CIVIL WRIT JURISDICTION CASE No.9007 OF 1999 ******* In the matter of an application under Article 226 of the Constitution of India. ******* M/S LOWTAN & CO., Gun Factory, Jail Compound Munger- 811201, Bihar through its Proprietor, Sri Subodh Kumar Sharma. …….. Petitioner. Versus 1. THE PRESIDING OFFICER, Employees Provident Appellate Tribunal, New Delhi. 2. Assistant Provident Fund Commissioner, Adampur Chowk, Adampur Chowk, Bhagalpur-812001. ….. Respondents. ----------- For the Petitioner: Mr. Shivajee Pandey, Sr. Advocate with Mr. Nalin Vilochan Tiwary, Advocate For the Respondents: Mr. R.S. Pradhan, Sr. Advocate with Mr. Amrendra Narain Rai & Mr. Sanjeev Nikesh, Advocates. P R E S E N T THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR THE HON'BLE MR. JUSTICE BIRENDRA PRASAD VERMA ******* S.K. Katriar, J. This writ petition is directed against the order dated 1.7.1999 (Annexure-2), passed by respondent no.1, whereby the appeal has been rejected on the ground of limitation, and the order dated 25.2.1998 (Annexure-1), passed by respondent no.2, has been upheld. It has been held that the petitioner is covered by the provisions of the Employees‟ Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as „the Act‟). 2. A brief statement of facts essential for the disposal of this writ petition may be indicated. The petitioner is engaged in the 2 manufacture of guns on the strength of a valid licence at Munger. It had deposited the employees‟ contribution under the Act for the period 31.7.1972 to 31.12.1980, whereafter it stopped depositing its contribution. The periods January 1981 to May 1986, and June 1986 to November 1997, are involved in the present proceedings. The matter was then raised before respondent no.2 in terms of Section 7A of the Act. Respondent no.2 held that the petitioner has been employing 23 employees, had deposited the provident fund contribution of its employees for the period 31.7.1972 to 31.12.1980, and is „establishment‟ within the meaning of section 1(3) of the Act, read with Schedule-I thereto. In other words, it has been held that the petitioner is engaged in the manufacture of a product which is covered by the relevant entry in Schedule-I, namely, electrical, mechanical or general engineering products. Respondent no.2 relied on the judgment of a learned Single Judge of this Court in M/s. Girilal & Co., Gun Factory Vs. Union of India and others, reported in 1997 (2) P.L.J.R. 739= 1998 (1) B.L.J. 651. 2.1) Aggrieved by the order of respondent no.2, the petitioner preferred statutory appeal before respondent no.1 which has been rejected by the impugned order. Hence this writ petition at the instance of the petitioner. 3. Before we proceed further, we may indicate that, by order dated 21.4.2000, passed in the present writ petition, a learned 3 Single Judge of this Court noticed difference of opinion between the two decisions of this Court, namely, the judgment dated 15.10.1993, passed in Criminal Appeal No.79 of 1981 (The Sarkar through Shri D.K. Bhattacharya, Provident Fund Inspector, Bihar, Patna Vs. Jhunni Lal Sharma), and the judgment in M/s. Girilal & Co., Gun Factory vs. Union of India and others (supra), both rendered by the learned Single judges of this Court. It has been held in the former decision of this Court that an establishment in the nature of the petitioner herein is not covered by the provisions of the Act. On the other hand, it has been held in the latter judgment that it is covered by the provisions of the Act. Therefore, a learned Single Judge of this Court has referred the matter for the consideration of a Division Bench. That is how the matter comes up before us. 4. While assailing the validity of the impugned order, learned counsel for the petitioner submits that the petitioner‟s item is not covered by the expression “electrical, mechanical or general engineering products”, inter alia, for the reason that it is not engaged in any mechanical act. Manufacture of guns in the petitioner-factory is only an act of assemblage. In other words, it is a nut-and-bolt industry. He relies on the judgment of a learned Single Judge of this Court in the Sarkar through Shri D.K. BhattacharyaVs. Jhunni Lal Sharma (supra). He submits that, if the learned Single Judge in M/s. Girilal & Co., Gun Factory vs. Union of India (supra), 4 disagreed with the view taken in Sarkar through Shri D.K. Bhattacharya vs. Jhunni Lal Sharma (supra), the appropriate course was to refer it to a Division Bench to resolve the conflict. He next submits that respondent no.2 in his order failed to decide both the vital issues of facts, namely, whether the petitioner is engaged in mechanical act of production of guns, and whether or not the petitioner has employed twenty or less than twenty number of workers. He, therefore, submits that the matter may be remitted to the learned first authority for adjudication on facts. 5. Learned counsel for the respondents has supported the order of respondent no.2. He submits that the decision of learned Single Judge in M/s. Girilal & Co., Gun Factory Vs. Union of India (supra), has been correctly decided. It has been so decided after taking into account the relevant provisions of law, relevant rules, and the authoritative pronouncement of the Supreme Court in the Regional Provident Funds Commissioner, Punjab vs. Shibu Metal Works (AIR 1965 S.C. 1076), which raised identical issues. He lastly submits that even though the learned Single Judge in M/s. Girilal & Co., Gun Factory Vs. Union of India (supra), erred in distinguishing the decision of another learned Single Judge in Sarkar through D.K. Bhattacharya vs. Jhunni Lal Sharma (supra), and ought to have referred the matter to a Division Bench, but it does not detract from the correctness of his decision. Secondly, the learned 5 Single Judge in the present case has after all referred the view taken in the two decisions by order dated 21.4.2000, and the issue is now at large before the present Bench. 6. We have perused the materials on record and considered the submissions of learned counsel for the parties. When the matter was taken up by respondent no.2, the petitioner had before it the aforesaid three decisions. The issue and the controversy, if any, by that time had fully crystallized, and the petitioner was expected to be aware of the requirements of law. It appears to us from a perusal of the order of respondent no.2 that it did not raise the important issues, namely, whether or not it is engaged in mechanical act and, secondly, whether or not it was employing twenty or less than twenty persons in a factory within the meaning of the Factories Act. This has to be seen in the background that the petitioner had already submitted to the jurisdiction of the Act for the period 31.7.1972 to 31.12.1980. This is not to suggest that it was not open to the petitioner on legal advice to alter its stand. In other words, we do say that it was open to the petitioner to alter its stand after December 1980, on correct legal advice but it is evident that, in view of the foregoing discussion there was heavy onus on the petitioner to establish on facts as well as in law that it is not covered by the relevant provisions of the Act read with the relevant provisions of the Factories Act. It is manifest on a perusal of the materials on record that the petitioner completely failed 6 to raise these vital issues before respondent no.2. The irresistible conclusion, as has been rightly recorded by respondent no.2, is that the petitioner is engaged in mechanical act of production of guns and it has engaged twenty or more workers all through. 7. We now notice the relevant provisions of law relevant in the present context. „Factory‟ has been defined in section 2(m) of the Factories Act 1948, and is reproduced hereinbelow: “2. Interpretation.- In this Act, unless there is anything repugnant in the subject or context,- xxxx xxxx xxxx xxxx xxxx xxxx (m) “factory” means any premises including the precincts thereof- (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or (ii) Whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,- but does not include a mine subject to the operation of 4[the Mines Act, 1952 (35 of 1952), or 5[a mobile unit belonging to the armed forces of the Union, railway running shed or a hotel], restaurant or eating place]. 2[Explanation 6[I] - For computing the number of workers for the purposes of this clause all the workers in 7[different groups and relays] in a day shall be taken into account;] 8[Explanation II.- For the purposes of this clause, the mere fact that an Electronic Data Processing Unit or a Computer Unit is installed in any 7 premises or part thereof, shall not be construed to make it a factory if no manufacturing process is being carried on in such premises or part thereof;]”. The petitioner‟s case is covered by clause (ii) of section 2(m) of the Act, which provides that the petitioner should have engaged twenty or more workers on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on. It has been found hereinabove that the petitioner was admittedly engaging twenty or more workers during the preceding 12 months. Secondly, the expression „manufacturing process‟ has been the subject-matter of a large numbers of decisions of the Supreme Court as well as High Courts, the substance of which is that if the product being manufactured in the factory is known to the commercial world as a different and distinct product from its raw material, then it is said to have undergone a manufacturing process. The Courts have gone to the extent of stating, for example, in the cases of mica that if the pieces of mica received in the factory from mines subjected only to cleaning and grading of the same, and is given a brand name, it has been held by the Courts to be a product different and distinct from its raw material known to the commercial world. In the present case, the guns that the petitioner produces, even if it were essentially an act of assemblage of parts, it is known to the commercial world as a different and distinct product from its components. 8 8. Section 1 (3) of the Act reads as follows: “1. Short title, extent and application.- xxx xxx xxx xxx xxx xxx (3) Subject to the provisions contained in Sec. 16, it applies,- (a) to every establishment which is a factory engaged in any industry specified in Sch.1 and in which 6[twenty] or more persons are employed, (b) to any other establishment employing 6[twenty) or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf: Provided 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 this Act to any establishment employing such number of persons less than 6[twenty] as may be specified in the notification.]” It is evident on a bare perusal of the relevant provisions of this Act that, in order that an establishment is taken to be within the meaning of section 1(3) of the Act, it should be a factory obviously within the meaning of section 2(m) of the Factories Act, as well as one or the other of the industries specified in Schedule-I thereto, in which twenty or more persons are employed. This position is surely consistent with the definition of „factory‟ in the Factories Act. 8.1) Section 2(i) of the Act is also relevant in the present context and is reproduced hereinbelow: 9 2. Definitions. - In this Act, unless the context otherwise requires,- xxx xxx xxx xxx xxx xxx (i) “industry” means any industry specified in Sch.1, and includes any other industry added to the schedule by notification under Sec.4.” This has to be read with Schedule-I, the relevant portion of which is reproduced hereinbelow: SCHEDULE I [See Secs. 2(i) and 4] Any industry engaged into the manufacture 1[***] of any of the following, namely: xxx xxx xxx xxx xxx xxx Electrical, mechanical or general engineering products xxx xxx xxx xxx xxx xxx 21[Explanation.- in this Schedule, without prejudice to the ordinary meaning of the expression used therein,- (a) the expression “electrical, mechanical or general engineering products” includes.- (1) machinery and equipment for the generation, transmission, distribution or measurement of electrical energy and motor including cables and wires, (2) telephones, telegraph and wireless communication apparatus, (3) electric lamps (not including glass bulbs), (4) electric fans and electrical domestic appliances, (5) storage and dry batteries, (6) radio receivers and sound-reproducing instruments, (7) machinery used in industry (including textile machinery), other than electrical machinery and machine tools, 10 (8) boilers and prime-movers, including internal combustion engines, marine engines and locomotives, (9) machine tools, that is to say, metal and wood-working machinery, (10) grinding wheels, (11) ships, (12) automobiles and tractors, (13) bolts, nuts and rivets, (14) power-driver pumps, (15) bicycles, (16) hurricane lanterns, (17) sewing and knitting machines, (18) mathematical and scientific instruments, (19) products of metal rolling and re-rolling, (20) wires, pipes, tubes and fittings, (21) ferrous and non-ferrous castings, (22) safes, vaults and furniture made of iron or steel or steel alloys, (23) cutlery and surgical instruments, (24) drums and containers, (25) parts and accessories of products specified in terms 1 to 24] (b) the expression “iron and steel” includes pig iron, ingots, blooms, billets and rolled or re- rolled products into basic forms and tools and alloy steel; (c) the expression “paper” includes pulp, paper board and straw board; (d) the expression “textile” includes the product of carding, spinning, weaving, finishing and dyeing yarn and fabrics, printing, knitting and embroidering]. 9. These provisions fell for the consideration of the Supreme Court in the Regional Provident Funds Commissioner, Punjab vs. Shibu Metal Works (supra). That was a case where the establishment in question was manufacturing brass utensils, drums etc. The question arose whether or not the respondents were engaged in manufacture of a product which was within the meaning of the 11 expression “electrical, mechanical or general engineering products”. Paragraph 22 of the judgment is reproduced hereinbelow: “(22) 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.I is to include within the scope of the Act every industry which is engaged in the manufacture of electrical engineering products, mechanical engineering 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.” It is evident, according to the authoritative pronouncement of the Supreme Court, that gun, the product in question is known to the commercial world as a mechanical engineering product. No evidence to the contrary has been led by the petitioner before the forum of facts. It is thus manifest that the guns 12 manufactured in the petitioner-factory are covered by the provisions of the Act. 10. Law is well settled that, while interpreting a beneficent legislation, the Court should always strive to construe the enactment which advances the aims and objects of the Act to the advantage of the subjects to whom it seeks to govern, rather than to put technical obstruction which would defeat the aims and objects of the Act. In other words, no problem arises where the provisions of law admit of only one view. In other words, in case of doubt or difficulty, the Court should lean in favour of extension of benefits under the Act towards the persons to whom it seeks to cover. 11. In view of the foregoing discussion, we reach the conclusion that the view taken by the learned Single Judge in M/s. Girilal & Co., Gun Factory vs. Union of India (supra) is the correct view of law based as it is on an accurate interpretation of the relevant provisions of the Act, and on the basis of the authoritative pronouncement of the Supreme Court. We do not agree with the view taken by the learned Single Judge in the Sarkar through Shri D.K. Bhattacharya Vs. Jhunni Lal Sharma (supra). The same does not take the correct view of law, does not notice at all the relevant provisions of the Act, nor the judgment of the Supreme Court, and is hereby over-ruled. We are of the view that the petitioner is covered by the provisions of the Act. 13 12. In the result, this writ petition is dismissed, and the order dated 25.2.1998 (Annexure-1), passed by respondent no.2, is hereby upheld. In the circumstances of the case, there shall be no order as to costs. (S K Katriar, J.) Birendra Prasad Verma, J. I agree. (Birendra Prasad Verma, J.) Patna High Court, Patna. Dated the 18th day of November, 2010. S.K.Pathak/(AFR)