AN

Assignment
ON
Cases
Of
Bombay Shops and establishment
Act, 1948

SUBMIT TO: PROF.ALPABEN MEHTA

DEPARTMENT OF LABOUR WELFARE,
SCHOOL OF SOCIAL SCIENCE,
GUJARAT UNIVERSITY,
AHMEDABAD.

SUBMIT BY;
NIKUNJ.B.PATEL
ROLL NO. 19
Jr.M.L.W.

1
1. CLOTHING FACTORY, NATIONAL WORKERS'
UNIONAVADI, MADRAS, REPR
Vs.
UNION OF INDIA BY ITS SECRETARY, MINISTRY
OFDEFENCE, NEW DEL
Equivalent citations: 1990 AIR 1383, 1990 SCR (2) 617
Bench: Ahmadi
DATE OF JUDGMENT: 20/04/1990
BENCH:
AHMADI, A.M. (J)
BENCH:
AHMADI, A.M. (J)
FATHIMA BEEVI, M. (J)

CITATION:
1990 AIR 1383 1990 SCR (2) 617
1990 SCC (3) 50 JT 1990 (2) 231
1990 SCALE (1)798

ACT:
Factories Act, 1948--Section 59 and Presidential Order dated September 1,
1959 and February 13,
1963--Ordinance Clothing Factory--Payment of over-time wages for piece
rated workers-Computation of.

HEADNOTE:
The controversy that requires determination in this appeal is whether
piece-rated workers are entitled to overtime wages for work done beyond
the normal hours of 44-3/4 hours and up to 48 hours in a week, i.e. for 3-
1/4hours in a week and the rate at which they should be paid the overtime
wages for those hours.

2
 The workers of the Clothing Factory are divided into two categories
viz., (i) day workers and (ii) piece-rated work ers. Whereas the day workers
are paid wages in the scale of Rs.260-400, on the basis of their actual
attendance the piece-rated workers are paid on actual output or production
calculated on the basis of time
required for making the item at an hourly rate to be arrived at in accordance
with the formula prescribed for the purpose. According to the appel- lants,
the piece-rate system was introduced sometime in 1963 and since then the
piece-rate workers were paid overtime wages accordingly for work done
beyond the normal working
hours i.e. 44-3/4 hours (8 hours per day other than Satur- days when the
working hours are 4-3/4 hours), but the same was abruptly stopped from
1983 so much so that they were even denied the wage at the normal rate
for work done beyond normal hours and up to 48 hours. Being dissatisfied,
the appellant Union filed a writ
petition in the High Court of Madras praying for a suitable direction to the
respondents to pay the piece-rate workers extra or overtime wages at the
rate prescribed by section 59(1) of the Factories Act if the total working
hours of any workman exceeded 44-3/4 hours in a week. The learned
Single Judge of the High Court by his order dated 6th December 1983,
dismissed the writ petition. An appeal was preferred by the appellant Union
but whilst the said appeal was yet pending disposal by the High Court, the
appellant Union filed yet another writ

618
Petition in the same High Court, which was later transferred to the Central
Administrative Tribunal and which has been disposed of by the Tribunal by
the impugned order. Hence this appeal by the Union after obtainingspecial
leaves. The appeal preferred against the order of the learned single Judge
of the High Court was later dismissed for default. The workers claim that
they are entitled to extra wages for these 3-1/4 hours at double the normal
rate in accord- ance with section 59(1) of the Factories Act whereas the
Union denies such liability
.Dismissing the appeal, this Court,

3
HELD: There is no dispute that the workers are paid overtime wages for
work done in excess of 9 hours on any day or 48 hours in any week in
accordance with section 59 of the Factories Act. This section does not
provide for overtime wages for work done in excess of the normal working
hours and up to 48 hours. [624C]
Under the Presidential order of 1st September, 1959, overtime wage was
payable for work in excess of normal working hours and up to 9 hours on
any day or 48 hours in a week at the rate prescribed in the departmental
rules. By the subsequent Presidential Order of 13th February, 1963, the
method of calculation and payment of overtime wage to piece workers was
outlined. Under these orders the day workers are allowed overtime wages
for working beyond the normal working hours whereas piece workers are
allowed piece work profits as maybe earned by them for working beyond
normal working hours and up to 48 hours in a week. [625A-B] In the instant
case, the grant of overtime wages for the period in excess of the normal
working hours of 44-3/4 per week and up to 48 hours is governed by the
relevant depart- mental rules and Section 59(1) of the Factories Act comes
into play only if a piece worker has worked beyond 9 hours in a day or 48
hours in a week and not
Otherwise. Further, piece workers are allowed piece work profits as may be
earned by them for working beyond normal working hours and up to 48
hours in a week. [625G-H]Union of India e.g. Kokil, [1984] Suppl. S.C.C.
196, distinguished.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1929 of 1990.

619
From the Judgment and Order dated 29.7.1988 of the Central
Administrative Tribunal Madras in Transferred
Appli- cation No. 244 of 1987.
Ambrish Kumar for the Appellant.
Anil Dev Singh, R.B. Misra and Ms. Sushma Suri for the Respondents.
The Judgment of the Court was delivered by
AHMADI. J. Special leave granted.
4
The workmen of the Ordinance Clothing Factory, Avadi, Madras are
represented by the petitioner/appellant
Union. The workers of the factory are divided into two categories, namely,
(i) day workers and (ii) piece-rated workers. The day workers are paid
wages in the time scale of Rs.260-400 on the basis of their actual
attendance whereas the piece- rated workers are paid on actual out-put or
production calculated on the basis of
time required for making the item by multiplying the same by the hourly rate
worked out by dividing the mean of the time scale by monthly working
hours e.g., Rs.330 + 195 hours = Rs.1.69 (Rs.330 being the mean of the
time scale of Rs.260-400 and 195 hours being the total monthly hours).
The appellant-Union contends that the daily normal working hours of the
workmen are 8 during the week except on Saturdays when the working
hours are 4-3/4 only. Thus the total working hours during the week comes
to 44-3/4 hours. If the piece-rated workers are required to work beyond the
aforesaid normal working
hours they are entitled to overtime wages under section 59 of the Factories
Act, 1948. That section, in so faras is relevant, reads as under: "Section
59(1)'--Where a worker works in a factory for more than nine hours in any
day or for more than forty-eight hours in any week, he shall, in respect of
overtime work, be entitled to
wages at the rate of twice his ordinary rate of wages."
This sub-section postulates payment of extra wages at twice the ordinary
rate of wages for those workers of the factory who are required to work for
more than 9 hours in a day or for more than 48 hours in a week. The
appellant-union filed a Writ Petition No. 2356 of 1985 in the
620
High Court of Madras praying for an appropriate writ or direction to the
respondents to pay the piece-rated workers extra or overtime wages at the
rate prescribed by section 59(1) if the total working hours of any
workman exceeded 44-3/4 hours in a week. The appellant-union contended
that the piece-rate system was introduced sometime in 1963 and since
then the piece-rate workers were paid overtime wages accordingly for work
done beyond the normal working hours but the same was abruptly
discontinued from 1983; so much so
5
that they were even denied the wage at the normal rate for work done
beyond 44-3/4 hours and up to 48 hours,
i.e, 3-1/4 hours. It is, however, admitted that if the workmen are required to
work beyond 48 hours in a week,
They are paid extra wages in accordance with section 59(1) of the Facto-
ries Act. Thus the controversy is in respect of the rate at which piece-rate
workers should be paid wages for the work put in between 44-3/4 and48
hours in a week. The workers claim they are entitled to extra wages for
these 3-V4 hours at double the
normal rate in accordance with section 59(1) of the Factories Act. In
support reliance is placed on the Ministry of Defense letter no. F. 8(5)/56/D
(Civ. II) dated 1st September, 1959 which inter alia provides that in all
cases where overtime pay is admissible to civilian person- nel, both under
the provisions of the Factories Act
and Departmental Rules, the overtime pay should be calculated as under:
(i) For work in excess of normal working hours and up to 9 hours on any
day or 48 hours in a week, overtime will be paid at the rate prescribed in
the departmental rules. For calculation of overtime pay under this item only
basic pay and Dearness allowance shall be taken into account. (2) For
work in excess of 9 hours on any
day or 48 hours in week overtime will be paid at the rates prescribed in the
Factories Act. For calculating overtime pay under this item total pay
including all allowances will be taken into account.
By a subsequently communication dated 13th February, 1963 the Ministry
clarified that having regard to their vision of piece work rates effected in the
Ordinance Factories co- relating them to the monthly scales of pay
sanctioned by the Ministry's letter dated 16th January, 1954, the distinction
between High Paid and Low Paid piece workers stood abolished and
keeping in mind the Ministry's letter dated 1st Septem- ber, 1959, the
President was pleased to sanction the follow- ing methods of calculation
and payment of overtime to
piece-rate workers:
621
(i) Piece workers under P & A Regulations Part I 1923. (a) No overtime will
be admissible for working overtime in the day shift. But for the purposes of
6
distribution of P.W. profits, the time wages element in respect of overtime
up to 9 hours per day or 48 hours a week will be determined at the rate of
P/200 per hours,
where 'P' represents the monthly basic pay and dearness pay where
admissible. (b) An extra 1/2 hour pay calculated at the hourly rate of 1/200
of the monthly basic pay or the monthly basic pay and dearness pay, where
admissible, for every hour of systematic overtime worked on the night shifts
in addition to their piecework earnings.
(ii) Piece workers under the Factories Act
For each hour of overtime in excess of 9 hours on any day or 48 hours in a
week a piece worker will be 1/200of the monthly basic pay plus 25% of
basic pay plus twice all allowances. In other words, if 'P' represents the
monthly basic pay and 'D' stands for all allowances such as dearness
allowance, house rent allowance, compensatory (city) allow- ance,
overtime for each hour will be P/200 + 1/4P/200 +2D/200.
This order was directed to take effect from 1st March, 1954. Thereafter, by
a corrigendum issued on 21st
October, 1965, sub-paragraph (1) of the Ministry's letter of 1st September,
1959 was directed to be substituted
w.e.f. 2nd July, 1965 by the following:
"1. For work in excess of normal working hours and up to 9 hours on any
day or 48 hours in a week, overtime will be paid at the rate prescribed in
the departmental rules. For calculating overtime pay under this item,
Basic pay, dear- ness allowance, special pay, personal pay, pension (to the
extent taken into account for the fixation of pay) in the case of re-employed
pensioner and city compensatory allow- ance shall be taken into account.
House Rent Allowance, conveyance allowance, traveling and daily
allowances, permanent travelling
allowance, clothing allowance, uniform allowance, washing allowance and
children education allow- anceshall not be included."
622
But by a Circular No. 1823/LB dated 2nd February, 1983 it was stated that
orders had since been received from the Ordinance Factory Board 'to stop
payment of Departmental Overtime when piece workers work beyond

7
normal working hours and up to 9 hours a day or 48 hours a week'. It was
further clarified that they
would be entitled to piece work earnings only for the period they work extra
hours. Thus the payment of departmental overtime for January, 1983 in
February, 1983 was stopped. However, with regard to workmen of the Ordi-
nance Factories and other industrial establishments under the Defence
Ministry governed by the
Factories Act, it was laid down by the communication dated 11th
September, 1987 that such workmen shall be entitled to overtime
allowance at time rate for work done in excess of prescribed hours and up
to 48 hours a
Week, in accordance with Ministry's O.M. dated 25th June, 1983, but it was
clarified that the time rate of wages will be calculated with reference to pay
in the revised scale w.e.f. the date the worker has been brought on the
revised scale introduced from 1st January, 1986. In the light of the above,
the appellant-union contends that as the prescribed hours of work were 44-
3/4 hours per week, the workmen were entitled to overtime wage or
allowance for work done beyond 44-3/4 hours and up to 48 hours a week at
double the ordinary rates, which has been wrongly and illegally
discontinued. The case set up by the respondents is that the workers of the
petitioner/appellant-union are mostly doing tailoring work, stitching
uniforms, tents, parachutes, covers etc., in the Ordinance Clothing Factory,
a Govt. of India Undertak- ing, and are paid wages on piece rate basis. It is
submitted that while fixing the piece work rate the labour involved in the
production of each article is analysed in detail and the basic time is
determined
to which 25% incentive is added and the wage is paid on the basis of time
so calculated by taking thearithmatic mean of the scale to which the worker
belongs and dividing the same by the figure 195 representing the number
of standard hours for a month. Thus if a piece worker completes his job
allotted to him he would
earn his basic time wage plus an extra 25% as incentive. It is fur- there
stated that the payment of overtime wages for the work done beyond the
normal working hours of 44-3/4 and up to 48 hours in a week is regulated

8
by the Departmental Rules and for the period exceeding 48 hours in a
week or 9 hours on a single day is
regulated as per the requirements of the Factories Act. According to the
respondents the Defence Ministryletter of 1st September, 1959 as
amended by the corrigendum of 21st October, 1965 does not apply to
pieceworkers but their case in regard to the grant of overtime payment is
governed by
623
the Defence Ministry letter dated 13th February, 1983 as amended by the
Corrigendum of 18th January, 1970.
In fact the former letters apply to day workers who are paid wages on the
basis of attendance. Thus according to the respondents piece workers are
not entitled to overtime wages at double the rate for work done in excess
of 44-3/4 hours up to 48 hours in a week because they are entitled to piece
work profit in the form of earning which is included in their wage structure
itself to compensate them for the extra working hours up to 48 hours in a
week. Yet on account of a mistake such payment was made till December,
1982 but when it came to light the same was discontinued by the Circular
letter dated 2nd February, 1983. This discontinuance was challenged in
Writ Petition No. 10095/83 in the Madras High Court which was repelled by
Mohan, J. by his
order dated 6th December, 1983. The appeal filed against the decision of
Mohan, J. was still pending in the High Court when the proceedings giving
rise to this appeal were initiated by this Union. Lastly it is pointed out that
according to the terms of section 59 of the Factories Act, the question of
payment of overtime at
double the rate can arise any if the piece worker has worked for more than
9 hours per day or 48 hours per week and not to cases of the present type.
The respondents, therefore, pray that the present appeal is not
maintainable and deserves to be dismissed.
In the rejoinder filed on behalf of the appellant-union it is contended that the
25% incentive is not to compensate for overtime work beyond 44-3/4 hours
and up to 48 hours in a week but is a measure to provide for rest intervals,
minor mechanical breakdowns, tools sharpening or grinding or hold-ups for
want of
9
raw-materials, etc., to arrive at the operational time for production of an
item. The appellant, therefore, contends that the contention that the letters
dated 1st September, 1959 and 12th October, 1969 applied only tithe
monthly-rated day workers is misconceived. This is apparent from the
subsequent letter dated 13th
February, 1963 as amended by the corrigendum of 18th January, 1970.
Therefore, according to the appellants, the contention that piece-work profit
is incorporated in the wage structure applicable to piece rated workers is
not correct and clearly manifests that the discontinuance of overtime is
based on a wrong understanding of the relevant orders. In support strong
reliance is placed on this Court's decision in Union of India v.G.H. Kokil,
[1984] Suppl. SCC 196. Lastly it is contended that the respondents were
not justified in abrupt- lydiscontinuing the grant of overtime wages on the
pretext of a so-called 'mistake' and their action in so doing is
clearly high-handed amounting to unfair labour practice not expected from
a governmental
624
undertaking. It is also contended that the circular letter of 2nd February,
1983 is a document of doubtful origin
and can not in any case override the prior orders contained in the letters of
the Ministry of Defense earlier referred to. The appellants, therefore,
contend that the impugned deci- sion needs to be set aside and the
overtime payments which have been unilaterally and arbitrarily
discontinued re- stored. From the above resume it is clear that the
controversy is limited to the question of non-payment of overtime wages for
work done beyond the normal hours of 44-3/4 hours and up to 48 hours in
a week i.e., for 3-14 hours in a week. There is no dispute that the workers
are paid overtime wages for work done in excess of 9 hours on
any day or 48 hours in any week in accordance with section 59 of the
Factories Act. This section does not provide for overtime wages for work
done in excess of the normal working hours and up to 48 hours. InKokil's
case (supra) the point for consideration was whether the employees
working in the factory of the Indian Security Press, Nasik, were entitled to
overtime wages under section 59 of the Factories Act read withsec- tion 70
of the Bombay Shops & Establishments Act, 1948, for the work done
10
beyond the normal working hours. According to them their normal working
hours were 44 per week, they were required to work in excess
thereof but they were paid over- time wages for the extra hours of work at
the basic rates though they were entitled to overtime wages at double the
normal rate. In that case three contentions were raised, viz., (i) since none
of the respondents was a 'worker' under section 2(1) of the Factories Act,
their case was not gov- erned
by section 59 of the said Act read with section 70 of the Bombay Shops &
Establishments Act; (ii) assuming the respondents were entitled to claim
the benefit of section 59 read with section 70 as aforesaid even though
none of them was a worker, section 59 became inapplicable by virtue of
Rule 100 made under section 64 of the Factories Act; and (iii) since none of
the respondents was a 'workman' under section 2(s) of the Industrial
Disputes Act, 1947, the application under section 33C(2) thereof was not
maintain- able. This Court, on a true
interpretation of section 70 of the Bombay Shops & Establishments Act,
came to the conclude- sion that then on-obstante clause found therein
made it clear that section 59 would apply and the same non-obstante
calusekept out the application of section 64 read with Rule100. On the third
question this Court confirmed the Labour Court's finding that the
respondents were workmen under the Industrial Disputes Act. In this view
of the matter this Court held that the employees were
entitled to overtime wages under section 59 of the Factories Act.
625
Now under the Presidential order of 1st September, 1959 overtime wage
was payable 'for work in excess of normal working hours and up to 9 hours
on any day or 48 hours in a week' at the rate prescribed in the
departmental rules. By the subsequent Presidential order of 13th February,
1963 the method of calculation and
payment of overtime wage to piece workers was outlined. Under these
orders the day workers are allowed overtime wages for working beyond the
normal working hours whereas piece workers are allowed piece work
profits as may be earned by them for working beyond normal working hours
and up to 48 hours in a week.

11
This is clear from clause (i) of the letter dated 13th February, 1963. Even
the Manual of Cost Accounting(1986) meant for Ordinance and Ordinance
Equipment Factories indicates that in the case of piece workers no
separate payment for overtime is permissible under the departmental rules
for day shift workers but they are entitled to piece work earnings only. That
is why in the earlier Writ Petition No. 10095 of 1983 filed in the Madras
High Court a contention was based on Article 14 of the Constitution that the
management was guilty of discrimina- tion inasmuch as day workers of day
shifts were entitled to overtime wages whereas piece .workers were denied
the same. The contention was turned down by Mohan, J. whose decision
was challenged in appeal before the High Court which appeal has since
been dismissed for default. It is indeed surpris- ingwhy another Writ Petition
No. 2356 of 1985 was filed in the same High Court, notwithstanding the
pendency
of the said appeal, which writ petition on transfer to the Central
Administrative Tribunal came to be disposed of by the im- pugned
judgment and order. In fact it is doubtful if this second Writ Petition would
have been entertained in view of the earlier decision of Mohan, J. rendered
several years back soon after the
discontinuance of grant of overtime by the circular letter of 2nd February,
1983 merely because a different union was espousing the cause, since the
cause was identical. The decision of this Court in Kokil's case is clearly
distinguishable on facts. 1n that case there was no dispute that if section
59 of the Factories Act applied the workers were entitled to overtime wages
for work done beyond the normal hours and up to 48hours. That would
naturally depend on the relevant service rules since section 59 stric- to
sensu applies to cases of overtime work done beyond 9 hours a day or 48
hours a week. In the present case the grant of
overtime wages for the period in excess of the normal working hours of 44-
3/4 per week and up to 48 hours is governed by the relevant departmental
rules and section 59(.1) of the Factories Act comes into play only if apiece
worker has worked beyond 9 hours in a day or 48 hours in a week and not
otherwise. Further, piece
workers are denied overtime wage for these 3-1/4 hours of work in a week
626
12
because this factor is taken care of in the calculation of the piece rate. We
are, therefore, of the opinion that the ratio of Kokil's case has no application
to the facts of the present case. For the above reasons we see no merit in
this appeal. The appeal, therefore, fails and is dismissed. No order as to
costs.
Y. Lal Appeal dismissed.

2. Kalidas Dhanjibhai
Vs.
The State of Bombay
DATE: 29 October, 1954

Bench: Bose, Vivian

Equivalent citations: 1955 AIR 62, 1955 SCR (1) 887

ACT:

Bombay Shops and Establishments Act, 1948 (Bombay Act LXXIX of

1948), s. 2(27)-Premises (situated in Ahmedabad) where no buying or
selling is done-Owner employing three workers- Doing business in a very
small way-By going to certain local mills-Collecting orders for spare Parts-
Manufacturing the parts in his workshop -Concern of this nature-Whether a
shop within the meaning of s. 2(27).

HEADNOTE:

The appellant, the owner of a small establishment in Ahmedabad, employs

three workers, does business in a very small way by going to certain local
mills, collecting orders from them for spare parts, manufacturing the parts
so ordered in his workshop, delivering them to the mills when ready and
collecting the money therefore. No buying or selling is done on the
premises.

13
Hold, that a concern of this nature is not a shop within the meaning of s.
2(27) of the Bombay Shops and Establishments Act, 1948:

JUDGMENT:

Appeal by Special Leave granted by the Supreme Court by its order dated
the 9th February, 1953, from the Judgment and Order dated the 23rd
September, 1952, of the High Court of Judicature at Bombay in Criminal
Appeal No. 828 of 1952 arising out of the Judgment and Order dated the
27th March, 1952, of the Court of Stipendiary Magistrate, Ahmedabad, in
Summary Case No. 3029 of 1954.

Rajni Patel and M. S. K. Sastri for the appellant. M. C. Setalvad, Attorney-

General of India, and (Porus A. Mehta and P. G.Gokhale, with him) for the
respondent. 1954. October 29. The Judgment of the Court was delivered
by

BOSE, J.-This case is unimportant in itself, for a small fine of Rs. 50 (Rs.
25 on each of two counts) has been imposed for a couple of breaches
under section 52 (f) of the Bombay Shops and Establishments Act, 1948,
read with rule 18(5) and (6) of the Rules framed under the Act. But the
question involved is of general importance in the State of Bombay and
affects a large number of similar establishments, so in order to obtain a
clarification of the law, this has been selected as a test case. The appellant
is the owner of a small establishbment called the Honesty Engineering
Works situate in Ahmedabad in the State of Bombay. He employs three
workers. He does business in a very small way by going to certain local
mills, collecting orders from them for spare parts, manufacturing the parts
so ordered in his workshop, delivering them to the mills when ready and
collecting the money therefor. No buying or selling is done on the premises.
The question is whether a concern of this nature is a "shop" within the
meaning of section 2(27) of the Act. The learned trying Magistrate held that
it was not and so acquitted. The High Court, on an appeal against the
acquittal, held it was and convicted.

14
It is admitted that the appellant maintains no "leave registers" and gives his
workers no "leave books" and it is admitted that the Government Inspector
of Establishments discovered this on 12th January, 1951, when he
inspected the appellant's works. If his establishment is a "shop" within the
meaning of section 2(27) he is guilty under the Act; if it is not, he is not
guilty.

3. Shri B. P. Hira, Works...

vs
Shri C. M. Pradhan
DATE: 8 May, 1959

Bench: Gajendragadkar, P.B.

Equivalent citations: 1959 AIR 1226, 1960 SCR (1) 137

ACT:

Overtime Wages-Claim by employees in railway factory- Validity-Factories

Act, 1948 (LXIII of 1948), SS. 2(1),59- The Bombay Shops and
Establishments Act, 1948 (Bom. 79 of 1948). SS. 4, 70.

HEADNOTE:

The Authority was right in the view that it took Of S. 70 Of the Bombay
Shops and Establishments Act, 1948, and its decision must be affirmed.

On a proper construction Of S. 70 Of the Act it is clear that the first part of

the section excludes a factory and its employees from the operation of the
Act; but the second part makes the relevant provisions of the Factories Act
applicable to them. The non-obstante clause in the section shows that the
employees in a factory, although they might not be workers within the

15
meaning Of S. 2(1) of the Factories Act, are entitled to claim overtime
wages as provided for by that Act.

It is not correct to say that S. 4 Of the Bombay Shops and Establishments

Act, 1948, has the effect of excluding the operation Of S. 70 Of the Act.
Section 4 applies only to establishments and not to factories; but even if it
applied, to factories 18,138 that cannot materially affect the application Of
s. 70 which is intended to operate not withstanding the other provisions of
the Act.

Consistently with its policy, the Act, which provides for overtime wages for
employees in all establishments, provides for overtime wages for
employees in factories as well by making the relevant provisions of the
Factories Act applicable to them.

JUDGMENT:

The Bombay Shops and Establishments Act, 1948, is the third statute
which makes a provision for the payment of extra wages for overtime work.
Section 63 of the Act deals with this topic. Section 63(1) provides for the
payment of overtime work at the rate of 1-1/2 times the ordinary rate of
wages in the case of employees in any establishment other than a
residential hotel, restaurant, or eating-house, whereas sub-s. (2) provides
for wages for overtime at the rate of twice the ordinary rate of wages in
respect of employees in a residential hotel, restaurant or eatinghouse,
subject to the other conditions specified in the said section. It is clear that
this section does not apply to the respondents because they are employees
in a factory and not in any of the establishments enumerated in its two sub-
sections.

144

The respondents' case, however, is that by virtue of s. 70 of the. Act the

provisions of the Factories Act,including a. 59, are extended to the cases of
all employees in factories, and so they are entitled to claim wages for
overtime under the said section of the Factories Act. This contention has

16
been upheld by the Authority. It is not disputed by the appellant that the
Bombay Legislature was competent to prescribe for the extension of the
provisions of the Factories Act to employees in the factories within the
territory of the State of Bombay; and since sanction for this legislation has
been duly obtained from the Governor- General of India on January 3,
1949(1), no question about any repugnance between the provisions of s.
70 and those of the Factories Act can possibly arise. Thus the validity of
the said section is not in dispute; and so the only point which calls for our
decision is one of construction:

This conclusion is obviously consistent -with the policy of the Act. It has
itself made provision for the payment of overtime wages to employees in all
establishments by s. 63; and it has made applicable inter alia the relevant
provisions of the Factories Act in regard to employees in factories. That is
the view which the Authority has taken, and in our opinion its validity or
correctness is not open to doubt.

In the result the orders passed by the authority are confirmed and the
appeals are dismissed with costs in one set.

Appeals dismissed.

4. Union of India and another

vs
17
 G.M. Kokil
DATE: 21 March, 1984

Bench: Tulzapurkar, V.D.

Equivalent citations: 1984 AIR 1022, 1984 SCR (3) 2921 984 SCALE
(1)521

CITATOR INFO: D 1990 SC1382 (7) RF 1992 SC 81 (11)

ACT:

Factories Act, 1948-s.59-Benefit of overtime wages at double the rate of

ordinary wages-Scope of Section 70 of Bombay Shops and Establishments
Act, 1948 extends the benefit under s. 59 of Factories Act to all persons
employed in factory irrespective of the fact whether they are workers under
s. 2(1) of the factories Act or not and whether they are exempted under s.
64 of Factories Act read with rule 100 made by State Government.

Bombay Shops & Establishments Act. 1948S- 70- Interpretation of.

HEADNOTE:

The respondents who were working in different capacities in the factory of

India Security Press at Nasik, an establishment of the appellant, filed an
application before the Central Government Labour Court, Bombay under s.
33 C(2) of the Industrial Disputes Act, 1947 claiming overtime wages at
double the ordinary rate of wages under s. 59 of the Factories Act read with
s. 70 of the Bombay Shops and Establishments Act, 1948. The Labour
Court dismissed the contentions of the appellant and granted relief. Hence
this appeal.

JUDGMENT:

Section 70 of the Bombay Shops and Establishments Act, 1948 runs thus:

18
"70. Persons employed in factory to be governed by Factories Act and not
by this Act.

Nothing in this Act shall be deemed to apply to a factory and the provisions
of the Factories Act, 1948 shall, notwithstanding anything contained in that
Act, apply to all persons employed in and in connection with a factory:

Provided that, where any shop or commercial establishment situate within

the precincts of a factory is not connected with the manufacturing process
of the factory the provisions of this Act shall apply to it: Provided further
that, the State Government may, by notification in the official Gazette, apply
all or any of the provisions of the Factories Act, 1948 to any shop or
commercial establishment situate within the precincts of a factory and on
the application of that Act to such shop or commercial establishment, the
provisions of this Act shall cease to apply to it."

Counsel for the appellants made a feeble attempt to contend that not
merely such of the respondents who were holding the posts of Senior
Supervisors and Supervisors were not industrial employees but all the
other respondents were also not industrial employees i.e. were not
workmen under the Industrial Disputes Act. In the first place, the contention
depends upon the appreciation of evidence led by the parties on the nature
of duties and functions performed by the concerned respondents and it was
on an appreciation the entire material that the Labour Court recorded a
finding that having regard to the nature of their duties and functions all
respondents, other than those who were holding the post of Senior
Supervisors and Supervisors, were industrial employees, i.e. workmen
under the Industrial Disputes Act and it is not possible for this Court to
interfere with such a finding of fact recorded by the Labour Court. Even
otherwise after considering some of the important material on record
through which we were taken by counsel for the appellants, we are
satisfied that the Labour Court's finding is correct.

In the result the appeal fails and is dismissed but there will be no order as
to costs.

19
H.S.K. Appeal dismissed.

5. Bombay Gas Co. Ltd

vs
Jagannath Pandurang
DATE: 12 Aug, 1975

Bench: Vaidyialingam, C.A.

Equivalent citations: 1972 AIR 2356, 1972 SCR (3) 929, RF 1974
SC1495 (11)

ACT:

Industrial Disputes Act 1947 Section 10-Award of an Industrial Tribunal, if

binds workman coming to Work under the employer after the award.

Labour. Law-Principles of res judicata, if apply to industrial disputes.

HEADNOTE:

The Authority held that (1) the claims of the Booster Attendants for wages
for overtime work and weekly off days were covered by the award, (2) the
claims of Applicants other than Booster Attendants were not covered by the
award, and (3) the Bombay Shops and Establishments Act was not
applicable to them, and dismissed the applications of respondents I to 80.
The applications made by respondents 81 to 113 were allowed by the Third
Additional Authority holding that the award was no bar to those
applications, and that the provisions of the Bombay Shops and
Establishments Act were applicable. The Court of Small Causes, Bombay,
which dealt with the appeals filed by the workmen and the company held
that the claims of workers for overtime. wages and wages for weekly off

20
days were barred by the award. It also held that the appellant company
was a commercial establishment within The meaning of that terms under
the Bombay Shops and Establishments Act. All the workmen filed a writ
petition challenging the judgment of the Court of Small Causes. The High
Court held that the claims of the respondents were not barred by the award
and remanded the applications of respondents I to 80 to the Authority
under the Payment of Wages Act for ascertaining and decreeing the
amount. As regards respondents 81 to 118 the judgment of the Third
Additional Authority under the Payment of Wages Act was restored. This
appeal is preferred on the basis of the special leave granted by the
Supreme Court. Dismissing the appeal,

JUDGMENT:

The High Court seems to have been of the impression that these workmen
were entitled to be paid for the days off either under the award or under s
18(3) of the Bombay Shops and Establishments Act. It seems to have
assumed that there was a scale of wages for weekly off days under the
award. That this is an obvious mistake would be apparent from a reading of
paragraphs 114 and 115 of the award to the following effect:

"114. It must be remembered that the wages of daily rated workers are
ordinarily fixed with reference to what their monthly income would be on the
basis of a month consisting of 26 working days. This undoubtedly secures
to them the benefit of holidays with pay. .. The company and the union
have entered into an agreement about June 1946 as regards wage scales
of various categories of workers that in respect of most of the daily rated
workers the wages must have been fixed on the basis of what their monthly
income would be for 26 working days.

115. Some difference must however be made in the case of the classes of
workers specifically mentioned in demand 11(b)... Until recently these
categories of workers used to work for all the 7 days of the week and earn
wages for all the days. Certainly it cannot be said in their case that their
daily rates of wages were fixed with reference to a month of 26 working
days. . . Time demand in respect of workers of the Mains Services and
21
District Fittings Departments and lamp-repairers and others who were till l
948 required to work on Sundays and in respect of whom a weekly day of
was introduced thereafter without any corresponding increase in their
wages is granted."

The matter would be further clear when paragraph 14 of the award is read,
wherein the Tribunal has observed: "While therefore, I approve of Rs. 30 as
the minimum wage for male mazdoors (coolies) which is at present given.

6. DR. DEVENDRA M. SURTI

Vs.
STATE OF GUJARAT
DATE OF JUDGMENT: 02/05/1968

BENCH: RAMASWAMI, V.BENCH: RAMASWAMI, V.VAIDYIALINGAM,

C.A.

CITATION: 1969 AIR 63 1969 SCR (1) 235

ACT:

Bombay Shops and Establishments. Act, 79 of 1948, s. 2(4) Rule, 23(1)-

Doctor's dispensary whether a commercial establishment as defined in s.
2(4)-Non-maintenance of register of employees under r. 23(1)whether an
offence.

HEADNOTE:

The appellant, a medical practitioner who also maintained a dispensary

was prosecuted for non-maintenance of a register of employees as
required by r. 23(1) of the rules made under the Bombay Shops and
Establishments Act, 1948. He contended that he could not be prosecuted
because his dispensary was not a 'commercial establishment' as defined in
s. 2(4) of the Act. He was acquitted by the trial magistrate but the High

22
Court, on appeal by the State convicted him. In appeal by special leave to
this Court,

HELD: Section 2(4) has used words of very wide import and' grammatically
it may even include the consulting room where a doctor examines his
patients with the help of a solitary nurse or attendant. But the language of
s. 2(4) must be construed on the principle noscitur a sociis. i.e. when two or
more words susceptible of analogous meaning are coupled together the
words take their colour from each other and the more general are restricted
to 'a sense analogous to less general. [240 A--C]

The words 'commercial establishment' and 'profession' in s. 2(4) are used

along with the words 'business 'and trade' and must therefore be restricted
to activity analogous to business or trade. Professional activity cannot be
treated as within the definition of s. 2(4) unless it is organised as trade and
business are organised i.e. the activity as systematically or habitually
undertaken for rendering material services to the community at large or a
part of such community with the help of the employees and such an activity
generally involves cooperation of the employer and the employees. [244 C-
E]

Tested in the light of these principles the appellant did not fall within. the
purview of the Act and his conviction was illegal. [244 E-F]

The National Union of Commercial Employees, and Anr. v. M. R. Mehr,

Industrial Tribunal, Bombay, [1962] Supp. 3 S.C.R. 157, relied On.

Reed v. Ingham, 3 E-B 889, Scales v. Pickering. (1828) 4 Bing. 448, 452,
453, McKay v. Rutherfurd, 6 Moore P.C. 425, Commissioners of Inland
Revenue v. Maxse, [1919] 1 K.B. 647, 657 and William Esplen, Son, and
Swainston Ld. v. Inland Revenue Commissioners, [1919] 2 K.B. 73 1,
referred to.

JUDGMENT:

S. T. Desai, Arun H. Mehta and I. N. Shroff, for the appellant.

23
R. H. Dhebar and M. S. K. Sastri, for the respondent. The Judgment of the
Court was delivered by Ramaswami, J.-The question involved in this
appeal is as to whether a Doctor's dispensary is, a "Commercial Establish-
ment" within the meaning of the Bombay Shops and Establish- ments Act,
1948 (Bombay Act LXXIX of 1948), hereinafter referred to as the 'Act'.

The case of the prosecution is that the appellant was a doctor having his,
dispensary situated near Jakaria Masjid at Ahmedabad. The dispensary is
registered as a 'Commercial Establishment' under the provisions of the,
Act. The complainant Shri Pale visited the dispensary on Juno 13, 1963 at
about 9.50 a.m and found that though the dispensary was registered as
'Commercial Establishment' under the Act, the Register produced before
him, ;at the time of his visit was not maintained as required -tinder Rule
23(1) of the Rules framed under the Art. Necessary remarks were made by
the complainant in the Visit Book of the dispensary. Thereafter, a complaint
was filed against the appellant after obtaining sanction for his prosecution
under s. 52(e) of the Act read with s. 62 of the Act and r. 23(1) of the Rules.
The ease was contested by the appellant on the ground that the doctor's
dispensary was not a "Commercial Establishment" within the meaning of
the Act and the provisions of the Act did got therefore apply to his
dispensary and the appellant bad not committed any offence. The City
Magistrate (First Court), (Munjipal), Ahmedabad held that the appellant was
not guilty and acquitted him. The State of Gujarat took the matter in appeal
TO the High Court of Gujarat in Criminal Appeal No. 208 of 1964. The
appeal was allowed by the High Court by its judgment dated February 14,
1966 and the appellant was convicted for an offence under s. 52(e) read
with s. 62 of the Act and r. 23(1) of the Rules and sentenced to pay a fine
of Rs. 25, in default to undergo, simple imprisonment for a week. This
appeal is brought by certificate from the judgment of the High Court.

Before considering the rival contentions of the parties it is necessary to

examine the scheme of the Act. The preamble to the Act states that it is an
Act "to consolidate and amend the law relating to the regulation of
conditions of work and employment in shops, commercial establishments,
residential hotels. restaurants, eating houses, theatres, other places of

24
public amusement or entertainment and other establishment". Section
2(4) ,of the Act defined "Commercial establishment" as followed. Applying a
similar line of reasoning we are of opinion that the dispensary of the
appellant would fall within the definition of S. 2(4) of the Act if the activity of
the appellant is organised in the manner in which a trade or business is
generally organised or arranged and if the activity is systematically or
habitually undertaken for rendering material services to the community at
large or a part of such community with the help of the employees and if
such an activity generally involves co-operation of the employer and the
employees. To put it differently, the manner in which the activity in question
is organised or arranged, the condition of the co-operation between the
employer and the employees being necessary for its success and its object
being to render material service to the community can be regarded as
some of the features which render the carrying on of a professional activity
to fall within the ambit of S. 2(4) of the Act. Tested in the light of these
principles, we hold that the case of the appellant does not fall within the
purview of the Act and the conviction of the appellant of the offence under
S. 52(e) of the Act read with S. 62 of the Act and r. 23(1) of the Rules is
illegal.

For these reasons we allow this appeal and set aside the judgment of the
Bombay High Court dated February 14, 1966 convicting and sentencing,
the appellant. G.C.

Appeal allowed.

25