The Laxmi Vishnu Textile Mills Ltd. , Bombay v. M. R. Balakrishnan
1977-06-17
RAMAPRASADA RAO, SURYAMURTHY
body1977
DigiLaw.ai
Judgment :- RAMAPRASADA RAO, J. 1. The petitioner in W.P. No. 4452 of 1974 questions the jurisdiction of the Additional Commissioner for Workmens Compensation, Madras, to entertain an appeal filed by its employee-first respondent under S. 41 of the Tamil Nadu Shops and Establishment Act 1947, hereinafter called the Act. The first respondent was entertained by the petitioner-company as its Madras representative in or about February 1969. The first respondents services were terminated with effect from 28th February 1971. On the ground that no reasonable cause has been adduced for such termination and as the prescribed mandate under S. 41 of the Act was not complied with, the first respondent questioned the validity of the order of termination of service. The petitioners case is that the first respondent was appointed purely on a temporary basis and for purposes of experimenting its project for expansion and that the intention from the beginning was that the post filled up by the first respondent in connection with such expansion could be abolished if they could not achieve the objective for expansion of their trade. As the project did not produce satisfactory results, the petitioner wanted to close down the Madras office and this resulted in the termination of the temporary and experimental service of the first respondent. On that ground it is said that the order of termination is justified. The second and the more formidable ground on which the writ petition rested was that the Additional Commissioner for Workmens Compensation (second respondent) who entertained the appeal under S. 41 of the Act had no jurisdiction to grant the first respondent any relief, as he was not a ‘person employed’ under the Act. On merits the petitioner also stated that the first respondent was in the position of a Manager and his work involved touring and canvassing and that there was no establishment as such to which he was allotted. On the above grounds the appeal before the second respondent was contested. The second respondent held that he had jurisdiction to entertain the appeal and that the tours undertaken by the employee was only incidental to his main work and as the prescriptions laid down under S. 41(1) of the Act were not complied with, he set aside the order of termination.
The second respondent held that he had jurisdiction to entertain the appeal and that the tours undertaken by the employee was only incidental to his main work and as the prescriptions laid down under S. 41(1) of the Act were not complied with, he set aside the order of termination. As against the order of the second respondent, the petitioner filed the Writ Petition under Art. 226 of the Constitution and sought for a Writ of Certiorari to quash the order of the second) respondent dated 22nd May 1973. 2. The main argument be fore the Appellate Authority was that he had no jurisdiction to entertain the appeal. The second respondent would not agree with the contention. The first respondent contended to the contrary and Mohan, J. after a review of judicial precedents quoted before him, found that the Additional Commissioner for Workmens Compensation did not consider the question whether there was any reasonable cause given by the employer in terminating the services of the employee. In those circumstances, he remitted the subject matter for disposal by the second respondent in accordance with the principles laid down in the well-known decisions of our court. Against this order of remittal, the present appeal has been filed. 3. Mr. B. Kalyanasundaram, appearing for the appellant, did not raise any question on the merits and he made it clear that he was only on the legal question whether the second respondent as the Appellate Authority constituted under S. 41 of the Act, had the requisite jurisdiction to entertain the appeal. The substantial contention raised before us is that the Act would not apply to the petitioner establishments as it is beyond the State of Tamil Nadu. Secondly it is said that it is not a commercial establishment at all and even otherwise it has no premises of its own in Madras to compel the petitioner to follow the prescriptions as regards the termination of service of its employees as set in S. 41 of the Act. 4. Regarding the first general contention it is not supportable at all.
4. Regarding the first general contention it is not supportable at all. As long as the jural relationship of employer and employee is not in dispute, any issue connected with and relating to such service resulting from the jural relationship as above, can be adjudicated upon by statutory tribunals, who are specifically created by a beneficial statute for giving redress to an aggrieved employee in a case where his services are terminated without justifiable cause. The argument that merely because the employer is an out of State establishment, the local enactments would not bind him is a far-reaching one and it would have sinister effect on labour relations. If the contention is well-founded it would only mean that the employer can escape with impunity merely on the ground that his head office or his principal place of business is outside a particular State which is governed by its own laws and which protects the interest of labour and employees in ordinary commercial establishments which are functioning within its local limits. We are unable to agree with the first contention. 5. The next contention is that there should be a commercial establishment in Madras and it should have a premises of its own so as to attract the provisions of the Act. 6. S. 2(5) of the Act defines an ‘employer’. It means a person owning or having charge of the business of an establishment etc. Therefore, a person having control over an establishment would also come within the purview of an employer. The definition contemplates an overall management of control and not a physical and actual control over the establishment as such. S. 2(6) of the Act while defining an ‘establishment’ includes within its fold a ‘commercial establishment’ etc., and includes such other establishment as the State Government may notify to be one such for purposes of the Act. The term ‘commercial establishment’ means an establishment which is not a shop, but which carries on the business of advertising, commission, forwarding or commercial agency, or which is a clerical department of a factory or industrial undertaking or which is an insurance company, joint stock company, bank, brokers office or exchange and includes such other establishment as the State Government may by notification declare to be a commercial establishment for the purposes of this Act.
A person employed in so far as our cast is concerned would include a person wholly or principally employed in connection with the, business of the establishment. Having regard to the principal definitions referred to above, it is contended that there being no commercial establishment of the appellant at Madras, and as there is no premises in which such an establishment is housed, it cannot be said that the first respondent is an employee in a commercial establishment which could only form the basis for an invitation to the second respondent to entertain an appeal against an alleged illegal termination of service. Mr. Kalyanasundaram vehemently contends that as the appellant is not having any establishment of its own and as there is no demonstrative commercial activity in the State of Tamil Nadu, the provisions of the Act would not be applicable. 7. To appreciate this contention, we should have an idea as to what the duties of the first respondent as such employee of the appellant employer are. According to the first respondent he was to act as a laiason between the petitioner Mills and the selling agents in the South and look after their general commercial interest. He had to conduct market survey regarding the products and suggest the ways and means of improving the trade of his employer. He would say that his work was mainly clerical and technical and that the was discharging such duties as an employee from his own house at Madras and that in every sense he was an employee of a commercial establishment. The appellants case however is that he had no office or establishment in the State of Tamil Nadu and that this by itself is sufficient to take the cause out of the provisions of the Act and that the first respondent therefore, cannot challenge the order of termination of service before the second respondent. 8. Under S. 41(2) of the Act any employee whose services were continuous for a period of not less than six months, were dispensed with without reasonable cause and without giving such person at least one months notice or wages in lieu thereof, has a right to appeal to the prescribed authority within the time set out under the said section. We have already referred to the definition of a ‘person employed’.
We have already referred to the definition of a ‘person employed’. A ‘person employed’ though would ordinarily cover generic employment, yet it has a special meaning having regard to S. 2(2) of the Act which refers to a person employed in a commercial establishment either principally or wholly in connection with the business of the establishment. Of course, there are certain exceptions engrafted in S. 2(2)(iii) with which we are not concerned in the instant case. 9. A commercial establishment under S. 2(3) of the Act engulfs within its range of activities, the commercial activity in which the appellant is involved. The ordinary meaning of an establishment given in the dictionary as equable to a place where one is permanently fixed for residence or business such as an office or place of business with its fixtures is not a safe guide for interpretation of the expression ‘commercial establishment’ in the Madras Act. Dictionary meanings of certain specified legal expressions used in a statute may not be a safe guide for adoption by Courts, as the duty of a court is to ascertain the meaning of the terms with reference to the context in which they occur. There is ample authority for the proposition that dictionaries are not to be taken as authoritative exponents of the meaning of the words used in Acts, as they are somewhat ‘delusive guides in the construction of statutory terms’. We are not, therefore, adopting the meaning of the word ‘establishment’ as given out in “Words and Phrases Permanent Edn— Vol. 15 page 274”. Prima facie, therefore, S. 41(2) of the Act would apply to the facts of this case. Mr. Kalyanasundaram refers to judicial pronouncements on the strength of which he contends that the Act would not apply to the first respondent and that, therefore, the second respondent would not have jurisdiction to entertain the appeal. 10. In Chief Commissioner v. Fedaration of Indian Chambers 1974-2 L.L.J. 271, S.C the expression ‘commercial establishment’ under the Delhi Shops and Establishments Act 1954, came up for clucrdation. Whilst in the Delhi Act, the accent is on the premises where the trade, business or profession in connection with it is carried on, there is no such emphasis on the place of work in the Madras Act. This generic definition therefore has to be borne in mind while appreciating the contention of the learned counsel for the appellant.
Whilst in the Delhi Act, the accent is on the premises where the trade, business or profession in connection with it is carried on, there is no such emphasis on the place of work in the Madras Act. This generic definition therefore has to be borne in mind while appreciating the contention of the learned counsel for the appellant. It was in that context the above decision was rendered an d the Supreme Court said that a place in order to be a commercial establishment must in that first instance to be a premises and that in the premises the trade, business or profession should be carried on. It appears, therefore, thus the definition of the Delhi Act being different, the ratio in the above case is not applicable to the facts of this case. In Dr. Devendra M. Surti v. State of Gujarat 1969-2-L.L.J. 116 S.C the Supreme Court was considering a case under the Bombay Shops and Establishments Act. In the Bombay Act, the definition to the words ‘commercial establishment’ or for the matter of that ‘establishment’ though not in pari materia with the Madras Act, appears to be similar. No importance is given to the place or premises where the commercial activity is carried on. Sufficient emphasis was therefore made on the substantive activity which was carried on by a person and in that context the expression ‘commercial establishment’ was understood by the Supreme Court in that case. In order to arrive at a reasonable conclusion on the question whether an establishment is a commercial establishment or not, it appears to us that even in the Madras Act, as it was in the Bombay Act, the activity indulged in by the employer or the employee as the case may be should be habitual and systematic and it should be mercantile oriented. Once it is made clear in a given case that the employee is rendering such services to the employer and through him to the mercantile community at large, then it can safely be assumed that the employee is in a commercial establishment and is involved in a commercial activity. The definition of the words ‘commercial establishment’ in the Bombay Act as above came for adjudication and explanation before a Division Bench of the Gujarat High Court in Smt. K.A. Ibrahim Tai v. N.T. Company 1973-1-L.L.J. 447.
The definition of the words ‘commercial establishment’ in the Bombay Act as above came for adjudication and explanation before a Division Bench of the Gujarat High Court in Smt. K.A. Ibrahim Tai v. N.T. Company 1973-1-L.L.J. 447. Categorically, the learned Judges, with whose opinion we respectfully agree, observed that there is nothing in the definition of commercial establishment’ which indicates that before an establishment can become a commercial establishment it must have a certain fixed place or abode, premises or location from where it operates and that the idea of premises is not implicit in the definition of ‘commercial establishment’. In the facts of our case it is not disputed that the employee is carrying on the business of his employer but in his own home. The utilisation of a part of his own abode for commercial activities connected with and incidental to the appellents trade is by itself an indicia that there is a commercial establishment in the State of Madras. The criteria to decide whether a particular establishment is a commercial establishment is only to find whether a regular mercantile activity is carried on by a person on behalf of another or by an individual himself with the assistance of others and whether such activity is regular and is commercial in its outlook and purpose. If such a meaning is attributable to an activity in a particular area, it appears to us that the absence of a fixed place or premises for carrying on such a commercial activity is not the sine quo non in order to bring such an overall integrated operation as one carried on by a person engaged in a commercial establishment. The result as above can also be seen from the examination of the provisions in the Act itself. Whilst in S. 2(12)(iii) there is no reference to a premises as being an essential requirement to make an establishment a commercial establishment, we find in S. 2(12)(iv) the word ‘premises’ is referred to. The reason is obvious. In S. 2(12)(iv) the person employed is one who is connected with a restaurant or eating house. Having regard to the nature of the commercial activity, the legislature has referred to the premises in which a restaurant or an eating house is situate and has given importance to it.
The reason is obvious. In S. 2(12)(iv) the person employed is one who is connected with a restaurant or eating house. Having regard to the nature of the commercial activity, the legislature has referred to the premises in which a restaurant or an eating house is situate and has given importance to it. This contrast in the invocation of the word ‘premises’ whilst defining a person employed in the Madras Act also gives the clue that it is not the premises which gains importance while deciding certain general problems and issues arising under the Act, but it is the commercial activity and the continuity of such activity by the person employed that figures in the forefront. 11. On the merits, it is not even seriously disputed that the first respondent was a full time employee of the appellant and he was a member of the clerical staff. The finding of the second respondent which was accepted by Mohan, J., that the first respondent was not canvassing any business and if at all he was canvassing any business, it was incidental to his main appointment as an ordinary employee of a commercial establishment, is upheld by us. We are unable to agree with Mr. Kalyanasundaram, that the first respondent cannot be said to be a person employed at all, for the facts of this case undoubtedly disclose a jural relationship of master and servant as between the appellant and the first respondent. Apart from this, we are not inclined to disturb the concurrent finding of fact in a Writ Appeal. 12. One other aspect which was also touched upon in this case relates to the principle adumbrated in S. 20 C.P.C. which says that a court within the jurisdiction of which a dispute has arisen in part can take cognizance of it and adjudicate upon it. Law cannotes the idea of behaviour and a notional pattern of conduct to which human beings ought to conform. Therefore, if the pattern of law is to give relief in certain cases, by enabling certain Tribunals and Courts to decide upon it, although the entire dispute adjudicatable by it did not wholly arise within its territorial jurisdiction, then it stands to reason that law as it is understood enables that Tribunal or Court, to deal with it on the ground that a substantial part of the dispute has arisen within its jurisdiction.
The Supreme Court quoted with approval the observations of Chagla, C.J. in Lalbhai Triumlal Mills Ltd. v. Vin A.I.R. 1655 Bom. 463, 464 while deciding the question whether an order of reference under the Industrial Disputes Act, 1947, was right or wrong in Workmen v. Ranga Vilas Motors (P.) Ltd A.I.R. 1967 S.C. 1040. The approved observations are to the following effect— “But what we are concerned with to decide is where did the dispute substantially arise? Now, the Act does not deal with the cause of action, nor does it indicate what factors will confer jurisdiction upon the Labour Court. But applying the well-known tests of jurisdiction a court or Tribunal would have jurisdiction if the parties reside within jurisdiction or if the subject matter of the dispute substantially arises within jurisdiction.” 13. Adopting the above principle, we are of the view that the second respondent within whose jurisdiction a substantial question has arisen whether the order of termination of service of the first respondent is justified or not can certainly be adjudicated upon by him. We would add that there is sufficient nexus between the cause of action and jurisdiction and once it is made out that a cause of action in a particular lis or dispute has arisen substantially within the territorial jurisdiction of a statutory functionary Tribunal or Court, then such Tribunal or Court would certainly have the requisite jurisdiction in law to consider the problem and adjudicate upon it. We approve of the observations, of Koshal, J. in Parry & Co. v. R.J. Stephens (Madras) 50-I.F.J.R. 217 wherein the learned Judge said— “The question of jurisdiction is normally related to the cause of action and wherever such cause or part of it arises, the authority having territorial jurisdiction there over is clothed with the power to take up and decide the dispute. Nothing has been brought to my notice which may induce me to refuse to apply that principle to the case on hand”. Having regard to the well-known principles referred to above, we have no hesitation in rejecting the contentions of the appellant that the second respondent has no jurisdiction to entertain the appeal under S. 41(2) of the Act. The order of remand made by Mohan, J. shall stand. 14. As no other question was argued before us, the Writ Appeal is dismissed; but there will be no order as to costs.