Bombay High Court Upholds Minimum Wages Order Against Co-operative Society — 'No Profit; No Loss' Basis Not Exempt from Minimum Wages Act, 1948. The court held that the Minimum Wages Act applies to all establishments irrespective of profit motive, and the Authority under Section 20(1) has jurisdiction to entertain claims for minimum wages.

High Court: Bombay High Court Bench: NAGPUR In Favour of Prosecution

Admin

2026-05-19 04:51:59

Font size:

Case Note & Summary

The petitioner, Tantrik Shikshan Karmachari Sahakari Pat Sanstha Maryadit, a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960, challenged an order dated 3rd December 2014 passed by the Assistant Commissioner of Labour under the Minimum Wages Act, 1948. The order directed the petitioner to pay minimum wages to respondent nos. 3 and 4, Vijay Falke and Prabhakar Rahate, who claimed to be employees of the society. The society functioned on a 'No profit; No loss' basis, advancing loans to its members who were employees of Industrial Training Institutes. The respondents moved the Authority under Section 20(1) of the Act on 8th January 2013, seeking payment of wages in accordance with the Act. The Authority allowed their claim, leading to the present writ petition. The petitioner argued that the society was not an 'establishment' under the Act and that the Authority lacked jurisdiction, as the society was a co-operative society not engaged in any trade or business. The court rejected these arguments, holding that the Minimum Wages Act applies to all establishments regardless of profit motive, and the Authority under Section 20(1) has jurisdiction to entertain claims for minimum wages. The court emphasized that the obligation to pay minimum wages is a statutory duty and not dependent on the financial capacity of the employer. The writ petition was dismissed, and the order of the Authority was upheld.

Headnote

A) Minimum Wages Act - Applicability - 'No profit; No loss' basis - The Minimum Wages Act, 1948 applies to all establishments irrespective of profit motive. A co-operative society functioning on 'No profit; No loss' basis is not exempt from paying minimum wages as per the Act. The obligation to pay minimum wages is a statutory duty and not dependent on the financial capacity of the employer. (Paras 5-7)

B) Minimum Wages Act - Jurisdiction of Authority under Section 20(1) - The Authority under Section 20(1) of the Minimum Wages Act, 1948 has jurisdiction to entertain claims for payment of minimum wages. The petitioner's contention that the Authority lacked jurisdiction was rejected. (Paras 4-5)

C) Co-operative Society - Liability under Minimum Wages Act - A co-operative society registered under the Maharashtra Co-operative Societies Act, 1960 is an 'establishment' under the Minimum Wages Act, 1948 and is bound to pay minimum wages to its employees. The society's bye-laws stating 'No profit; No loss' do not override the statutory mandate. (Paras 3-7)

Issue of Consideration

Whether a co-operative society functioning on 'No profit; No loss' basis is liable to pay minimum wages under the Minimum Wages Act, 1948, and whether the Authority under Section 20(1) has jurisdiction to entertain such claims.

Final Decision

The writ petition was dismissed. The order dated 3rd December 2014 passed by the Assistant Commissioner of Labour directing the petitioner to pay minimum wages to respondent nos. 3 and 4 was upheld.

Law Points

Minimum Wages Act
1948 applies to all establishments regardless of profit motive
'No profit
No loss' basis does not exempt from minimum wages
Authority under Section 20(1) has jurisdiction to entertain claims for minimum wages
Co-operative society is an 'establishment' under the Act
Payment of minimum wages is a statutory obligation not dependent on financial capacity

Case Details

2016 LawText (BOM) (09) 125

Writ Petition No.3239 of 2015

2016-09-16

A.S. Chandurkar, J.

Mr. V. P. Marpakwar for the petitioners, Ms. Tajwar Khan Asstt. Govt. Pleader for respondent nos.1 and 2, Mr. S.W. Sambre for respondent no.3

Tantrik Shikshan Karmachari Sahakari Pat Sanstha Maryadit

The Assistant Commissioner of Labour-cum-Authority under the Minimum Wages Act, 1948, The Inspector, Authority under the Minimum Wages Act, 1948, Vijay son of Ajabrao Falke, Prabhakar Rahate

Nature of Litigation

Writ Petition challenging an order of the Assistant Commissioner of Labour directing payment of minimum wages under the Minimum Wages Act, 1948.

Remedy Sought

The petitioner sought quashing of the order dated 3rd December 2014 passed by the Assistant Commissioner of Labour.

Filing Reason

The petitioner was aggrieved by the order directing it to pay minimum wages to respondent nos. 3 and 4.

Previous Decisions

The Assistant Commissioner of Labour passed an order on 3rd December 2014 directing the petitioner to pay minimum wages to respondent nos. 3 and 4.

Issues

Whether the petitioner-society is an 'establishment' under the Minimum Wages Act, 1948? Whether the Authority under Section 20(1) of the Act has jurisdiction to entertain the claim for minimum wages? Whether a society functioning on 'No profit; No loss' basis is liable to pay minimum wages?

Submissions/Arguments

The petitioner argued that the society is not an 'establishment' under the Minimum Wages Act and that the Authority lacked jurisdiction. The petitioner contended that the society functions on 'No profit; No loss' basis and is not engaged in any trade or business. The respondents argued that the Minimum Wages Act applies to all establishments and the Authority has jurisdiction.

Ratio Decidendi

The Minimum Wages Act, 1948 applies to all establishments irrespective of profit motive. The obligation to pay minimum wages is a statutory duty and not dependent on the financial capacity of the employer. The Authority under Section 20(1) has jurisdiction to entertain claims for minimum wages.

Judgment Excerpts

The petitioner is aggrieved by the order dated 3rd December, 2014 passed by the Asstt. Commissioner of Labour in exercise of powers under the Minimum Wages Act, 1948. The facts giving rise to the present Writ Petition are that the petitioner-Society is duly registered under the provisions of the Maharashtra Co-operative Societies Act, 1960. The respondent nos. 3 and 4 claim to be in employment with the Society and, according to them, they were not being paid wages as per the Act of 1948.

Procedural History

The respondent nos. 3 and 4 moved the Assistant Commissioner of Labour under Section 20(1) of the Minimum Wages Act, 1948 on 8th January 2013. The Authority passed an order on 3rd December 2014 directing the petitioner to pay minimum wages. The petitioner challenged this order by filing Writ Petition No.3239 of 2015 before the Bombay High Court, Nagpur Bench. The petition was heard and dismissed on 16th September 2016.