The question before the Karnataka High Court in the matter of Bharti Airtel Ltd. vs. The Senior Labour Inspector was whether the State Government or its authorities have the jurisdiction to initiate prosecution against a telecom Company for non-compliance under the Minimum Wages Act, 1961.

With regard to this intricate question of law, the Karnataka High Court held that Telecom Company’s do not carry on business on behalf of the Government of India; also, the liability to pay salaries, wages etc. is fully within the domain of the Company. In fact, the Central Government does not derive any benefit from the business of the Company.

It was noted by the High Court that exemption u/s 3 (1) of the Karnataka Shops and Establishments Act was not applicable of a private Telecom Company since such exemption is available to services rendered by the State to the Public at large. Therefore, it was held that by no stretch of imagination could it be inferred that a Telecom Company was exempted under clause 3 (1) (b) of the Karnataka Shops and Commercial Establishments Act, 1961.

The second question before the court was whether ‘telephone services’ is one of the scheduled employment as defined u/s 2 (g) of the Minimum Wages Act, 1948. In this regard, the High Court held Telecom Company to be an ‘establishment’ as defined under the Act and scheduled under the Minimum Wages Act, 1948, and hence was not entitled to exemption under the Act.

The petition was dismissed by the Karnataka High Court, and it was held that the State Government was well within its jurisdiction to prosecution against the Company under the Minimum Wages Act, 1948.

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