Karnataka High Court
The Mangalore Co-Operative vs State Of Karnataka on 27 February, 2024
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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NC: 2024:KHC:8118
WP No. 29699 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
WRIT PETITION NO.29699 OF 2015 (GM-RES)
BETWEEN:
THE MANGALORE CO-OPERATIVE
BUILDING SOCIETY LTD
CLASSIC ORCADE, 1ST FLOOR
OPPOSITE PRABATH THEATRE
K.S.RAO ROAD
MANGALORE-575 001
REPRESENTED BY ITS SECRETARY
SRI.PADMANABHA.K
S/O VENKATAPPA
AGED ABOUT 48 YEARS
...PETITIONER
(BY SRI. HAREESH BHANDARY.T., ADVOCATE)
AND:
1. STATE OF KARNATAKA
REPRESENTED BY ITS SECRETARY TO
Digitally signed
by LABOUR DEPARTMENT,
NARAYANAPPA VIDHANA SOUDHA,
LAKSHMAMMA BANGALORE-560 001
Location: HIGH
COURT OF 2. THE LABOUR INSPECTOR
KARNATAKA SUB-DIVISION-1,
KARMIKA BHAVANA,
DIARY CIRCLE
BANNERAGHATTA ROAD
BENGALURU
3. THE SENIOR LABOUR INSPECTOR
3RD CIRCLE,
MANGALORE
K.D.DISTRICT-575001
...RESPONDENTS
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NC: 2024:KHC:8118
WP No. 29699 of 2015
(BY SRI. M.R. PATIL., HCGP)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227
OF CONSTITUTION OF INDIA READ WITH SECTION 482 OF CR.P.C.
PRAYING TO CALL FOR THE RECORDS FROM THE R-3 WHICH
ULTIMATELY ISSUED IMPUGNED ENDORSEMENT VIDE ANN-A DATED
10.6.2015 ISSUED BY THE R-3 BEARING NO. HIKANIMA-
3/KAAMVASAM/CR-04/2015-16 AND ETC.
THIS WRIT PETITION, COMING ON FOR HEARING, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner is before this Court seeking for the following reliefs:
i. Call for the records from the 3rd respondent which ultimately issued impugned endorsement Annexure-A dated 10.06.2015 issued by the R3 bearing No. Hikanima-3/Kaamvasam/CR-04/2015-16 ii. Issue writ of certiorari or any other appropriate writ quashing the impugned endorsement Annexure-A dated 10.06.2015 issued by the R3 bearing the No. Hikanima-3/Kaamvasam/CR-04/2015-16 iii. Issue writ of certiorari or any other appropriate writ quashing the entire proceedings in C.C.No. 885/2015 pending before the Court of J.M.F.C. II Court, D.K. Mangalore registered for offence under section 22-B or Minimum Wages Act, 1948 and C.C.No.1361/2015 pending before the Court of JMFC II Court, D.K. Mangalore registered for offence under section 31 of the Karnataka Shops and Commercial Establishments Act 1951 (Annexure- B and C) iv. Issue such other relief's as it deems fit to grant in favour of the petitioner by this Hon'ble Court in view of the facts and circumstances of the cases, in the interest of justice.-3-
NC: 2024:KHC:8118 WP No. 29699 of 2015
2. The petitioner is a society registered under the Karnataka Co-operative Societies Act, 1959 and is in the business of providing financial assistance to its members for purchase of house sites and also for construction of houses. The third respondent having visited the premises of the petitioner on 28.05.2014 had submitted a report in pursuance of which a show cause notice came to be issued on 17.07.2014 calling upon the petitioner to show cause as to why criminal action should not be initiated against the petitioner for non-registration/non-continuance of the registration under the Karnataka Shops and Commercial Establishments Act, 1961 (for short, 'the Act of 1961'). The petitioner contended that the petitioner is not a commercial establishment. It does not carry any commercial activity in respect of third parties, but it is only assisting its own members to obtain financial assistance and as such, the same is not being a commercial activity, the Act of 1961 would not apply to the petitioner.
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NC: 2024:KHC:8118 WP No. 29699 of 2015
3. The third respondent not being satisfied with the reply initiated two separate criminal cases against the petitioner viz., in C.C.No.885/2015 for offence under Section 22-B of the Minimum Wages Act, 1948 and in C.C.No.1361/2015 for offence under Section 31 of the Act of 1961. It is challenging the same that the petitioner is before this Court seeking for the aforesaid reliefs.
4. Sri.Hareesh Bhandary, learned counsel for the petitioner would again reiterate that the petitioner does not carry out any commercial activity; there is no business as such which has been carried out by the petitioner. The petitioner only provide assistance to its own members which cannot be said to be commercial in nature and as such, the Act of 1961 would not apply to the petitioner. Insofar as the proceedings initiated under Minimum Wages Act, Sri.Hareesh Bhandary, learned counsel would submit that there being no commercial activity being carried -5- NC: 2024:KHC:8118 WP No. 29699 of 2015 out and the activity of the petitioner not being scheduled under the Minimum Wages Act, 1948, no such proceedings could have been initiated and as such, he submits that both are required to be quashed.
5. Heard Sri.Hareesh Bhandary, learned counsel for the petitioner and Sri.M.R.Patil, learned HCGP for respondents and perused papers.
6. Sub-Section (e) of Section 2 of the Act of 1961 defines 'Commercial Establishment', which reads as under:-
2(e) "commercial establishment" means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a cafe 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;
7. Sub-section (g) of Section 2 of the Act of 1961 defines 'employee' which reads as under:- -6-
NC: 2024:KHC:8118 WP No. 29699 of 2015 2(g) "employee" means a person wholly or principally employed in or in connection with, any establishment whether working on permanent, periodical, contract or piece-rate wages, or on commission basis, even though he receives no reward for his labour and includes an apprentice, any clerical or other member of the staff of a factory or industrial establishment who falls outside the scope of the Factories Act, 1948, but does not include a member of the employer's family; and "employed" shall be construed accordingly;
8. Sub-section (u) of Section 2 of the Act of 1961 defines 'Shop', which reads as under:
2(u) "shop" means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, storerooms, godowns, or warehouses, whether in the same premises or otherwise, used in connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop fall within the scope of the Factories Act, 1948
9. A perusal of all the three definitions would indicate that an establishment dealing with banking, administrative service where persons employed were mainly engaged in office work would be a commercial establishment and any premises where any trade or business is carried on or where services are rendered to customers and includes offices in connection with such trade or business would amount to a shop. An -7- NC: 2024:KHC:8118 WP No. 29699 of 2015 employee means a person who is employed in connection with the establishment either permanent, periodical, contract or piece-rate or on commission basis. The petitioner admittedly is a co-operative society registered under the Karnataka Co-operative Societies Act, 1959 providing financial assistance to its members for purchase of house sites and for construction of houses. By providing financial assistance in terms of a loan, the petitioner is essentially in the business of banking which is covered under the definition of 'Commercial Establishment' in terms of sub-section (e) of Section 2 of the Act of 1961.
10. That apart the persons employed in the said office of the petitioner render various services to the members on account of they being members as also on account of loan/financial assistance made available to such members. Thus, the persons employed therein would come within the definition of -8- NC: 2024:KHC:8118 WP No. 29699 of 2015 'employee' in terms of sub-section (g) of Section 2 of the Act of 1961.
11. In that view of the matter, I am of the considered opinion that the establishment of the petitioner is one which is covered under the Karnataka Shops and Commercial Establishments Act, 1961 and would therefore be required to be registered in terms thereof.
12. Insofar as Minimum Wages are concerned, an establishment which is registered under the Act of 1961 would also be amenable to the Minimum Wages Act, 1948 requiring minimum wages to be paid. Having held the petitioner to be covered under the Act of 1961 as a corollary thereto and necessary consequences thereof, the Minimum Wages Act, 1948 would also equally apply to the petitioner. Therefore, I do not find any infirmity in lodging of the criminal proceedings by the third respondent in -9- NC: 2024:KHC:8118 WP No. 29699 of 2015 C.C.No.885/2015 for offence under Section 22-B of the Minimum Wages Act, 1948 and in C.C.No.1361/2015 for offence under Section 31 of the Karnataka Shops and Commercial Establishments Act, 1961. The Writ Petition not making out any grounds stands dismissed.
Sd/-
JUDGE PRS List No.: 1 Sl No.: 93