Case: Regional Provident Fund Commissioner Vs. Shibu Metal Works

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 Fund 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 explanation 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.2. 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 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 recovery any amount from the respondent under the Act.3. 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 respondents 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, he should have approached the Central Government for removal of the doubt and not rushed to the court for a judgment.4. 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. I, 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 be respondent that it was not liable to deposit the contributions under the Act, the learned Judge held that the said claim was not justified.5. 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 respondents contention that the manufacture of brass utensils does not fall within the entry "Electrical, Mechanical or general engineering products" enumerated in Sch. 1 to the Act. In the result, the respondents appeal was armed 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.

Court's reasoning:
20. There are, however, several confiderations 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 read 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 usedIf 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, 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. I, 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 ourour 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 accept the very broad construction of the entry suggested by Mr. Sen.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.23. If we bear in mind the three broad categories of products, the manufacture of which brings the industry within the scope of Sch. I, 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. This 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 by Mr. Sen, and on the whole, it seems to fit in with the scheme of Sch. I 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. I itself. We are, therefore, satisfied that the Letters Patent Bench of the Punjab High Court was in error in holding that the respondents 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 been making deposits towards the Provident Fund as required by the Act.Reverting then to the question of construing the relevant entry in Sch. I, 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 competetion 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 broaderwe 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 Encyclopaediawould 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.