CA CLUB AGED 38 YEARS v STATE OF KERALA & ORS; P.R.MENON & ORS v STATE OF KERALA & ORS

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL TUESDAY, THE 1[ST] DAY OF AUGUST 2023 / 10TH SRAVANA, 1945 WP(C) NO. 2155 OF 2012** ## **PETITIONER/S:** 1 CA CLUB AGED 38 YEARS X/37/160, 4TH FLOOR, ADAM BAZAR COPMPLEX, RICE BAZAR, THRISSUR-680 001, REPRESENTED BY ITS SECRETARY MR.VARGHESE PAUL. 2 TONY M.P. S/O.M.P.PYLOTH, CHARTERED ACCOUNTANT, TONY ASSOCIATES, CITY CASCELE BUILDING, EAST FORT P.O., THIRUVANANTHAPURAM-680 005. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.BENNY THOMAS SRI.P.GOPINATH SRI.K.JOHN MATHAI ## **RESPONDENT/S:** 1 STATE OF KERALA REPRESENTED BY THE SECRETARY TO GOVERNMENT, LABOUT & REHABILITATION DEPARTMENT, GOVERNMENT SECRETRIAT, THIRUVANANTHAPURAM-695 001. 2 MINIMUM WAGES ADVISORY BOARD REPRESENTED BY ITS CHAIRMAN KIWI TOWERS, IIND FLOOR, TUTORS LANE, STATUE, THIRUVANANTHAPURAM-695 001. 3 ASSISTANT LABOUR OFFICER MINI CIVIL STATION, IRINJALAKUDA-680 125 BY ADVS. GOVERNMENT PLEADER SABEENA P.ISMAIL(K/994/2007) SHRI.ASOK M.CHERIAN, ADDL. ADVOCATE GENERAL() THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2023, ALONG WITH WP(C).2365/2012, THE COURT ON 1.8.2023 DELIVERED THE FOLLOWING: **WP(C) NO. 2155 OF 2012** **2** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL TUESDAY, THE 1[ST] DAY OF AUGUST 2023 / 10TH SRAVANA, 1945 WP(C) NO. 2365 OF 2012** ## **PETITIONER/S:** 1 P.R.MENON AGED 85 YEARS PARTNER, M/S.T.K.MENON & COMPANY, CHALAPURAM, KOZHIKODE- 673002. 2 P.BALAGOPALAN PARTNER, M/S.T.K.MENON & COMPANY, CHALAPURAM, KOZHIKODE- 673002. 3 P.SREEHARI PARTNER, M/S.T.K.MENON & COMPANY, CHALAPURAM, KOZHIKODE- 673002. 4 P.JAYAKRISHNAN PARTNER, M/S.T.K.MENON & COMPANY, CHALAPURAM, KOZHIKODE- 673002. 5 MS.T.K.MENON AMP COMPANY CHARTERED ACCOUNTANTS, CHALAPURAM, KOZHIKODE-673002. BY ADVS. SRI.K.P.BALASUBRAMANYAN SRI.NIRMAL. S ## **RESPONDENT/S:** 1 STATE OF KERALA REPRESENTED BY SECRETARY TO GOVERNMENT OF KERALA, LABOUR & REHABILITATION (E) DEPARTMENT, THIRUVANANTHAPURAM. 2 SECRETARY MINIMUM WAGES ADVISORY BOARD, TUTOR'S LANE, THIRUVANANTHAPURAM. BY ADVS. GOVERNMENT PLEADER SABEENA P.ISMAIL(K/994/2007) SHRI.ASOK M.CHERIAN, ADDL. ADVOCATE GENERAL() THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.07.2023, ALONG WITH WP(C).2155/2012, THE COURT ON 1.8.2023 DELIVERED THE FOLLOWING: **WP(C) NO. 2155 OF 2012** **3** ## JUDGMENT 1. By virtue of a power derived under Section 27 of the Minimum Wages Act, 1948, Government of Kerala came out with a notification dated 9.8.2011, Ext.P3 amending the schedule attached thereto inserting clause 78 bringing the employment in Chartered Accountant offices under the provisions of the Minimum Wages Act. The said notification is under challenge at the behest of the petitioners. 2. The facts are taken from W.P.(C) No.2155 of 2012. 1[st] Petitioner is an Association of Chartered Accountants registered under the Travancore Cochin Literary, Scientific and Charitable Societies Registration Act, 1955. It was submitted that the Chartered Accountants all over India are members of the Institute of Chartered Accountants of India, established under the Chartered Accountants Act 1949 passed by the Parliament. The Central Government is empowered to control the activities of the Institute and also to appoint Council Members as its nominees in the Central Council of the Institute, which is the premier decision making body of institute of Chartered Accountants of India. It is mandatory that every practicing Chartered Accountant has membership with the institute and hold certificate of practice. Every practicing Chartered Accountant is bound to follow the **WP(C) NO. 2155 OF 2012** **4** rules and regulations of both the Institute and the Government of India as the Chartered Accountants are appointed by the Central Government as Auditors for companies, Government Departments and Public Sector undertaking and this appointment is under the Authority of Central Government. When the Government intended to bring the 'employment in the Chartered Accountants' office' in the schedule notified under the provisions of the Minimum Wage Act as item No.78. The objections were filed, Ext.P2. A committee was appointed to consider the objection and the meeting held by the committee, petitioner explained that the offices of the Chartered Accountant could not be termed as establishment or industry as the service rendered was only professional service. Therefore would not fall within the purview of Minimum Wages Act. But the respondents without considering the legal issues, came out with a impugned notification dated 9.8.2011, Ext.P3. 3. Learned counsel appearing on behalf of the petitioners submitted that scheduled employment is defined under Section 2(g) of the Minimum Wages Act, would mean an employment specified in the schedule or any process or branch of work forming part of such employment. Legislature while introducing the Act intended only for bringing the provisions of the Act for Industries, factories, mines, plantations, shops or **WP(C) NO. 2155 OF 2012** **5** commercial establishments. Even the import of Section 2(e) would also reveal the intention of the legislature. Definition of employee under Section 2(i) of the Minimum Wages Act would also mean 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. It is clear that the legislature intended only persons employed in industries, ie., factories, commercial establishments, shops etc. In Sasidharan v. Peter and Karunakaran reported in 1984 KLT 1039, the Supreme Court held that the office of a Lawyers firm is not a commercial establishment. Same ratio is also applicable to the office of the Chartered Accountant. 4. At an earlier point of time, the Chartered Accountants were brought within the purview of Kerala Shops and Commercial Establishment and the said notification was also struck down by this Court in Ramanathan v. State of Kerala (1991 (1) KLT 89) . In support of their contentions, also judgment of the Division Bench of Delhi High Court in LPA No.564 of 2015 (South Delhi Municipal Corporation v. B.N Magon, relied upon, wherein the Municipal Corporation, Delhi by invoking the provisions intended to impose commercial property tax upon the lawyers running their offices. The said act, of the Municipal Corporation was struck down. **WP(C) NO. 2155 OF 2012** **6** 5. On the other hand, learned Government Pleader supported the impugned notification and argued that prior to the impugned notification, a notification dated 28.8.2003 intended to bring the employment in the Chartered Accountant office under the Schedule was promulgated by inviting objections. Minimum Wage Advisory Board considered the objections and rejected the same. Minimum Wages Act in no way intervened in any activity of the firm but simply make aware of the employees to provide minimum or reasonable amount of livelihood. It is the responsibility of the State to provide minimum required livelihood to all the subjects. The workers employed in any such sector can be brought under the realm of the aforementioned act as per the provisions of Section 27 of the Act and it would not be in any way violation of Article 19(1)(g) of the Constitution of India. 6. I have heard the learned counsel for the parties and appraised the paper book. Definition of employer under Section 2(e), scheduled employment under Section 2(g) and Employee under Section 2(i) of the Minimum Wages Act reads as follows: 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 employees in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, and includes, except in sub-section (3) of section 26,— (i) in a factory where there is carried on any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, any person named under[ 8] [clause (f) of sub-section (1) of section **WP(C) NO. 2155 OF 2012** **7** 7 of the Factories Act, 1948 (63 of 1948)], as manager of the factory; (ii) in any scheduled employment under the control of any Government in India in respect of which minimum rates of wages have been fixed under this Act, the person or authority appointed by such Government for the supervision and control of 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 scheduled employment in respect of which minimum rates of wages have been fixed under 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 an employment specified in SCHEDULE, or any process or branch of work forming part of such employment; 2.i) employee: 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 up, cleaned, washed, altered, ornamented, finished, 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 premises under the control and management of that other person; and also includes an employee declared to be an employee by the appropriate Government; but does not include any member of the Armed Forces of the [Union]. 7. On perusal of the same, employer would mean any person who employs, whether directly or through another person in a factory, in a scheduled employment under the control of any Government, i under any local authority in respect of which **WP(C) NO. 2155 OF 2012** **8** minimum rates of wages have been taken or in any other cases where any scheduled employment is carried out in respect of which minimum rates of wages have been fixed under the Act, any person responsible to the owner for the supervision and control of the employees or for the payment of wages. Working conditions of the Chartered Accountants are governed under the Central Act ie., Chartered Accountants Act, 1949. By virtue of which, they are required to be registered and amenable to the provisions of the aforementioned Act. They do not discharge the role of any industry or any manufacturing entailing into extensive employment of employees. No doubt, Section 27 of the Act, empowers the State Government to amend the schedule and by virtue of the impugned notification, item No.78 had been added in Schedule 1. Section 27 of the Act and item No.78 reads as under: Power of State Government to add to schedule-The appropriate Government after giving by notification in the official Gazette not less than three months, notice of its intention so to do, may, be 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 thereupon the Schedule shall in its application to the State be deemed to be amended accordingly. THE SCHEDULE, PART – I, (Employment in Chartered Accountants Offices) 8. Prior to the aforementioned notification, State **WP(C) NO. 2155 OF 2012** **9** Government have promulgated a notification under the Shops and Commercial Establishment Act, 1960 brought the establishment of the Chartered Accountants under the provisions of the Act and this Court vide judgment in Ramanathan (supra) quashed the notification. In Sakharam v. Nagpur Corporation AIR 1964 Bombay 200 , Division Bench of the Bombay High Court considered the question that the office of the Advocate cannot be declared and establishment under Bombay Shops and Commercial Establishments Act. The lawyers performs ministerial functions by typing his opinion, or the documents prepared by him, or by maintaining accounts of his income and expenditure. The question which arises whether any perceptible difference between the office of the Advocate or a Chartered Accountant. No doubt the legal profession and Chartered Accountant profession have differences and dissimilarities. But the areas of the similarities obviously would outweigh with dissimilarities between the two. Legal proposition applicable to the profession of law can generally be applied Chartered Accountants also. 9. Learned Government Pleader relied upon the two judgments in 1955 KHC 314 (Edward Mills Co. Ltd, Beawar v. State of Ajmer) and 1983 (1) SCC 525 (Sanjit Roy v. State of Rajasthan) and it was held that non payment of minimum wages **WP(C) NO. 2155 OF 2012** **10** would be violation of Article 23 of the Constitution of India. It mandates that no person shall be required or permitted to provide labour or service to another on payment of anything less than the minimum wage if the exemption by excluding the applicability of the Minimum Wages Act provide the minimum wages lesser than that. I am afraid the said judgments would not have any applicability as the proposition raised in the aforementioned judgments was with regard to industries and other activities which are not akin to the ministerial job being undertaken by the employees either in the Lawyers or the Chartered Accountant. 10. The Division Bench of Delhi High Court in LPA 564 OF 2015, supra, by noticing the judgment of the Supreme Court in 2018 (9) SCC 1 (Commissioner of Customs and Others v. Dilip Kumar and Company and others) held that when the language of the statute is plain and unambiguous, court has to seal and understand the plain language as such, and there is no scope of interpretation. In the instant case also, by drop of hat the State Government had brought the employment in the office of Chartered Accountant in the ambit of Minimum Wages Act without noticing the nitty-gritties ,nature of service conditions and avocation etc. The services of the Chartered Accountants fall within the scale of professional activity and cannot be said to be **WP(C) NO. 2155 OF 2012** **11** commercial to bring under the parameters of the provisions of the 1948 Act. The advisory Board also did not consider the objections in a correct prospective as the notification impugned does not reflect any such reasons. For the reason aforementioned the impugned notification is not sustainable and bad in law and hereby quashed. Writ petitions are allowed. sab SD/AMIT RAWAL JUDGE **WP(C) NO. 2155 OF 2012** **12** ## PETITIONER'S EXHIBITS IN WP(C) NO. 2155 OF 2012 Exhibit P1: True copy of the certificate of registration of the 1st petitioner under the Travancore Literary Scientific and Charitable Societies Act, 1956 (Act XII of 1955) 28.02.2007. Exhibit P2: True copy of the objection dated 09.02.2011 submitted by the petitioners before the 1st respondent. Exhibit P3 True copy of the gazette notification dated 9.8.2011 issued by the 1st respondent. Exhibit P4: True copy of the Schedule part-I and II of the Minimum Wages Act. Exhibit P5 True copy of the notice dated 20.12.2011 issued by the Assistant Labour Office to Mr Paulson Michel, Paulson Michel & Company, Cathedral Building, Iringalakuda, one of the members of the 1st respondent after inspection of his office. **WP(C) NO. 2155 OF 2012** **13** PETITIONER'S EXHIBITS IN WP(C) NO. 2365 OF 2012 P1: TRUE COPY OF THE NOTIFICATION NO.GO (MS) NO.67/06 LBR DATED 13.11.2006 P2: TRUE COPY OF THE NOTIFICATION NO.10690/E1/007 DATED 14.12.2010 P3: TRUE COPY OF THE OBJECTION FILED BY THE 5TH PETITIONER DATED 11.2.11 P4: TRUE COPY OF THE NOTICE ISSUED BY THE RESPONDENT TO THE PETITIONER DATED 28.2.11 P5: TRUE COPY OF THE NOTIFICATION NO.GO(MS) NO.107/11/LBR DATED 9.8.2011