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Madurai Bench of Madras High Court
T.S. SIVAGNANAM, J.
The Management of Vivekananda Kendra Rural Development Programme
Versus
The Deputy Commissioner of Labour & Others
W.P. (MD) Nos. 8738 & 8739 of 2006
Decided On : 06-03-2013
Shop Act - Applicability to Charitable Organization - Section 2(3), Section 2(6), Section 2(16), Section 4, Section 5, Section 6 - The judgment discusses the applicability of the Tamil Nadu Shops and Establishment Act, 1947 to a charitable organization and the criteria for determining whether an organization falls within the definitions of 'commercial establishment', 'establishment', or 'shop' under the Act. The court emphasizes the need for a factual examination of the nature of activities carried out by the organization and highlights the tests and guidelines laid down by the Hon'ble Supreme Court in Bangalore Water Supply and Sewerage Board vs. A.Rajappa & Ors, [(1978) 2 SCC 213] to determine whether an organization qualifies as an 'industry' under the Industrial Disputes Act. The judgment also addresses the issue of violation of principles of natural justice in a domestic enquiry and the requirement for a fair and proper examination of evidence before setting aside an order of dismissal.
Fact of the Case:
The petitioner, a charitable organization, challenged an order under the Tamil Nadu Shops and Establishment Act, 1947 dismissing two employees for not obeying transfer orders. The employees contended that the Act did not apply to the petitioner as it was a service organization without profit motive.
Finding of the Court:
The court found that the first respondent failed to address the preliminary objection regarding the applicability of the Shop Act to the petitioner and committed a fundamental error in not framing the questions for consideration properly. The court also held that the first respondent's conclusion on the applicability of the Act was cursory and lacked a proper examination of the nature of the petitioner's activities. Additionally, the court found that the first respondent failed to examine whether the charges against the employees were proved by the petitioner organization before setting aside the order of dismissal.
Issues: The issues included the applicability of the Shop Act to a charitable organization, violation of principles of natural justice in a domestic enquiry, and the need for a fair and proper examination of evidence before setting aside an order of dismissal.
Ratio Decidendi: The court emphasized the need for a factual examination of the nature of activities carried out by the organization to determine its classification under the Shop Act. It also highlighted the tests and guidelines laid down by the Hon'ble Supreme Court in Bangalore Water Supply and Sewerage Board vs. A.Rajappa & Ors, [(1978) 2 SCC 213] to determine whether an organization qualifies as an 'industry' under the Industrial Disputes Act. The court further emphasized the requirement for a fair and proper examination of evidence before setting aside an order of dismissal.
Final Decision: The writ petitions were allowed, and the impugned orders were set aside. The matter was remanded to the first respondent to decide afresh, following the decision of the Hon'ble Supreme Court and taking note of the observations made in the court's order. The court also directed the petitioner to pay the last drawn wages to the employees until the matter was decided afresh by the first respondent.
1. The petitioner in both the writ petitions is the Vivekananda Kendra Rural Development Programme, Vivekanandapuram and the challenge in both the cases is to a common order passed by the first respondent under the provisions of the Tamil Nadu Shops and Establishment Act, 1947 (The Shop Act), in the appeals filed by the second respondents against the order dispensing with their services from the Rural Development Programme.
2. The petitioner would contend that they are part of the activities of Vivekananda Kendra Rural Development Programme, which was established with the object of propagating the philosophy of Swami Vivekananda. The institution itself is a charitable and service organisation without any profit motive and several young men and women rendered selfless service through out the country in pursuit of the objectives of the institution. It is further stated that as a part of their activities, education is given to poor children, nutritious food is provided to them, free medical camps are conducted and in addition to these charitable activities, rural development is undertaken in various parts of the country like Tamil Nadu, Karnataka and Bihar. In Tamil Nadu the programme is conducted in five southern Districts, namely, Kanyakumari, Tirunelveli, Tuticorin, Ramanathapuram and Virudhunagar. According to the petitioner, the Rural Development Programme is centered around Tuticorin District and for administrative convenience, the petitioner's office was shifted to Tuticorin. The second respondent in W.P.No.8738 of 2006, was working as a Compounder on a monthly payment of Rs.2090/- and the second respondent in W.P.No.8739 of 2006, was working as a Graduate Social Worker (Pattathari Thondar) and receiving a monthly payment of Rs.3580/-. On 11.02.1999, an office order was issued by transferring the second respondent in W.P.No.8738 of 2006 to Valliyur to assist the Doctor in the Medical Centre in that area and by a subsequent order, he was transferred to Sathankulam to assist the Doctor which also comes under Valliyur area. Similarly, the second respondent in W.P.No.8739 of 2006, was transferred to Madurai District and advised to do his service in the rural area in Madurai District. Both the respondents did not obey the order of transfer and one of them sent a letter dated 28.02.2000, questioning the transfer with a copy of the letter marked to the Assistant Commissioner of Labour. Thereafter, both the respondents did not report for work, though the petitioner had sent communication to them calling upon them to report for work. The second respondent sent a reply stating that a suit has been filed before the District Munsif Court, Nagercoil, questioning the transfer and till the disposal of the suit they cannot insist him to join duty in the transferred place. Thereafter, the petitioner issued a charge memo dated 30.01.2001/30.09.1999 to the respondents respectively. The second respondent in W.P.No.8738 of 2006 did not submit any explanation, whereas the other respondent submitted his explanation. The petitioner decided to conduct a domestic enquiry and sent a notice of enquiry to both the second respondents. As both of them did not participate in the domestic enquiry stating that civil suit was pending, they were set exparte and after considering the oral and documentary evidence placed by the petitioner, the enquiry officer submitted a report holding that the charges were proved. Thereafter, second show cause notice was issued to both the second respondents along with the copy of the enquiry officer's report as earlier, only the second respondent in W.P.No.8739 of 2006 submitted his further explanation and thereafter, the petitioner by orders dated 01.10.2002/11.12.2001 respectively dismissed them from service.
3. Aggrieved by such order both the respondents preferred appeals under the Provisions of the Shop Act before the first respondent along with application for condonation of delay. The delay was condoned by
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