1. This is a petition under Article 226 of the Constitution for the issue of an appropriate writ to the Regional Provident Fund Commissioner, Bombay, prohibiting him from recovering from the petitioner contribution towards the Provident Fund under the Employees' Provident Funds Act, 1952.
2. The admitted facts are as follows : The petitioner is a public limited company registered under the Indian Companies Act. It carries on business of manufacturing hydrogenated vegetable oil named 'Vanasada' and its by-products, such as soap, oil-cakes etc. at Akola under the name and Style of 'Berar Oil. Industries.' it commenced manufacturing its products on 11-10-1948. It also manufactures and markets its vegetable oil after completing all the processes at Akola whereafter the oil is tinned in tin containers of certain sixes. The aforesaid tin containers are fabricated by the petitioner in the precincts of the oil factory. These tin containers are used only for the purpose of packing vegetable oil and are not used for any other purpose. They are not sold separately nor arc the customers charged separately for the price of the tins. The fabrication of these containers commenced on 13-10-48. Only 31 workers are engaged in this work while oh 1-11-1952, 211 workers were working on the manufacture of oil and its by-products.
3. The Central Government framed a scheme under Section 5 of the 'Employees' Provident Funds Act, 1952, which came into force partly on 2-9-1952 and partly on 6-10-1952. Under this scheme an employer is required to contribute 6 1/2 per cent, of the total wage bill every year as the employer's contribution towards the fund and 3 per cent, as the administrative charges on the total contribution of the employer and the employees.
4. Certain correspondence ensued between the petitioner and the respondent with respect to the liability of the petitioner to make contribution towards the provident fund. Eventually, by a letter dated 8-8-1955, the respondent called upon the petitioner to deposit its contribution and incidental charges as required by the scheme. It is stated in the petition that the total amount came to Rs. 34000/- for this period and this fact is not denied in the return. It may be mentioned that this contribution is in respect of the workers employed in the oil industry, i. e. not only in respect of the persons who are employed in the fabrication of tin containers but also in respect of the workers who are employed solely for the production of vegetable oil. The petitioner has not deposited the amount and has alleged that as a result of this demand it is faced with proceedings for the recovery of this amount under Section 8 of the Act. The petitioner disputes its liability to pay the amount and has therefore come up to this Court for the issue of an appropriate writ to the respondent restraining him from taking any further action.
5. The application of the Act is provided for in Sub-section (3) of Section 1 thereof, which reads as - follows:
'Subject to the provisions. contained in Section 16, it applies in the first instance to all factories engaged in any industry specified in Sch. I in which fifty or more persons are employed, but 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 all factories employing such number of persons less than fifty as may be specified in the notification and engaged in any such industry.' The expressions, 'factory' 'industry' and 'employee' are defined in the Act. Factory as defined means:
''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.' Industry as defined means :
'any industry specified in Sch. I, and includes any other industry added to die Schedule by notification under Section 4.' Employee means;
''any person who is employed for wages in any kind of work,' manual or otherwise, in or in connection with the work of a factory, and who gets his wages directly or indirectly from the employer, and includes any person employed by or through a contractor in or in connection with the work of the factory.' in Sch. I as amended by Act 37 of 1953 it is stated:
'Any industry engaged in the manufacture.....of any of the following, namely,--
Electrical, mechanical or general engineeringproducts.
Iron and steel.
Then there is the Explanation which contains 25 items, one of which is ''drums and containers''. It will thus be seen that for the application of the Act, the unit must be a factory. It must be engaged in any industry. The industry must be one which is specified in Schedule I and that industry must employ SO or more persons. From the Schedule it will be seen that the industry itself must be engaged in the manufacture of any of the scheduled products. The word 'manufacture' is also defined thus in. Section 2, as amended by Act 37 of 1953;
'manufacture means mating, altering, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal.'
Reading all these provisions together it would appear that the Act applies to a unit on the premises of which (i) a. manufacturing process is carried oh ii) in any industry engaged in the manufacture of any of the schedule products and (iii) jn which fifty or more persons are employed. Thus all the three conditions must co-exist. From this it follows that the 'process must relate to the industry , itself. It also iollows that if any of these conditions does not exist, the Act would not apply. As already stated it is an admitted position that the industry in question is the production of edible oil. This industry was not at the relevant time included in the Schedule though we understand that it has subsequently been so included. It would therefore appear that the Act would not apply to this industry.
6. it is however argued on behalf of the respondent that 'drums and containers' are admittedlybeing manufactured within the precincts of the factory and as those articles are included in the Schedule the Act must apply to this unit. It is to beborne in mind that though the petitioner manufactures drums and containers it is not engaged in abusiness of manufacturing these articles in the sensethat its object is not to trade in these articles butits object is only to use these containers for enablingit to carry on its business of producing and marketing vegetable oil. If it may be put that way, thisis only a process in the business of manufacturingand selling vegetable oil and what is produced isonly an intermediate product. The Act applieswhere the final product is within the Schedule I notwhere only an intermediate product is in the schedule.
7. The word 'industry' as already stated has been defined to mean a specified industry. What we have therefore to ascertain is, what was the industry in which the unit was engaged and not merely what was manufactured by the unit for the purpose of its industry'. A unit may manufacture a number of things some of which may fall within the Schedule. But if that was not the main or the dominant purpose of the industry, it would mate no difference. In other words, where while carrying on an industry certain products are produced, not with the object of marketing them separately but with the object of using them in the industry itself, then the production of those articles cannot result in theengagement in an industry of producing these articles. The word' 'industry' should bo understood in the sense in which it is understood in the business community. If the industry, as here, is the production of edible oil, then all the intermediate products which are produced for carrying on that industry cannot be regarded as separate industries. Therefore, the mere fact that any of these products was included in the Schedule will not bring the Act into operation.
8. No doubt this Act is a piece of social legislation and must receive benevolent construction. II is however to be noticed that, it was not the inten-tion of the legislature to make this Act applicable to each and every factory or industry as is the case with the Factories Act or with the Industrial Disputes Act. This Act was made specifically applicable to certain industries only. Power has been conferred on the Central Government for increasing the ambit of the Act by enabling them to issue a notification under Section 1(3) of the Act for applying it to other industries. Where such is the case, the question of benevolent construction would not come in. In the circumstances, therefore, it is clear that the, demand made by the Regional , Provident Fund Commissioner, Bombay, is not legal and it is there-fore necessary that a writ should issue. In this view it is not necessary to consider separately the petitioner's contention regarding its liability to pay 3 per cent in respect of administrative charges. We would, therefore, allow the petition with costs. Counsel's fee Rs. 100/-. The outstanding amount of deposit is ordered to be refunded to the petitioner.
9. I agree with my learned Brother in the conclusion reached, viz. that this petition slwuld bo allowed. However, with utmost respect to my learned Brother, I do not find myself jn agreement with the view taken by him that where the principal object of an industry does not fall within the mean-ing of the First Schedule of the Act then even if certain scheduled articles for being used in that in-dustry only are manufactured, the provisions of the Act are not attracted. In my view, the determining factor is whether in any part of a factory any manufacturing process is going on and whether the manufactured article is such which falls within the mean-ing of the First Schedule. But to attract the Act tins alone is not sufficient. The number of persons employed in the unit engaged in the manufacture of such article must be fifty or more.
10. Section 1(3) of the Act provides that the provisions thereof apply to all factories engaged in any industry specified in, Schedule I in which fifty or more persons are employed. Now, 'factory' is defined in Section 2(g), of the Act. This definition 1ms already been reproduced above. From this definition it will be clear that the manufacturing process of scheduled article need not go on in the entire premises of the factory but it may go on in any portion of it. Further, the word 'manufacture' has been defined in Section 2, clause (ia). This definition has also been reproduced above. Looking to this definition it will be seen that the word 'manufacture' will include making of goods even for the use of the factory itself. These definitions read together, in my opinion, would show that if in any part of a Factory anarticle which falls within the ambit of the First Sche-dule is manufactured, though -not for the. purposes of marketing it, and if the number employed in that process is fiity or exceeds fifty, then the provisions of the Act would be attracted. Hut in the instant case it is not in dispute that the labour employed in the unit engaged in manufacturing drums and containers is only 31. The provisions ot the Act therefore are not attracted to the instant case.
11. The learned counsel for the opponent, however, places reliance on a decision of the Travancore-Cocbin High Court in O. P. No. 78 of 1953, D/-2-2-1954 (A). The facts in this case were that onepart of a factory was engaged in manufacture ofarticles that fell within the First Schedule of the Act,the number of employees in that unit of the factorywas only 33, the manufacture carried on in the otherpart of the factory did not fall within the First Schedule of the Act, and the total number employed inboth these units exceeded fifty. It was held thatas the factory was carrying on the manufacturingprocess in one part of it which fell within the FirstSchedule and as the total number of employees exceeded fifty, the provisions of the Act were attracted. With utmost respect to the learned Judge Ifind tnyseif unable to agree with this view. In arriving at the conclusion the learned Judge observed that the unit for determining the application ofthe Act is the total number of the employees in thefactory and not only those engaged in the manufacture of the scheduled article. In my view, forreasons stated above, when one of tire units of thefactory is engaged in the manufacture of an articlewhich falls within the First Schedule of the Act, theprovisions of the Act are attracted only to that unitif the other condition, namely that the employeesemployed in that unit are fifty or more, is fulfilled. In my view, the clause 'in which fifty or more persons are employed' used in Section 1(3) of the Act governs or qualifies the phrase 'industry specified inSchedule I' used therein and not the word 'factories'.
12. Petition allowed.