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2003 DIGILAW 1606 (ALL)

SWARAJ ASHRAM, KANPUR v. STATE OF UTTAR PRADESH

2003-07-21

D.P.SINGH

body2003
D. P. SINGH, J. ( 1 ) THIS writ petition arises out of proceedings under Minimum Wages Act, 1948 (hereinafter referred to as the Act) wherein writ of prohibition has been sought restraining the respondents from proceeding with penal action against the petitioner. ( 2 ) BRIEF facts which are necessary for decision of this writ petition are that Swaraj ashram is a Society registered under the U. P. Societies Registration Act and receives financial aid from the Khadi and Village industries Commission which is a corporation established under a Central Act. It is asserted that the main object of the society is to provide engagement to weavers, spinners etc. in their village homes and to encourage khadi and village industry. It is also stated that it runs on a no profit basis. The functioning of the organization is such that the weavers and spinners do the entire work at their own homes and they are not paid regular wages, but they are given remuneration in accordance to their output. However, having failed to pay the minimum wages to their employees as prescribed in the notification dated June 21, 1984, notices have been issued to the petitioner for payment and also penal action for contravening the provisions of the Act. These notices are under challenge in the present writ petition. ( 3 ) THE learned counsel for the petitioner has urged that since the petitioner organization was neither a commercial establishment nor a shop and the weavers and spinners were not employees in that sense of the word, therefore, the Act or the Notification issued therein would not apply to it. In the writ petition it has been admitted that the petitioner has established 60 outlets in the State for the purposes of selling khadi cloth manufactured by its weavers. Even though the weavers after lifting cotton from the petitioners centre weave it in their home and then return the finished product to the Centre but the Act applies even to such employees. Sub-section (1) of Section 2 defines an employee. The definition in the Act includes such out workers. The Court in the case of Lok nath Nathu Lai v. State of M. P. 1960-II-LLJ-348 (MP), after considering the provisions of the Act has held that such out workers, as the employees of the petitioner, are covered under the Act. Sub-section (1) of Section 2 defines an employee. The definition in the Act includes such out workers. The Court in the case of Lok nath Nathu Lai v. State of M. P. 1960-II-LLJ-348 (MP), after considering the provisions of the Act has held that such out workers, as the employees of the petitioner, are covered under the Act. Even according to the averments in the writ petition it cannot be denied that the petitioner is not running retail outlets which partake the character of a shop and the finished products are sold there. ( 4 ) THE second submission of the counsel for the petitioner is that since it is being run on no profit motive, the Act will not apply. A perusal of the Act shows that the Minimum wages Act does not exclude such organization. In fact, it has already been held by the Apex court in the case of Management of Shri chelthan Vibhag Khand Udyog Sahkari Mandi ltd. v. G. S. Barot, Member Industrial Court and another, AIR 1980 SC 31 : 1979-II-LLJ-383 that minimum wages can be fixed even at the stake of closure of the industry. However, the learned counsel for the petitioner has relied upon a judgment of the supreme Court rendered in the case of swarajya Ashram Karmchari Sangh v. Swarajya Ashram, Kanpur, 1994 Supp (2) SCC 392 : 1995-I-LLJ-486 to contend that the provisions of the Act would not apply to the petitioner. The aforesaid decision was rendered under Payment of Bonus Act, 1965 which is directly related to profit motive of an establishment and the ratio laid-down therein, in my opinion, would not apply to the case at hand. Therefore, this argument also has no force. ( 5 ) THE next contention of the learned counsel for the petitioner is that the State government had failed to make any enquiry regarding financial condition of the petitioner and also no opportunity was given to it prior to the issuance of the notification, thus, the action was in violation of Section 27 of the Act. A perusal of the notification annexed with the writ petition shows that the proposal was earlier notified and the Advisory Board was also consulted before fixing minimum wages. Non-electing the views of the petitioner, which is a unique organization, may amount only to an irregularity. A perusal of the notification annexed with the writ petition shows that the proposal was earlier notified and the Advisory Board was also consulted before fixing minimum wages. Non-electing the views of the petitioner, which is a unique organization, may amount only to an irregularity. The Supreme Court in the case of ministry of Labour and Rehabilitation and another v. Tiffins Barytes Asbestos and Paints limited and another, AIR 1985 SC 1391 : 1985 (3) SCC 594 : 1985-II-LLJ-412 has held that a notification fixing minimum wages should not be interfered with under Article 226 of the constitution of India merely on some irreguliarity either in the procedure adopted or the constitution of the committee which recommended it. Therefore, this ground also has no force. ( 6 ) THE last contention of the learned counsel for the petitioner is that the appropriate government in the case of the petitioner is the central Government since it is working under the authority of Khadi and Village Industries commission, which Corporation has been established under a Central Act. It is admitted in the writs petition that the petitioner is a registered society receiving aid from various sources and also from the Khadi and Village industries Commission. It has nowhere been stated or shown as to how it is working under the said Commission. Sub-section (b) of section 2 of the Act clearly states that when a schedule employment is carried on by, or under the authority of the Central Government, the appropriate Government would be the Central government. However, there is nothing on record to show as to how the Central government could be the appropriate government in the case of the petitioner. ( 7 ) THE issues raised in this case are not only away from the normal rut, but proves the message of the age old proverb of killing the goose which laid the golden egg. ( 8 ) THE nature of the activities carried on by the petitioner, finances involved and the object for which the petitioner society was set up, no doubt, deserves to be nurtured. ( 8 ) THE nature of the activities carried on by the petitioner, finances involved and the object for which the petitioner society was set up, no doubt, deserves to be nurtured. The organization is a source of employment to the teeming rural masses, and as the Mahatma then said, and which is true even today, "india lives in the villages," crippling such an organization financially may have a telling effect on the lowest of the down trodden who are the main beneficiary of the activities of the organization. It would also prove to be counter productive even, to the very object which is sought to be achieved by the Act. It cannot be denied that the notification under the Act would only benefit the employees at the retail outlets who are only in the nature of facilitators, at the cost of the weaver. The Act contains an exception clause and this Court is confident that if the petitioner approaches the State Government for exemption under the Act, it would take into consideration the financial aspects, the objects of the petitioner society and other relevant circumstances to pass suitable orders vis-a-vis granting of exemption from the rigours of the act. In case the petitioner approaches the State government, the State Government shall take a decision within a period of six months with regard to granting exemption to the petitioner organization from the applicability of the provisions of the Act. ( 9 ) HOWEVER, as law stands as of date, in my opinion, petition is devoid of any merit. ( 10 ) SUBJECT to the observations already made, the writ petition fails and is dismissed. However, in case the petitioner files an application seeking exemption from the State government under the Act, no proceedings shall be initiated or continued against the petitioner under the Act for a period of seven months from today. ( 11 ) WITH the aforesaid observations and directions, the writ petition fails and is dismissed. No order as to costs.