IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY SEVENTH DAY OF NOVEMBER, TWO THOUSAND EIGHT ONLY PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.29166 of 1995, 16940, 17074, 17075, 17076, 17077 and 17078 of 1999 Between: Mecca Madina Alladin Wakf, Secunderabad. … Petitioner (in all the writ petitions) AND The Second Appellate Authority, U/s. 48(3) of AP Shops & Establishments Act, 1988 & Dy. Commissioner of Labour (Twin cities), RTC X roads, Hydeabad & others. … Respondents (in all writ petitions) Counsel for the petitioner : Sri V. Hari Haran Counsel for respondent 1&2 : GP for Labour This Court made the following: THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.29166 of 1995, 16940, 17074, 17075, 17076, 17077 and 17078 of 1999 COMMON ORDER:- This batch of writ petitions raised common issues. Hence, they are heard together and being disposed of by a common order. WP.No.29166 of 1995 is filed questioning notice issued by the Assistant Commissioner, Labour under The Andhra Pradesh Shops and Establishments Act, 1988 (for short, ‘the Act’) calling upon the petitioner to pay minimum wages to its workmen. The other writ petitions are filed questioning the orders of the first and second appellate authorities, respondent Nos.2 and 1 herein, directing reinstatement of six workmen, each of whom is shown as respondent No.3 in the individual writ petitions. Sri V. Hariharan, learned counsel for the petitioner submitted that both the authorities committed grievous error in holding that the petitioner falls within the definition of ‘Establishment’ under Section 2(10) of the Act. The learned counsel submitted that since the petitioner is not an establishment within the definition of the said provision, neither the Assistant Commissioner of Labour nor the first and second appellate authorities under the Act have jurisdiction to direct payment of minimum wages or reinstatement of the workmen, as the case may be. Opposing this contention, Sri A.K. Jayaprakash Rao, learned counsel for the respondent – workmen submitted that both the authorities have concurrently found that the petitioner is an establishment and this Court exercising jurisdiction under Article 226 of the Constitution of India will not re-examine the reasons given by the said authorities. I have carefully considered the respective submissions of the learned counsel for the parties. Sections 2(5) and (10) defined ‘commercial establishment’ and ‘establishment’ respectively, which read as under: “Section 2(5):- ‘commercial establishment’ means an establishment which carries on any trade, business, profession or any work in connection with or incidental or ancillary to any such trade, business or profession or which is a clerical department of a factory or an industrial undertaking or which is a commercial or trading or banking or insurance establishment and includes an establishment under the management and control of a cooperative society, an establishment of a factory or an industrial undertaking which falls outside the scope of the Factories Act, 1948 (Central Act 63 of 1948), and such other establishment as the Government may, by notification, declare to be a commercial establishment for the purposes of this Act but does not include a shop. Section 2(10):- ‘establishment’ means a shop, restaurant, eating-house, residential hotel, lodging house, theatre or any place of public amusement or entertainment and includes a commercial establishment and such other establishment as the Government may, by notification, declare to be an establishment for the purposes of this Act.” From the above-reproduced definitions, it is clear that to fall within the said definitions, the activity must relate to carrying on trade, business, profession or any work in connection with or incidental or ancillary to any such trade, business or profession or a shop, restaurant, eating-house, residential hotel, lodging house, theatre or any place of public amusement or entertainment. If any activity does not fall in the said two provisions, the State Government may, by notification, declare such activity to be an establishment for the purpose of the Act. The respondent – workmen specifically contended before the lower authorities that the petitioner is a charitable institution and trust established in 1947 for the purpose of providing food, charities to the needy and the poor, donations to other charitable institutions and that no business or trade is undertaken by it. It further pleaded that the only source of income to the petitioner is by way of rents from shops, hotels, banks etc., which are run in the premises let out by the petitioner to different tenants. It is the common case that the petitioner itself has not been running the commercial activities such as banks, shops, restaurants etc. A specific finding is indeed rendered by the first appellate authority by stating that the petitioner is letting out a portion of his building property to the banks, shops, restaurants etc., and has been earning money. The plea of the petitioner that it has not let out its building as a part of business activity and that it is spending the money, derived from the rents, on charity has not been accepted by both the authorities below on the sole ground that the petitioner did not file a copy of the trust deed showing its objects. The other reasons for which the petitioner was held to be an ‘establishment’ under Section 2(10) are that it has been paying Income Tax and Wealth Tax and that the Government has not granted any exemption to it from application of provisions of the Act. In my considered view, these two reasons have no relevance at all to decide whether the petitioner falls within the definition of ‘establishment’ under Section 2(10) of the Act. Mere payment of Income Tax or Wealth Tax does not make the activity of the petitioner in letting out the part of its building on lease or rent, business or commercial activity. Even if a trust is established for the purpose of charity, unless specific exemption is given under the provisions of the Income Tax Act, 1961 it is liable to pay Income Tax. At any rate, the said aspect has no relevance in the context of considering the petitioner’s claim that it is not an establishment within the parameters of Section 2(5) or Section 2(10) of the Act. The other reason, namely, that the State Government has not exempted the petitioner by any notification is totally unsound because if the petitioner does not straight away fall under the definition of ‘establishment’, to make it fall within the said definition, it is necessary for the State Government to issue a notification for this purpose. Admittedly, no notification has been issued by the State Government treating the petitioner as a ‘commercial establishment’ or ‘establishment’ within the definitions of Section 2(5) and Section 2(10) respectively. Both the authorities therefore failed to construe the said provisions from proper perspective. As regards rejection of the petitioner’s plea that it is not collecting rents as a part of business/commercial activity, in my considered opinion, the authorities below ought to have compelled the petitioner to produce the trust deed. The trust deed will provide conclusive evidence as to the true activities of the petitioner. Instead of allowing the application of the workmen on technical grounds, the petitioner should have been asked to produce the trust deed, which would have disclosed the true purpose for which it is constituted and the activities which it is permitted to carry on. Both the authorities thus committed a grievous error in not summoning and examining the trust deed of the petitioner. For the abovementioned reasons, the orders of both the authorities are quashed. The notice of the Assistant Commissioner of Labour, which is the subject matter of WP.No.29166 of 1995 is also quashed. The cases are remitted back to the appellate authority under Section 48(1) of the Act and the Assistant Commissioner of Labour, Circle IV, Hyderabad respectively to decide afresh. The petitioner shall produce the authentic copy of the trust deed before the said authorities within a period of eight weeks from today. On such production, respondent No.2 and the Assistant Commissioner of Labour, Circle IV, Hyderabad, shall decide the cases within a period of eight weeks thereafter in the light of the observations made above. Accordingly, all the writ petitions are disposed of. As a sequel to disposal of all the writ petitions, WPMP.Nos.884 and 24691 of 1996, 33555 of 2007 and WVMP.No.847 of 1996 in WP.No.29166 of 1995, WPMP.No.21052 of 1999 in WP.No.16940 of 1999, WPMP.No.21209 of 1999 and WVMP.No.2839 of 2000 in WP.No.17074 of 1999, WPMP.No.21210 of 1999 and WVMP.No.2840 of 2000 in WP.No.17075 of 1999, WPMP.No.21211 of 1999 and WVMP.No.2841 of 2000 in WP.No.17076 of 1999, WPMP.No.21212 of 1999 and WVMP.No.2842 of 2000 in WP.No.17077 of 1999, WPMP.No.21213 of 1999 and WVMP.No.2843 of 2000 in WP.No.17078 of 1999 are disposed of as infructuous. ____________________________ C.V.NAGARJUNA REDDY, J Date: 27.11.2008 ES