Tuesday, April 19, 2011

HC: TN Shops & Establishments Act applies to software units

TN Shops & Establishments Act applies to software units, says court

OUR LEGAL CORRESPONDENT

Mr Justice K. Chandru, who heard the writ petitions, ruled that this Court was not inclined to interfere with an order passed to condone the delay in filing the appeal.

CHENNAI, APRIL 19: Software industries in Tamil Nadu are exempted only from application of Chapters II and III of the TN Shops & Establishments Act, 1947 dealing with opening and closing hours daily and weekly hours spread over on holidays. Thus, it went without saying that the other provisions would automatically apply to these industries, the Madras High Court has held.

In clarifying the position of law in connection with a contention voiced by a Chennai-based software industry that its factory came within the meaning of the Factories Act so as to enable an exemption in terms of notification in GO Ms No 543 Development dated February 10, 1950, the Court ruled that the said issue was no longer res integra.

It went without saying that the other provisions (except Chapters II & III) of the TN Shops & Establishments Act would automatically apply to software industries.

Chemoil Advanced Management Services Pvt Ltd, Pallikaranai, Chennai, in its writ petition challenged an order dated October 28, 2010 of the 2nd respondent Appellate Authority (Deputy Commissioner, TN Shops & Establishment, Chennai). The 1st respondent (Mr V. Raghunandan) filed an appeal under Sec 41(2) of the TNSE Act challenging the order of termination dated March 29, 2010, issued by the petitioner and sought for setting aside the same. Since the appeal was filed with a delay of 110 days, he filed an application under proviso to Rule 9(2) of the TNSE Rules, 1948.

R-2 said he found there was sufficient cause which disabled R-1 from moving the authority. He condoned the delay. Challenging the order dated October 28, 2010 condoning the delay, the first writ petition was filed.

The 2nd writ petition was filed to issue a writ in nature of prohibition to R-2 from hearing the appeal.

Mr Justice K. Chandru, who heard the writ petitions, ruled that this Court was not inclined to interfere with an order passed to condone the delay in filing the appeal.

The Authority had exercised his discretion to condone the delay. Citing an order of the Supreme Court in Tirumala Tirupati Devasthanam vs Thallappaka Ananthacharyulu [reported in (2003) 8 SCC 134] the Judge pointed out that in the absence of very cogent or strong reasons, a writ in nature of prohibition could not be issued.

Regarding the contention of the petitioner that R-2 Appellate Authority was a lay person and his position could not be equated to a court, the Judge said his argument could not be accepted as R-2 had been given quasi-judicial powers.

On the petitioner's submission that R-1 was employed in a position of management and hence exempted from the purview of the Shops Act, could not be countenanced by this Court.

Another contention that factories coming within definition of Sec 2(n) of the Factories Act were exempted from the purview of the Shops Act could not also be accepted.

Regarding the petitioner's submission that software units were exempted from application of Shops Act under GO Ms N 15 ITD dated May 22, 2003, the Judge ruled that all 3 GOs merely stated that they referred only to the earlier exemption given by the Government to software units from application of Chapters II & III of the Shops Act.

Also, it was too late in the day for the petitioner to contend that there was no termination so as to enable the Authority to entertain the appeal.

Both the writ petitions would stand dismissed with a cost of Rs 10,000 payable to counsel for R-1, the Judge held.

Courtesy_

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