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TMI Blog1984 (12) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... g the said conclusions In these appeals, Since the question of law is common, all these appeals are being disposed of by a common judgment. 2. Sri IA Naidu, learned counsel for the Corporation that the Act, in the first instance was made applicable to all factories including those belonging to the Government other than the seasonal factories. The State Government of Andhra Pradesh issued the notification on complying with the conditions precedent prescribed in Section 1(5) of the Act by publication in the official Gazette extending the provisions of the Act to the responded firms in G.O. Ms. No. 297 and Clause (1) thereof would apply to the respondents. The respondents employed, as found by the Court, not less than ten and not more than twenty persons and they are manufacturing garments and for ironing the clothes thus stiched they took the aid of the power. Therefore it is a 'factory' within the meaning of Section 2(m) of the factories Act. It committed error of law in holding that there is no intimate connection between the stitching of clothes and ironing of the manufactured clothes. The Court committed error in arriving at this finding on the premise that ironing with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to make provisions for certain other matters in relation thereto. Under section 1(4), the Act was made applicable in the first instance to all factories inclusive of those belonging to the Government other than seasonal factories. Power was relegated to the appropriate Government after complying with the conditions precedent prescribed under Section 1(5) to issue a notification published in the official Gazette extending the provisions of the Act or any part thereof to any "other establishment" or class of establishments-industrial, commercial, agricultural or "otherwise". Therefore, the animation of the Act is of wide amplitude to encompass within its ambit not only the factories except the seasonal one, but also establishments which undertake industrial, commercial, agricultural ventures or otherwise. In exercise thereof, the notification in G.O. Ms. 297 was issued by the State Government of Andhra Pradesh. Clauses (1) and (3) of the notifications are relevant for the purpose of this case and they read thus: "(1) Any premises including the precincts thereof whereon "ten or more persons but in any case less than twenty persons" are employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on,-- but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1951) or a mobile unit belonging to the armed forces of the Union, a railway running shed or a hotel, restaurant or eating place. Explanation : For computing the number of workers for the purposes of this clause all the workers in different-relays in a day shall be taken into account. "Employee" means any person employed for wages in or in connection with the work of a factory or establishment to which the Act applies, etc... (Section 2(9) of the Act). 7. It is therefore clear that the State Government while exercising the power under Section 1(5) of the Act, adopted the definition of Section 2(m), (i) of the Factories Act as clause (1) of the notification in the G.O. and made to be an establishment under the Act. Therefore, for its applicability, there must be : (1) ten or more persons are employed or were employed in an establishment under the Act for wages on any day of the preceding twelve months; and (2) manufacturing process must be carried on with the aid of the power in the premises including the precincts or part thereof. The finding of the Court is that admittedly th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it......" At page 679, it is stated that a manufacturing establishment includes all its essential parts. In order that a particular article or class of articles should constitute a part of a manufacturing establishment it is not essential that they be actually employed in the process of manufacture. Under the caption "Material Used', at page 681, it is stated that the material entering into the finished product may pass through many stages of manufacture before the completed article is produced, since the complicated structure of the modern industry is such that very few manufacturers create out of an original raw material a finished product ready for the ultimate consumer and it is a familiar fact that that which is the finished produce of one manufacturer becomes in turn the so-called raw material or another manufacturer. At page 686, it is stated that ordinarily the product takes a different form, although alight change of form may be sufficient, and when labour is bestowed on an articles so that a new form or new combinations result, the process of manufacture has taken place. It is not necessary, however, that the component materials should have been changed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be successful and the product should be manufactured. The period between 3-3-1969 and 21-2-1970 cannot be considered as a period when merely an experiment being carried out without reference to manufacture. The appellant is liable to cover the employees by insurance during that period." 11. In VH Kotecha v. RI of Factories a Division Bench of this Court speaking through Jaganmohan Reddy, J. (as he then was) was to consider a case where ghee was collected by various intermediaries from several place, it was poured into a big can and heated. The ghee from the melting pot was sampled and analysed chemically and it was then poured into tins and sealed and sealed tins were sent for sale. When it was contended that there was no manufacturing process, it was held that this process involved not only packing, but also treating or adapting any article or substance with a view to its transport and sale and clearly came within the definition of manufacturing process, in that context, the Division Bench has further held that it is difficult to find out a mere comprehensive definition of manufacturing process than what is mentioned in this clause (Clause (k) of Sec 2 of the Factories Act). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on a Division Bench judgment of the Madras High Court reported in V. Md. Haneed & Co. v. E.S.I. Coron, AIR 1969 Madras 155, The question arose in that case was whether tannery is a factory within the meaning of Section 2(12) of the Act. Water was pumped with the aid of the power for the subsequent manufacturing purposes. The Division Bench has held that in the case of tannery, the mere use of power for pumping water which is used for the subsequent manufacturing purposes cannot be described as the use of power in the manufacturing process so as to bring the tannery within the definition of 'factory' under the Act. In that case, the facts were that water utilised in the process is lifted by power from a well into a tub and from there it is taken through channels and pipes to the tanning premises, in the light of those facts, the Division Bench has interpreted the word 'Manufacturing process' carried on with the aid of power, thus: "In this case power comes into the picture only in that the water is lifted from a well situated outside the establishment by electric power and stored in tubs and there from the water is diverted into the establishment, the wat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not a "manufacturer" in the popular sense of the word. It is stated at page 697, thus: "While the literal definition of manufacturer" would include a tailor, in the popular sense of the term, a merchant tailor is not a manufacturer, and this has been so held regardless of the mere amount of business done and the mere mariner of transacting it. Accordingly, the plane where the tailoring business is conducted has been held not a manufacturing establishment. However, the rule that a merchant tailor is not a manufacturer has been subject to criticism, and at least in a case it has been held that under certain conditions a tailor may be a manufacturer. It has been held that the making of wearing apparel by machines driven by electric power is a manufacturing purpose." (Emphasis supplied). 20. Usha Prints India (P) Ltd. v. ESI Corpn. AIR 1964 Bombay 94 is a case directly arose under the Act. There, the Division Bench has held that; "Where a factory uses electrical energy for the purpose of ironing cloth, though ordinarily mere use of electrical energy may not be regarded as a bringing the case under the Act, since the Factories Act defines the word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true that Mittal J in M/s. Raison Tailor case (supra) while holding that Clause (1) applies to the facts, held that master tailoring firm is a shop coming within the meaning of Clause (3) of the notification and unless twenty persons are employed as contemplated thereunder, the Act has no application. The question is whether such a construction is feasible or permissible? 23. The Act is post independent but pre constitutional one. The object thereof is to provide certain benefits to employees in case of their sickness, maternity and employment injury and other matters relating thereto. It is a welfare legislation to protect the health and strength of the workers envisaged under Art. 39(e) of the Constitution 24. In Royal Talkies, Hyderabad v. ESI Corporation AIR 1978 SC 1478 while considering the provisions of the Act, Krishna Iyer, J speaking for the Court, held at page 1481 in paragraph 9, that social orientation protective purpose and human coverage of the Act are important considerations in the statutory construction, more weighty than mere logomachy or grammatical nicety, it was further held that to decide the meaning of a welfare measure a feeling for the soul of the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke every part effective harmonious and sensible...... The Court must construe the statute in this manner, for by failing to do so, the statute is not considered in its entirety and the intention of the legislature is likely to be defeated. The legislative intent is just as apt to be lost where a word, phrase or sentence of statute is rejected as where they are considered separate and apart from the rest of the statute". 27. In Hill v. William Hill (Park Lane) LD. (1949) Appeal Cases 530 the House of Lords were called upon to consider Section 18 of the Gaming Act. Sub section (1) declares the contract on wagery as null and void and sub section (2) prohibits to grant a relief on the basis of such a contract. It was contended that sub section (2) is only a procedural character and it is a surplusage since the contract itself was declared to be void under sub-section (1) While considering that question, majority of the learned Law Lords have rejected that contention and held that each sub-section should be allowed to have its own play. Viscount Simon considered this question at pages 546-547 and held thus : "When the legislature enacts a particular phrase in a statute the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section was given effect to. It is thus settled law that the Court would endeavour to construe each clause and find whether the relevant one would apply to the facts of the given case and when it got attracted, it must be given effect to. 29. Keeping in view of this settled position of law, let us consider Clauses (1) and (3) of the notification. It is already seen that Clause (1) apply when ten or more persons are employed or were employed in an establishment in which manufacturing process is carried on with the aid of the power. It is already held that though power was/is not used to stitch clothes or garments, yet the respondents adopted to iron them with the aid of power for ornamentation or giving elegant appearance to the stitched cloths as finished product to use them and to enhance the goodwill of the tailoring firm. Thereby ironing the clothes with the aid of power became an internal part of manufacturing process though no new product has emerged. Therefore, Clause (1) directly applies to the facts in this case. It is thereby needless to consider the applicability of Clause (3) which intended to apply altogether to different circumstances. A Division Bench of this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G.O. If it was intended that the expression 'shop' should carry the same meaning as in the Andhra Pradesh Shops and Establishments Act, the item would have been worded in a manner similar to item 6 making express reference to Section 2(21) of the A.P. Shops and Establishments Act' For these reasons we agree with the court below that the definition of 'shop' in the Shops and Establishment Act cannot govern the meaning of the word 'shop' occurring in item 3 of the impugned G.O." 30. Following that decision, the necessary conclusion is that the definition of the word 'shop' under the Shops Act cannot be applied to the Act. But however, as pointed out thereunder, that the general criteria of a 'shop' should also get attracted to the shop under the Act. But in view of the finding that Clause (1) gets attracted, it is unnecessary to go into that question. In view of the above consideration, we have to hold that the learned single Judge (Mittal, J.) in M/s. Raison Tailors case (Supra) has not decided the case correctly. Therefore we express our respectful dissent to his view. We, therefore, hold that the respondent-firm in each case is an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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