Manohar Lal vs The State

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Criminal Appeal No. 11 of 1950

Decision Date: 23 May, 1951

Coram: Vivian Bose, Hiralal J. Kania, Saiyid Fazal Ali, Mehr Chand Mahajan, N. Chandrasekhara Aiyar

In the case of Manohar Lal versus The State, the judgment was delivered on 23 May 1951 by a Bench of the Supreme Court of India. The Bench consisted of Justice Vivian Bose, Chief Justice Hiralal J. Kania, Justice Saiyid Fazal Ali, Justice Mehr Chand Mahajan and Justice N. Chandrasekhara Aiyar. The petitioner was Manohar Lal and the respondent was the State. The citation for the decision is reported in 1951 AIR 315 and 1951 SCR 671. The matter arose under the Punjab Trade Employees Act of 1940, as amended in 1943, particularly sections 2-A (i) and (j), section 7(1) and section 16. The central issue recorded in the headnote concerned the liability of a shopkeeper who did not employ any labour but whose son sold goods on a day that had been designated as a close day. The petitioner contended that section 7 of the Act was beyond the legislative competence of the Provincial Legislature and that, even if the provision was valid, the exemptions in clauses (i) and (j) of section 2-A should protect him because he acted as a manager and the sale was performed by his son.

The Full Court held that the Provincial Government was competent to regulate the hours, place, date and manner of sale of any commodity under item 27 of List I of the Government of India Act, 1935, and therefore section 7 of the Punjab Trade Employees Act was not ultra vires. The Court also observed that the matter could alternatively be placed under item 27 of List III, which deals with the welfare and conditions of labour. Regarding the exemption provisions, the Court ruled that clause (j) of section 2-A did not apply because the conviction was not for the son’s sale but for the petitioner’s act of keeping the shop open on a prescribed close day. Further, the Court declined to extend the protection of clause (i) to the petitioner, stating that although the petitioner performed the functions of a manager, his status as the owner created a separate liability distinct from that of a manager under the Act. Consequently, the conviction under section 16 of the Act was affirmed. The judgment was rendered in Criminal Appeal No. 11 of 1950 under Article 134(1)(c) of the Constitution, and it set aside the order dated 10 April 1950 of the High Court of Judicature at Simla in Criminal Revision No. 449 of 1949.

In this criminal appeal, the Court considered a conviction under section sixteen of the Punjab Trade Employees Act, 1940, as amended in 1943, together with section seven paragraph one of the same enactment. The appellant was the proprietor of a shop situated in the Cantonment Area of Ferozepore. He owned and operated the shop personally and did not employ any person who fell within the statutory definition of “employee”; nevertheless, his son assisted him in the day-to-day conduct of the business. The premises were divided into two distinct sections, one dealing in articles of haberdashery and the other in articles of stationery. Section seven paragraph one required, save for any exemption expressly provided in the Act, that every shop remain closed on a day designated as a close day. Paragraph two sub-paragraph (i) specified that the selection of such a close day was the exclusive prerogative of the owner or occupier of the shop, and that the chosen day had to be communicated to the appropriate authority in the manner prescribed by law.

The appellant exercised his discretion by deciding that the haberdashery section would be closed on Mondays, while the stationery section would be closed on Saturdays, and he duly gave notice of this arrangement to the prescribed authority. On Monday, 17 May 1948, his son sold a tin of boot polish to a customer from the haberdashery section, with the appellant himself present at the time of the sale. Because Monday had been declared a close day for the haberdashery section, the sale was alleged to be in violation of section seven paragraph one, and the appellant was consequently charged under section sixteen read with section seven. The trial magistrate held that by allowing the sale of an article from the haberdashery section on a day that had been designated as a close day, the appellant had contravened the statutory provision, and therefore convicted him, imposing a monetary fine of Rs 20.

The appellant sought a revision of the conviction before the High Court of Judicature at Simla. The revision petition (Criminal Revision No 449 of 1949) was dismissed, the High Court affirming that the appellant had failed to keep the shop closed on the prescribed day and that the conviction was therefore justified. The appellant then applied for leave to appeal to this Court, arguing that a substantial question of law arose concerning the constitutional competence of the provision in question under the Government of India Act, 1935. The Court granted leave on the ground that the issue required interpretation of whether the provision fell within the legislative competence of either the Provincial List or the Concurrent List. The learned counsel for the appellant contended that section seven of the Act was ultra vires because it did not correspond to any entry in either List II or List III of the 1935 Act. In contrast, the Court observed that the matter could be situated under entry number twenty-seven of List II, which pertains to “trade and commerce within the Province,” as well as under entry number twenty-seven of List III, which deals with “welfare of labour; conditions of labour.” The Court therefore proceeded to examine the constitutional validity of the provision in light of these two possible entries.

It was observed that a province could, under item No 27 in List II, regulate the manner, place and time of sale of any particular commodity. For example, a provincial law could require that explosives or other hazardous substances be sold only in designated areas, at particular times or on certain days so that additional safety measures for the public and those directly involved could be arranged. Likewise, the law could prohibit sales on a specific day such as a Sunday or a Friday, or on days of religious festivals, if the province so desired. Instead of using those possible approaches, the legislature chose to regulate the internal trade of the province by imposing a restriction that is only one of the many ways it could have acted.

The court further considered that the same provision could also fall under item No 27 in List III, which deals with “welfare of labour; conditions of labour.” Section 7, which is the provision in question, is a general rule that applies to all kinds of shops, whether they employ labour or are run by owners and their families. The act containing the section is intended to regulate the hours of employment of persons working in shops or commercial establishments. Consequently, insofar as Section 7 concerns establishments where labour is employed, it is unquestionably within the legislative competence. The appellant, however, argued that the section could not apply to shops run by the owner with or without family assistance. He relied on Section 2-A(i) and (j), which state: “2-A. Nothing in this Act shall apply to— (i) persons employed in a managerial capacity … and (j) the members of the family of the employer.” The appellant contended that the sale was made by the son, who, being a family member, was not affected by the Act and therefore was entitled to keep the shop open on the day it was required to be closed. He also argued that, as the owner acted in a managerial capacity, he similarly could not be compelled to close the shop under Section 7. The court found this reasoning fallacious. The conviction was for keeping the shop open on a day that the law required it to be closed, not for making a sale. Section 2-A(j) merely exempts the family member from the provisions of the Act; it does not give him the right to keep the shop open or to sell. Section 7(1), on the other hand, is directed at the owner of the shop and obliges the owner to close the shop one day each week. Therefore, the argument that a managerial employee or a family member could not be bound by Section 7 does not hold, and the provision remains applicable to the appellant’s shop.

The Court observed that the contention was also fallacious because, although in the present case the owner and the manager were the same person, the Act clearly anticipates situations where those roles are distinct. It further stated that the owner is required to close the shop one day each week, whereas the manager of the shop may continue to work without, for example, the twenty-four consecutive hours of rest each week prescribed by section 7-A. Consequently, the Court held that the appellant’s function as manager must be separated from his status as owner for the purpose of applying the statutory provisions. The judgment explained that section 2-A(i) does not govern or override the requirements of section 7(1). The Court then considered the argument that the scheme of the Act is intended solely to improve the conditions of labour employed in shops, and therefore should not apply to shops where no labour is employed, especially since the family of the “employer” is expressly excluded from its scope. It also noted that, on that basis, the Act could not fall within item 27 of List III. Rejecting this narrow construction, the Court said that such a limited interpretation could not be placed upon the entry. It observed that the legislature may have deemed it necessary, to minimise possibilities of evasion, to encroach upon the liberties of persons who otherwise would not be affected, and that it possessed the authority to do so. Moreover, the Court pointed out that requiring a shopkeeper who employs one or two workers to close while allowing a rival who employs many family members to remain open would place the former at a serious commercial disadvantage and could generate discontent, ultimately affecting employer-employee relations. While acknowledging that these are matters of policy beyond its adjudicative role, the Court concluded that they support a wide and liberal interpretation of the relevant provisions. Accordingly, the appeal was dismissed, and the order was entered. The appellant was represented by Vidya Sagar, and the respondent by P.A. Mehta.