Case: THE STATE OF MADHYA PRADESH &amp; ORS Vs. SOMDUTT SHARMA

25L. Definitions.- For the purposes of this Chapter,- (a) industrial establishment means— (i) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 (63 of 1948); (ii) a mine as defined in clause (i) of subsection (1) of section 2 of the Mines Act, 1952 (35 of 1952); or (iii) a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951 (69 of 1951). (emphasis added) 7. It is the case of the respondent that the Irrigation Department of the first appellant is an Industrial Establishment as it is a Factory as defined in clause (m) of section 2 of the Factories Act. 8. It is, therefore, necessary to consider the definition of Factory under clause (m) of section 2 of the Factories Act, which reads thus:- (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,- (emphasis added) An establishment cannot be termed as a factory unless it is carrying on manufacturing process. The manufacturing process is defined under clause (k) of section 2 of the Factories Act, which reads thus:- (k) manufacturing process means any process for— (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) pumping oil, water, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; (vi) preserving or storing any article in cold storage. (emphasis added) 9. We have carefully perused the findings recorded by the Labour Court as well as the High Court. In paragraph 9 of the Judgment, the Labour Court held that as hundreds of employees are posted in Irrigation Department, provisions of Chapter VB will apply. However, the crucial question whether the Irrigation Department of the first appellant is a factory within the meaning of clause (k) of section 2 of the Factories Act, is not considered at all. Even the learned Single Judge of the High Court has not adverted to this aspect. The Division Bench in paragraph 8 of its judgment observed that Irrigation Department is responsible for creation and maintenance of irrigation potential through construction of Water Resources Department. It is also mentioned that it also looks after the calamity management work. It is stated that as the Irrigation Department is pumping water and sewage, it will be governed by sub-clause (ii) of clause (k) of section 2 of the Factories Act. 10. The respondent has only relied upon sub-clause (ii) of clause (k) of section 2. The Irrigation Department, as noted in paragraph 8 of the impugned judgment and order, looks after creation and maintenance of irrigation potential through construction of water resources projects. The Irrigation Department also deals with disaster management, calamity management, maintenance of flood control works, reservoir operations etc. None of these functions will attract the definition of Industrial Establishment. Even assuming that some of the employees may be doing the work of pumping of water, that is not sufficient to hold that Irrigation Department of the first appellant is carrying on manufacturing process. Overall activities and functions of the Irrigation Department will have to be considered while deciding the question whether it is carrying on manufacturing activities. Few employees of the Irrigation Department out of several may be incidentally operating pumps. But the test is what are the predominant functions and activities of the said Department. Even if the activity of operation of pumps is carried on by few employees, the Irrigation department does not carry on manufacturing process. As it is not carrying on manufacturing process, it is not a factory within the meaning of clause (m) of section 2 of the Factories Act. Therefore, the Irrigation Department of the first appellant will not be an Industrial Establishment within the meaning of Section 25L. Accordingly, Chapter VB will have no application in the present case. 11. The learned counsel relied upon a decision of the Apex Court in the case of Sarva Shramik Sangh, Sangli (supra). In the facts of the said case, the employees were involved in activity of pumping of water and therefore, the said decision is of no help to the respondent. As regards compliance with clause (F) of section 25 of the ID Act, Annexure P-1 is a copy of the notice dated 28th January 2012 issued by the Executive Engineer of Sindh Project Pucca Dam Division. It is a notice under section 25F of the ID Act addressed to the respondent. It is stated therein that in compliance with section 25F, a sum of Rs. 36,361/- was being transferred to his bank account mentioned in the notice. This fact is specifically pleaded in ground 5F of this petition. There is no counter filed by the respondent denying the fact of payment of compensation in accordance with Section 25F. 12. The Labour Court as well the learned Single Judge and the learned Division Bench of the High Court have not adverted to the question whether the Irrigation Department of the first appellant is an Industrial Establishment within the meaning of Section 25L. There is no finding recorded that the Irrigation Department of the first appellant is doing manufacturing activity as provided in sub-clause (k) of Section 2 of the Factories Act.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the present case, there is no dispute that the Irrigation Department satisfied the test of having not less than hundred workmen employed on an average.9. We have carefully perused the findings recorded by the Labour Court as well as the High Court. In paragraph 9 of the Judgment, the Labour Court held that as hundreds of employees are posted in Irrigation Department, provisions of Chapter VB will apply. However, the crucial question whether the Irrigation Department of the first appellant is a factory within the meaning of clause (k) of section 2 of the Factories Act, is not considered at all. Even the learned Single Judge of the High Court has not adverted to this aspect. The Division Bench in paragraph 8 of its judgment observed that Irrigation Department is responsible for creation and maintenance of irrigation potential through construction of Water Resources Department. It is also mentioned that it also looks after the calamity management work. It is stated that as the Irrigation Department is pumping water and sewage, it will be governed by sub-clause (ii) of clause (k) of section 2 of the Factories Act.10. The respondent has only relied upon sub-clause (ii) of clause (k) of section 2. The Irrigation Department, as noted in paragraph 8 of the impugned judgment and order, looks after creation and maintenance of irrigation potential through construction of water resources projects. The Irrigation Department also deals with disaster management, calamity management, maintenance of flood control works, reservoir operations etc. None of these functions will attract the definition of Industrial Establishment. Even assuming that some of the employees may be doing the work of pumping of water, that is not sufficient to hold that Irrigation Department of the first appellant is carrying on manufacturing process. Overall activities and functions of the Irrigation Department will have to be considered while deciding the question whether it is carrying on manufacturing activities. Few employees of the Irrigation Department out of several may be incidentally operating pumps. But the test is what are the predominant functions and activities of the said Department. Even if the activity of operation of pumps is carried on by few employees, the Irrigation department does not carry on manufacturing process. As it is not carrying on manufacturing process, it is not a factory within the meaning of clause (m) of section 2 of the Factories Act. Therefore, the Irrigation Department of the first appellant will not be an Industrial Establishment within the meaning of Section 25L. Accordingly, Chapter VB will have no application in the present case.11. The learned counsel relied upon a decision of the Apex Court in the case of Sarva Shramik Sangh, Sangli (supra). In the facts of the said case, the employees were involved in activity of pumping of water and therefore, the said decision is of no help to the respondent. As regards compliance with clause (F) of section 25 of the ID Act, Annexure P-1 is a copy of the notice dated 28th January 2012 issued by the Executive Engineer of Sindh Project Pucca Dam Division. It is a notice under section 25F of the ID Act addressed to the respondent. It is stated therein that in compliance with section 25F, a sum of Rs. 36,361/- was being transferred to his bank account mentioned in the notice. This fact is specifically pleaded in ground 5F of this petition.There is no counter filed by the respondent denying the fact of payment of compensation in accordance with Section 25F.12. The Labour Court as well the learned Single Judge and the learned Division Bench of the High Court have not adverted to the question whether the Irrigation Department of the first appellant is an Industrial Establishment within the meaning of Section 25L. There is no finding recorded that the Irrigation Department of the first appellant is doing manufacturing activity as provided in sub-clause (k) of Section 2 of the Factories Act.