are 'employer/s'.
10. The word 'establishment' is defined in Section 2(i) of the Karnataka Shops and Commercial Establishments Act, 1961 as 'a shop or commercial establishment'. It is not the case of the complainant that petitioners are running any establishment in the apartment or that it deals with any commercial activities. 'Commercial Establishment' is defined in Section 2(e) of Karnataka Shops and Commercial Establishments Act, 1961 as under:-
"2(e) Commercial establishment means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons -9- employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a café or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such establishments as the State Government may by notification declare to be a commercial establishment for the purposes of this Act."
11. It is not in dispute that petitioners' Association is registered under the Karnataka Societies Registration Act. In this context, it may also be apt to refer to the enunciation of law laid down by the Hon'ble Supreme Court in the case of Management of Som Vihar Apartment Owners Housing Maintenance Society Limited Vs. Workmen C/o. Indian Engineering and General Mazdoor reported in 2001 (1) LLJ 1413, wherein it is held that when personal services are rendered to the Members of a Society and that Society is constituted only for the purposes of those Members to engage the services of such employees, its activity should not be treated as an industry nor are they workmen. In that
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context, it is held that the Apartment Owners Housing Maintenance Society is not an Industry.
12. I have perused the Memorandum of Association of the Smondoville Apartment Owners' Association. The objectives of the Association as declared therein, are:
"a. To promote close co-operation between the members and to render all possible advice and guidance to members in any matter relating to ownership and enjoyment of living in the apartment and to provide such amenities and facilities to members as the Managing Committee may deem fit.
b. To render required civic service to the residents.
c. To promote welfare programmes of residents / owners and civic amenities.
d. To promote and encourage oneness amongst the members and to build the spirit of co- operation.
e. All the members of the Association are prohibited to undertake illegal Activities including child labour within the premises of the Association.
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f. To promote upkeep of all common areas and facilities.
g. To open and operate bank accounts in the name of the said Association and to draw and accept cheques, and to make execute or issue cheques or other negotiable instruments for and on behalf of the Association in all matters of financial transactions.
h. The surplus funds of the Association which may not be required by it the time being to be set aside in a fixed deposit in the bank in which the Association accounts are maintained.
i. To appoint any person(s) and other staff members to look after the affairs of the Association and to remunerate any such person in case or otherwise for the services rendered.
j. To pay all costs and expenses incurred or sustained in or about the promotion and establishment of the Society or which the Association shall consider being preliminary, out of its funds.
k. To represent the Association before the Government and other authorities for any common purpose which may impact the
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members monetarily or otherwise and take all such steps as may be necessary in this regard.
l. To take up and represent grievance of members of the Association in all matters of their common problems relating to the upkeep of the common area and facilities pursuant to the provisions contained in various legislative enactments as also the burden of payment of unjustifiable taxes, charges, revenues, duties and other out-going as and when levied before any forum, institution, government body or authority and to obtain passing of any Act or Ordinance of the Legislature or other law making body and to enter into such obligations or take such proceedings as may be calculated to advance the objects of the Association.
m. To constitute Reserve Fund and Sinking Fund as may be deemed necessary for the major repairs and rehabilitation of the building by way of collection or contribution from the members of the Association.
n. To engage the services of any professional like contractors, architects, structural engineers, chartered accounts, advocates and such other
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person/s to take up any necessary civil or structural work or to take the services of any professional initiating any action or defending the same generally.
o. In carrying out the above objectives and activities and to conduct the affairs of the Association effectively to liaise, collaborate and share experience with individuals and / or other bodies and organizations with similar objectives in the City of Bangalore. p. To frame rules and regulations with the approval of the General Body Meeting and any amendments thereof as the exigencies may require for effective and efficient management of the affairs of the Association. q. The Association shall not act beyond the scope of its "Objects" without duly amending the provisions of the Bye-laws for the purpose. r. The income of the Association shall be utilized for the objects of Association and shall not be distributed among its members. s. To do such other things as may be considered to be incidental or conducive to the fulfillment of the aforesaid objectives or any of them.
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t. The President shall be the correspondent of the Association with the Registrar of Societies, Bangalore Urban District, at Bangalore."
13. None of the above objectives fall within the definition of Section 2(e) of the Karnataka Shops and Commercial Establishments Act or Section 2(e) of the Minimum Wages Act, 1948.
14. As a result, I hold that the provisions of the Act and Rules do not apply to the Association run by the petitioners.
15. Accordingly, the petition is allowed. The prosecution instituted against the petitioners for the alleged violations of Section 18(3) of Minimum Wages Act, 1948 and Rules 24(9c), 23, 29(1) and 29(2) of the Minimum Wages (Central) Rules, 1950 are hereby quashed.
Sd/-
JUDGE nvj