Educational Institution Not An 'Establishment' Under 'Telangana Shops And Establishments Act': Telangana High Court

The Telangana High Court recently held that an educational institution is not covered within the meaning and definition of 'establishment' as defined under Section 2(10) of the Telangana Shops and Establishments Act, 1988.

The Bench of Chief Justice Satish Chandra Sharma and Justice B. Vijaysen Reddy took into account the Apex Court and Kerala High Court rulings to arrive at this conclusion.

The background of the case

The appellant institution is an educational institution and respondent No.3/employee was appointed in the year 1985 as an Attender in the Nutrition Lab Department. She tendered her resignation in December 2009, and service dues were also settled.

She preferred an Appeal before the Assistant Labour Commissioner under the Telangana Shops and Establishments Act, 1988 stating that she was illegally terminated by the appellant institution.

The appellant institution filed a counter-affidavit stating that the employee herself tendered her resignation, her dues have been settled and Appeal deserves to be dismissed.

It was further contended that the Appeal preferred by employee under Section 48(1) of the Shops and Establishments Act, 1988 was not maintainable, in spite of the aforesaid ground, the Appeal was allowed by an Order in July 2019, directing the appellant institution to reinstate the employee with full back wages.

The appellant institution preferred a writ petition stating that the appellant institution is not an establishment and is not covered under the provisions of the Shops and Establishments Act, however, the Single Judge dismissed the writ petition, the same was challenged before the division bench.

Court's order

At the outset, the Court noted that the institution was governed by the provisions of the Telangana Education Act, 1982 and the said Act provides for redressal of grievance of the nature involved in the instant writ appeal.

Further, the Court observed that whether an educational institution falls within the meaning of 'establishment' or not, had been looked into by the Supreme Court in the case of Ruth Soren v. Managing Committee (2001) 2 SCC 115.

In that case, keeping in view the definition 'establishment' under the Bihar Shops and Establishments Act, which is similar to the definition under the Telangana Shops and Establishment Act, the Apex Court had held that an educational institution does not fall within the scope of establishment under the Act.

The Supreme Court had held that an educational institution may fall within the meaning 'industry', but will certainly not fall within the meaning and term 'establishment', and therefore, the Telangana High Court decided to set aside the Order passed by the Appellate Authority in July 2019 as well as the Order passed by the Single Judge.

It may be noted that the Kerala High Court had also taken a similar view in the case of Sree Narayana Educational Institution v. Assistant Labour Officer 2001 (91) FLR 284.

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