CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 102 of 1966. Appeal from the judgment and order dated February 14, 1966 of the Gujarat High Court in Criminal Appeal No. 208 of’ 1964. 5. Parliament was aware of the fact that employees in establishments other than those to which, the Act applies were getting bonus under adjudication provided by the Industrial Disputes Act and other similar Acts. If it intended to deprive them of such bonus surely it would have expressed so in the Act; 6. Sec. 39 in clear terms saves the right to claim bonus under the Industrial Disputes Act or any corresponding law by providing that the provisions of this Act shall be in addition to and not in derogation of the provisions of those Acts. It is true that the preamble states that the Act is to provide for payment of bonus to persons employed in certain establishments and sec. 1(3) provides that the Act is to apply, save as otherwise provided therein, to factories and every other establishments in which 20 or more persons are employed. Sub-sec. (4) of sec. 1 also provides that the Act is to have effect in relation to such factories and establishments from the- accounting year commencing on any day in 1964 and every subsequent accounting year. But these provisions do not, for that reason, necessarily mean that the Act was not intended to be a comprehensive and exhaustive law dealing with the entire subject of bonus and the persons to whom it should apply. Even where an Act deals comprehensively with a particular subject-matter, the Legislature can surely provide that it shall apply to particular persons or groups of persons or to specified institutions only. Therefore, the fact that the preamble states that the Act shall apply to certain establishments does not necessarily mean that it was not intended to be a comprehensive provision dealing with the subject-matter of bonus. While dealing with the subject-matter of bonus the Legislature can lay down as a matter of policy that it will exclude from its application certain types of establishments and also provide for exemption of certain other types of establishments even though such establishments would otherwise fall within the scope of the Act. The exclusion of establishments where less than 20 persons are employed in sec. 1(3) therefore is not a criterion suggesting that Parliament has not dealt with the subject-matter of bonus comprehensively in the Act. As already seen, there was until the enactment of this Act no statute under which payment of bonus was a statutory obligation on the part of ,in employer or a statutory right therefore of an employee. Under the Industrial Disputes Act, 1947 and other corresponding Acts, workmen of industrial establishments as defined therein could raise an industrial dispute and demand by way of bonus a proportionate share in profits and Industrial Tribunals could under those Acts adjudicate such disputes and oblige the employers to pay bonus on the principle that both capital and S. T. Desai, Arun H. Mehta and I. N. Shroff, for the appellant. 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 Establishment" within the meaning of the Bombay Shops and Establishments 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 public amusement or entertainment and other establishment". Section 2(4) ,of the Act defined "Commercial establishment" as follows:
"’Commercial establishment’ means an
establishment which carries on, any business,
trade or profession or any work in connection
with, or incidental or ancillary to, any
business, trade or profession and includes a
society registered under the Societies
Registration Act, 1860, and a charitable or
other trust, whether registered or not, which
carries on whether for purposes of gain or
not, any business, trade or profession or work
in connection with or incidental or ancillary
thereto but does not include a factory, shop,
residential hotel, restaurant, eating house,
theatre or other place of public amusement or
entertainment."
Section 2(8) states :
"’Establishment’ means a shop, commercial
establishment, residential hotel, restaurant,
eating house,theatre, or, other place of
public amusement or entertainment to which
this Act applies and includes such other
establishment as the State Government, may, by
notification in the Official Gazette, declare
to be an establishment for the purposes of
this Act."
Section 2(6) and s. 2(7) read as follows
"(6). ’Employee’ means a person wholly or
principally employed, whether directly or
through any agency, and whether for wages or
other consideration, in or in connection with
any establishment; and includes an apprentice,
but does not include a member of the em-
ployer’s family."
"(7) ’Employer’ means a person owning or
having ultimate control over the affairs of an
establishment."
Section 2(3) and 2(18) define the expression
"closed" an(] "opened" as meaning "closed or
opened for the service of any ,customer, or
for any business, of the establishment, or for
work, by or with the help of any employee, of
or connected with the establishment." Section
4 states :
"Notwithstanding anything contained in this
Act, the provisions of this Act mentioned in
the third column of Schedule It shall not
apply to the establishments, employees and
other persons mentioned against them in the
second column of the said Schedule
Provided that the State Government may, by
notification published in the Official
Gazette, add to, omit or alter any of the
entries of the said Schedule subject to such
conditions, if any, as may be specified in
such notification and on the publication of
such notification,
the entries in either column of the said
Schedule shall be deemed to be amended
accordingly."
Section 5 provides as follows :
(1 ). Notwithstanding anything contained in
this Act, the State Government may, by
notification in the Official Gazette, declare
any establishment or class of establishments
to which, or any person or class of persons to
whom, this Act or any of the provisions
thereof does not for the time being apply, to
be an establishment or class of establishments
or a person or class of persons to which or
whom this Act or any provisions thereof with
such modifications or adaptations as may in
the opinion of the State Government be
necessary shall apply from such date, as may
be specified in the notification.
(2) On such declaration under sub-section
(1), any such establishment or class of
establishments or such person or class of
persons shall be deemed to be an establishment
or class of establishments to which, or to be
an employee or class of employees to whom,
this Act applies and all or any of the
provisions of this Act with such adaptation or
modification as may be specified in such
declaration, shall apply to such establishment
or class of establishments or to such employee
or class of employees." Chapter II deals with the Registration of establishments. Under S. 7(1) within the period specified the employer of every establishment is required to send to the Inspector of the local area concerned a statement in the prescribed form together with necessary fees, containing the name of the employer and of the establishment, the category of the establishment, whether it was a shop, commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment and such other particulars. Under S. 7(2) a "registration certificate" is to be granted. Chapter III deals with shops and commercial establishment. Sections IO and II provide for the opening and closing hours of the shop. Section 13 deals with the opening and closing hours of a commercial establishment. Section 14 provides for the maximum limit of the daily and weekly hours of work of the employees in shops and commercial establishments. Section 15 provides for rest interval, and S. 17 provides for spread-over of hours of work in commercial establishments. Section 18 provides for weekly holidays in shops and commercial establishments. Chapter VI deals with employment of children, young persons and women, and applies to all establishments. Section 32 provides that no child should be required or allowed to work in any establishment, notwithstanding that such child is a member of the family of the employer. Similarly, s. 33 provides that no young person or women shall be required or allowed to work whether as an employee or otherwise in any establishment before 6 a.m. and after 7 p.m. notwithstanding that such young person or woman is a member of the family of the employer. Section 34 prescribes daily hours of work for young persons. The next Chapter, i.e. Ch. VII deals with leave pay and payment of wages for such leave. Section 38 provides for the extension of the Payment of Wages Act by the State Government by a notification in the Gazette to all or any class of establishments or to any class of employees to which the Act applies. Similarly, s. 38A provides for the extension of the Workmen’s Compensation Act, 1923. Chapter VIII enacts provisions for health and safety of the workers generally for all establishments. Chapter IX enacts provisions for setting up of the machinery for enforcement and inspection. Chapter X deals with offences and penalties. Section 52 deals with contravention of certain provisions and cl. (e) of that section provides for the penalty if the employer contravenes the provisions of s. 62 by not maintaining the prescribed register. Section 62 provides for maintenance of registers and records and display of notices as may be prescribed by Rules. Section 63 deals with wages for overtime work. On behalf of the appellant Mr. Mehta put forward the argument that under s. 2(4) of the Act which defines ’Commercial’ Establishment’ as an establishment which carries on any business, trade or profession, the emphasis was not on the place from which the trading or professional activity was carried on but the emphasis was really on the nature of the activity which must be a commercial activity. In other words, the contention was that the intention of the legislature in enacting s. 2(4) was to include only those professions which are carried on in a commercial manner’ It was therefore contended that in the present case the dispensary of the appellant does not fall within the definition of ’Commercial Establishment’ under s. 2(4) of the Act. In our opinion, the argument addressed on behalf of the appellant is well-founded and must prevail. Under s. 2(8) of the Act an ’establishment’ is defined as meaning ’a shop, commercial establishment, residential hotel, restaurant, eating house, theatre, or other place of public amusement or entertainment to which this Act applies’. Section 2(24) again defines a "Residential hotel", s. 2(25) a "Restaurant or eating house" and s. 2(27) similarly defines a "Shop". Section 2(29) defines a "Theatre". It is clear therefore that the legislature has taken care separately to define each one of the categories of ’the establishments mentioned in s. 2(8) of the Act. It is, true: that s. 2(4) of the Act has used words of very wide import and grammatically it may include even a consulting room where a doctor examines his patients with the help of a solitary nurse or attendant. But, in our opinion, in the matter of construing the language of s. 2(4) of the Act we must adopt the principle of noscitur a sociis. This rule, means that, when two or more words which are susceptible of analogous meaning are coupled to-ether they are understood to be used in their cognate sense. The words take as it were their colour from each other, that is, the more general is restricted to a, sense analogous to, a less general. "Associated words take their meaning from one another under the doctrine of noscitur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broiderthan the maximum Ejusdein Generis." (Words and Phrases. Vol. XIV, p. 207). For instance, in Reed v. Ingham(1) it was upon the principle of the maxin nosscitur a sociis, that a steam tug of eighty-seven tons burden engaged in moving another vessel was not a craft within the meaning of the statute. Again, in Scales v. Pickering(-) the question was what was the meaning of the word "footway" when used in a private Act which empowered a water company to break up the, soil and pavement of roads. highways, footways, commons, streets, lanes, alleys’, passages and public places. provided they did not enter upon any private lands without the consent of the owner. It was contend that this authorised the company to break up the soil of a private field in which there was a public footway, but it was held otherwise. "Construing the word ’footway,’ " said Best C. J. "from the company in which it is found the legislature appears to have meant those paved footways in large towns which are too narrow to admit of horses and carriages." And Park J. added : "The word ’footway’ here noscitur a sociis." In the present case, certain essential features or attributes are invariably associated with the words "business and trade" as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition of s. 2(4’) of the Act, though. their normal import may be much wider. We are therefore of opinion that the professional establishment of a doctor cannot come within the definition of s. 2(4) of the Act unless the activity carried on was also commercial in character. As to what exactly is meant by "Commerce" it may be difficult to define but in an early case-McKav v. Rutherfurd(3), Lord Camp-bell gave a useful definition : "Commerce is that activity where a capital is laid out on any work and a risk run of profit or loss; it is a commercial venture". It is true that the definition of Lord Campbell is the conventional definition attributed to trade (1) 3 E. & B. 889. (2) (1828)4Sup.448,45.453. (3) 6 M-c P. C. 425. or commerce but it cannot be taken to be wholly valid for the purpose of construing industrial legislation in a modem welfare State. It is clear that the presence of the profit motive or the investment of capital tradition associated to the notion of trade and commerce cannot be given an undue importance in construing the definition of ’Commercial establishment’ under s. 2(4) of the Act. In our opinion, the correct test of finding whether a professional activity falls within s. 2(4) of the Act is whether the activity is systematically and habitually undertaken for production or distribution of goods or for rendering material services to the community or any part of the community with the help of employees in the manner of a trade or business in such an undertaking. It is also necessary in this connection to construe the word "profession" under s. 2(4) of the Act. In Commissioner’s of Inland Revenue v. Maxse(1), Scrutton L.J. stated as follows
"I am very reluctant finally to propound a
comprehensive definition. A set of facts not
present to the mind of the judicial
propounder, and not raised in the case before
him, may immediately arise to confound his
proposition. But it seems to me as at present
advised that a ’profession’ in the present use
of language involves the idea of an Occupation
requiring either purely intellectual skill, or
of manual skill controlled, as in painting and
sculpture, or surgery, by the intellectual
skill of the, operator, as distinguished from
an occupation which IS substantially the
production or sale or arrangements for the
production or sale of commodities. The line
of demarcation may vary from time to time.
The word ’profession’ used to be confined to
the three learned professions, the Church,
Medicine and Law. IL has now, I think, a
wider meaning." The matter was again considered in another case where the question was whether a company doing the work of naval architect could be said to be carrying on a profession in a naval architecture. The case was William Esplen, Son, and Swainston, Ld. v. Inland Revenue Commissioner’s(2) where Rowlatt J. observed as follows :
"...... but :in my opinion the company is not
carry in,-- on the profession of naval
architects within the meaning of the section,
because for this purpose it is of the essence
of a profession that the profits should be
dependent mainly upon the personal
qualifications of the person by who m it is
carried on, and that can only be an
individual."
(1) [1919] 1 K.B. 647, 657.
(2) [1919]2K.B731
It is therefore clear that a professional
activity must be an -activity carried on by an
individual by his personal skill and
intelligence. There is a fundamental
distinction therefore between a professional
activity and an activity of a commercial
character and unless the profession carried on
by the appellant also partakes of the
character of a commercial nature, the appel-
lant cannot fall within the ambit of S. 2 (4)
of the Act. In The National Union of
Commercial Employees and another v. M. R.
Meher, Industrial Tribunal, Bombay(1) it was
held by this Court that the work of solicitors
is not an industry within the meaning of s.
2(J) of the Industrial Disputes Act, 1947 and
therefore any dispute raised by the employees
of the solicitors against them cannot be made
the subject of reference to the Industrial
Tribunal. In dealing with this question,
Gajendragadkar, J., speaking for the Court,
observed as follows at page 163 of ,the Report
"When in the Hospital case ((1960) 2 S.C.R.
866) this Court referred to the Organisation
of the undertaking involving the co-operation
of capital and labour or the employer and his
employees, it obviously meant the co-operation
essential and necessary for the purpose of
rendering material service or for the purpose
of production. It would be realised that the
concept of -industry postulates partnership
between capital and labour or between the
employer and his employees. It is under this
partnership that the employer contributes his
capital and the employees their labour and the
joint contribution of capital and labour leads
directly to the production which the industry
has in view. In other words, the co-operation
between capital and labour or between -the
employer and his employees which is treated as
a working test in determining whether any
activity amounts to an industry, is the co-
operation which is directly involved
in the
production of goods or in the rendering of
service. It cannot be suggested that every
form or aspect of human activity in which
capital and labour cooperate or employer and
employees assist each other is an industry.
The distinguishing feature of an industry is
that for the production of goods or for the
rendering of service, cooperation between
capital and labour or between the employer and
his employees must be direct and must be
essential."
Again, at page 166 of the Report
Gajendragadkar, J. proceeds
’to state
" Does a solicitor’s firm satisfy that test ?
Serficially considered, the solicitor’s firm
is no doubt
(1) [1962](3)Supp.S.C.R.157.
organised as an industrial concern would be
organised. There are different categories of
servants employed by a firm, each category
being assigned separate duties and functions.
But it must be remembered that the service
rendered by a solicitor functioning either
individually or working together with partners
is service which is essentially individual; it
depends upon the professional equipment,
knowledge and efficiency of the solicitor
concerned. Subsidiary work which is purely of
an incidental type and which is intended to
assist the solicitor in doing his job has no
direct relation to the professional service
ultimately rendered by the solicitor. For his
own convenience, a solicitor may employ a
clerk because a clerk would type his opinion;
for his convenience, a solicitor may employ
menial servant to keep his chamber clean and
in order; and it is likely that the number of
clerks may be large if the concern is pros-
perous and so would be the number of menial
servants. but the work done either by the
typist or the stenographer or by the menial
servant or other employees in a solicitor’s
firm is not directly concerned with the
service which the solicitor renders to his
client and cannot, therefore, be said to
satisfy the test of cooperation between the
employer and the employees which is relevant
to the -purpose. There can be no doubt that
for carrying on the work of a solicitor
effiecently, accounts have to be kept and
correspondence carried on and this work would
need the employment of clerks and accountants.
But has the work of the clerk who types
correspondence or that of the accountant who
keeps account,; any direct or essential nexus
or connection with the advice which it is the
duty of the solicitor to give to his client?
The answer to this question must, in our
opinion, be in the negative. There is, no
doubt, a kind of cooperation between the
solicitor and his employees, but that
cooperation has, no direct or immediate
relation to the professional service which the
solicitor renders to his client.
........ Looking at this question in a broad
and general way, it is not easy to conceive
that a liberal Profession like that of an
attorney could have been intended by the
Legislature to fall within the definition of
’industry’ under s. 2 (J). The very concent
of the liberal professions has its own special
and distinctive features which do not readily
permit the inclusion of the liberal
professions into the four corners of
industrial law.
The essential basis of an industrial dispute
is that it is a dispute arising between
capital and labour in enterprises where
capital and labour combine to produce
commodities or to render service. This
essential basis would be absent in the case of
liberal professions. A person following a
liberal profession does not carry on his
profession in any intelligible sense with the
active cooperation of his employees and the
principal, if not the sole, capital which he
brings into his profession is his special or
peculiar intellectual and educational
equipment. That is why on broad and general
considerations which cannot be ignored, a
liberal profession like that of an attorney
must, we think, be deemed to be outside the
definition of ’Industry’ under section 2(1)." 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. L10Sup.C.1/68 --2,500- 20-8-69Sec.VI- GIPF.