Karnataka High Court
Malleswaram Co-Operative Society Ltd. vs Senior Labour Inspector on 14 August, 1998
Equivalent citations: [1999(81)FLR326], ILR1999KAR650, (1999)ILLJ1326KANT
Author: R.P. Sethi
Bench: R.P. Sethi, V. Gopala Gowda
JUDGMENT
R.P. Sethi, C. J.
1. The Common question of law requiring adjudication in these petitions is as to whether the employees of the petitioners Co-operative societies were entitled to the benefit of Minimum Wages Act and the Payment of Gratuity Act? The claim of the workmen is based upon the notification issued by the Government of Karnataka under the Minimum Wages Act specifying the scheduled employments. It is contended on behalf of the employees that as shops and commerical establishments have been notified as schedule establishments, the societies being shop or commerical establishment as defined under Clause (u) and (e) of the Karnataka Shops and Commerical Establishments Act, 1961, they were entitled to the benefit of Minimum Wages and the Payment of Gratuity Act.
2. In order to appreciate the rival contentions of the parties, it is necessary to take note of various provisions of the enactments sought to he relied upon by the learned counsel for the parties. Minimum Wages Act (hereinafter called the Wages Act) has been enacted to provide for fixing minimum rates of wages in certain employments to be notified as such under the Act. In exercise of the powers vesting in the State a number of employments have been specified in the schedule including, 'shops and commercial establishments'. The notification appears to have been issued in terms of Section 3 thereof. It is to be noticed at this stage that the Co-operative societies hav e not been included in any part of the schedule issued in exercise of the powers vesting in the Government under Section 3 read with Section 27 of the Wages Act. The shop has been defined under the Act No. 8 of 1962 to mean:-
"2(u):- 'shop' means any premises where any trade or business is carried on or where services are rendered to customers and includes offices, store rooms, 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 person employed in the shop falls within the scope of the Factories Act, 1948".
And Commercial establishment under Section 2 means:-
"(e) 'commercial establishment' means a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed or 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 amusement or entertainment and includes such establishments as the State Government may by notification declare to be a commercial establishment for the purpose of this Act".
3. It has further to be noticed that before the enactment of Act No. 8 of 1962, there existed an Act known as Mysore Shops and Establishments Act, 1948. Under the aforesaid Mysore Act, a notification was issued on May 17, 1952 which provided:-
"NOTIFICATION In exercise of the powers conferred by Section 6 of the Mysore Shops and Establishments Act 1948 (Mysore Act, No. II of 1948) His Highness the Maharaja of Mysore is pleased to exempt all the Co-operative institutions in the State of Mysore, registered under the Mysore Co-operative Act 148 from the provisions of the said Act."
While enacting Act No. 8/1962 the Legislature appears to be conscious of the notifications issued under the repealed Mysore Act of 1948 as is evident from Section 42 of the 1962 Act. Section 42 provides:-
"42. Repeal and Savings:- the Bombay Shops and Establishments Act, 1948 (Bombay Act LXXXIX of 1948) as in force in the Bombay area, the Hyderabad Shops and Establishments Act, 1951 (Hyderabad Act X of 1951) as in force in the Hyderabad area, the Madras Shops and Establishments Act, 1947 (Madras Act XXXVI of 1947) as in force in the Madras Area and the Mysore Shops and Establishments Act, 1948 (Mysore Act 11 of 1948) as in force in the Mysore area hereby repealed.
Provided that Section 6 of the Karnataka General Clauses Act, 1899 (Karnataka Act III of 1899) shall be applicable in respect of such repeal and Sections 8 and 24 of the said Act be applicable as if the said Act has been repealed and re-enacted by this Act."
4. Generally speaking all provisions of the repealed Act would continue in force for the purposes of enforcing the liability incurred when the Act was in force and any investigation, legal proceedings or remedies can be instituted, continued or enforced as if the Act had not expired, is the mandate of Section 6 of the Karnataka General Clauses Act, 1899. Clause 6 of Section 6 of the aforesaid Act provides that the repeal of the enactment, unless a different intention appears, shall not effect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed enactment. Ordinarily Section 6 of the General Clauses Aqt will apply if there is no saving clause in the repealing enactment but if the repealing enactment makes a special provision regarding the past transactions under the repealed Act, the pro vision, made in the latter enactment would determine the liability which arose under the repealed Act survived or extinguished. The Supreme Court in State of Punjab v. Mohar Singh AIR 1955 SC 84 held that whenever there was repeal of enactment, the consequences laid down in Section 6 of the General Clauses Act will follow unless, as the Section itself prescribes, a different intention appeared. In case of a simple repeal there is scarcely any room for expression of a contrary opinion. But when the repeal is followed by a fresh legislation on the same subject the Court would undoubtedly have to look to provisions of the new Act for the purpose of determining whether those indicated a different intention. It further held:-
"The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities, but whether it manifests an intention to destroy them. The Court cannot therefore subscribe to the broad proposition that Section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests as intention incompatible with or contrary to the provisions of the Section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material. The provisions of Section 6 of the General Clauses Act will apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment. Of course, the consequences laid down in Section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed."
While enacting Act No. 8/1962 the Legislature specifically referred to the provisions of Sections 6, 8 and 24 of the General Clauses Act and prescribed that the aforesaid provisions shall be applicable in respect of the repealed Act as if the Act had been repealed or enacted by the General Clauses Act. Section 8 of the Karnataka General Clauses Act provides that where the said Act or any Karnataka Act made after the commencement of the said Act, repeals and reenacts, with or without modification, any provision of a former enactment, then reference in any other enactment or in any instrument to the provision so repealed, shall, unless a different intention appears, be construed as reference to the provision so reenacted. Section 24 of the Karnataka General Clauses Act provides:
"24. Continuation of orders etc. issued under enactments repealed and re-enacted. Where any enactment is, after the commencement of this Act, repealed and re-enacted with or without modification, then, unless it is otherwise expressly provided, any (appointment, notification) order, scheme, rule, form or bye-law, (made or) issued under the repealed enactment, shall so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been (made or) issued under the provisions so re-enacted, unless and until it is superseded by any (appointment, notification), order, scheme, rule, form or bye law (made or) issued under the provisions so re-enacted."
The main object of Section 24 is to preserve the continuity of the orders, schemes, rules or bye-laws issued under the repealed Act, unless a different intention appears. We do not agree with the learned Counsel appearing for the employees that the provisions of Section 24 would not apply in the case or save the notification issued under the Mysore Shops and Establishments Act, 1948 because the provisions made in the repealed Act and the new enactment in the matter of Minimum Wages Act were inconsistent. The notification dated May 17, 1952 had Specifically excluded the Co-operative societies from the purview of the Mysore Shops and Establishments Act, 1948 which was in no way inconsistent with the new enactment being Act No. 8/1962 dealing with the same subject. The enactment under the Mysore Act appears to have been issued in view of the effective mechanism for fixation of fair wages for the employees of the Co-operative societies was found to be already effective and prevalent.
5. The Legislature appears to be conscious and aware of Rule 17 of the Karnataka Co-operative Societies Rules enacted to carry out the purpose of Section 121 of the Karnataka Co-operative Societies Act providing that the management committee shall from time to time prescribe the strength of the establishment of the Society and the scale of pay and other allowances to its employees subject to the budget allotments sanctioned by the general body. Provision for prescribing the scale of pay for the employees of the Co-operative Society appears to have been substituted in the aforesaid rule by GSR 85 dated March 28, 1987. It has not argued on behalf of the employees of the Co-operative Societies that their scale of pay was lesser than the minimum wages being paid to the employees of the shops and establishments. The exclusion of the employees of the Co-operative Societies from the ambit of the Minimum Wages Act is explicit and unambiguous. Had the appropriate Government decided to include the employees of the Co-operative Societies, nothing prevented it from including such employees in the notification issued under the Minimum Wages Act and adding them in the schedule to the Wages Act.
6. Similar is the position with respect to the payment of gratuity to the employees of the Co-operative Societies. Sub-section 3 of Section 1 of the Payment of Gratuity Act makes the said Act applicable to:-
"(a) every factory, mine, oilfield, plantation, port and railway company:
(b) every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months;
(c) such other establishments or class of establishments, in which ten or more employees are employed, or were employed, on any day of the preceding twelve months, as the Central Government may, by notification, specify in this behalf".
The definition of the employer and employee in the said Act is substantially the same as defined under the Wages Act. Rule 18(4) of the Karnataka Co-operative Societies Rules specifically deals with gratuity and provides:-
"(4) Gratuity :- 1) The Committee of a Co-operative Society shall grant Gratuities on retirement to the employees of the Co-operative Society or on his death to his nominees or heirs or representatives subject to the following conditions;
(a) When an employee leaves the service within five years from the date of his permanent appointment, he shall have no claim to this benefit;
(b) When an employee who has put in five to ten years service retires from service or if he dies while in service, gratuity not exceeding from half a month's pay for every year of service which he was drawing on the date of retirement, or death as the case may be;
(c) when an employee who has put in more than- ten years service retires from service or if he dies while in service, gratuity not exceeding a month's pay for every year of service which he was drawing on the date of retirement or death as the case may be;
(ii) The, maximum amount payable to any employee shall not exceed fifteen months' pay under any circumstances.
N.B.:- 'Pay' means the average monthly salary drawn during the last year of the employee's active service."
7. Under the circumstances the writ petitions are allowed and the rule issued made absolute. It is held that the provisions of the Minimum Wages Act and the Payment of Gratuity Act are not applicable to the employees of the Co-operative Societies. The orders impugned in the petitions passed by the authorities under the aforesaid Act are quashed. The disposal of these petitions would however not prevent the appropriate Government from specifically applying the provisions of the aforesaid Act to the employees of the Co-operative Societies if deemed proper and appropriate under the circumstances which may be brought to its notice. No costs.