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Allahabad High Court · body

1970 DIGILAW 17 (ALL)

Som Nath Soni v. Hind Housing And Constructions Ltd.

1970-01-15

M.H.BEG

body1970
ORDER M.H. Beg, J. - This is a complainant's appeal against the acquittal of the Hind Housing and Constructions Ltd. and its seven Directors for alleged offences punishable u/s 35 read with Sections 33 and 34 of the UP Shops and Commercial Establishments Act (Act No. XXVI) of 1962 (hereinafter referred to as 'the Act'). Section 34 of the Act makes a company as well as every person incharge of and responsible to the company for the conduct of its business at the time of the commission of the offence guilty and liable to be proceeded against and punished under the. Act. There is however, a proviso which exempts from criminal liability a person who proved that the offence was committed without his knowledge or that he exercised due diligence to prevent the commission of the offence. Section 33 of the Act which lays down: Any person, who contravenes, or fails to comply with, any of the provisions of this Act, or of the rules made thereunder, other than those of Sub-section (1) of Section 20, shall be guilty of an offence under this Act. 2. The contravention of the Act alleged by the complainant was said to be covered by the provisions of Sections 10 Sub-section (7) and 13 and 19 and 20 of the Act. Section 10 Sub-section (7) lays down the liability of the employer to pay wages for the number of days for which earned leave is due to an employee whose services have been terminated either by the employer or by the employee. Section 13 of the Act provides for the fixation of the wage period and the time when it becomes payable. Section 20 of the Act relates to termination of the employment by the employee himself and therefore, it has no application to the instant case; and it is admitted by the learned Counsel for the complainant that Section 20 was wrongly mentioned in the complaint. The correct section, however according to the Appellant's case, is Section 19 of the Act which provides that no employer will discharge an employee unless the post held by the employee has been retrenched or the employee is unfit to perform his duties because of his physical infirmity or continued ill-health. The correct section, however according to the Appellant's case, is Section 19 of the Act which provides that no employer will discharge an employee unless the post held by the employee has been retrenched or the employee is unfit to perform his duties because of his physical infirmity or continued ill-health. It also enacts that the discharge will not take place without serving a notice in writing, containing the grounds for the discharge, which should be served not less than 30 days before the discharge unless it is accompanied by payment of wages for shortage in the period of notice. Section 19, however, lays down that its provisions have no application to a case of dismissal for misconduct. There is no provision in the Act itself for the circumstances in which the dismissal for misconduct may take place, but Section 40 of the Act mentions that dismissal may be provided for by rules made under the Act. Rule 15, made under the Act, gives all the cases of misconduct which, being a ground of punishment, can only be held to have been made out after the person against whom misconduct is alleged has been given a reasonable opportunity of showing cause to meet the allegations made against him. 3. The complainant did not allege any wrongful dismissal for misconduct. The accused also have not taken up the case that they intended to take any action against the complainant for any misconduct, although it has been suggested that losses had been incurred by the company, which has its Head office at Lalbagh Circus in Lucknow and a branch at Allahabad, due to the negligence of the Appellant who was incharge of the Allahabad branch. The case set up by the Respondents accused was that they had actually closed down the branch at Allahabad due to the losses incurred, but had subsequently decided to engage Abdul Khaliq, DW 1, again, on an application made by him, only to collect instalments due from customers at Allahabad. It appears that the business of the company was to construct houses for customers and to collect the charges made for construction of houses by instalments. 4. It appears that the business of the company was to construct houses for customers and to collect the charges made for construction of houses by instalments. 4. There is a letter dated 2-3-1967, written by Ram Chandra Gurnani, the Director Incharge of the company, from Lucknow, to the Post Master, GPO, Allahabad, showing that the branch office at Allahabad was actually closed down so that the Post Box No. 58 in the Post Office, of which the key was returned, was relinquished. There is another letter, dated 28-9-1966, from the landlord of the premises in which the business of the company was carried on showing that the premises had been vacated after the rent of the premises had been fully paid up by the company. There is, therefore, no reason to doubt that the branch office of the company was actually closed at Allahabad in the month of August, 1966, for reasons stated by it, so as to occasion the termination of services of the Appellant by retrenchment. 5. The Magistrate before whom the case was tried, however, came to the conclusion that the complainant, having been employed to work in a supervisory capacity, could not come forward as an "employee" within the meaning of Section 2 Sub-section (6) read with Section 3 of the Act. Section 2 Sub-section (6) includes, within the purview of employees, all persons employed on wages by an employer in connection with any trade, business, or manufacturer, carried on in a shop or "commercial establishment." A 'shop' is defined in Section 2 Sub-section (16) as premises where any wholesale or retail trade or business is carried on, or where services are rendered to customers, including godowns or warehouses, whether in the same premises or not, which are used in connection with such trade or business. A "commercial establishment" is defined by Section 2 Sub-section (4) as "...any premises, not being the premises of a factory, or a shop, wherein any trade, business, manufacture, or any work in connection with, or incidental or ancillary thereto, is carried on for profit and includes a premises wherein journalistic or printing work, or business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on...." The branch office of the company would, therefore, fall under the heading of a 'commercial establishment' even if the definition of a 'shop' was confined to places where wholesale or retail trade or business is carried on or where services are actually rendered to customers. Section 3 of the Act, however, provides that the provisions of the. Act will not apply to "employees occupying positions of confidential, managerial, or supervisory character in a shop or commercial establishment, wherein more than five employees are employed." 6. The trying Magistrate had held that the Appellant was not an employee because it had been admitted that he was employed in a company in which about 30 employees were working. The statement of Abdul Khaliq, DW 1, on which the learned Magistrate relied, showed that there were only three employees working at the commercial establishment at Allahabad although the company, with its Head Office at Lucknow, employed altogether about 30 persons in it. Section 3, however, refers to employment at the particular shop or commercial establishment in question. A company may have more than one shop or commercial establishment to each of which the provisions of the Act will apply. It is only if the employees at that particular commercial establishment are more than five that an employee working in confidential, managerial, or supervisory capacity there would be excluded from the purview of the definition of an 'employee' given in Section 2 Sub-section (6). In the instant case, the particular commercial establishment at Allahabad did not have more than three employees in August 1966 although the Appellant did supervisory and field work. Therefore, the Appellant would not be outside the purview of an 'employee' to whom the Act applies notwithstanding that he drew a salary of Rs. 450/- per month. In the instant case, the particular commercial establishment at Allahabad did not have more than three employees in August 1966 although the Appellant did supervisory and field work. Therefore, the Appellant would not be outside the purview of an 'employee' to whom the Act applies notwithstanding that he drew a salary of Rs. 450/- per month. The definition of "wages", given in Section 2 Sub-section (18) of the Act, includes even salary, allowance or payments expressed in terms of money or capable of being so expressed and does not contain a limit on the amount payable per month so as to fall within the definition of 'wages'. 7. Although the ground given for the acquittal of the Respondents by the trying Magistrate is not for the reasons given above, correct, I find that the case could have been dealt with on another footing. It is that the commercial establishment, which was the office of the company at Allahabad, had been closed in August, 1966, so that the company was entitled to retrench the post held by the Appellant. The contention on behalf of the Appellant is that, even if the company was entitled to retrench the post, the Appellant was entitled to a notice of 30 days prior to his discharge. The company had sent what is called an order, dated 23-4-1966, signed by the Director Incharge of the company, to the Appellant, who was incharge of the branch office at Allahabad. It was stated there, inter alia: It would be, therefore, advisable for the members of the staff of the company to individually try to secure a job somewhere else so that they may not be inconvenienced if the company is obliged to dispense with their services. Accordingly, they will please make a note of this situation and sign this directive in token of one month's notice from the date hereof for the termination of their appointments in the office of the company. Thus, they will be at liberty to leave the office at any time before or after the termination of this one month's notice without even intimating, in advance, their intention to leave it. At the same time the company will be at liberty to terminate their services at any time after the expiry of one month allowed herein before without any further notice. At the same time the company will be at liberty to terminate their services at any time after the expiry of one month allowed herein before without any further notice. This document, which clearly amounts to a notice, within the meaning of Section 20 of the Act, was signed by all the members of the staff including the Appellant Som Nath Soni. It appears, from the document, there being eight signatures of the members of the staff, that, at the time when the notice was given, there were more than three employees at the commercial establishment. It may be that some of them were doing field work or supervising the actual construction of buildings. It has, however, been shown that the Appellant was incharge of the office at Allahabad. Therefore, if there were more than five persons employed at the time when the notice was given, the Appellant would not be an employee, in view of Section 3 of the Act, at that time. Nevertheless, the so called order clearly amounted to be a notice and showed that it was for all the members of the staff including the Appellant, who had signed it as evidence of the contents of the notice. It is immaterial that the Appellant was also asked to give a notice to each member of the staff individually as he was incharge of the branch office. This appears to have been done out of abundant caution. Therefore, even if the Appellant was an "employee", to whom the provisions of Section 20 of the Act were applicable when he was discharged it could not be said that this provision had been contravened in the case of the Appellant. It appears that the number of employees had been reduced to three, when the Appellant was actually discharged on. 1-9-66. The Appellant's case, taken in the complaint that he was discharged from 1-9-1966, without previous statutory notice required by the Act, cannot, therefore, be accepted. 8. The complainant had also taken up the case that he was entitled to be paid at the rate of Rs. 450/- per month for the period from 1-9-1966 to 31-1-1967, although he filed the complaint on 28-2-1967, on the last day of the period of limitation provided by Section 36 of the Act. The amount claimed, therefore, is in respect of the period after 1-9-1966, although the details of claim of Rs. 450/- per month for the period from 1-9-1966 to 31-1-1967, although he filed the complaint on 28-2-1967, on the last day of the period of limitation provided by Section 36 of the Act. The amount claimed, therefore, is in respect of the period after 1-9-1966, although the details of claim of Rs. 5085/- show that salary for the month of August, 1966, a month's salary in lieu of notice and wages for unavailed earned leave of 1 1/2 months and the estimated bonus for the years 1964-65 and 1965-66 were also claimed. The complainant, however, admitted that he had received a notice dated 20-8-66, terminating his services from 30-8-1966, which he had filed in Court, in addition to the above mentioned order-cum-notice dated 23-4-66. Thus, all the requirements of the statutory notice, for which no form is prescribed by Section 20 of the Act were satisfied here. The Appellant could not, therefore, claim any amount for a period after 1-9-1966. As regards other claims relating to the period before 1-9-1966, no evidence has been placed before me to justify these claims. Learned Counsel for the Appellant stated that his client will prove these items in other proceedings which are pending. This decision will not operate as a bar to proof of any claim relating to a period before 1-9-1966 which may have been made by the Appellant in other proceedings. 9. As the Appellant has not established any contravention of the provisions of this Act in the case before me, the Respondents cannot be convicted of any offence.