S. Anandan v. Assistant Labour Officer, Kayamkulam & State of Kerala

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE. P.S.GOPINATHAN TUESDAY, THE 10TH DAY OF JULY 2012/19TH ASHADHA 1934 Crl.MC.No. 370 of 2006 ( ) -------------------------ST.51/2005 of J.M.F.C., HARIPAD PETITIONER/ACCUSED:: ---------------------- S. ANANDAN, PRESIDENT, KANDALLUR FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.1410, KANDALLUR P.O., KAYAMKULAM. BY ADV. SRI.V.G.ARUN RESPONDENTS/COMPLAINANT & STATE:: ------------------------------------ 1. THE ASSISTANT LABOUR OFFICER - (INSPECTOR UNDER THE ACT) KAYAMKULAM. 2. STATE OF KERALA, REPRESENTED BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA ERNAKULAM. BY GOVERNMENT PLEADER SMT.S.HYMA THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 12-06-2012, THE COURT ON 10.7.2012 PASSED THE FOLLOWING: ## P.S.GOPINATHAN, J. ----------------------------Crl.M.C.No.370 of 2006 -----------------------------Dated this the 10[th] day of July, 2012 ## ORDER Petition under Section 482 of the Code of Criminal Procedure. Petitioner is the accused in ST No.51 of 2005 on the file of the Judicial Magistrate of the First Class, Haripad. The first respondent herein, the Assistant Labour Officer, Kayamkulam, filed Annexure-III complaint before the lower court against the petitioner alleging offence under Section 29 of the Kerala Shops & Commercial Establishments Act (hereinafter referred to as 'the Shops Act') with a plea that the petitioner, who is the President of the Kandalloor Farmers Service Co-operative Bank Ltd. No.1410, Kandalloor P.O, (hereinafter referred to as the Bank) is an employer coming under the definition of Section 2(7) of the Shops Act, the Bank is a commercial establishment as defined under Section 2(8) of the Shops Act and that on 22.7.2005 when the first respondent, who is an inspector appointed under Section 25 of the Shops Act, inspected the above establishment, it was found that the petitioner had violated the provisions of the Shops Act and Rules thereunder Crl.M.C.No.370 of 2006 2 as he failed to apply for registration under Section 5A of the Shops Act and that though a show cause notice caused on 5.5.2005 was accepted by the petitioner, the petitioner had not rectified the defect till date and therefore, the petitioner had violated the provisions of the Shops Act and is punishable under Section 29 of the Shops Act. 2. The learned Magistrate took cognizance and issued process. Assailing the order taking cognizance and seeking an order to quash Annexure-III complaint, this petition is filed. 3. The plea of the petitioner is that the petitioner would not come with the definition of the employer under the Shops Act, the bank would not come with the definition of the establishment under the Shops Act, the bank would come within the exemption under Section 3(1)(f) of the Shops Act and that he is only the head of a governing body coming under Section 2(e) of the Kerala Cooperative Societies Act (hereinafter referred to as the 'Societies Act') under which the Bank was established and therefore, he is not liable to be prosecuted under the Shops Act. Crl.M.C.No.370 of 2006 3 4. I have heard Advocate Sri.K.Anand, the learned counsel appearing for the petitioner and the learned Government Pleader, Smt.S.Hyma. The documents were perused. 5. The fact that the petitioner is the President of the Bank and that the Bank was not registered under Section 5A of the Shops Act are not in dispute. Therefore, the question is whether the above bank would come within the purview of the Shops Act and whether the petitioner would come within the definition of the employer under the Shops Act. 6. For a correct appraisal of the case, a reference to sub clauses 4, 7 and 8 of Section 2 of the Shops Act, which defines commercial establishment, employer and establishment, which read as follows would be relevant. 2. Definitions:- In the Act, unless the context otherwise requires- xxxxxx xxxxx xxxxx xxxxx xxxxx (4) “commercial establishment” means a commercial or industrial or trading or banking or insurance establishment, an establishment or administrative service in which the persons employed are mainly engaged in office work, hotel, restaurant, boarding or eating house, cafe or any other refreshment house, a Crl.M.C.No.370 of 2006 4 theatre or any other place of public amusement or entertainment and includes such other establishment as the Government may, by notification in the Gazettee, declare to be a commercial establishment for the purposes of this Act, but does not include a factory to which all or any of the provisions of the Factories Act, 1948 (Central Act 63 of 1948) apply. xxxx xxxx xxxx xxxx xxxxx xxxxx xxxxx - (7) “employer” means a person owning, or having ultimate control over the affairs of an establishment and includes the manager, agent or other person acting in the general management or control of an establishment. - (8) “establishment” means a shop or a commercial establishment. Clause 4 quoted above would show that a banking establishment would also come within the definition of the establishment. Sub clause 8 quoted above would show that establishment means a shop or a commercial establishment. Sub clause 7 quoted above would show that employer means a person owning, or having ultimate control over the affairs of an establishment and includes the manager, agent or other person acting in the general management or control of an establishment. Therefore, the Bank, of which the petitioner is the President also would come within the Crl.M.C.No.370 of 2006 5 definition of the establishment under the Shops Act. The question then arises is whether the petitioner is owning or having ultimate control over the affairs of the Bank or acting in the general management or control of the Bank. ## 7. The bank is admittedly an establishment registered under the Societies Act. Sub clause (e) of Section 2 of the Societies Act defines committee as follows: “Committee means the governing body of a cooperative society by whatever name called, to which the management of the affairs of the society is entrusted ”. The petitioner is the President of the Committee to which admittedly the management of the bank is entrusted. Nowhere in the Societies Act specifies the powers or functions of the President of a governing body or committee. Neither the rules framed under the Societies Act define. During the course of argument it was revealed that the powers of the President and functions of the Bank are governed by the bye law of the bank. Therefore, the petitioner was directed to produce the bye law of the Bank by an order dated 6.3.2007. Till now, the Crl.M.C.No.370 of 2006 6 petitioner had not produced the bye law of the bank, which is admittedly in the possession of the petitioner and the petitioner holding office of the President of the bank by virtue of the powers vested on him under the bye law. Therefore, I am persuaded to arrive at an adverse inference that the petitioner as President of the Bank was in ultimate control of the Bank. To a query put to the learned counsel for the petitioner, he had been fair enough to concede that though there are other elected members in the committee or the governing body and that there is a secretary to the bank, the petitioner, being the president of the governing body was vested with the ultimate control over the affairs of the bank. That being so, I have no hesitation to hold that the petitioner would come within the definition of the employer of the bank as defined under Section 2(7) of the Shops Act. ## 8. The learned counsel for the petitioner advanced an argument that the establishments under Societies Act would come within the exemption under clause (f) of Section 3 (1) of the Shops Act, which reads as follows: Crl.M.C.No.370 of 2006 7 - - 3.Exemptions-(1) Nothing contained in this Act shall apply to xxxxx xxxxx xxxxx xxxxx xxxxx - (f) establishments which, not being factories within the meaning of the Factories Act, 1948 (Central Act 63 of 1948) are in respect of matters dealt with in this Act, governed by a separate law for the time being in force in the State of Kerala.” Carefully going through the above clause, I find that under the above clause, only factories within the meaning of the Factories Act, 1948 are exempted as it is covered under the Factories Act. 9. The learned counsel for the petitioner would advance an argument that bank being an establishment constituted under the Societies Act, it is governed by the Rules thereunder, Sub rules and other welfare schemes which would take care of the welfare of the employees and therefore, the provisions of the Shops Act are not attracted. From the arguments advanced it is revealed that under the Co-operative Societies Act, the following schemes and rules are made for the benefit of the employees. (1) Co-operative Societies Pension Scheme, 1994, (2) LIC linked Group Gratuity Scheme, (3) Crl.M.C.No.370 of 2006 8 Kerala Co-operative Societies Welfare and Development Scheme, 2004, (4) Financial Assistance from Welfare Fund Regulation, (5) Kerala Co-operative Subordinate Service Rules, 1962, and (6) State Co-operative Bank & District Co-operative Bank Employees Self Financing Scheme, 2005. 10. On the other hand, under the Shops Act, Chapter II deals with the hours of work, extra wages for overtime work, intervals for rest, spread over, opening and closing hours, closing of shops and grant of weekly holidays etc. Chapter III deals with holidays and leave. Chapter IV deals with wages, dismissal etc. Chapter V deals with prohibition regarding employment of children and women. Chapter VI deals with health and safety. Chapter VII deals with enforcement and inspection of the various welfare measures. Going by the various schemes and rules under the Societies Act, I find that the provisions relating to the welfare and safety measures coming under Chapter II to VII of the Shops Act are not at all covered by the Rules and Schemes or other welfare measures under the Societies Act which generally relates to terms and conditions of service. Crl.M.C.No.370 of 2006 9 Therefore, it could not be said that there are various welfare schemes relating to the Bank and other establishments under the Societies Act so as to exempt from the purview of the Shops Act. Consequently, I find that to claim exemption under Section 3(1)(f) of the Shops Act there is no separate law governing the bank and therefore, the Bank wouldn't come under Exemptions under Section 3(1)f). 11. It is also noticed that by various notifications issued under the Shops Act, certain establishments were excluded from the purview of the Shops Act or from the purview of the certain provisions of the Shops Act. By virtue of Notification No.13827/H3/68/LSWD dated 18.5.68 published in Kerala Gazette dated 4.6.68 Part I, the Government have permanently exempted all co-operative stores and supermarkets in the State from the provisions in Section 20 of the said Act subject to the condition that no women shall be required or allowed to work whether as an employee or otherwise in the establishment after 8 P.M and before 6 P.M. A look at Section 20 of the Shops Act would show that there is Crl.M.C.No.370 of 2006 10 total prohibition of employment for women and persons below seventeen years between 7 P.M. and 6 A.M. That means only Cooperative Stores and Supermarkets are exempted from the purview of Section 20 on certain conditions. It further indicates that all other establishment under the Societies Act would come within the purview of all provisions of the Shops Act. 12. Searching the precedents, it is noticed that the applicability of the provisions of the Shops Act on establishments under the Societies Act had been to the consideration of this court in Asst. Labour Offier v. Kadungallur Service Co-operative Bank Ltd. (1980 KLT SN 26 (Case No.61)). This court has held that establishments under the Societies Act are not exempted from the purview of the Shops Act. I find no reason to disagree. In the above circumstance, I find no merit in the contentions advanced by the petitioner. As I mentioned earlier, the petitioner had not obtained registration under Section 5A of the Shops Act. Therefore, the assail as against Annexure-III complaint is without any merit. Crl.M.C.No.370 of 2006 11 In the result, this petition is dismissed without prejudice to the defence of the petitioner. The petitioner is directed to appear before the trial court on the next posting date. The case being a pretty old one, the trial court shall give top priority and dispose of the case as expeditiously as possible. P.S.GOPINATHAN, JUDGE cms