Civil Appeal Nos
2593 2599 of 1980
From the Judgements and Orders dated 23579 30579 25679 26679 and 971979 of the Kerala High Court in MFA Nos 69 76 80 81 83 89 and 75 of 1977
ATM Sampath for the Appellant in CA No 259380
VA Bobde OC Mathur Ms Meera and DN Mishra for the Appellant in CA No 2594 9980
VA Bobde OC Mathur Ms Meera and DN Mishra for the Respondent in CA No 259380
NN Goswamy VC Mahajan Hemant Sharma and Mrs Anil Katiyar for the Respondent
The Judgements of the Court were delivered by SHARMA J
The learned counsel for the respondent has in support of his stand placed reliance on several decisions of this Court and the High 912 courts in which the notification in identical terms has been construed in the way as is suggested on behalf of the Corporation
Although Mr Bobde learned counsel for the appellant has advanced an argument which on the face of it appears to be attractive I think that in view of the consistent interpretation of the notification which has been followed in the country the question should not be reopened for fresh consideration
Accordingly I agree that all these appeals should be dismissed but without costs
MOHAN J These appeals can be dealt with by a common judgement since the question of law to be decided is one and the same
It is enough if we note the facts in Civil Appeal No 2599 of 1980
The appellant is a company incorporated under the Companies Act
It has its registered office at Jew Town in Mattancherry
It is engaged in the business of clearing and forwarding at the Port of Cochin situated in Willingdon Island
It is authorised to transact its business at the Cochin Custom House under the terms of Section 202 of the Sea Customs Act read with the Rules made thereunder and a licence was issued under the said provisions
The appellant received a notice dated 3175 enclosing certain notification whereby the Employees State Insurance Act hereinafter referred to as the Act was extended to certain classes of establishments specified in the Schedule wherein 20 or more persons are employees or were employed during that period
The appellant replied that it did not fall under the purview of the said notification
Therefore the appellant was not liable to comply with any of the provisions of the Act
Another letter dated 8975 was received by the appellant calling it upon to furnish certain details
This was replied to by a letter dated 20975 whereunder the details were furnished
Thereafter a notice dated 71175 with which were enclosed certain printed forms was received by the appellant
The appellant replied on 181175 denying liability to pay any contribution under the Act
The stand of the appellant was that the company does not come within the notification dated 18974 as the appellant was not a shop and was carrying on business of clearing and forwarding at the Cochin Port
In reply to the said letter the appellant received a letter dated 91275 stating that the Insurance Inspector who visited the appellant found 20 persons employed in the shop
It was functioning as shipping clearing and forwarding agents
The appellant served the customers
Therefore it was a shop within the 913 dictionary meaning of the term and called upon the appellant to submit the returns
Contending that the appellant does not render any service to customers at its office it was merely carrying on clearing and forwarding business by processing the documents at Custom House no service being rendered at the appellant s office establishment it was urged that it could not be called a shop within the dictionary meaning
An application was moved under Section 75 of the Act before the Employees Insurance Court Calicut to decide the dispute and to hold that the appellant was not a shop within the purview of the Act and therefore the Act itself was inapplicable
Objections were preferred on behalf of the Regional Director Employees State Corporation that in view of the notification dated 18974 supplemented by the other notifications dated 21274 and 22375 the appellant s business would fall within the ambit of the said notifications
The Government of Kerala issued those notifications with a view to extend benefits to the employees working in other sections of organized labour such as shops and establishments
The Employees Insurance Court by a judgement dated 29177 in EIC No 176 held that the appellant would be covered with effect from six months after 211274
In the result the appellant was brought within the notification
Against this order MFA No 75 of 1977 was preferred to the High Court of Kerala
A Division Bench by its judgement dated 25679 following its earlier judgement held that the term shop as understood in the scheme of the Act is not merely a place where the business of purchase and sale takes place but it is a place where there is commercial activity arising from customer service
In that sense the establishment of the appellant has to be understood to fall within the purview of the term shop
Accordingly the appeal was dismissed
Hence the civil appeals leave having been granted by an order dated 31180
Mr Bobde learned counsel for the appellants would raise the following submissions
The Act primarily applies to factories
Of course the Act could be extended to other establishments by means of a notification
In the instant case a notification dated 16974 catalogues six establishments one of which 914 is shop
Though shop would take within it other establishments like hotels or restaurants yet they have come to be specifically mentioned
In view of that enumeration of other establishment in contradiction to shops the word shop must be held to relate to a place where commercial activity of buying and selling merchandise takes place otherwise the enumeration of other establishment becomes meaningless
As to what is the meaning of shop could be gathered from Wharton s Law Lexicon 14th Ed 929 and Words and Phrases Legally Defined 2nd Ed 73
The next submission of the learned counsel is in view of the fact that the notification specifically enumerates the other establishments the intention has been clearly brought out not to give a wider meaning of the term shop as otherwise the term shop itself would be enough to cover other establishments like hotels restaurants cinema etc
From this point of view the activity carried on by the appellant merely processing the document at the customs clearing house without rendering any service to the customers at the appellant s office or establishment cannot be said to fall within the meaning of shop
Therefore the approach of the High Court and the authorities would require to be set aside
It must be held that the notification has no application to the appellant s business
In opposition to this Mr Goswamy learned counsel appearing on behalf of Employees State Insurance Corporation would submit that the word shop is wide in its amplitude
It means a place where any kind of commercial activity is pursued and where services are rendered to the customers
In so far as the appellant is carrying on the business of clearing and forwarding and rendering service which are part of carrier s job certainly it will be a shop
It caters to the needs of exporters and importers
It is a systematic commercial activity or an economic activity
Hence it would be a shop within the meaning of the notification
Merely because every establishment may fall within the scope of the term shop as enumerated it does not in any way restrict the meaning of the word shop
The object of enumeration is to envelop as many establishments as possible without leaving room for any doubt where therefore the word shop alone would be enough to cover the activities of the appellant it is not necessary to further enumerate and specifically bring within the scope of the notification the activities of the appellant
Regard must be had in 915 this connection that this is a social welfare legislation
This Court had always taken the view that as far as permissible the endeavour of the Court must to be cover those employees than to deny the benefit of these provisions
In support of these submissions the cases in Hindu Jea Band Jaipur vs Regional Director Employees  State Insurance Corporation Jaipur etc
  and Ms International Ore  Fertilizers India Pvt Ltd vs Employees  State Insurance Corporation  are cited
Thus it is submitted that no exception could be taken to the impugned judgement
Mr ATM Sampath learned counsel appearing for the appellant adopts the arguments of Mr Bobde while the respondent opposes in the same vein
The Employees State Insurance Act is an Act to provide certain benefits to employees in case of sickness maternity and employment injury and make provision for certain other matters in relation thereto
The Act is an outcome of a policy to provide remedy for the widespread evils arising from the consequences of national poverty
Indeed it is a piece of social security
Under Section 1 4 in the first instance it is made applicable to all factories
The Act envisages the extension of benefit to the employees in other establishments or class of establishments  industrial commercial agricultural or otherwise
The extension of benefit is to be done by means of a notification by the appropriate Government
Thus the benefits conferred by the Act cover a large area of employees than what the Factories Act and the akin legislations intended
The conclusion is inescapable that it is a welfare legislation
The endeavour of the Court should be to place a liberal construction so as to promote its objects to which a reference has been made
In the instant case the impugned notification runs as follows GOVERNMENT OF KERALA No 22877E273LBR LABOUR E DEPARTMENT TRIVANDRUM DT
18974 916 NOTIFICATION SRO
In exercise of the powers conferred by sub section 5 of Section 1 of the Central Act 84 of 1948 the Government of Kerala in consultation with the Employees  State Insurance Corporation and with the approval of the Central Govt
hereby given notice of its intention to extend the provisions of the said Act to the clauses of the Establishments specified in the Schedule annexed hereto on or after 2931975
____________________________________________________________ Description of establishments Areas in which the establis hment are situated ____________________________________________________________ The following establishments 1
Trivandrum Navaikulam where on twenty or more persons and Pazhayakunnumel Kil are employed for wages on any day imanoor in Trivandrum of the preceding twelve months District
namely
Quilon Kundara Chatha nnur Kottaraka Punalur an Sast hamcotta in Quilon District
i Hotels 3
Alleppey Kayamkulam and Shertailai in Alleppey District
ii Restaurants 4
Kottayam town in kottayam District
iii Shops 5
Ernakulam and Cochin in Ernakulam District
ivRoad Motor Transport 6
Trichur town in Trichur establishment v Cinema including preview 7
Palghat town in Palghat theatres District
ivNewspaper establishments 8
Kozhikode town in as defined in Section 2 Kozhikode District and d of the Working Journalists Conditions of Service 9
Cannanore town Tellich and Miscellaneous Provisions erry and Baliapatam in Act 1955 5 of 1955
Cannanore District in the State of Kerala
By order of the Governor Sd U Mahabala Rao Secretary to Government 917 As it could be seen six kinds of establishments wherein 20 or more employees are or were employed for wages on any day of the preceding 12 would months fall within the scope of the notification
Item 3 says shops
Therefore the argument is while shop could cover the other establishments like hotels or restaurants in view of the specific enumeration the activities of clearing and forwarding carried on by the appellant unless specifically enumerated cannot be brought within the word shop
This argument takes us to the meaning of shop
Wharton s Law lexicon 14th Ed
Page 929 Shop a place where things are kept for sale usually in small quantities to the actual consumers
By Shops Act 1912 s19 shop includes any premises where any retail trade or business is carried on retail trade or business  includes the business of a barber or hairdresser but not the sale of programmes etc at places of amusement
 Words and Phrases Legally Defines 2nd Ed 73 Shop includes dwelling house and warehouse or other place of business or place where business is transacted
Shop includes any premises and any vehicle stall or place other than premises
on or in which any retail trade or business is carried on  It has also come up for consideration in the rulings of this Court while interpreting a similar notification
In Hindu Jea Band Jaipur supra it was held thus The first contention urged in support of the petition is that since the petitioner was not selling any goods in the place of its business but was only engaged in arranging for musical performances on occasions such as marriages etc
its business premises cannot be called a shop
We do not agree with the narrow construction placed by the petitioner on the expression shop which appears in the notification issued under section 15 of the Act which is a beneficent legislation
The word shop has not been defined in the Act
A shop is no doubt an 918 establishment other than a factory to which the Act can be extended under section 15 of the Act provided other requirement are satisfied
In Collins English Dictionary the meaning of the word shop is given thus i a place esp
a small building for the retail sale of goods and service and ii a place for the performance of a specified type of work workshop
 It is obvious from the above meaning that a place where services are sold on retail basis is also a shop
It is not disputed that the petitioner has been making available on payment of the stipulated price the services of the members of the group of musicians employed by it on wages
We therefore hold that the place where the petitioner has been carrying business is a shop to which the Act is applicable by virtue of the notification referred to above
The first contention therefore fails Again in Ms International Ore  Fertilizers India Pvt Ltd vs Employees  State Insurance Corporation  at 206 the following useful observations are found The word shop is not defined in the Act or in the notification issued by the State Government
According to the Shorter Oxford English Dictionary the expression shop means a house or building where goods are made or prepared for sale and sold
It also means a place of business or place where one s ordinary occupation is carried on
In ordinary parlance a shop is a place where the activities connected with the buying and selling of goods are carried on
The evidence produced in the case shows that the petitioner is carrying on its business at its business premises in Secunderabad
At that place the petitioner carries on the commercial activity facilitating the emergence of contracts of sale of goods between its foreign principals and the State Trading CorporationMinerals and Metals Trading Corporation of India
It arranges for the unloading of the goods under its supervision and for the survey of the goods despatched by its foreign principals at the ports on behalf of its foreign principals and on the goods being delivered to the Central Government it collects the price payable by the government and remits it to its foreign principals
All these activities are directed and controlled from its 919 premises at Secunderabad
It is thus clear that the activities carried on by the petitioner constitute trading activities although the goods imported from abroad are not actually brought to the said premises and delivered to the purchaser there
In our opinion it is not actually necessary that the delivery of the goods to the purchaser should take place at the premises in which the business of buying or selling is carried on to constitute the said premises into a shop
The delivery of the goods sold to the purchaser is only one aspect of trading activities
Negotiation of the terms of sale carrying on of the survey of the goods imported arranging for the delivery of the goods sold collection of the price of the goods sold etc
are all trading activities
The premises where the business is carried out by the petitioner is undoubtly a shop as the activities that are carried on there relate only to the sale of goods which are imported to India
The petitioner acts as the agent of its foreign principals who are the sellers
The petitioner directs and controls all the activities from the premises in question
If orders are received at a place which ultimately fructify into sale and the resulting trading activity is directed from there that place comes to be known as a shop
In our view the Employees  Insurance Court placed a very narrow interpretation on the expression shop while upholding the contention of the petitioner by confining shop to a place where goods are actually stored and delivered pursuant to a sale
We agree with the decision of the High court that while construing a welfare legislation like the Act and the notification issued thereunder a liberal construction should be placed on their provisions so that the purpose of the legislation may be allowed to be achieved rather than frustrated or stultified
 In this case the argument advanced on behalf of the appellant is slightly different namely other kinds of establishments which can easily fall within the definition of shop have been enumerated
Hence a specific enumeration so as to include the appellant s business activity is to be insisted upon
In our considered view this argument cannot be accepted
First of all merely because other establishments which are akin to shop are enumerated it does not in any manner oblige us to give a narrow meaning to the word shop nor does it any way dilute the meaning of 920 shop
As rightly contended by the learned counsel for the respondent the object is to envelope as many establishments as possible without leaving any room for doubt
That is precisely what the notification intends to do
The appellant is carrying on stevedoring clearing and forwarding operations
Clearing the documents even it be in the custom house is the carrier s job
It cannot be gainsaid that the appellant is rendering service to cater the needs of exporters and importers and others who want to carry the goods further
Therefore it is a shop carrying on a systematic economic or a commercial activity
This would be enough to bring the appellant without specifically enumerating the specific activities carried on by the appellant
Merely because shop has been enumerated along with other similar establishment we do not think any further specific enumeration is necessary to cover the appellant
Thus we reject the contentions raised on behalf of the appellant
The appeals stand dismissed
There shall be no order as to costs
TNA Appeals dismissed


Summary:
A trust namely Ganga Bai Charities was created on 1391958 to construct and provide a building for the benefit of the public to be used for religious charitable cultural and social purposes
The founder of the trust contributed Rs 34000 to the trust fund
With that fund a plot of land was purchased and the construction of a building was begun
The fund was augmented by her son from his own contribution as well as from outside donations
The building was completed at the cost of about Rs six lakhs and it was let out as a marriage mandapam to be used by the members of the public
The income derived from letting out the Kalyana Mandapam came to Rs10639200 in the year ending March 31 1963
For the subsequent years also the income was substantial
The trust was also running a printing press and seizable income was being from the press
Income tax proceedings were initiated against the trust
The appellant trust contended that the income derived from the property was being held wholly for religious and charitable purposes and as such was exempt under Section 11 of the Income Tax Act
The Income tax Officer holding that the income earned by the trust was taxable rejected the contention of the trust
On appeal the Appellate Assistant Commissioner reversed the Income tax Officer s order holding that the trust was a charitable trust and its income was entitled to exemption under Section 11 of Act
627 On further appeal by the department the Tribunal upheld that decision of the Commissioner but remitted the assessment to the Income tax Officer to find out as to what extent in each year the trust income or accumulation were expended for charitable purposes
The Income Tax Appellate Tribunal referred the following question to the High Court under Section 2561 of the Act Whether it had been rightly held that the income of the trust would be entitled to exemption under Section 11 of the Income Tax Act 1961 The High Court answered the question in the negative and in favour of the department against which these appeals were filed by the assessee trust by special leave before this Court
On the question whether the Gengabai Charities a trust was entitled to exemption under Section 111a of the Income Tax Act 1961 this Court dismissing the appeals of the assessee trust HELD  101
The crux of the statutory exemption under Section 11a of the Income Tax Act 1961 is not the income earned from property held under the trust but the actual application of the said income for religious and charitable purposes
It is therefore necessary to indicate in the trust deed the broad objectives for which the income derived from the property is to be utilised
There is no mention in the trust deed as to how the income derived from the trust property is to utilised
The public uses the building on payment of rent to the trustees
What is to be done with the money so collected has not been provided in the trust deed
There is no mandate in the trust deed that the income derived from the trust property is to be spent on religious or charitable purposes
632 C D 102
On a careful reading of the trust deed it is not possible to cull out in clear terms a specific charitablereligious object to conclude that the trust was set up wholly for or religious purposes
The religious charitable cultural and social purposes referred to in the deed are not avowed as the objectives of the trust itself
What the founder of the trust intended to convey was that the building to be constructed out of the funds provided by her and supplemented from other sources must be heed for the benefit of the public for being used by them for religious charitable cultural or social purposes
631 F G 628 103
The intention of the founders was to provide a building for the benefit for the benefit of the public to be used by them for religious charitable andor cultural and social purposes
It is nowhere stated in the trust deed that the trust itself has been created for the purpose of carrying out any of such objectives
The holding and conducting of religious discourses and the running of schools for the development of Sanskrit have also been mentioned from the point of view of the users of the trust property
These are some of the purposes for which the public can be permitted to use the property
631H 632B 104
On a proper construction of the trust deed it does not meet the requirements of Section 111a of the Act
632E