1. The applicability or otherwise of the rigour of the relevant provisions of the Bombay Labour Welfare Fund Act of 1953 is the question that is posed in this proceeding for being answered in the context of the rival contentions. The question so posed no doubt falls in a narrow field, though the contentions canvassed on behalf of both the sides fall in a comparatively expanded field, in it is. The petitioners herein are the Board of Trustees of the Port of Bombay which is a statutory Corporation constituted under the provisions of the Major Port Trusts Act of 1963. The second respondent is the Welfare Commissioner being the Officer of the first respondent-State of Maharashtra and exercises powers and functions under the provisions of the Bombay Labour Welfare Fund Act (shortly the Act). The third respondent has also been joined being the Maharashtra Labour Welfare Board. The petitioners are undertaking certain activities which according to the respondents got the label of business or trade activities and thereby all the wings annexed thereto are being styled as Commercial Establishments and therefore according to the respondents the petitioners are liable to make their contributions even in respect of such wings or Departments which were not specifically covered prior to the year 1971 when there has been amendment to the relevant provisions and thus would not be restricted only to those main Departments where manufacturing activities are effected. The dispute, therefore, pertains essentially to those other wings where no manufacturing activities as such are carried out with the further question that is being posed which harmoniously flows out of this controversy as to whether such other wings can be said to be carrying out some work which is incidental or ancillary to the activities of the main Department which carries on the manufacturing work. The petitioners would have it that though they are accepting their obligation to pay the contribution under the Act in so far as the Departments which carry on the manufacturing activities, still the other wings unconnected with the process of manufacture cannot be saddled with the similar responsibility to make the payment of contributions. Since this has not been accepted by the respondents in spite of the repeated correspondence exchanged between the parties as also the representations made from time to time, they ultimately issued notice to the petitioners to comply with their obligation under the Act. An endeavour was made once again on behalf of the petitioners to claim exemption from the rigour of those provisions as contemplated by Section 22 of the Act. That representation was also considered by the respondents and ultimately a demand notice came to be issued by the Welfare Commissioner of the Maharashtra Labour Welfare Board on August 2, 1982 intimating to the petitioners that their request for exemption from the provisions of the Act was declined and further intimating that in view of the Government decision and as intimated earlier the petitioners were requested to remit to the said Welfare Board an amount of Employees'' and Employer''s contribution, fines and unpaid accumulations in respect of all the Employees of Bombay Port Trust. The said notice is annexed at Exh. ''R'' to this petition. It is the challenge that is levelled to this notice which forms the subject matter of this petition under Article 226 of the Constitution of India.
2. Shri Bhabha, the learned counsel for the petitioners, mainly contended that in so far as the main Department where the manufacturing activities are in progress the Port Trust has been regularly paying their contributions and they are not shirking their responsibility nor are they challenging the validity of such such very in this petition. However, according to him, in so far as the Departments other than those are concerned, the provisions of the Act are obviously not applicable and therefore the demand for levy of the contributions is unsustainable in law. He also endeavoured to submit that exemption claimed u/s 22 of the Act has been unjustifiably denied though according to him some other public bodies have been granted such exemption. The main thrust of the contentions is that these other wings of the Port Trust in respect of which contributions are now sought to be levied do not entail in any manner into any manufacturing activities nor they can be styled also as being incidental or ancillary or being in connection with any business or trade or profession that may have been carried out in respect of the main Departments. A list is annexed to the petition at Exh. ''A'' in respect of which the petitioners do not dispute their liability to pay the contributions because in those Departments the manufacturing activities or other activities which can legitimately be called as business or trade are going on. It is excluding those wings that have generated the entire controversy about the liability to pay be contributions and those wings for instance comprise such as Accounts Department, Medical Department, Legal Department, etc. which list is obviously not exhaustive.
3. All these contentions are countered by Shri Singhvi and Shri Dixit, the learned counsel for the respondents, who have mainly contended that having regard to the scheme of the Act and the terminology used in various relevant provisions, not only in the Act in question but also in different statutes which are relevant, it would leave no manner of doubt that even in respect of these wings which are sought to be excluded the activities must get the label of business or trade and if that be so, then the liability to make the contributions by the petitioners cannot be wiped out. The contention that exemption has been unjustifiably denied has also been contested and so also a rather vague plea taken by the petitioners about discrimination violating of Article 14 is also seriously contested.
4. This in short is the field of contest.
5. To appreciate the thrust and dimensions of 45 this contest a few aspects relating to the provisions of the Act and the allied statute would be necessary to be examined to find out their applicability or otherwise to the factual structure which has already been indicated.
6. The Act in question came into force in 1953 by Act No. XL of 1953 and it is to provide for the constitution for the financing of activities to promote welfare of labour in the State of Maharashtra for conducting such activities and for certain other purposes. Certain definition are incorporated in the Act though we are mainly concerned with the definition of establishment (as definition) as embedded in Section. 2(4). It would be better if it is reproduced verbatim because much of the controversy revolves around the same.
Section 2(4). "Establishment" means -
(i) a factory :
(ii) A tramway or motor omnibus service or a motor transport undertaking to which the Motor Transport Workers Act, 1961, applies; and
(iii) any establishment within the meaning of the Bombay Shops and Establishments Act, 1948 (Bom. LXXIX of 1948), which employs, or on any working employed, five or more persons :
Provided that, any such establishment shall continue to be an establishment for the purposes of this Act, notwithstanding a reduction in the number of persons to less than five at any subsequent time :
Provided further that, where for a continuous period of not less than three months the number of persons employed therein has been less than five, such establishment shall cease to be an establishment for the purposes of this Act with effect from the beginning of the month following the expiry of the said period of three months, but the employer shall, within one month from the date of such cessation, intimate by registered post the fact thereof to such authority as the State Government may specify in this behalf;
Explanation. - For the removal of doubt, it is hereby declared that where an establishment has different branches or departments, all such branches or departments, whether situated in the same premises, or different premises shall be treated as parts of the same establishment.
7. Item No. (iii) of this definition regarding the establishment has been introduced in the year 1971 by Maharashtra Act No. 16 of 1971 by section 2(3). This would indicate that prior thereto the definition of establishment lay within the narrow compass of only two items as prescribed in Items Nos. (i) and (ii), No. (i) being the ''Factory'' as defined u/s 2(m) of the Factories Act, 1948 and which definition, in addition to the number of workers actually employed and working, envisages and stipulates the effecting of manufacturing process though it is not necessary to reproduce the said definition in details because that part being made applicable to the main Departments is not disputed. It would thus be clear that by reason of this amendment in the year 1971 the concept of establishment has been very much expanded so as to take within its fold certain other establishments which are not covered by the first two clauses meaning thereby that those may cover if permissible under the statue even such an establishment where no direct process of manufacturing is carried though no doubt it should have some connection with the same. The explanation which is obviously annexed to sub-clause (iii) as is apparent from the amendment makes it clear that when an establishment has different branches or departments, all such branches or departments, whether situated in the same premises or different premises, shall be treated as parts of the same establishment. This explanation, therefore, covers the case of such wings or Departments, or branches of the main establishment, whether located in the same premises or not, to be part and parcel of the main establishment for the purposes of this Act and consequently it would not be open for anyone to contend that the wings or different branches can be excluded from the rigour of this provision. This definition, however, by itself does not answer the issue involved because it will have to be supplemented to complete the circuit by the relevant provisions of the Bombay Shops and Establishments Act because this amended provision makes it clear that any establishment within the meaning of this other Act is to be treated as establishment under the provisions of the main Act. It would, therefore, be proper to consider on the parallel track the provisions of the Bombay Shops and Establishments Act of 1948. There are two relevant provisions which fall for consideration in the context of the controversy regarding the definition of an establishment and those are covered by Section 2(8) and Section 2(4). Since these provisions are very much contributory to give complete meaning to the provisions of Section 4 of the Act, it would not burden the record if these to provisions are also reproduced verbatim. Section 2(8) of the Bombay Shops and Establishments Act reads as -
Section 2(8) : "Establishment" means a shop, commercial establishment, residential hotel, restaurant, eating house, theatre, or other place of public amusement or entertainment to which this Act applies and includes such other establishment as the State Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act.
8. Merely referring to this provision also would be incomplete and would be in a truncated form and the circuit would be complete only after reading Section 2(4) which reads as -
Section 2(4) : "Commercial establishment" means an establishment which carries on, any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession and includes establishment of any legal practitioner, medical practitioner, architect, engineer accountant, tax consultant or any other technical or professional consultant and also includes a society registered under the Societies Registration Act, 1860, and a charitable or other trust, whether registered or not, which carries on, whether for purposes of gain or not, any business, trade or profession or work in connection with or incidental or ancillary thereto but does not include a factory, shop, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment.
9. The combined reading of these two provisions spell out certain features in a harmonious manner. The establishment as envisaged u/s 2(8) includes a commercial establishment and the concept of commercial establishment is expanded and defined in Section 2(4). Consequently, therefore, if an establishment can be covered by the label of commercial establishment as contemplated in Section 2(4) then it obviously would be an establishment even u/s 2(8) of this Act. Therefore, the main search will have to be as to whether these wings in respect of which contribution is now sought to be levied are covered by the concept of commercial establishment so as to become an establishment within the meaning of Shops and Establishments Act and thereby so as to be transplanted into the provisions of Section 4, sub-clause (iii) of the main Act. This is obviously divided into two parts, the first being the establishment which actually and directly does or carries the business or trade or profession. While the second part deals with such Department or such main Establishment which is engaged in a work in connection with or incidental or ancillary to such business or trade or profession. As stated at the outset the petitioners do not dispute that the main Departments as mentioned under the Act though according to them all the other wings such as Accounts Department, Medical Department. Legal Department, etc. cannot be said to be having any connection or doing any work incidental or ancillary to any business or trade and Shri Bhabha. The learned counsel, sought to submit that those are unconnected with any such concept of business or trade and those being totally independent cannot be tagged with the main Departments.
10. This proposition has been contested by Shri Singhvi, the learned counsel, and in my opinion, with full justification. It is for that purpose that a further exercise would be necessary to find out as to what is really meant by "business" so as to cover the case of all other wings or branches of the main Departments. Further reliance is placed by Shri Singhvi on some of the rations most of which no doubt deal with the concept of industry as defined under the Industrial Law and in particular the Industrial Disputes Act, though in my opinion the basic foundation or concept can well be equated with that of business or trade in order to find out the real meaning of these terms used in Section 2(4) of the Bombay Shops and Establishments Act. Consequently, therefore, though the ratios relate to the concept of Industry, still the analogy can well be extracted which would be relevant to the facts of this case also. Apart from that the ratios relied upon by themselves clarify the concept of business which has a broad connotation and cannot be examined in a restricted field.
11. Reference to a few of those decisions would serve the purpose. It has been observed in the case of
"If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act."
In
"Business means an enterprise which is an occupation as distinguished from pleasure".
In the
"Business means an enterprise which is an occupation as distinguished from pleasure."
The nature of these activities is a pointer in respect of the respondents'' case that even such activities can be styled as business activities which ostensibly may tend to do service like services rendered to the members. In
"Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.
The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking".
Reliance is also placed by Shri Singhvi, the learned counsel, on the ratio of President, Agricultural Produce Market Committee. Tumsar v. Murari Kapurchand Yadav. 1986 Mh. L.J. 258, to suggest that even such activities of market committee have been brought under the clutches as those having concern or connection even incidental or ancillary with the business and in fact those have been styled as business or trade and all those activities are prescribed in Section 29 of the Maharashtra Agricultural Produce Marketing (Regulation) Act. The provisions of other Acts in that context were also considered and in fact the relevant provisions of the Shops and Establishments Act as contemplated in Section 2(4) about the commercial establishment were also referred to suggesting that it is not only an establishment which itself carries on business, trade or profession but also includes an establishment which carries on any work in connection with, or incidental or ancillary to, any business, trade or profession. It is in that context that it was ultimately held that basically speaking these activities do amount to business but even assuming otherwise, still the traders or businessmen who carry on their activity within the market establishment carry on business or trade in the normal sense and the market committee does carry on work which is obviously in connection with such business and therefore by virtue of Section 2(4) of the Bombay Shops and Establishments Act the said activities have also been held to be falling within the concept of ''commercial establishment''.
12. Shri Bhabha, the learned counsel, however, sought to place reliance on the ration in
13. These decisions harmoniously spell out the inescapable conclusion that in some matter there are direct activities which could be called as business or trade activities and the profit motive or the absence of gaining any profit would be wholly irrelevant while assessing the correct nature of such activities. Further some of the activities are such which by themselves do not entail in any manufacturing work or the actual business, yet those are so integrally connected with the main part of business or trade that those can be legitimately styled as being ancillary or incidental or connected with the said business activities. Consequently, therefore, even accepting the contention raised by Shri Bhabha, the learned counsel, that the actual manufacturing work is not carried in these wings still the integrated connection with the main work of the business cannot be divorced at all. Shri Singhvi, the learned counsel, the respondents, has rightly submitted and which argument is adopted by Shri Dixit, the learned counsel for the other respondent, that when the main department carries some manufacturing process or some other business which is not disputed then can it be said that the Accounts Department which maintains the accounts of the main department of process of manufacturing, is wholly unconnected with the said business activities. The question posed will have to be answered in favour of the respondents'' interpretation that those are very much integrally connected with the main business activities of the Department and therefore are either incidental or ancillary or connected with the business or trade. The same analogy will apply to all such Departments such as Medical Department where welfare of the labour in respect of the health problem is integrally blended with the business activities and cannot be said to be unconnected with the same Similarly in respect of the main business activities if any legal problem crops up then can it be said that the Legal Department in question has absolutely no nexus with the main department because it is through this channel that the legal problem arising out of the business can be resolved. It is not necessary to multiply the illustrations. In my opinion the contentions raised by Shri Singhvi, the learned counsel, are absolutely unassailable and therefore all these wings which are sought to be excluded will have to be included within the concept of commercial establishment as envisaged u/s 2(8) of the Bombay Shops and Establishments Act and therefore by reason of Section 2(8) of the same Act those are bound to be styled as establishments. To complete the circuit this concept will have to be transplanted to the third item of Section 4(iii) of the main Act which under amendment of 1971 includes within its fold this expanded field of establishment. It is extremely relevant to note that the terminology used in sub-clause (iii) of Section 2(4) of the Act while expanding the field of establishment deliberately used the word "any establishment within the meaning of Bombay Shops and Establishments Act", and it does not use the word "as defined under the Act". Consequently the provisions of Section 2(4) read with Section 2(8) of the Bombay Shops and Establishments Act are ipso facto attracted by this definition of Section 2(4)(iii) of the main Act and therefore all these wings are covered by this provision at least after the year 1971 by reason of this amendment. As stated, the explanation to sub-clause (iii) which is reproduced earlier also covers all those wings whether those are located in the same premises or elsewhere because those are to be clubbed with the main establishment in question.
14. Shri Bhabha, the learned counsel, endeavoured to submit that the terminology used in Section 2(8) of the Bombay Shops and Establishment Act and in particular "includes such other establishment as the State Government may declare ..." and extending the argument the learned counsel submitted that "such other establishment" as envisaged under this provision must have the direct nexus with the establishment enumerated in Section 2(8) of the said Shops and Establishments Act and could not be dissimilar to those establishment. Consequently he wanted to submit that all these wings did not fall in the category of those items which are mentioned in sub-cause (8) and thus cannot be said to be establishment. For that purpose he also wanted to place reliance on the ratio in
15. In this view of the matter the challenge on the ground of non-applicability of the provisions of the Act must completely fail.
16. As regard the further contention that exemption was sought for u/s 22 of the Act and which was unjustifiably denied has also no substance. Shri Bhabha, the learned counsel, no doubt in that behalf sought to place reliance on Schedule II, Serial No. 4 of the Bombay Shops and Establishment Act, 1948 under which certain exemptions have been allotted. The establishment of the Bombay Port Trust is at Serial No. 4 and Column 3 indicates that the provisions of the Bombay Shops and Establishment Act are not applicable and are thus exempted from application to the Bombay port Trust. Shri Sanghvi, the learned counsel, is justified in submitting that the very foundation of this argument as also this schedule with reference to Serial. No. 4 pre-supposes the applicability of the provisions of the Act because unless the applicability exists the question of exemption does not arise. In my opinion, this submission also deserves to be accepted. This line of reasoning gets full support in the decision of President, Agriculture Produce Market Committee, Tumsar v. Maruti Kapurchand Yadav (cited supra) which has been clearly observed in paragraph 5 of the said decision. A feeble attempt was made to suggest that that there is hostile discrimination since several such public bodies have been exempted from the applicability of the Act as contemplated by Section 22. A specific statement is made that the same has not been made applicable to the Bombay Dock Labour Board. It is however made clear in the affidavit filed on behalf of the Respondents that this provisions has now been made applicable to that Board also. A grievance is made with some justification that this contention relating to the alleged discrimination has been levelled for the first time in affidavit in rejoinder which has never been reiterated before in any manner and this appears to be factually correct and if that be so then this is a basic deficiency on account of which this contention can be hardly be considered. Even otherwise the details thereof are not supplied. In my opinion no further discussion is relevant in that behalf.
17. Incidentally it may be observed that having regard to the various statutory obligations and the provisions of the Major Port Trusts Act it can hardly be controverted that those very much contain the firm concept of business. Those are not merely the services by themselves because for the same different rates are charged such as for instance if goods are to be maintained in the warehouse then certain charges are to be paid. Chapter VII onwards of the Act makes this position quite clear. There is hardly any challenge to this feature and it is not necessary to catalogue all such activities which are detailed under the said Major Port Trusts Act most of which would obviously get the label and characteristic of trade or business. Merely because there is a supervision or control of the Central Government of the scale of rate has been so fixed does not wipe out the character of the said activities being business activities. It is manifest that the concept of ''Business'' or even of ''trade'' has undergone substantial modification along with the increase in variety of activities that are carried out in different fields. Actually as clarified in Legal and Commercial Dictionary by Mitra as also as per "Legally Defined Words and Phrases", ''Business'' is a wider term then, and not synonymous with, trade, and means practically anything which is an occupation as distinguished from pleasure and profit or even the intention of making profit may not be essential part of the legal definition. There can thus be no controversy on this aspect which is also finally concluded a positive admission in the petition itself which reads as -
"The petitioner does not, except in its factory establishment, carry on any trade or business, or commerce."
18. Under the circumstances for the reasons assigned, the challenge to the demand of levy of the contribution by the Welfare Commissioner under the Bombay Labour Welfare Fund Act, 1953 has no substance and must fail. It may be incidentally observed that the provisions the said Act and the object behind those provisions are obviously laudable and are in the larger interest and thus their implementation cannot be frustrated on the basis of such contentions which even otherwise on merits have no substance.
19. Rule discharged with however no order as to costs.
20. Oral motion for stay execution of this order. In the nature of the order there is hardly any ground made out for granting such stay. Motion rejected.
