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Ruia Krishi Kendra v/s Controlling Authority


Company & Directors' Information:- RUIA AND RUIA PRIVATE LIMITED [Active] CIN = U51900MH1969PTC014329

Company & Directors' Information:- RUIA AND COMPANY PRIVATE LIMITED [Active] CIN = U74999MH1960PTC011837

    Writ Petition Appeal No. 8885 of 1984

    Decided On, 05 June 1989

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE MR. JUSTICE K. RAMASWAMY

    For the Appearing Parties: A. Gopal Reddy, Advocate.



Judgment Text

(1) THE petitioner, admittedly, has established an agricultural farm in which he continuously and systematically carries on the activities of rearing grape plantations, crop dairy farming and agricultural farming. He employs ten or more employees in the farm. A notice was given covering the petitioner's establishment under the Payment of Gratuity Act 39 of 1972 (for short "the Act"). Assailing the jurisdiction to issue the notice covering the farm as an establishment under the Act, the petitioner canvassed before the Controlling Authority, contending that it is not an establishment or a commercial establishment and therefore, it is not 'establishment' or a 'shop' under Section 1 (3) (b) of the Act and therefore, the coverage is illegal and without jurisdiction. That contention was found favour with to the controlling authority , against which an appeal was carried to the appellate authority, which reversed the finding of the Controlling Authority and held that the petitioner's farm is an establishment within the meaning of Section 1 (3) (b) of the Act and therefore, it is covered under the provisions of the Act. Assailing the legality thereof, this writ petition has been filed.


(2) THE contention of Sri Gopal Reddy, the learned counsel for the petitioner is that the Andhra Pradesh Shops and Establishments Act 15 of 1966 (for short "the Shops Act") was not applied specifically to the area, viz. , Ruia Krishi Kendra, Peddashapur village, Ranga Reddy District ; as a result the Shops Act does not apply ; there is no law in force applicable to the area ; and as a result, the petitioner is not covered under the provisions of the Act.


(3) I find it difficult to give acceptance to the contention. Act 15 of 1966 has been repealed and A. P. Shops and Establishments Act 20 of 1988 came into force with effect from July 26, 1988. At the relevant time, the Shops Act was in force. As regards the definitions, there is no material change. Therefore, it makes little difference whether Act 20 of 1988 or Act 15 of 1966 applies to the facts of this case. Section 2 (10) of the Shops Act defines:


" 'establishment' means a shop, restaurant. . . . . . . . . and includes a commercial establishment and such other establishment as the Government may by notification declare to be an establishment for the purpose of this Act. "


. Admittedly, there is no notification issued by the Government applying the shops Act to the area. Section 2 (5) defines "commercial establishment" as meaning an establishment which carries on any trade, business, profession or any work in connection with or incidental or ancillary to such trade, business or profession. . . . . but does not include an establishment. Section 1 (3) (b) of the Act postulates that the Act shall apply to every shop or establishment within the meaning of any law for the time being in force to shops or establishments in which ten or more persons are employed or were employed on any day of the preceding twelve months.


(4) ON a conjoint reading of Sec. 1 (3) (b) of the Act read with Section 2 (10) and (5) of the Shops Act, it is clear that where a commercial establishment, within the meaning of the Shops Act which is in force in the State of andhra Pradesh, which carries on any trade, business or profession or any work in connection with or incidental or ancillary to such trade, business or profession is an establishment within the meaning of Section 1 (3) (b) of the act. When a person has been systematically and continuously carrying on any commercial activity, whether he receives profits or not in a systematic manner, it is a commercial venture. What is material that any law must be in force in a State in which the establishment or commercial establishment is situated. It is needless for the purpose of the applicability of the Act the shops Act must be applied specifically to the area in which the establishment is situated is covered under the Shops Act. It is, therefore, a commercial establishment within the meaning of Section 2 (5) of the Shops Act and therefore, is an establishment within the meaning of Section 1 (3) (b) of the act. Where ten or more employees are or were employed by such an establishment, then all the provisions of the Act stand applied.


(5) IN Slate of Punjab vs Labour Court, Juliundur, AIR 1979 Supreme Court 1981 the Supreme Court was called upon to consider whether the Act applies to the Hydel Upper bari Doab Construction Project established by the State Electricity Board. The Supreme Court, considering the effect of Section 1 (3) (b) of the Act in relation to an establishment and interpreting any law for the time being in force in relation to Shops and Establishments Act, laid down thus :


"there can be no di pute that the Payment of Wages Act is in force in the State of Punjab. Then, it is submitted, the Payment of wages Act is not a law in relation to "shops and establishments". As to that, the Payment of Wages Act is a statute which, while it may not relate to shops, relates to a class of establishments, that is to say, industrial establishments But, it is contended, the law referred to under Section 1 (3) (b) must be a law which relates to both shops and establishments, such as the Punjab Shops and Commercial Establishments Act, 1958. It is difficult to accept that contention because there is no warrant for so limiting the meaning of the expression 'law' in Section 1 (3) (b). The expression is comprehensive in its scope, and can mean a law in relation to shops as well as, separately, a law in relation to establishments, or a law in relation to shops and commercial establishments and a law in relation to non-commercial establishments. Had Section 1 (3) (b) intended to refer to a single enactment, surely the appellant would have been able to point to such a statute, that is to say, a statute relating to shops and establishments both commercial and non-commercial. The Punjab Shops and Commercial establishments Act does not relate to commercial establishments alone. Had the intention of Parliament been, when enacting section 1 (3) (b), to refer to a law relating to commercial establishments, it would not have left the expression 'establishments' unqualified. We have carefully examined the various provisions of the payment of Gratuity Act, and we are unable to discern any reason for giving the limited meaning to Section 1 (3) (b) urged before us on behalf of the appellant. . . . . . . . . . "


(6) WHEN the petitioner has been, systematically an

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d regularly, carrying on activities in dairy farming and horticulture and has been or were employing ten or more employees in that establishment, certainly it is a commercial establishment within the meaning of Section 2 (5) of the Shops Act and it would be covered under the provisions of the Shops and Establishments act. By necessary operation thereof, the petitioner's establishment certainly is governed by the provisions of the Payment of Gratuity Act. Therefore, the Controller under the Act is well within his power to issue the notice and it is legal and valid. The petitioner is bound to comply with the provisions of the Act. (7) THE writ petition is accordingly dismissed. No costs. Advocate's fee Rs. 350/ -.
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