DELHI COUNCIL FOR CHILD WELFARE v. SHEELA DEVI & Anr.

Judgment

1. These appeals are directed against the impugned judgment dated

3.1.2003 passed by the learned Single Judge in C.W.(P) No.3654 of 1999 and C.W.(P) No.3675 of 1999. By the said impugned judgment, the learned Single

Judge dismissed the said writ petitions filed by the appellant herein and affirmed the order dated 2.12.1998passed by the competentauthority under the Minimum Wages Act, 1948(Act') holding that the appellant herein was bound to pay LPA No. 657 of 2004 2 of 22 ts'.. mmimum wages to two of its workers namely Smt.RameshKumari (Resp<^ent ( ^ ' No.l in L.P.A.NO. 909 of 2003) and Smt. Sheela Devi (Respondent\^o.l/m L.P.A.NO. 657 of 2004).

2. The question arising in these appeals, and which arose before the learned Single Judge, is whether the appellant Delhi Council for Child Welfare is covered by the provisions of the Act and is accordingly under an obligation to pay minimum wages to its workmen.

3. The admitted facts are that both Smt. Ramesh Kumari and Smt. Sheela Devi are Balsevikas employed by the appellant. Smt. Ramesh Kumari was being paid Rs 680/- per month from 1.4.1993 onwards as against her entitlementfor minimum wages which was Rs 1176/- per month for the period 1.4.1993 to

31.7.1993 and Rs 1217/- per month from 1.8.1993 onwards. Smt. Sheela Devi was receiving wages at Rs 700/- per month between January and March 1994 and Rs 825/- per month for the period between April 1994 to June 1994 whereas for this entire period she was entitled to minimum wages of Rs 1830/- per month. Some time in 1994, two separate applications were filed by the said Balsevikas before the competent authority under Section 20(2) of the Act. LPA No. 657 of 2004 3 of 22

4. The competent authority by its order dated 2.12,1998 negativ^the contents of the appellant herein and held that the appellant was covered"by^the definition of Section 2(5) of the Delhi Shops and Establishment Act, 1954('Shops Act') and consequently covered by the provisions in the Act by virtue of a notification dated 15.2.1994 issued under Section 27 of the Act. It was further held by the competent authority that while the claim of Smt. Sheela Devi was barred by time for the period 1.1.1994 to 18.1.1994 she was entitled to claim the difference between the minimum wages prescribed and the actual salary drawn by her from 19.1.1994 to 30.6.1994 amounting to Rs 5327/-. As regards Smt. t Ramesh Kumari her claim for the period 1.4.1993 to 28.4.1993 was held to be barred by time. She was held to be entitled to an amount of Rs 2524/- being the difference between the minimum wages and actual salary drawn by her for the period from 29.4.1993 to 30.9.1993. Both the applicants were awarded Rs 500/- each towards costs of litigation.

5. The appellant society thereupon filed writ petitions in this Court challengingthe said order dated 2.12.1998. Pursuantto an interim order passed in the writ petitions,the amounts directedto be paid to Smt. Ramesh Kumari and ) LPA No. 657 of 2004 4 gf 22 Smt Sheela Devi were deposited by the appellant in Court and thereafter withdrawnby the said two persons. 6. By the impugned order dated 3.1.2003, Qj the learnedSingle Judge dismissedthe writ petitionafter coming to the following conclusions: (a) The appellant society was a commercial establishment within the meaning of Section2(5) of the Shops Act, particularlyin view of the decisionsof Hon'ble Supreme Court in Chief CommissionerDelhi v. Federationof Indian Chambers of Commerce and Industry AIR 1974 SC 1527 and Federationof Indian Chambersof Commerceand Industryv. R.K. Mittal(1972) 2 SCR 353. (b) The notificationdated 13.8.1965 issued by the Governmentof India under Section27 of the Act clarifiedthe positionthat all shops and establishments covered by the Shops Act would also be covered by the Minimum Wages Act. Even though this notificationwas not consideredby the competentauthority,and the issue had been decided by the competent authority on the basis of the '¥• notification dated 15.2.1994, there was no need to remand the matter to the competent authority for this purpose since the notification dated 13.8.1965 was LPA No. 657 of 2004 5 of 22 merely clarificatory of the legal status of the appellant. (c) The plea of the appellant that the Union of India should be directed' to release additional funds with effect from 1.10.1993, in order to enable appellant to meet its liabilities under the Act, could not be considered in these writ petitions particularly when the appellant had filed a separate writ petition against the Union of India for that purpose. The non-release of funds by the Central Government could not be a ground for the appellant avoiding its statutory liability under the Act, (d) The directions issued on 16.2.2000 to the appellant to start paying minimum wages to the Respondents from 1.10.1993, along with the arrears, within a period of three months was reiterated. An application filed by the appellant for modification of the said order was dismissed.

7. On 29.5.2006, when these appeals were listed for hearing, this Court was informed by the counsel for Respondent No.l that the payments as directed V by the learned Single Judge had not been made. However, the counsel for the appellant maintained that all the amounts had been paid. In the circumstances, on

29.5.2006 this Court passed the following order: LPA No. 657 of 2004 6 of 22 in order to "In the circumstances, we think it necessary, proceed further in the matter, to direct the appellant to file an affidavit stating clearly the exact amount due and payable by the appellant to respondent no. 1 under the earlier directions contained in the order dated 16.2.2000 read with the impugned judgment dated 3.1.2003 of the learned Single Judge. The said affidavit will also state if and when the said amount was paid. In case the amount has not yet been paid it shall be done so forthwith and The appellantmay file such affidaviton or before 4.7.2006. Respondentno.l is permitted to file a reply to the said should also be indicated in the affidavit. affidavit within four weeks."

8. When the matter was listed on 7.8.2006, it was noticed that the additional affidavit as directed had not been filed. In those circumstances,the Court passed the following order ; " In spite of one pass-over, the learned counsel for the appellant seeks adjournment on the ground that the senior counsel is not available and he is not in a position to argue the matter. We are of the view that this is no ground for adjournment. Though a detailed order has been passed by this Court directing the appellant to file an additional affidavit on or before 4^*" July 2006, even after passage of more than a month, the learned counsel In for the appellant has not complied with the said order. this view of the matter, we reserve orders. Later, Mr.Rajiv Bahl, learned counsel for the LPA No. 657 of 2004 7 of 22 appellant appeared and sought sometime to file written submissions. He is permitted to do so by 11.8.2006." 9^ Pursuant to above order, written submissions running to 30 pages have been filed by the appellant on 18.8.2006. 9, The principle contentionsof the appellant as contained in its written submissions are as under: (a) The appellant, which is a society registered under the Societies Registration Act, 1860, is a voluntary organisationengaged in child welfare V activitiesand is not carrying on a trade, business or profession. The appellant cannot be considered to a commercial establishment under Section 2(5) of the Shops Act. The learned Single Judge erred in following the judgment of the Gujarat High Court in Ahmedabad Panjrapole Sanstha v. Miscellaneous Mazdoor Sabha 1987 LAB. I.C. 577 in as much as the definition of commercial establishment under Section 2(5) of the Shops Act is different from Section 2(4) of the Bombay Shops and Establishment Act. LPA No. 657 of 2004 8 of 22 (b) The appellant is not carrying on any activity which is covered by the Schedule I or II or any notification issued under the Minimum Wages Act. (c) The notification dated 15.2.1994 only revises the minimum wages already fixed under an earlier notificationdated 28.4.1989 and does not declare that all shops and establishmentscovered by the Shops Act would come within the purview of Section 2(g) of the Minimum Wages Act as a scheduled employment. Thus the competentauthoritycommitteda grave error in holding that the notification dated 15.2.1984 resulted in the appellant being covered by the Minimum Wages Act. r (d) The appellantsociety is not covered by any notificationissued under Section 27 of the Minimum Wages Act nor is it covered under any scheduled employmentwithinthe meaningof Section2(g) of the Act. Smt. Ramesh Kumari and Smt. SheelaDevi are not employeeswithin the meaning of Section2(i)ofthe Act. There is no relationshipof employeror employeebetweenthe parties within the meaning of the Act and as such the provisions of the Act are not applicable. (e) Relying on the judgment of the Hon'ble Supreme Court in Sanjit Roy v. State of Rajasthan 1983 LAB. I.C. 312 the appellant contends LPA No. 657 of 2004 9 of 22 Government of India is under a moral and legal obligation to release grants to A appellant to enable it to meet its liability under the Minimum WagesS^t particularlysince its workmen were employed for the purpose of executing a scheme of the Government of India,

10. We may first notice the relevant provisions of the MinimumWages Act which read 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 employeesin any scheduledemploymentin respect of which minimum rates of wages have been fixed under this Act, and includes, except in sub-section (3) of Section 26,~ in a factory where there is carried on any (i) 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 in India in respect of which of any Government minimum rates of wages have been fixed under this the person of authority appointed by such Act, Government the supervision and control of LPA No. 657 of 2004 10 of 22 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 of which scheduled minimum rates of wages have been fixed under employment respect this Act, any person responsible to the owner for the supervision and control of the employees or for the payment of wages; : 2(g) "scheduled employment" means Section employment specified in the Schedule, or any process or branch of work forming part of such employment; Section 2(1) : "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 ornamented, cleaned, washed, finished, altered, up, repaired, adapted or otherwise processed for sale for the purposes 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 LPA No. 657 of 2004 11 of 22 premisesunder the controland managementof that other person; and also includes an employee declaredto be an employee by the appropriateGovernment;but does not includeany member of the Armed Forces of the [Union]. Section 27 of the Act reads as under:

27. Power of State Government to add to " Schedule.-- The appropriateGovernment, after giving by notificationin the OfficialGazette not less than three months' notice of its intention so to do, may, by like notification, add to either Part of the Schedule any employment in respect of which it is of opinion that minimum rates of wages should be fixed under this Act, and thereuponthe Scheduleshall in, its applicationto the [State]be deemedto be amendedaccordingly." W' Parts I and II of the Scheduleto the Act specifythe various kinds of employment for the purposes of Section 2(g) of the Act.

11. At the outset it may be noticed that the appellant does not deny that the V two workers, Smt. Ramesh Kumari and Smt. Sheela Devi, are employed with the appellant as Balsevikas. The ground now urged is that the appellant is not employer and they are not employees within the meaning of Minimum Wages Act LPA No. 657 of 2004 12 of 22 ^ only becausethe activityof child welfareis not listedas ascheduledemploy^nt under the MinimumWages Act. It is contented that there is no notificationissued under Section 27 of the Act by the appropriate Government to include the activitiesof the appellantin the Schedule to the Act. Therefore,the activitiesof the appellantcannotbe characterisedas a ScheduledEmployment. Consequently it is contended that the Act can have no application and therefore, the appellant is not requiredto pay minimumwages to its employees.

12. In the first place it must be noticed that these argument that the activitiesof the appellantdoes not constitutea ScheduledEmploymentis clearly unacceptablein view of a notificationdated 13.8.1965issued by Governmentof India under Section 27 of the Minimum Wages Act. By the said notification an amendment was made to the Schedule to the Act and Item 15 was introduced. The said amendment reads as under: V. AMENDMENT " In Part I of the said Schedule, item 14 the following new item shall be added, namely:-" "15. establishments, Employment covered by the Delhi Shops LPA No. 657 of 2004 13 of 22 < Establishments Act, 1954." That this notificationwas not disputedby the appellanteither before the learned SingleJudge or in the appeal or writtensubmissionsbeforeus. Thereforeboth the competentauthorityand the learned Single Judge rightly proceeded to examine whetherthe appellantwas an establishmentcoveredby the Shops Act. If indeed it was, then it would undoubtedly be covered by the Minimum Wages Act by virtue of the above amendment.

13. Section 2(5) of the (Shops Act), which is relevant for the purposes of the present case, reads as under: "Section 2(5)" ; 'commercial establishment' means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered the Societies Registration Act, 1860 (XXI of 1860) charitable trust, whether registered or not, which carries on any business, trade or work in connection with, or or profession incidental or ancillary thereto, journalisticand printing establishments, contractors and auditors establishments, quarries and mines not governedby the Mines Act, 1952 (23 of 1952), educational or other institutions run for LPA No. 657 of 2004 14 of 22 privategain, and premisesin which businessof banking, insurance, stocks and shares, brokerage or produce exchange is carried on, but does not include a shop or a factory registered under the Factories Act, 1948 (63 of 1948) or theatres, cinemas, restaurants, eating houses, residential hotels, clubs or other places of public amusements or entertainment." (emphasis supplied) ^

14. The competentauthorityrelied upon the judgment of Hon'ble Supreme Court in Federation of Indian Chambers of Commerce and Industry v. R.K. Mittal (Supra) and Chief Commissioner Delhi v. Federation of Indian Chambers of Commerceand Industry (supra) and came to the conclusionthat the appellantwas a commercialestablishmentwithin the meaning of Section 2(5) of the Shops Act. The competent authority observed as under: " It respondent vocational is also the case of society training for drop out boys and girls and mid services the management providing \ V children, handicapped rehabilitation day meals for them, Rehabilitation on and treatment of physically working children/vocational training, supervise home work schemes for school going children, sponsoring programmesfor various categories of children having no financial support, running creches, balwadis, nutrition training center, and nucleus programme, administration. Thus although the respondent society anganwadi LPA No. 657 of 2004 15 of 22 may not be doing its activitiesfor the purpose of profit like Chief Commissioner's case (supra) before the Apex Court, the activitiesof the respondentsociety shall be termed as business activities notwithstanding the fact that these activities are not for the purpose of any profit motive or sharing profit by the members. The definition of commercial establishment as given in Section 2(5) of the Shops Act includes society registered under the Societies RegistrationAct, 1860 and charitable or other trust whether registered or not which carry on any business, trade or proferssion or any work in connection thereto. Thus since respondent therewith or incidental society is doing business activities it is commercial establishment within the meaning of Section 2(5) of the Shops Act and is covered as schedules employment within the meaning of Section 2(g) of the Act by virtue of No.F.12(12)/92-MW/Lab-143 notification

15.1.94 issued under the Act."

15. The learned Single Judge noticed that the notification dated 15.2.1994 referred to by the competent authority was a notification revising the minimum wages applicable to all shops and establishments and that even though the parent y notificationwas the one dated 13.8.1965 which was not before the competent authority, the conclusion reached by the competent authority was nevertheless the correct one. The learned Single Judge also independently examined the issue and LPA No. 657 of 2004 16 of 22 after referring to the judgments in Ahmedabad Panjrapole Sanstha (supr State of Gujarat v. Sthanakvasi Jain Mota Sangh 1995 Vol.III LLJ(Suppl.) and the judgments of the Hon'ble Supreme Court, concurred with the view taken by the learned competent authority.

16. Having examined the records of the case and the order of the competent authority and the impugned order of the learned Single Judge, we are of the view that the concurrent findings of both the competent authority and learned Single Judge do not call for any interference. Although the expression sought to be w defined under Section 2(5) of the Shops Act that of a 'commercial establishment', what is contained in the definition is indicative of the wide sweep of those words. The definition is an inclusive one and expressly includes "a society registered under the Societies Registration Act, 1860 and charitable or other trust whether registered or not, which carries on any business, trade or professionor work in connectionwith, or incidentalor ancillary thereto.' We V- may add that the word 'work' is wide enough to include the activities of an organisationlike that of the appellantbefore us. If even a charitabletrust which obviouslywould not be engagedin any commercialactivityfor profitis expressly LPA No. 657 of2004 17 of 22 included in this definition,as is a Society, we see no reason why it woul^nQt^ 4 include the appellant. It may also be noticed that latter part of the definitron excludescertaintypes of establishments.In other words, the definitionexpressly states that it "does not include a shop or a factory registered under the Factories Act, 1948,' theatres, cinemas, hotels, eating houses, restaurants, health clubs or other places of public amusement or entertainment." The purpose of this exclusion is that, but for such an exclusion these establishments would otherwise be included in the definition. If it was the legislative intention to expressly exclude establishments like that of the appellant, then that would have been expresslystated in the definitionitself. The absence of such an exclusionhas to be construed to mean that organisations and establishments like that of the appellant would fall in the inclusive ambit of definition. A further aspect is that the definition is relatable to a 'premises' where the activity or work is carried on. Section 4 of the Shops Act envisages the grant of exemptions of two kinds from V the provisionsof the Act. As indicatedin the Scheduleto the Act, the exemption couldbe to an establishmentor it could be to a categoryof employee. Even here, the exemptioncould be either from all of the provisionsof the Act or particular LPA No. 657 of 2004 18 of 22 X provisions of the Act. The list of establishments and employees contained in the Schedule is fairly large. It is significant that the establishments i?y like that oOne appellant, or employee like the Respondents herein, do not figure in any of these lists. An establishment like the appellant also envisages a workplace where persons like the Respondents herein would work for specified hours of the day performing tasks as in any other work place. There is no reason why such employees should not be extended the benefit of the Shops Act. This is also a beneficial legislation and its provisions must be interpreted in that light. We are of the view that the appellant is covered by the definition contained in Section 2 (5) of the Shops Act.

17. Once it is clear that the appellant falls within the ambit of Section 2(5) of the Shops Act, the Minimum Wages Act gets attracted by virtue of the notification dated 13.8.1965 issued under Section 27 of the Act. Therefore, the activityof the appellantis a ScheduledEmployment,the appellant'employer'and the two Balsevikas are 'employees' within the meaning of the Act. Thus the contentions of the appellant as noticed in Para 9 (a) to (d) above are without merits. We may add that the learned Single Judge was justifiedin rejectingthe LPA No. 657 of 2004 22 1 plea of the appellant that the matter required to be remanded to the competent authority for determining the applicability and effect of the notification dated

13.8.1965, which admittedly had been produced for the first time before the learned Single Judge. This would have been a pointless exercise involving the wastage of precious time and further litigation. Since the said notification has been considered by the learned Single Judge, there was no need for any remand of the matter.

18. As regards the last submission of the appellant concerning the liability of Union of India, the learned Single Judge referred to the judgment of the Hon'ble Supreme Court in Sanjit Roy (supra) and rightly observed that this matter had to be taken up by the society with the Union of India. The learned Single Judge also noticed that the appellant had already filed a writ petition against Union of India for release of adequate funds. We concur with the learned Single Judge that the mere fact that the appellant has to get grants from the CentralGovernmentfor runningthe scheme for the purposesof which the Bal Sevikas are employed,cannot enable it to avoid the statutoryliabilitiesunder the Act. Thus the directions sought by the appellantto the Union of India to release LPA No. 657 of 2004 20 of 22 the grants to enable it to meet its liabilitiesunder the Act, cannot be gr^nt^ in these proceedings.

19. Before concluding we must once again reiterate what was said in order dated 29.5.2006. In the said order, the order of the learned Single Judge passed on 16.2.2000 directing the appellant to pay minimum wages to the Respondents from 1.10.1993 along with arrears was noticed. It was further noticed that said order dated 16.2.2000 had been reiterated in impugned order dated 3.1.2003 of the learned Single Judge who declined modification of the said order dated >

16.2,2000. As noticed hereinbefore, it is not clear whether the appellant has in fact complied with the said directions. It is unfortunate that the appellant did not comply with the order dated 29.5.2006 passed by this Court requiring it to file an affidavit stating the amounts due and payable as per the order dated 16.2.2000 of the learned Single Judge. Even as on 7.8.2006 no such affidavit was filed. ^ Unfortunately,even in the written submissionsdated 18.8.2006running into 30 pages there is not a single word on whether the order dated 16.2.2000 of the learned Single Judge has been complied with or not. We do not appreciate the failure of the appellant to inform this Court whether the said order has been LPA No. 657 of 2004 21 of 22 /" • compliedwith or not. We also fail to appreciatethe reluctanceofthe app&Hantto IKy. pay minimum wages to its employees as is evident by its persistence wrai this litigationfor nearly twelve years. We may only reiterate that the appellant is bound to comply with the said order, if already not complied with, without any further delay.

20. With the above directions, the appeals are dismissed with costs of Rs 5000/- each to be paid by the appellantto RespondentNo.l in each of the appeals i withina period of four weeks, and in any event not later than 30.9.2006. S. MURALIDHAR, J J ' MUKUL MUDGAL, J AUGUST 28, 2006 LPA No. 657 of 2004 22 of 22