Is a letter of the Principal Secretary to the Government a notification granting exemption under Section 9 of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981?

(Judgment of the Court was delivered by C.V. KARTHIKEYAN, J.) All these Writ Appeals have been filed by the Writ Petitioner, the District Manager, Tamil Nadu State Marketing Corporation Limited (TASMAC), in a batch of Writ Petitions, aggrieved by the dismissal of the Writ Petitions by the learned Single Judge by common order, dated 24.11.2025.

The Writ Petitions had been filed in the nature of a Certiorari seeking records relating to an order of the first respondent, the Assistant Commissioner of Labour (Enforcement) under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (Permanent Status Act) and to quash the same.

The second respondents in the respective Writ Petitions were engaged as Salesmen in the appellant TASMAC shops. They claimed to be workmen and further claimed that they had been engaged continuously from the year 2003 and therefore, have been in continuous service for more than 480 days within a period of 24 calender months between 2003 and 2005, sought conferment of permanent status in accordance with the provisions of the Permanent Status Act. They had filed petitions before the first respondent/Assistant Commissioner of Labour (Enforcement), and by the impugned orders/proceedings, they had been granted permanent status. These orders/proceedings had been challenged by the appellant herein by filing the Writ Petitions.

Since the issues involved were similar, the learned Single Judge had disposed of all the Writ Petitions by a common order. Even before this Court, since arguments were advanced on the same lines in all the Writ Appeals, a common judgment is pronounced.

The appellant/TASMAC, is a Company registered under the Companies Act, 1956. It is wholly owned by the Government of Tamil Nadu. In the Writ Petitions, it had been contended that since it is wholly owned by the Government of Tamil Nadu, they are exempted from the provisions of the Tamil Nadu Shops and Establishment Act, 1947 (Shops Act) as provided under Section 4(1)(c) of the Shops Act.

It is the contention of the petitioner/appellant that this exemption had been conferred and confirmed by a letter dated 19.02.2010 in Letter No. 9894/K2/2008-11, issued by the Principal Secretary to the Government, Labour and Employment (K2) Department, to the Commissioner of Labour and the Managing Director, TASMAC Limited. It had been further contended that this clarification was issued on a request made by the Managing Director, TASMAC, seeking a notification for exemption under the Shops Act.

It had also been contended that Section 2(3)(c) of the Permanent Status Act, would apply only to an industrial establishment, which is defined under Section 2(6) of the Shops Act. It had been further contended that Permanent Status Act, does not define an industrial establishment and therefore, the definition of “establishment” under the Shops Act will have to be incorporated and since it had been clarified that the Act would not apply to TASMAC, the claim of the Salesmen to be conferred with permanent status had been wrongly granted to the first respondent. It had also been contended that some of the workmen are actually working as Supervisors and cannot claim themselves to be workmen as defined under Section 2(4) of the Permanent Status Act. Claiming as above, the Writ Petitions had been filed seeking to quash the order of the first respondent/Assistant Commissioner of Labour (Enforcement), under the Permanent Status Act.

The Writ Petitions had been resisted on behalf of the second respondents/salesmen/workmen, who primarily contended that they had worked for more than 480 days in two consecutive calender years. They had therefore, filed applications seeking conferment of permanent status. The applications had been answered in their favour by the appropriate authority. It had been further stated that the exemption provided under Section 4(1)(c) of the Shops Act would not be applicable to the provisions of the Permanent Status Act. It had been further contended that the exemption under the Permanent Status Act can be conferred only by the Government under Section 9 of the said Act and cannot be declared by a letter of the Principal Secretary to the Government. It had also been contended that the definition of “establishment” alone had been incorporated from the Shops Act to the Permanent Status Act and this incorporation would not indicate that all the provisions of the Shops Act had been incorporated to the Permanent Status Act.

The learned Single Judge, on the basis of the aforementioned rival position taken by TASMAC on the one hand and the workmen on the other hand, had examined the provisions of the Permanent Status Act particularly, Sections 3 and 2(4) and also the eligibility of the respective second respondents who claimed permanent status and to be categorised as workmen. It was found that the workmen had joined service as Salesmen in the year 2003 and by the year 2005, they had completed 480 days of continuous service. They had completed 480 days in two consecutive calender years and therefore, they had to be conferred with permanent status irrespective of the fact whether they had been subsequently posted as Supervisors. It was also noted that as Supervisors, they had no control over the salesmen and even if they were termed as Supervisors, they sell liquor like Salesmen, naturally also maintained accounts and deposits of the incoming cash into Bank.

The learned Single Judge had also taken the additional care to determine this fact by calling upon TASMAC to produce the duties and responsibilities of the Supervisors and the particulars of their salary as on the date of completion of 480 days. Those details had been produced. They comprised of separate duties. The learned Single Judge having examined them, had observed that except one or two, all the rests were clerical in nature and therefore, came to a definite conclusion that the second respondents were not discharging work which could be termed as “Supervisory in nature”.

It was also found that during the relevant period, when they were discharging work for the mandatory period of 480 days, they were drawing as salary an amount less than Rs.3500/- per month. It was also noted that TASMAC had not produced any documents to show that they were actually drawing salary exceeding Rs.3500/- per month. On the other hand, the respondent workmen have produced their salary acquittance, which showed that their salary was less than Rs.3500/- per month.

The learned Single Judge then examined Section 4(i)(c) of the Shops Act and Section 2(e) of the Permanent Status Act. It was observed that only the definition of “establishment” had been incorporated from the Shops Act to the Permanent Status Act and no other provision. This position had actually been held by a Division Bench in an earlier judgment of this Court reported in 2007 (2) L.L.N. 212, in the case of V.Elayaperumal and others -vs.- State Bank of India and other.

The learned Single Judge further observed that the dictum laid down had been followed by yet another Division Bench of this Court and therefore held that quite consistently, it had been held that only the definition of the term “establishment” had been incorporated from the Shops Act to the Permanent Status Act and no other provision had been incorporated.

In view of the above reasons, the learned Single Judge dismissed the Writ Petitions and affirmed the order of the first respondent/the Assistant Commissioner of Labour (Enforcement), recognising permanent status of the workmen. Challenging that decision of the learned Single Judge, the Writ Petitioner had filed the present Writ Appeals.

Heard arguments advanced by Mr.T.Gowthaman, learned Additional Advocate General assisted by Mr.H.Arumugam, learned Counsel for for the appellant, Mr.M.P.Senthil, learned Government Pleader for the first respondent, Mr.C.K.Chandrasekar, learned Counsel for Mr.S.Arunachalam and Mr.A.Rahul, learned Counsels for the second respondent/salesmen/workmen.

The learned Additional Advocate General took the Court through the facts of the case. He pointed out that TASMAC is a Company established by the Government of Tamil Nadu and wholly owned by the Government of Tamil Nadu. It is a State owned Public Sector Undertaking (PSU), which operates under the jurisdiction of the Department of Prohibition and Excise and is run by a Board of Directors consisting of Indian Administrative Service (IAS) Officers. It has State granted monopoly over wholesale and retail distribution of alcoholic beverages (Indian made Foreign Liquor) in the State. It was established in the year 1983. In October 2003, the Government passed an amendment to the Tamil Nadu Prohibition Act, 1937, making TASMAC, the sole retail vendor of alcohol in the State. Private outlets selling alcohol were either shut down or taken over by the Government by the year 2004. Though there had been changes in the Government, this policy had not been interfered with and had been continued by successive Governments.

It was further pointed out that as on the date of advancing arguments on 08.09.2026, TASMAC had in its role, 16,231 Sales Supervisors and 14,348 Salesmen and 2181 Assistant Salesmen. There were 4006 shops. It was pointed out that 717 shops had been closed by the Government by taking a policy decision to scale down the number of shops selling alcohol.

It was contended that none of the Sale Supervisors or Salesman or Assistant Salesmen were functioning in sanctioned posts. There were, on an average, five employees in each shop. They were paid provident fund, gratuity, employees State insurance, premium based provident fund and consolidated pay, but, however, they were not paid dearness allowances, house rent allowances and travelling allowances. They had all however been employed through the Employment Exchange. The only sanctioned posts were the posts of Junior Assistants, who were in the administrative office. The Junior Assistants had been absorbed from the 22,960 initially employed Salesmen.

It was contended by the learned Additional Advocate General that the Government had the liberty to take a policy decision to close down any shops at any point of time by withdrawing licences. It was therefore contended that the shops are not permanent in nature, but functioned only under the control of the Government and that therefore, the employees can never claim to be permanent workmen/salesmen, eligible to be conferred with permanent status.

It was also contended that Section 2(6) of the Shops Act defined the word “establishment”, which definition had been incorporated in the Permanent Status Act under Section 2(3)(e). It was further contended that under Section 4(1)(c) of the Shops Act, establishments run by the Government are exempted from the purview of the Act and therefore, Government had sought exemption. They were however visited with a letter from the Principal Secretary that such exemption is not required, since TASMAC is a Company run by the Government. This particular letter of the Principal Secretary is the main fulcrum around which arguments were advanced by the learned Additional Advocate General to emphasise that Salesmen can never seek permanent status.

It was also contended that the vending of liquor is not a constitutional right and therefore, the Salesmen or employees can never claim a right to be continued to be in service or to be granted permanent status. It was argued that the Government can close down any shop except those where the lease agreements were in force or where there was a dispute about revision of rent. However, the learned Additional Advocate General stated that the employees of the 717 shops were absorbed in other shops. He was fair enough to concede that there is no dispute that the employees did indeed worked for more than 480 days in two consecutive calender years between 2003 and 2005, but stated that this would not grant them automatic recognition as permanent status, since the letter of the Principal Secretary had stated that the shops were exempted, as provided under Section 4(1)(c) of the Shops Act.

It was therefore, contended that though the judgment in V.Elayaperumal case, referred supra, had stated that only the term of “establishment” had been incorporated in the Permanent Status Act, still the letter would override that particular reasoning and therefore, the order of the first respondent is required to be re-visited by this Court.

The learned Counsels for the workmen, however, disputed the said contentions. The learned Counsels contended that as a fact the workmen were discharging clerical work and not supervisory work. They had also been actually discharging work for more than 480 days in a two consecutive calender years. It was contended that this would be sufficient to grant them permanent status. The learned Counsel further argued that specific exemption had not been granted under Section 9 of the Permanent Status Act. He further pointed out that the letter relied upon by the learned Additional Advocate General can never be the basis to reject the status, as it could not construed just an opinion of an individual and nothing else. The learned Counsel pointed out that even if the Shops Act is repealed, the Permanent Status Act would still continue. He further stated that there was no manufacturing of liquor in the shops but only sales. He therefore, argued that in the order under appeal, the learned Single Judge had considered all required aspects and therefore, urged that the Court should dismiss the appeals.

We have carefully considered the arguments advanced and perused the material records.

The appellant has filed a batch of Writ Petitions questioning an order of the first respondent/the Assistant Commissioner of Labour (Enforcement), under the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act, 1981 (Permanent Status Act), whereby, the said authority had affirmed and granted the claim of the second respondent/workmen/employees/salesmen in TASMAC shops and granted them permanent status in accordance with the Permanent Status Act.

The primary ground on which the said order and the order of the learned Single Judge is impugned is that the Principal Secretary to the Government had addressed a letter stating that the TASMAC is a wholly owned and controlled by the State Government and that it is an “establishment” under the State Government and therefore, the provisions of the Shops Act would not be applicable, in view of the exemption under Section 4(1)(c) of the Shops Act.

We hold that this letter can never termed as a pronouncement of a legal principle or as a judgment of the Court. This letter, at the most, is a private opinion of the individual who had authored the letter. Incidentally, he happened to hold the position of the Principal Secretary to the Government. But that would not confer any special status to his opinion. The Court is not bound by that opinion. The Court can always disregard such opinion. When the law direct a particular act to be performed in a particular manner, it should be done only in that manner and by none else.

Under the Permanent Status Act, 1981, any workman, who completed 480 days of continuous service within a period of 24 consecutive calender months, must automatically be made a permanent employee. This Act applies to commercial establishments. Seasonal businesses or places where work is done only intermediately, are not covered. By no stretch of imagination, can it be stated by any individual in this State that a liquor shop run by TASMAC is doing seasonal business. TASMAC itself would reject that suggestion. The shops are doing business day-in and day-out, practically 24 hours a day, 7 days a week and 365 days in a year and in a leap year for 366 days. Even when the shop is officially closed, business is done through the back door and through the opening in windows and through hoarded stock in the platforms in the dark. This is a reality, which the appellant encourages to gain more profit by bringing the common man to the door step of the liquor shop. In fact, reports suggest that they even intend to sell liquor online.

The fact that the second respondent in each of the Writ Petitions had actually worked for 480 days continuously in 24 calender months between 2003 and 2005 had not been denied or disputed by the appellant. We should place our deep appreciation to the learned Additional Advocate for being extremely fair on this point. The learned Additional Advocate General, however, argued that satisfaction of that condition is not sufficient. He pointed out the definition of “establishment”, under Section 2(6) of the Shops Act, 1981, which is as follows:

He then pointed out Section 2(e) of the Permanent Status Act, which relates to the term “establishment”, and is as follows:

He therefore expanded his argument by stating that every other provision under the Shops Act should also be automatically incorporated, even though not specified by the Legislation to the Permanent Status Act and therefore, argued that Section 4(1)(c) of the Shops Act would also be attracted to the Permanent Status Act.

Section 4(1)(c) of the Shops Act is as follows:

To add force to this argument, the learned Additional Advocate General relied on the opinion of the Principal Secretary to the Government, Labour and Employment Department, who had opined that the provisions of the Tamil Nadu Shops and Establishments Act. 1947, are not applicable to the Permanent Status Act and therefore, opined that a specific notification granting exemption is not required.

The letter as already observed by us is not the law of the land and is not binding on us or on anybody, except perhaps on the author himself. This letter cannot also be termed as a notification granting exemption by the Government. We would not even extract that letter in view of its absurdity.

We would on the other hand place reliance on a judgment of this Court reported in 2007 (2) L.L.N. 212, in the case of V.Elayaperumal and others -vs.- State Bank of India and others, which in our opinion, has laid down the correct position of law and with the pronouncement which we respectfully and with much pleasure follow. The position of law had been very succinctly put by the Division Bench in paragraph No.17, which is as follows:

This dictum very clearly establishes that not only is Section 4(1)(c) of the Shops Act of no consequence but also that the Permanent Status would continue to apply and in effect, re-enforces our opinion that the letter of Principal Secretary is also of no consequence.

It is not in dispute that the employees had been initially employed through employment exchange. They did not enter employment through the back door. They had been appointed through an established procedure. They had worked for 480 days in 24 consecutive calender months. We hold that they should therefore be granted permanent status as declared by the first respondent.

In Shripal and another vs Nagar Nigam, Ghaziyabad, reported 2025 INSC 144, the Hon'ble Supreme Court had examined the issue of exploitation of labour and had held as follows:

The observations are forceful and we direct the appellant to be mindful of the same.

The learned Additional Advocate General further argued that the State had closed 717 liquor shops and that therefore, the workmen cannot claim any recognizable status. However, what had been missed is that the services of the workmen or salesmen, who were working in those 717 shops, had not been ordered to be terminated, but they had been accommodated in other shops, which fact itself would show that their status had been recognised by the Government and that mere closure of shops can never be stretched to imply that the tenure of the workmen also stood terminated . They continued to work. They continued to work only because they were recognised as permanent workmen. Their status can never be disputed by the appellant. Therefore, though the Government has a right to close down any shop, it would not mean that the Government has a right to terminate the services of the workmen of those shops.

The Government has to abide by the law of the land and grant permanent status to their employees who had been rendering service continuously and definitely for more than the mandatory period stipulated by law.

We hold that there are no merits in the appeals.

In result, the Writ Appeals stand dismissed. The common order of the learned Single Judge is confirmed. No order as to costs. Consequently, connected miscellaneous petitions are closed. [C.V.K., J.] [R.S.V., J.] 25.09.2026