Appeal No 1059 of 1963
Appeal from the judgment and order dated April 10 1962 of the Punjab High Court in LP Appeal No 312 of 1959
B Sen and R N Sachthey for the appellant
C B Agarwala J B Dadachanji O C Mathur and Ravinder Narain for the respondent
The Judgment of the Court was delivered by Gajendragadkar CJ
This appeal raises a short question as to the content of the entry Electrical Mechanical or general engineering products used in Schedule 1 to the Employees  Provident Fund Act 1952 No 19 of 1952 hereinafter called the Act
The respondent firm Shibu Metal Works runs a factory which manufactures brass utensils
Under the Act and the scheme framed thereunder the employer to whose factory the Act applies is required to deposit with the appellant the Regional Provident Commissioner his share of the contribution as well as that of the employees coupled with the administrative charges within 15 days of each succeeding month
It appears that the respondent had been making such deposits in the past
If the employer makes a delayed payment the Government is entitled to impose damages not exceeding 25 per cent of the amounts payable by the employer
In respect of the period between June 1955 to October 1955 and for the months of June August September and November 1956 delayed payments were made by the respondent
Thereupon the appellant called upon the respondent to pay the damages
The respondent in turn made explanations and contended that there was really no delay in the making of payments in regard to some months and in respect of the others where delay was admitted it claimed that the same should be condoned
The appellant did not accept either of the pleas raised by the respondent and demanded the payment of damages
That led to the present writ proceedings commenced by the respondent in the High Court of Punjab
In its writ petition filed on the 3rd November 1958 the respondent contended that the appellant was not entitled to recover either the contributions alleged to be due under the Act or Sup65 6 74 damages alleged to be due on the ground that there was delay in payment because the manufacture of brass utensils which was the work carried on in the respondents factory did not come within the purview of the Act
On this ground the respondent urged that the demand made by the appellant was illegal ultra vires and without jurisdiction
The writ petition asked for the issue of a writ of mandamus restraining the appellant from recovering any amount from the respondent under the Act
The appellant resisted the writ petition and urged that the entry Electrical Mechanical or general engineering products included manufacture of brass utensils and so the respondent s factory fell within the purview of the Act
The appellant also urged that if the respondent entertained any doubt as to the applicability of the Act to its factory it should have approached the Central Government for removal of the doubt and not rushed to the court for a judgment
The learned Single Judge who heard the writ petition held that the manufacture of brass utensils fell within the provisions of the relevant entry in Sch 1 because in his opinion the said utensils were in substance drums and containers
He therefore held that the appellant was entitled to demand from the respondent the deposit of the contributions as prescribed by the Act
He however took the view that the demand for damages made by the appellant was not justified
On these findings the writ petition was partly allowed in that a writ was issued against the appellant restraining him from making a demand for the payment of damages
In regard to the claim made by the respondent that it was not liable to deposit the contributions under the Act the learned Judge held that the said claim was not justified
The respondent then preferred an appeal under the Letters Patent before a Division Bench of the Punjab High Court
The Letters Patent Bench has upheld the respondent s contention that the manufacture of brass utensils does not fell within the entry Electrical Mechanical or general engineering products enumerated in Sch 1 to the Act
In the result the respondents appeal was allowed and a writ was issued against the appellant in terms of the prayer made by the respondent in its writ petition
The appellant then moved the said High Court for a certificate and with the certificate granted to him he has come to this Court in appeal
That is how the only question which arises for our decision is  what is the true content of the entry Electrical Mechanical or general engineering products included in Sch 1 of the Act 75 Before dealing with this point it would be relevant to refer briefly to the broad features of the scheme prescribed by the Act and its purpose
This Act was passed in order to provide for the institution of provident funds for employees in factories and other establishments
Section 1 sub section 3 originally provided that subject to the provisions contained in section 16 the Act would apply a to every establishment which is a factory engaged in any industry specified in Sch 1 and in which 50 or more persons are employed and b to any other establishment employing 50 or more persons or class of such establishments which the Central Government may by notification in the Official Gazette specify in that behalf Mere is a proviso to this subsection which it is unnecessary to set out
Later in 1960 the requirement that 50 workmen should be employed has been modified and now the employment of 20 workmen is enough to attract the application of the Act
Section 2g defines a factory a  any premises including the precincts thereof in any part of which a manufacturing process is being carried on or is ordinarily so carried on whether with the aid of power or without the aid of power
This shows that if the test prescribed by section 13 is satisfied and the undertaking is shown to be engaged in a manufacturing process the Act applies
It makes no difference to the applicability of the Act that in a given factory the manufacturing process is carried on without the aid of power
It is the manufacturing process which is the decisive factor
Section 1 defines industry as meaning any industry specified in Sch 1 and includes any industry added to the Schedule by notification under section 4
This definition shows how entries in Sch 1 assume significance
Whenever a question arises as to whether any industry is governed by the Act the answer is to be found by looking at Sch
It is also clear that additions can be made to Sch 1 from time to time by notification by the Central Govern ment
Section 4 specifically confers this power on the Central Government
It provides that the Central Government may add any industry to Sch 1 and it lays down that after the notification is issued by the Central Government in that behalf the industry so added shall be deemed to be an industry specified in Sch 1 for the purposes of the Act
Section 42 provides a safeguard by requiring that notifications issued under sub section 1 shall be laid before Parliament as soon as may be after they are issued
Section 5 is the key section of the Act and it provides for the institution of Employees  Provident Fund Schemes
It is not necessary for our purpose to refer to the details of these schemes
It would thus be seen that the basic purpose of the Act is to 76 require that appropriate provision should be made by way of provident fund for the benefit of the employees engaged in establishments to which the Act applies
Rules made for the institution of the funds provide for contribution both by the employees and the employers and there can be little doubt that the purpose intended to be achieved by the Act is a very beneficent purpose in that it assures to the employees concerned the payment of specified amounts of provident fund in due time
Schedule 1 which plays a decisive role in the determination of the question as to whether an industry falls under the provisions of the Act originally contained six entries
It provided that any industry engaged in the manufacture or production of the six items mentioned therein shall be an industry for the purpose of the Act
The words or production were deleted in 1953 and now the entry refers to any industry engaged in the manufacture of the items mentioned in Sch 1
Amongst the items thus inserted was Electrical Mechanical or general engineering products
 Just as the requirement as to the number of workmen whose employment would bring the establishment within the scope of the Act has been liberalised and 50 has been brought down to 20 so the items listed in Sch 1 have also been expanded and several additions have been made in that behalf
The object of the Act clearly was to proceed to make provision for the provident fund for the benefit of industrial employees in a cautious and pragmatic manner and that explains how and why the Central Government has slowly and gradually but progressively been expanding the scope of the applicability of the Act to different branches of industry
The process of making additions to Sch 1 has been proceeding apace and one has merely to look at the items which have been listed in Sch 1 by several additions up to the 15th of May 1964 to realise how the scope of Sch 1 has been considerably expanded
The question as to what exactly is the content of the entry with which we are concerned has been considered by different High Courts from time to time and we would very briefly indicate what the effect of these decisions is in order to illustrate how the approach adopted by the Courts in interpreting this entry has not been uniform
In Regional Provident Commissioner UP Kanpur vs Ms Great Eastern Electroplator Ltd1 a Division Bench of the Allahabad High Court held that an electric torch case is receptacle in which the torch batteries are kept and it is therefore a container within the meaning of item 24 of the 1 AIR 1959 All 133 77 Explanation to Sch 1 and is or must be deemed to be an electrical mechanical or general engineering product
We ought to add that in 1953 an Explanation has been added to Sch 1 for the purpose of indicating what items would fall under the entry Electrical mechanical or general engineering products
Amongst the items listed under the Explanation item 24 is drums and containers 
The Division Bench of the Allahabad High Court reversed the view taken by the learned single Judge of the said High Court and came to the conclusion that an electric torch case is a container within the meaning of item 24 in the Explanation to which we have just referred
This decision of the Divi sion Bench was brought to this Court in appeal No 580 of 1960 decided on 18th December 1962 and this Court took the view that the conclusion reached by the Division Bench that an electric torch case is a container within the meaning of item 24 of the Explanation to Sch
1 was right
In the Nagpur Glass Works Ltd vs Regional Provident Fund Commissioner 1 the Bombay High Court has held that burners or metal lamps were products which fell within the Schedule under the entry Electrical mechanical or general engineering products 
In Haji Nadir Ali Khan and Others vs The Union of India and Others2 Falshaw J as he then was took the view that musical instruments whether made of metal or otherwise though not mentioned specifically in Sch 1 fell within the scope of the expression electrical mechanical or general engineering products
In Hindustan Electric Co Ltd vs Regional Provident Fund Commissioner Punjab  Anr
3 Grover J of the Punjab High Court similarly held that stoves would fall within the expression in question
In Madras in T R Raghava Iyengar and Co vs The Regional Provident Fund Commissioner Madras 4 Jagadisan J has taken the view that the conversion of metal sheets and circles into vessels results in products of metal rolling and re rolling within the meaning of the Schedule to the Act and so an industry for the purpose of manufacturing vessels and utensils out of brass and copper sheets and circles is covered by the Act
In The Regional Provident Fund Commissioner Bombay vs Shree Krishna Metal Manufacturing Co Bhandara and Oudh Sugar Mills Ltd
1 one of the points which arose for the decision 1 ILR 2 AIR 1958 Pun
3 AIR 1959 Pun
4 AIR 1963 Mad 238
5 1962 Supp 3 SCR 815
78 of this Court was whether the manufacture of metal circular sheets fell within Sch 1 and it appears that it was conceded by both the parties that the said work would fall within Sch 1 of the Act and so the Co carrying on the said work was a factory engaged in the industry which attracted the provisions of the Act
We have referred to these decisions only to illustrate how in dealing with different products the Courts have tried to interpret the entry in question it appears that in dealing with the products with which they were concerned in each case they did not adopt a uniform approach and the reasons given and the tests applied by them are not the same or similar
It is hardly necessary to add that we propose to express no opinion on the merits of the decisions to which we have just referred
Reverting then to the question of construing the relevant entry in Sch
1 it is necessary to bear in mind that this entry occurs in the Act which is intended to serve a beneficent purpose
The object which the Act purports to achieve is to require that appropriate provision should be made for the employees employed in the establishments to which the Act applies and that means that in construing the material provisions of such an Act if two views are reasonably possible the courts should prefer the view which helps the achievement of the object
If the words used in the entry are capable of a narrow or broad construction each construction being reasonably possible and it appears that the broad construction would help the furtherance of the object then it would be necessary to prefer the said construction
This rule postulates that there is a competition between the two constructions each one of which is reasonably possible
This rule does not justify the straining of the words or putting an unnatural or unreasonable meaning on them just for the purpose of introducing a broader construction
The other circumstance which has to be borne in mind in interpreting the entry is that the interpretation should not concentrate on the word products used in it
If this word had been used say for instance in the material provisions of the Sales tax Act the decision as to whether a particular product is liable to pay the tax would depend upon the consideration whether the pro duct in question falls within the scope of the said Act or not and in that context interpretation would naturally concentrate on the character and nature of the product in question
In the present case the entry takes us back to the first clause of Sch 1 which refers to any industry engaged in the manufacture of any of the products enumerated by the different entries in Sch
T So in 79 construing the relevant entry what we have to ask ourselves is  is the industry of the respondent engaged in the manufacture of any of the products mentioned in the entry  It is the character of the industrial activity carried on by the respondent s undertaking that falls to be determined and the question is not so much as to what is the product produced as what is the nature of the activity of the respondent s undertaking is the respondent s undertaking engaged in the manufacture of the products in question  This consideration is relevant for the purpose of determining the content of the entry
There is no doubt that the establishment of the respondent is a factory within the meaning of section 2 g and it would be an industry within the meaning of Sch 1 if its manufacturing activity is found to be an activity connected with the products enumerated in the entry
The entry refers to engineering products
It is therefore necessary to clear the ground by referring to the word engineering which qualifies the word products
To engineer according to the dictionary meaning is to act as an engineer or to employ the art of the engineer upon to construct or manage as an engineer
Engineering according to the Encyclopedia Britannica Vol 8 in its early uses referred specially to the operations of those who constructed engines of war and executed works intended to serve military purposes
Such military engineer  were long the only ones to whom the title was applied
But about the middle of 18th century a new class of engineers arose who concerned themselves with works which though they might be in some cases of the same character as those undertaken by military engineers as in the making of roads were neither exclu sively military in purpose nor executed by soldiers and those men by way of distinction came to be known as civil engineers
Thus civil engineering came to be known as the art of directing the great sources of power in nature for the use and convenience of man as the means of production and of traffic in states both for external and internal trade as applied in the construction of roads bridges aqueducts canals river navigation and docks for internal intercourse and exchange and in the construction of ports harbours moles breakwaters and lighthouses and in the art of navigation by artificial power for the purposes of commerce and in the construction and adaptation of machinery and in the drainage of cities and towns
p 444
Gradually however Specialisation set in
The first branch of engineering which received recognition as a separate branch was mechanical engineering
This branch is concerned with 80 steam engines machine tools millwork and moving machinery in general and it was soon followed by mining engineering which deals with the location and working of coal ore and other minerals
Subsequently numerous other more or less strictly defined groups and sub divisions came into existence they are  civil mining and metallurgical mechanical electrical chemical aeronautical and industrial
There are other less clearly defined branches of engineering such as sanitary structural drainage hydraulic highway railway electric power electrical communications steam power internal combustion marine welding production petroleum production fire protection safety architectural nuclear and management or administrative engineering p 448
It would thus appear that the area covered by engineering which was originally occupied only by military engineering is now split up into several sub areas which are covered by special branches of engineering known by special names
The entry in question refers to electrical and mechanical engineering and it is easy enough to determine what the denotation of these two expressions is
In the context general engineering  which is also mentioned in the entry must not be construed in a general comprehensive sense which the words may prima facie suggest because if that was the scope of the said words there was hardly any point in referring to electrical and mechanical engineering separately
Therefore we are inclined to hold that the expression general engineering does not include electrical or mechanical engineering which are specifically mentioned in the entry and it also does not include other branches of engineering which are known by specific or special titles
These specific branches of engineering have already been indicated by us by reference to the Encyclopaedia Britannica
After the first six entries had been included in Sch 1 in 1952 an Explanation was added to it in 1953 which purports to indicate what items are intended to be included in the entry Electrical mechanical or general engineering products
This Explanation consists of four clauses cl
a enumerates the items falling under the entry with which we are concerned in the present appeal whereas clauses b c and d afford similar explanation in regard to entries relating to Iron and Steel Paper and Textiles respectively
A glance at the items included in cl
a of the Explanation as well as the items included in clauses b c  d clearly shows that the object of the legislature in enacting the Explanation was to clarify the content of the respective entries 81 in Sch 1 to illustrate them by adding specific items and to enlarge their scope in some material particulars
The fact that an Explanation has been added with this purpose in 1953 must also be taken into account in construing the entry in question
Mr Agarwala for the respondent has contended that the learned single Judge was in error in holding that the respondent s industry was engaged in the manufacture of drums and containers specified as item 24 introduced in cl
a of the Explanation
He argues that the core of the entry is engineering products and while construing the entry the significance of this core should not be overlooked
According to him the entry really takes in engineering products like machinery and equipment for generation of electrical energy
He suggests that in determining the content of this entry we should ask ourselves what would this entry mean to an ordinary citizen in a commercial sense  It would mean that the products to which the entry refers are products which are useful in or meant for electrical engineering mechanical engineering or general engineering
This entry may also take in machines or their parts which are similarly useful in or meant for electrical mechanical or general engineering
If this narrow construction is accepted then of course production of brass utensils would be plainly outside the entry
There are however several considerations which suggest that this narrow construction cannot be accepted
As we have already indicated a glance at the items mentioned in cl
a of the Explanation and the extended meaning attributed to the respective entries covered by clauses b c and d of the Explanation clearly indicates that none of the said entries can be reasonably mad in that restricted manner
If this restricted interpretation is accepted then several items included in cl
a of the Explanation would be so completely foreign to the original content of the entry that their inclusion would appear to be unjustified
Take for instance item 15 in cl
a of the Explanation which is bicycles item 17 which is sewing and knitting machines item 22 which is safes vaults and furniture made of iron or steel or steel alloys or item 23 which is cutlery and surgical instruments
Clause a of the Explanation provides that these items should be included in the entry in question without prejudice to the ordinary meaning of the expressions used therein
If the narrow construction for which Mr Agarwala contends is accepted it would look unreasonable that the Legislature should have introduced these items under cl
a of the Explanation
Besides 82 this construction lays undue emphasis on the concept of products and erroneously treats engineering products as the core of the expression
What the entry really means is electrical engineering products mechanical engineering products or general engineering products and in determining the content of the entry we have to hark back to the relevant consideration that this entry is intended to describe an industry as falling within the scope of the Act if the said industry is engaged in the manufacture of the products in question
Now if we take the other entries which were initially included in Sch 1 the construction for which Mr Agarwala contends cannot obviously be applied in respect of them and so we think it would not be possible to adopt the narrow construction which Mr Agarwala has suggested for our acceptance
On the other hand Mr Sen for the appellant suggested that the proper way to construe this entry would be to hold that this entry would take in every industry which is engaged in the manufacture of products which are manufactured by electrical mechanical or general engineering process
This construction treats the process of production as the crux of the entry and if this construction were accepted the scope of the content of the entry would be very wide indeed
If every product whose production can be referred to one or the other of the processes mentioned in the entry is construed to fall within its content then several other entries in the Schedule would prima facie appear to be redundant because this entry itself would be comprehensive enough to take them in
In that case Explanation a which has been added in 1953 would itself appear to be without any purpose because most if not all of the items introduced by the said clause would be included within the original entry itself
In our opinion such a wide construction would not be justified because we are inclined to hold that it is not the process which is important in construing the entry as the character of the activity with which the industry is concerned
That is why we are not prepared to accent the very broad construction of the entry suggested by Mr Sen
The proper way to determine the content of this entry appears to us to be to hold that all products which are generally known as electrical engineering products or mechanical engineering products or general engineering products are intended to be covered by the entry and the object of Sch
1 is to include within the scope of the Act every industry which is engaged in the manufacture of electrical engineering products mechanical engineering 83 products or general engineering products
It is the character of the products that helps to determine the content of the entry can
the product in question be reasonably described as an electrical engineering product or a mechanical engineering product or a general engineering product  That is the question to ask in every case and as we have already indicated in considering the question as to whether the product falls under the category of general engineering product general engineering should be construed in the limited sense which we have already shown
It may be that in a large majority of cases the products included within the entry may be produced by electrical or mechanical or general engineering process but that is not the essence of the matter
The industrial activity which manufactures the three categories of products already enumerated by us brings the industry within the scope of Sch 1 and therefore attracts the application of the Act
If we bear in mind the three broad categories of products the manufacture of which brings the industry within the scope of Sch 1 it would be easy to appreciate the items enumerated in cl
a of the Explanation
Broadly stated items 1 to 6 can be said to be electrical engineering products 7 to 10 may be said to be mechanical engineering products and the rest general engineering products
We are free to confess that the inclusion of each one of these items in cl
a of the Explanation cannot be easily explained but on the whole it appears to us that the object of the Explanation was to clarify illustrate and expand the content of the entry in question in order that there should be no doubt as to the classes and categories of industry which were intended to be brought within the purview of the Act
Thus considered we think that the manufacture of brass utensils can easily be regarded as an activity the object of which is the manufacture of general engineering products
This interpretation is not as narrow as that suggested by Mr Agarwala nor as broad as that suggested to Mr Sen and on the whole it seems to fit in with the scheme of Sch
1 considered in the light of the object intended to be achieved by the insertion of the Explanation in 1953 and the subsequent additions made to Sch 1 itself
We are therefore satisfied that the Letters Patent Bench of the Punjab High Court was in error in holding that the respondent s factory did not fall within the scope of the material provisions of the Act
Incidentally we may add that before the present controversy arose between the respondent and the appellant it appears that the respondent had 84 been making deposits towards the Provident Fund as required by the Act
The result is the appeal is allowed the order passed by the Letters Patent Bench is set aside and that of the learned single Judge restored with costs throughout
Appeal allowed


Summary:
The respondent firm which ran a factory manufacturing brass utensils filed a Writ Petition for the issue of a mandamus restraining the appellant from recovering contributions alleged to be due under section 13 read with Schedule 1 of the Employees Provident Fund Act 1952 contending inter alia that the manufacture of brass utensils did not fall within the relevant entry in Schedule 1 ie it was not an industry engaged in the manufacture of electrical mechanical or general engineering products 
The learned Single Judge who heard the petition rejected the respondent s contention holding that brass utensils were in substance drums and containers  ie they fell within item 24 and cl
a of the Explanation to Schedule 1 and that therefore their manufacture was covered by Schedule 1
On appeal however the Division Bench reversed this finding and issued a writ as prayed for
it was contended on behalf of the respondent that the products to which the entry referred were products which were useful in or meant for electrical engineering mechanical engineering or general engineering
On the other hand it was the appellant s contention that the entry would take in every industry which was engaged in the manufacture of products that were manufactured by an electrical mechanical or general engineering process
HELD  In construing the relevant entry in Schedule 1 it was necessary to bear in mind that this entry occurred in an Act which was intended to serve a beneficent purpose
If the words used in the entry were capable of a narrow or broad construction each construction being reasonably possible and if it appeared that the broad construction would help the furtherance of the object then it would be necessary to prefer that construction
78 C F The nature of the items included in the Explanation to Schedule 1 clearly showed that some of the items could not reasonably be included within the restricted interpretation canvassed by the respondent on the other hand the mention of several of items would be redundant if the wide interpretation advocated by the appellant was to be accepted
81 B H 82 A F The content of the entry electrical mechanical and general engineering products  was that all products which were generally known as electrical engineering products or mechanical engineering products or general engineering products were intended to be covered by the entry and the object of Schedule 1 was to include within the scope of the Act every industry which was engaged in the manufacture of electrical engineering products mechanical engineering products or general engineering products
It was the character of the products that helped to determine the content of the entry
82 G H 83A 73 Thus considered the manufacture of brass utensils must be regarded as an activity the object of which was the manufacture of general engineering products
83 F Case law reviewed