The Cosmopolitan Club, Madras vs The District Employment Officer, Madras-14

Srinivasan, J.—The Cosmopolitan Club, Madras, is the petitioner. The respondent, the District Employment Officer, wrote to the petitioner

club on 23rd March, 1963, a letter drawing attention to an earlier letter dated 22nd December, 1962, wherein the respondent had requested the

club to furnish information concerning the employment in the petitioner''s establishment. This letter led to the filing of the present writ petition

seeking the issue of a writ of certiorari or other appropriate writ to quash the proceedings taken by the District Employment Officer. The petitioner

states in its affidavit that the club is a members'' club not run with any profit motive, that it is not the nature of a commercial undertaking and that the

communication of the District Employment Officer asking the club to furnish particulars is based on a misconstruction of what an establishment

means within the meaning of the Employment Exchanges (Compulsory Notification of Vacancies) Act of 1959. It is the contention of the petitioner

that not only is petitioner club not an establishment within the meaning of the Act but also that no industry, trade, business or occupation is carried

on in the premises. It is urged that the respondent has no jurisdiction to call upon the club to furnish the information sought. The respondent in his

counter-affidavit claims that the above mentioned act was enacted for the purpose of undertaking measures for the training and employment of

persons on information gathered to indicate the employment trends in the market. In order that vocational training might be given to make

employees suitable for the demands of the employers, the Act makes it compulsory upon employers to report all vacancies except in certain

categories. It is claimed that the Act applies to all establishments in the private sector, where ordinarily 25 or more persons are employed for

remuneration. It is claimed also that having regard to the object of the Act, the expressions ''industry'', ''business'', ''trade'' and ''occupation'' need

not involve any connotation of a profit motive. It is urged therefore that the District Employment Officer is within his powers in calling upon the

petitioner to furnish the required information.

Mr. T.A. Ramaswami Reddiar, learned Counsel for the petitioner club, in the course of his arguments contends that in the light of decisions

which have dealt with organisations like the petitioner club for the purpose of analogous enactments, it should be held that the petitioner club would

not come within the scope of an establishment as defined in this Act. That is the short contention which requires to be examined.

The Employment Exchange (Compulsory Notification of Vacancies) Act makes it compulsory upon the employer in every establishment in the

private sector to notify any vacancy arising in the establishment to such Employment Exchanges as may be prescribed. Section 4 of the Act makes

it compulsory for every establishment in the public sector to do so on and after the commencement of this Act. But, in the case of an establishment

in the private sector, the appropriate Government issues a notification u/s 4 (2) of the Act making the provisions applicable thereto. It is not in

dispute that such a notification was issued in 1960. Turning to the definitions contained in the Act, the word ''employee'' and ''employer'' are

defined in relation to an ""establishment"", the one as employed to do any work for remuneration and the other as one who employs one or more

person to do work for remuneration. ''Establishment'' is defined to mean any office or any place where any industry, trade, business or occupation

is carried on. Nextly, the expressions ""establishment in the public sector"" and ''establishment in the private, sector'' are defined the latter being

defined to mean an establishment which is not an establishment in the public sector and where ordinarily 25 or more persons are employed, to

work for remuneration. While section 4, by sub-sections (1) and (2), makes it obligatory, upon establishments in the public sector and in the

private sector respectively to notify vacancies, S. 3 makes the Act inapplicable in relation to certain type of vacancies, so that in the case of even

establishments which are compelled to notify vacancies, certain specified vacancies need not be notified. An important provision is section 4, sub-

section (4), which states that notwithstanding the obligation to report the vacancies, it does not impose the further obligation upon the employer to

recruit any person through the Employment Exchange to fill the vacancy reported. Broadly stated, therefore, this Act confers no authority upon the

Employment Exchanges to insist that any person indicated by them should be employed for the purpose of filling the vacancy reported by an

establishment. Reading these provisions in the Act along with the Statement of Objects and Reasons, it appears to be abundantly clear that the Act

was brought on the statute book only for the purpose of enabling the appropriate authorities to assess the employment potential in various

categories of employment. The Act was clearly intended to serve a statistical need to assess any future policy in connection with the imparting of

training to potential employees.

As I stated, the principal argument of Mr. Ramaswami Reddi is that the petitioner club is not an establishment, for according to him it is not a

place where any industry, trade, business or occupation is carried on. He has referred to The Cosmopolitan Club v. Joint Commercial Tax Officer

(1963) 2 M.L.J. 480. In that case, the question arose whether the sales effected by the club to its own members, such sales being of refreshments,

would come within the scope of the General Sales Tax Act and would attract tax thereunder. That decision was more concerned with interpreting

the expressions ''sale'' and ''dealer'' which occur in that enactment, for that Act purports to bring to tax only the turnover of a dealer carrying on the

business of sales of goods. The real basis of that decision was that in supplying and distributing refreshments to its members against payment there

was no transfer of property by the club as an absolute owner to its members as purchasers. Whether or not a profit margin existed was not

regarded as material. When once there was no sale, which according to the definition meant a transfer of property in goods, the liability to tax did

not arise. The question whether a business must always be associated with a profit motive did not expressly come up for consideration in that

decision.

In The Y.M.I.A. v. The Assistant Inspector of Labour (1964) 4 M.L.J. 177 the question was whether this association could be brought within

the scope of the expression of ''catering establishment'' in the ''Catering Establishments'' Act. In that Act, the expression ''catering establishment''

was defined to mean a ""restaurant"" or a ""residential hotel"" and in defining these two latter expressions, the relevant part dealt with ''any premises'' in

which the business of providing accommodation and supply of meals or of supply of refreshments to the public or a class of the public was carried

on. In view of the inter-related nature of these definitions, the learned Judges went on to hold that the expression ''business'' involved an essential

element thereof the profit motive.

Mr. Ramaswami Reddi also referred to Wharton''s Law Lexicon and other dictionaries to emphasise his point that business is an activity

connected with the operation of trade as a productive pursuit and that a profit element is invariably linked with business. It is his contention that

since the Cosmopolitan Club caters to its own members and no one else the profit motive is altogether absent and that therefore the activity carried

on by the club is not business.

I am unable to agree that the word '' business '' should be invariably associated with the carrying of an activity which includes a profit motive.

The first point to notice is that though a statute may define certain expressions in a particular manner, the interpretation of those expressions cannot

be unrelated to the purpose underlying the enactment. That principle has been laid down in The State of Bombay and Others Vs. The Hospital

Mazdoor Sabha and Others, where the definition of the word ''industry'' in the Industrial Disputes Act was examined. The definition of that

expression in that Act included any business, trade undertaking etc. Their Lordships pointed out that the definition had deliberately used words of

very wide import. They referred to the rule of interpretation that where there are two or more words which are susceptible of analogous meanings,

they are to be understood as used in their cognate sense. They observed that that principle is only a rule of construction and cannot prevail where

the statute has deliberately used words to make the scope of the defined word much wider and they clearly say that,

if the object and scope of the statute are considered, there would be no difficulty in holding that the relevant words of wide import have beta

deliberately used by the Legislature in defining industry.....

and they proceeded to refer to various definitions and the object of the Act as well.

On behalf of the respondent the decision of a single Judge of the Calcutta High Court. The Bengal Club Ltd. Vs. Santi Ranjan Somaddar and

Another, has been relied upon. In that case, the learned Judge held that a club run for the benefit of its members carries on an industry within the

meaning of the Industrial Disputes Act. In my view, taking into consideration the object of the enactment, the definitions used in the Act must be

understood in their widest sense, and if that should be done, the presence or absence of a profit motive in the carrying on a business is wholly

immaterial in construing the relevant expression. I am satisfied that the contention of the petitioner that the Act does not apply to it cannot be

maintained. The petition is accordingly dismissed. No costs.