By- Ritika Singh
In this case of OM Dayal Educational & Research Society & Ors., the appellants, asserted that they are a charitable and educational society that manages Delhi Public School Ruby Park, Kolkata and Delhi Public School, Durgapur. They challenged two notifications published in the Kolkata Gazette dated August 28, 2006, and February 10, 2011, by the Labour Department, Government of West Bengal, where it says, exercise of powers conferred under subsection (5) of Section 1 of the Employees’ State Insurance Act, 1948 (hereinafter “the said 1948 Act”), inter alia with approval from the Central Government, the Labour Department extended the provisions of the said 1948 Act to, educational institutions (including public, private, aided or partially aided) run by individuals, trusts, societies, or other organizations. The appellants alleged that they have also paid certain sums to the Employees’ State Insurance Corporation pursuant to the said notification.
On the writ petition, the judgment issued by the Single Bench of the Calcutta High Court, it was stated that the argument that institutions of the appellants were a ‘commercial establishment’ under Section 2(2) of the West Bengal Shops and Establishments Act, 1963 and carrying on business, trade, profession, or any work in connection with, or incidental to, or ancillary to any business, trade, or profession, could not be accepted.
READ ALSO: A WRONG DECISION DOES NOT GIVE A RIGHT TO A PERSON TO ENFORCE THE WRONG ORDER AND CLAIM EQUALITY: DELHI HIGH COURT
Justice Soumen Sen and Justice Saugata Bhattacharya, the Division Bench of the High Court of Calcutta, stated that organizations and institutions are by definition institutions either of a charitable nature or educational institutions, which are confined to be employing teachers and staff for imparting education. Therefore, they are almost inevitably within the meaning of ‘establishments’ under Section 1(5) of the Employees’ State Insurance Act, 1948.
The judiciary in this appeal understood the word ‘establishment’ and also ‘institution’ to detect how it precisely fits within the meaning of the word ‘establishment ‘.
The court confided upon the Black’s Law Dictionary where it is defined, ” institution. (14c) ….3. An established organization, esp. one of a public character, such as a facility for the treatment of mentally disabled persons….” (emphasis added)
The court also confided on Judicial Dictionary (15th edn., 2011, Vol 1) to examine the meaning of the word ‘institution’, where it says:
“Institution. According to the dictionary meaning, the term ‘institution’ means ‘a body or organization of an association brought into being for the purpose of achieving some object’. Oxford English Dictionary defines an ‘institution’ as an ‘establishment, organization or association, instituted for the promotion of some object, especially one of public or general utility, religious, charitable, educational, etc.’. Other dictionaries define the same word as organized society established either by law or the authority of individuals for promoting any object, public or social. [K V Krishna Rao v SubCollector, Oagole AIR 1969 SC 563, (1969)1 SCJ 687, (1969) 2 SCA 255, (1969) 1 SCWR 999, (1969) 1 Mad LJ 83, (1969) 1 And WR 85].”(emphasis added)
Furthermore, the court confided on The Major Law Lexicon (4th edn., 2010, Vol 3), where the ‘institution’ is defined as:
“Organization, particularly one concerned with the promotion of specific subject or some public object (e.g. the Royal United Services Institution)” “It is a little difficult to define, the meaning of the term ‘institution’ in the modern acceptation of the word. It means, I suppose, an undertaking formed to promote some defined purpose having in view generally the instruction or education of the public. It is the body (so to speak) called into existence to translate the purpose as conceived in the mind of the founders into a living and active principle. Lord Mancnaghten in Mayor, etc. v. Mcadam, 1896 AC 500.” (emphasis added)
In Bangalore Turf Club case, the dictionary meaning including test put forth by the apex court reads, where it says, an establishment includes an institution which is engaged in the act of achieving a certain purpose, mostly a public purpose (including charity and education), and in the process is engaged in employing persons for providing a good or service to the community, the court said:
Nowhere is this more firmly established than in the species put forth as belonging to the genus ‘establishment’ in Section 1(5), which include establishments that are ‘industrial’, ‘commercial’, ‘agricultural’, “or otherwise”. The word ‘otherwise’ here has clearly been placed to specify that the genus of establishments is not restricted to those organizations which are industrial, commercial or agricultural only but also includes organizations which can otherwise fall within the broad definition of the words “establishment or class of establishments”—which, as we have shown, includes institutions of a charitable nature or educational institutions.
The court while setting aside the judgment and order of the Single Bench of the Calcutta High Court and allowing the appeal said,
The impugned notifications extend the application of the said 1948 Act to, inter alia, educational institutions (including public, private, aided, or partially aided) run by individuals, trusts, societies or other organizations. Such organizations and institutions are by definition institutions either of a charitable nature or educational institutions, which are bound to be employing teachers and staff for imparting education. Hence, they are most certainly within the meaning of ‘establishments’ under Section 1(5) of the said 1948 Act.
READ ALSO: SECTION 144: GROUNDS TO IMPOSE RESTRICTIONS
The Calcutta High Court stated that the two schools run by the appellants, being charitable and educational society certainly falls within the horizon of the announcement mentioned previously and also within the meaning of establishment under Section 1(5) of the said 1948 Act.