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1994 DIGILAW 420 (PAT)

Popular Nurshing House v. State of Bihar

1994-12-20

AFTAB ALAM

body1994
JUDGMENT AFTAB ALAM, J. This writ petition arises out of a complaint filed by the second respondent under Section 26 of the Bihar Shops and Establishment Act (‘the Act’ for short) regarding his dismissal from service. By order, dated 4.10.88 (copy at Annexure-1) the Labour Courts and the Authority under the Act rejected the petitioner’s objection the complaint under Section 26 of the Act was not maintainable as the petitioner establishment was exempted from all the provisions of the Act by virtue of entry 2 in schedule I read with Section 4(2) of the Act. Finally by order, dated 27.3.92 (copy at Annexure-2) the authority allowed the claim of the second respondent; the authority found that the charges levellaed against the complainant respondent no.2) were not proved before him even in terms of Section 26(5) of the Act and that the action of the petitioner in dismissing respondent no.2 from service appeared to be tainted with malafide bias and prejudice. The petitioner was accordingly, directed to reinstate respondent no.2 in service with full back wages and further to pay him a sum of 3,000/- as litigation cost. These two orders come under challenge in this writ petitioner. In course of hearing, however, the challenge was sharply targeted at the first order relating to the maintainability of a proceeding under the Act against the petitioner. 2. In order to appreciate the petitioner’s challenge to the order relating to the maintainability of the complaint under section 26 of the Act. It would be opposite to take note of the following facts and circumstances. 2. In order to appreciate the petitioner’s challenge to the order relating to the maintainability of the complaint under section 26 of the Act. It would be opposite to take note of the following facts and circumstances. Section 4 of the Act deals with the establishments which are exempted from any one or more of the provisions of the Act and sub section (2) of Section 4 is the following terms: “Notwithstanding anything contained in this Act, the provisions there of specified in the, column of the schedule not apply to the establishment, employees and other persons referred to in the corresponding entry in the second column: “Provided that the State Government may, by notification and to, omit or alter any of the entries in the schedule in respect of one or more areas of one or more areas of the State and on the publication of such notification the entries in either column of the schedule shall be deemed to be amended accordingly.” Earlier all provision of the Act were made in applicable to an establishment for the treatment of the infirm sick, destitute or the mentally unfit but virtue of entry no.2 in schedule I which, before its amendment was in the following term : “Establishment for the treatment or the care, of the inform, sick, destitute or the mentally unfit.” 3. At that time a dispute had arisen regarding the amenability of the petitioner establishment to the provisions, particularly Section 26 of the Act. The matter had come before this Court in miscellaneous judicial case no.1234 of 1960. This case was heard and disposed of, as one of a batch of cases, by a Bench of this Court by judgment and order dated August 07, 1963 (copy at Annexure-6). In that decision this Court noted the assertion made by the petitioner in the writ petition then filed before the Court that M/s Popular Nursing Home was an institution for the treatment or care of the infirm, sick and alling persons. In that decision this Court noted the assertion made by the petitioner in the writ petition then filed before the Court that M/s Popular Nursing Home was an institution for the treatment or care of the infirm, sick and alling persons. And such an establishment being exempt from all the provisions of the act by virtue of entry 2 (as it then stood) of schedule 1 the Court held that the provisions of Section 26 of the Act did not apply to the petitioner establishment and, hence, the order of the Labour Court coming under challenge in that writ petition was held to be ultra vires, illegal and without jurisdiction. 4. A very material change in this regard was, however, brought about when the State Government by S.O. 1460 dated 18.12.80 added the words, which are not run for the purpose of gains other than that of making profits for charitable, philanthropic, religious or educational object “in entry no.2 of Schedule I After the amendment the second entry read as follows: “Establishment for the treatment or the care of the inform sick, destitute or the mentally unfit which are not run for the purpose of gains other than that of making profits for the charitable, chilanthopic, religious or educational object.” (emphasis added to indicate the addition brought about by the amendment) 5. It is not denied that by virtue of the amendment introduced with effect from 18.12.80 the petitioner establishment ceased to enjoy the earlier exemption and became subject to all the provisions of the Act. It is also not in dispute that respondent no.2 was dismissed from service on 26.8.81 and the cause of section for filling the complaint under Section 26 of the Act arose on that date. 6. Respondent no.2, however, before filing the complaint before the Authority under the Act, filed Title Suit no. 38 of 1981 in the court of Munsif Ist, Patna for a declaration that he was entitled to continue in service in Popular Nursing House and that he must be deemed to be continuing in Service and was therefore, entitled to get all wages and emoluments. 38 of 1981 in the court of Munsif Ist, Patna for a declaration that he was entitled to continue in service in Popular Nursing House and that he must be deemed to be continuing in Service and was therefore, entitled to get all wages and emoluments. In that title suit a written statement was filed on behalf of the petitioner raising an objection that the filing of the suit was barred in view of the provisions of the Act and stating that the dismissed employee, if so advised, could claim his relief () under the provisions of the Shops Act. Thereupon respondent no.2 filed the complaint under Section 26 of the Act which from the number of the case in the court below appears to have been filed some time in the year 1981. When the filling of the complaint under Section 26 of the Act was brought to the notice of the Civil Court. It passed an order in the suit on 17.05.82 staying further proceeding in the suit till the final disposal of the proceeding under the Act. It is, therefore, undeniable that on the date of the dismissal of respondent no.2 or in other words on the date when the cause of action arose, as also on the date the complaint was filed before Authority the petitioner establishment was subject to all the provisions including those contained in Section 26 of the Act. 7. The petitioner filed its show cause to the complaint filed by respondent no.2 and, then also the provisions of the Shops Act fully applied to the petitioner establishment by virtue of the amendment of the relevant entry in the schedule. Then, it seems the petitioner was stuck with an idea to get back the exemption of which it had been deprived on account of the legislative amendment and for this the petitioner appears to have adopted a curious and strange procedure. Apparently the petitioner establishment was established as a trust deed provided for the distribution of the Income from the nursing home among the members of the donor’s family and made it quite manifest that the trust was for the benefit of the donor’s family. Apparently the petitioner establishment was established as a trust deed provided for the distribution of the Income from the nursing home among the members of the donor’s family and made it quite manifest that the trust was for the benefit of the donor’s family. The idea was to unilaterally change clauses 6 and 7 of the trust deed so as to bring the establishment within the cover of the amended entry no.2 and thereby to once again claim exemption from the provisions of the Act. To this end the Managing Trustee made a simple declaration on 17.3.92 on a stamp paper of rupees five (R) 5/-) purporting to bring about a change in the alm and object of the trust. The declaration purported to insert, in place of the original clauses 6 and 7 of the trust deed two new clauses stating that the income from the nursing home would be utilized in the maintenance, development and up keep of the nursing home and to the best of the benefit if the ailing citizens of the town as well as of the outsider, poor and deserving patients and also for the expansion and enlargement of the nursing home. By this simple device of the aforesaid declaration, the petitioner claimed that the alm and object of the trust was changed and the establishment was once again brought under the cover of entry no. 2 of schedule1. 8. Following this declaration a petitioner was filed before the Authority on 6.09.82 wherein an objection was raised that the case was no longer maintainable under the Act as the provisions of the Act had ceased to apply to the establishment of the petitioner by virtue of Section 4(2) read with entry no. 2 to schedule I. 9. It appears that the question of maintainability. In the light of the petitioner’s objection was argued at length before the Authority who by a long order decided the question against the petitioner. 2 to schedule I. 9. It appears that the question of maintainability. In the light of the petitioner’s objection was argued at length before the Authority who by a long order decided the question against the petitioner. In the impugned order (Annexure 1) the Authority appears to have come to the finding after taking into consideration a number of materials that notwithstanding the declaration made by the Managing Trustee on 17.03.82 the income from the establishment continued to be appropriated by the members of the donor’s family and, hence, on facts the establishment was not covered by entry no.2 of schedule I and was therefore, not exempted form the provisions of the Act. The Authority took into consideration a number of facts and circumstances in this regard and also noted that the stand of the petitioner had always been shifting according to the exigencies of the situation and it had taken different stands before the income tax authorities, before the Civil Court in a partition suit relating to the donor’s family and before other statutory authorities. Though not having said it so may words the Authority seems to have come to the conclusion that the declaration was a mere paper transaction and a sham : as noted above it has found that despite the aforesaid declaration, the income from the nursing house continued to be appropriated by the members of the donor’s family. 10. Mr. K.D. Chatterji, learned senior counsel appearing on behalf of the petitioner. Strenuously urged the Authority finding was perverse and based on no evidence He submitted that the Authority had taken into consideration the materials and documents of a period prior to the date of the declaration on 17.3.82 and the materials relied upon by the petitioner (which were of the period after 17.03.82) had not been taken into account. 11. On a consideration of the submissions advance by Mr. 11. On a consideration of the submissions advance by Mr. Chatterji and on a perusal of the impugned order, dated 04.10.88, I am inclined to agree with the findings recoded by the Labour Court, Moreover, I am of the view that any challenge to the Authority’s finding on this point is not of much relevance for the simple reason that the petitioner’s objection itself was quite mis-conceived and was founded on fallacious premise I do not see how on the basis of an unilateral declaration made on 17.03.82 the petitioner could hope to shut out the claim of the second respondent. I fall to appreciate even the validity of the declaration purporting to change the alms and objects of the Act by denying any further share in the income to the erstwhile beneficiaries under the provisions of the Indian Trusts Act. I put a pointed question to Mr. Chatterji regarding the competence of the Managing Trustee to so radically alter and change the nature of the trust and to cannot a private trust into a public charitable trust wholly on his own and without so much as the consent of any of the erstwhile beneficiaries and quite contrary to the wishes of the donor. I did not get any satisfactory answer. 12. That, however need not detain me so far as the main objection is concerned. It appears to me to be beyond any dispute that a complaint under the Act will have be adjudicated upon the basis of the legal status of the employer on the date when the cause of action for filing the complaint arose or in any event when the complaint was filed. Any attempt on the part of the employer thereafter to alter or change its legal status unilaterally shall have no effect on the pending adjudication. Muchless would an unilateral declaration by one of the parties of the dispute have any effect on a pending proceeding. In order to elucidate the point one may take the case of an establishment which is wound up and closed down in course of the proceeding on a complaint under Section 26 of the Act. Once the establishment has been closed down it would cases to exist and for that matter alone no provisions of the Shops Act would apply to it. Once the establishment has been closed down it would cases to exist and for that matter alone no provisions of the Shops Act would apply to it. Nevertheless the employer would not escape from the liability that may arise from a pending proceeding and though the closure of the establishment may be bonafide and genuine the pending proceedings would continue unaffected and the directions given in those proceedings would be fully binding upon the employer. Here the case stands on an even lower footing in as much as during the pendency of the proceeding under the Act, the employer purportedly changes the alms and objects of the trust by making a direction that the income from the establishment would no longer be used for the purpose for private gain. The whole idea appears to me to be plainly unacceptable and if the contention of the petitioner is accepted, then, it would be the easiest thing for the employer to frustrate any proceeding under the Act by unilaterally changing the nature of the establishment during the course of the proceeding. 13. In my opinion, therefore, these was no merit in the petitioner’s objection regarding the maintainability of the complaint filed by the second respondent and it was rightly rejected by the Labour Court. 14. Mr. K.D. Chatterji in support of his contention has relied upon a Supreme Court decision reported in AIR 1975 SC 1409 (paragraphs 4 and 5). It is to be noted that decision was rendered under the Rent Control Act where the significance of a subsequent event may be entirely different and in that regard the Supreme Court rightly held that the events arising subsequently to the institution of the suit must have been taken into account. The decision in that case, however, has no application to the facts of this case and does not support the petitioner’s challenge to the order, dated 04.10.88 (copy at Annexure-1). 15. Coming now to the final order, dated March 27, 1992, it is to be noted that respondent no.2 had been dismissed from service on the basis of an ex parte enquiry. The Authority not being satisfied with the fairness and validity of the enquiry gave an opportunity to the petitioner to lead evidence in order to establish the charges against the concerned employer before the Authority. On an appreciation of the evidence led on behalf of the parties. The Authority not being satisfied with the fairness and validity of the enquiry gave an opportunity to the petitioner to lead evidence in order to establish the charges against the concerned employer before the Authority. On an appreciation of the evidence led on behalf of the parties. The Authority came to the finding as aforesaid and gave the consequential directions. 16. Mr. K.D. Chatterji, learned senior counsel for the petitioner, submitted the Authority’s finding was perverse and, in this regard, submitted that the authority had erred in not relying upon exhibit ‘B’ filed on behalf of the petitioner. Exhibit ‘B’ purported to be receipt signed by the complainant respondent no.2 for having received the sum of Rs. 200/-. There was another document exhibit ‘4’ submitted by respondent no.2 which was a letter written by the employer, Brij Nandan Prasad, to the employee wherein a request was made not to press for the payment of the amount as money as needed for purchase of other articles. The parties in support of their cases were relying upon the aforesaid two documents which were mutually incompatible. The Authority under the Act –, on a careful consideration of various other circumstances, has accepted exhibit ‘4’ in preference to exhibit ‘B’ called upon by the petitioner. The Authority has discussed the matter in detail and has given valid and cogent reason for accepting exhibit ‘4’ in preference to exhibit ‘B’ (see paragraphs 10 and 11 of the impugned order, dated 27th March, 1992). The question appears to be essentially one of appraisal of evidence and in my opinion, the Authority has conducted itself quite reasonably and well within its jurisdiction. I am unable to hold the finding of the Authority on the basis of exhibit ‘4’ as perverse or unreasonable and in my opinion it does not warrant any interference by this Court. 17. No other point was urged against the final order, dated 27.3.92. 18. For the reasons, stated above, I find no merit in this application and it is accordingly, dismissed. No order as costs. Application dismissed.