TMI Blog1962 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... r work,, are situated in the same compound. For the manufacture of metal circular sheets, the company has a rolling machine. In order to carry on other works, a separate rice mill, flour mill and saw mill, have, been installed by the Co. The Company's case is that it employs different workers in each section of its activities and these workmen are engaged either on a permanent or on a temporary basis. Some workers, such as clerks and watchmen are common to the four sections of the Co.'s works. After the Act came into force, the Co. was required to comply with its provisions. The Co. protested and urged that it was not a factory under s. 1(3)(a) of the Act and so, it could not be called upon to comply with its provisions. The Regional Provident Fund Commr., however, took a contrary view. He held that the Co. fell within the meaning of the word factory as defined under s.1(3)(a) and so, be threatened to use coercive processes to compel the Co. to comply with its requisitions issued under the relevant provisions of the act. At that stage, the Co. moved the High Court of Bombay at Nagpur by a writ petition under Art. 226 of the Constitution and it prayed that an appropriat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclined to make the deposit on the ground that it was not a factory to which the Act applied. The Regional Commr. then threatened to take proceedings against the Mills for the recovery of the said amount under section 8 of the Act. At that stage, the Mill moved the High Court of Bombay at Nagpur by a writ petition and its writ petition has been allowed by the High Court. In the result, a direction has been issued restraining the Regional Commissioner from enforcing the provisions of the Act against the Mills. It is against this order that the Regional Commr. has come to this Court with a certificate granted by the High Court. For the sake of convenience, the Regional Commissioner will hereafter be called the appellant, whereas the Oudh Sugar Mills Ltd. will be described as the Mills. The appellant contends that the High Court was in error in coming to the conclusions that the company and the Mills did not constitute a factory as defined by s. 1(3)(a) of the Act. Section 1 (3) at the relevant period read thus: Subject to the provisions contained in section 16, it (i.e., the Act) applies in the first instance to all factories engaged in any industry specified in Schedule I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act imposed a burden on the employer and so, it took the precaution of confining the operation of the Act only to six important industries specified in Schedule 1. Section 1 (3) (a) no doubt confers power on the Central Government to extend the provision of the Act to other factories by issuing a notifications, as contemplated by it and so, whenever the Central Government comes to the conclusion that the benefits of the Act should be extended to workmen engaged in additional in that behalf and by issuing a notification, bring within the scope of the Act such factories. But this has to be done factory-wise in the sense that it has to be done by reference to the factories engaged in industries included in Schedule I and that shows that it is only factories exclusively engaged in the said industries that, are included within the purview of s. 1. (3 (a). In our opinion, this argument is not well founded. The expression all factories engaged in any industry specified in Schedule I does not lent itself to the construction that it is confined to factories exclusively engaged in any industry specified in Schedule I. What exactly is meant by the categories of factories, it cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts the idea of a composite factory and would, thus, assist the interpretation of the word factory as including a composite factory Under s.1(3)(a). The industry in question is electrical, mechanical or general engineering products and the explanation of this industry shows that it includes 25 different items, and so any factory carrying on the work of producing one or more of these items would not be exclusively engaged in producing one or the other of those, items and would be in the nature of a composite factory and yet it would definitely fall under s.1 (3)(a). Therefore in our opinion,' the argument that a composite factory carrying (in different industrial operations is outside the purview of s.1(3)(a) cannot be accepted. The next question which falls to be considered is whether the requirement that the workmen employed should be 50 or more, governs the word Industry or the word factor is under s. 1 (3)(a). The respondents' contention is that this numerical test must be satisfied by the industry and not by the factory. In other words, even if a composite factory is included in s.1(3)(a), before the provisions of the Act can be applied to it, it must be shown that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factories which have to satisfy two tests-(i) that the number of their employees should not be less than 50 and (ii) that they must be engaged in any such industry as is specified in Schedule I. This position has been placed beyond all doubt by the amended clause as it now stands as a proviso to s. 1(3)(a) and (b) after the amendment of 1956. This proviso reads that the Central Government, may, after giving not less than two months' notice of its intention so to do, by notification in the Official Gazette, apply the provisions of the Act to any establishment employing such number of persons less than fifty as may be specified in the notification. This proviso makes it absolutely clear that the requirement as to the number of the employees applies to the establishment and not to the industry. We may incidentally and that the requirement of fifty has now been reduced to twenty by the Amending, Act 46 of 1961). There is yet another provision in the Act which supports the same conclusion. Section 19A provides, inter alia, that if any difficulty arises in giving effect to the provisions of the Act, and in particular, if any doubt arises as to whether 50 or more persons are empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the specified industry. But each if undertaking is merely for the purpose of feeding its major activity; it is subsidiary, incidental and minor. In that case, the factory cannot be said to be engaged in the industry specified in Schedule 1. Both construction,% are possible and each one of them presents some anomalies. On the first construction, it would follow that even if half a dozen employees are engaged by the factory in regard to its activity in the industry specified in Schedule 1, the provisions of the Act would apply to all the workmen engaged in the whole of the factory because the factory would be deemed to have satisfied the test that it is engaged in the industry specified in Schedule I and that, no doubt, looks anomalous. On the other hand if the second construction is accepted, though more then 50 persons may be employed in the incidental and subsidiary activity relating to an industry specified in Schedule I, the provisions of the Act will not apply to such workmen because the factory, as a whole, does not satisfy the test that it is engaged in the said industry and that also is anomalous. It is true that in dealing with the construction of a clause w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the factory is engaged in the industry specified in Schedule 1. The fact that the factory engaged in other industrial activities will not necessarily take it out of the purview of s.1(3)(a). The broad test which may safely be applied in dealing with this question is: is the factory engaged in the industry specified in Schedule I from a business point of view?, and the answer to this question would generally give a satisfactory solution to the problem posed by s. 1(3)(a). Whether or not a factory is engaged in any industry specified in Schedule I would, thus, be a question of fact to be determined in the facts and circumstances of each case. That appears to be the view taken by Balakrishna Ayyar J. in the Madras Pencil Factory by its Properties v. Perumal Chetty Sons by its partner V. Ananthakrishna Chetty v.The Regional Provident Fund Commissioner,( A.I.R.. 1959 Mad. 235) and with the view we are in general agreement. What remains now is to consider whether the High Court was right in holding that the company and the Mills are outside the purview of s.1(3)(a). As we have already seen, company carries on four different kinds of industrial activities, one of of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position with regard to the Mille is, however, different. The main industrial activity of the Mills is the manufacture of hydrogenated vegetable oil named 'Vanasada' and its by-products, such as soap, oil-cakes etc. It 'is true that in the mills tin containers are fabricated and this, no doubt, is an activity covered by Schedule I. But it is obvious that this branch of the activity of the mills forms a very minor portion of its activity. The number of employees engaged in this branch is 31, whereas the total number of employees is 211. Besides; the containers are produced only for the use of the Mills. They, were not intended to be sold in the market at ill. Price for the containers is not also charged from the customers. Indeed, containers are required even for the purpose of storage of the vegetable oil. It is thus clear that the fabrication of tin containers has been undertaken by the Mills only as a feeder activity ; it is integrally connected with its main business of producing and marketing vegetable oil and as such, it is a minor part of the said activity. Having regard to the relevant facts admitted or proved in the present case, we are satisfied that the Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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