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Swastik Textile Trading Co. Ltd. Vs. Union of India (Uoi), New Delhi and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberSecond Appeal No. 989 of 1960
Judge
Reported inAIR1966Guj116; (1965)GLR458
Acts Code of Civil Procedure (CPC), 1908 - Sections 100 and 101; Employees' Provident Funds Act, 1952 - Sections 1(3), 2, 4 and 16; Indian Companies Act; Evidence Act, 1872 - Sections 101 and 104; Employees' Provident Funds (Amendment) Act, 1953 - Sections 18
AppellantSwastik Textile Trading Co. Ltd.
RespondentUnion of India (Uoi), New Delhi and ors.
Appellant Advocate B.K. Shah, Adv. and; I.M. Nanavati, Adv. for; B.A. Kayas
Respondent Advocate B.R. Sompura, Asst. Govt. Pleader
DispositionAppeal dismissed
Cases ReferredBombay v. Shree Krishna Metal Manufacturing Co.
Excerpt:
labour and industrial - provident fund - sections 1, 2, 4 and 16 of employees' provident funds (amendment) act, 1952 and sections 100 and 101 of code of civil procedure, 1908 - dispute regarding calculation of workers for purpose of provident fund scheme - appellant contended that factories being independent of each other number of workers engaged by appellant should be calculated in respect of each factory separately - provisions applied for composite factory manufacturing more than one article provided activity of producing scheduled article was principal or main activity of factory - articles produced by appellants come within purview of same description of industry namely textile industry - for economic or other reasons appellant accommodated workers to produce three different.....1. this is plaintiff's second appeal directed against the decree, dated 28th january 1960, passed by the learned second extra assistant judge, ahmedabad, in civil appeal no. 400 of 1958 from the decree in civil suit no. 1702 of 1956 by which the learned second extra assistant judge dismissed the appeal with costs and confirmed the decree passed by the learned third joint civil judge (senior division), ahmedabad, dismissing the suit of plaintiff-appellant with costs. plaintiff is a limited company registered under the indian companies act. the defendants-respondents are union of india, state of gujarat, regional provident fund commissioner, bombay, and provident funds inspector, ahmedabad. the main dispute between plaintiff and defendants is about the applicability to plaintiff of the.....
Judgment:

1. This is plaintiff's Second Appeal directed against the decree, dated 28th January 1960, passed by the learned Second Extra Assistant Judge, Ahmedabad, in Civil Appeal No. 400 of 1958 from the decree in Civil Suit No. 1702 of 1956 by which the learned Second Extra Assistant Judge dismissed the appeal with costs and confirmed the decree passed by the learned Third Joint Civil Judge (Senior Division), Ahmedabad, dismissing the suit of plaintiff-appellant with costs. Plaintiff is a limited company registered under the Indian Companies Act. The defendants-respondents are Union of India, State of Gujarat, Regional Provident Fund Commissioner, Bombay, and Provident Funds Inspector, Ahmedabad. The main dispute between plaintiff and defendants is about the applicability to plaintiff of the Employees' Provident Funds Act, 1952, Act No. 19 of 1952 (here after called 'the Act'). In order to understand the dispute between the parties, it will be useful to state a few facts. At the relevant time, plaintiff was engaged in manufacturing three items, viz., (i) shuttles, (ii) wire health, and (iii) reeds. Plaintiff started manufacturing shuttles in 1948 in the compound of Navbharat Mills at Ahmedabad. It gave the prescribed notice for starting the factory to the Factory Inspector in connection therewith on 1st October 1948. That factory got burnt in 1949 and, in January 1950, plaintiff started manufacturing shuttles in a building situated in the compound of the Ambica Oil Mills in the Gomlipur locality at Ahmedabad. The prescribed notice of occupation of these premises was sent to the Factory Inspector on 10th February 1950. In the latter part of 1950, plaintiff started manufacturing wire healds in a separate building situated in the same compound but adjoining the building in which shuttles were manufactured. Regular production for wire healds was started on 4th November 1951 when the prescribed notice of occupation was given to the Factory Inspector. Plaintiff started manufacture of reeds on or about 20th of November 1954 again in a separate building but situated in the same compound in which the manufacture of the other two articles, viz., shuttles and wire healds, was carried on and notice of occupation of this building was also given by plaintiff to the Factory Inspector on the same day. Sometime in 1954, which time however has not been made definite either in the pleadings or in the evidence, plaintiff ceased manufacturing wire healds in the aforesaid compound and shifted to a place called Amraivadi the manufacture of wire healds which place is about a mile away from Gomtipur in which formerly plaintiff was carrying on the aforesaid activities. On 15th May 1956, a Provident Fund Inspector appointed under the Act wrote a letter to plaintiff enquiring about the number of workers employed in the manufacturing of the aforesaid three articles and, thereupon, correspondence ensued between plaintiff and the Provident Fund Department, at the end of which that Department, on 28th September 1956, required plaintiff to introduce the Provident Fund Scheme under the Act with effect from 1st September 1964 on the ground that it was in the month of August 1964 that the total number of workers employed by plaintiff in the manufacture of the aforesaid three articles exceeded the number 50. Thereupon, plaintiff gave the requisite statutory notice to the persons concerned and filed the suit on 28th October 1956 from which this Second Appeal arises. Plaintiff prayed for a declaration that the Act was not applicable to any one of the three activities with which it was concerned and asked for a permanent injunction restraining respondents from enforcing the provisions of the Act against plaintiff.

Two questions arose for determination in the suit. The first question was as to whether the Act did or did not apply to any one of the three activities in which plaintiff was engaged. The second question was whether plaintiff was right in contending that, in fact, there were three factories, each independent of the other, and that, therefore, the number of workers engaged by plaintiff should be calculated in respect of each factory separately and that the number of workers engaged in each of the so-called independent factory was not to be totalled up for the purpose of determining the total number of workers for the purposes of the Act. The trial Court dismissed the suit of plaintiff with costs. Plaintiff went in appeal to the District Court at Ahmedabad. The learned Second Extra Assistant Judge who decided the appeal dismissed the same with costs. As already stated, it is against this appellate decree that the present Second Appeal has been filed.

2. In support of this Second Appeal, Mr. Nanavati has raised the same two questions for decision which I have already indicated above although the arguments which were addressed in support of the Second Appeal were not necessarily the same as they were advanced in the two lower Courts.

3. In order to understand the first point raised by Mr. Nanavati, it is necessary to read a few sections of the Act in the first instance. The Act came into operation on 4th March 1952. It has been amended by several amending Acts from lime to time. However, it is common ground that, in the present appeal, I am concerned with the Act as it stood amended on the date on which the present suit was filed. Therefore, in the course of this Judgment, I propose to confine my attention only to the provisions of the Act as they stood amended on the relevant date and I do not propose to refer to the subsequent amendments except when they are necessary for some purpose relevant for the decision of the points in dispute. Section 1, Sub-section (8) of the Act provided that, subject to the provisions contained in Section 16, which section, it is common ground, is not relevant for the purposes of the appeal, the Act applied in the first instance to all factories engaged in any industry specified in Schedule I in which fifty or more persons were employed. Schedule I originally mentioned only six industries. Under Section 4 of the Act, the Central Government had the power to add any other industries to that Schedule in respect of the employees whereof it was of opinion that a provident fund scheme should be framed under the Act. The section provided that, thereupon, the industries so added shall be deemed to be an industry specified in Schedule I for the purposes of the Act. In accordance with this power, the Central Government added a number of industries in Schedule I from time to time. I am not concerned in the present appeal with any of these added industries. However, one of the industries which was originally mentioned in the Schedule was the following: 'Electrical, mechanical or general engineering products'. The case of respondents la based on the allegation that all the three activities in which plaintiff is engaged are covered by this item in Schedule I. An Explanation was inserted to Schedule I by Section 18 of the Amending Act 37 of 1958. This Explanation, inter alia, stated that, without prejudice to the ordinary meaning of the aforesaid expression 'electrical, mechanical or general engineering products', items Nos. 1 to 25 specified in that Explanation were included in that expression. It appears that no reliance was placed upon this Explanation by the department in any of the two lower Courts. However, in this Court, Mr. Sompura, the learned Assistant Government Pleader, contended that the aforesaid three activities of plaintiff were covered by items Nos. 7, 20, 24 and, in any case, by item No. 25 read with item No. 7. However, as already stated, in the two lower Courts, the contention of the department was that the aforesaid three activities of plaintiff were covered by the general expression 'electrical, mechanical or general engineer ing products'. Plaintiff's contention was that they were not so covered. According to it, the aforesaid three articles--shuttles, wire healds and reeds--were not either electrical, mechanical or general engineering products. Mr Sompura conceded before me that the aforesaid three articles could not be regarded as electrical products. However, his contention was that, in any case, the, aforesaid three articles were either mechanical or general engineering products Now before I consider the validity of the rival submissions made by the parties as to whether the three articles aforesaid are or are not covered by the aforesaid part of the general expression 'mechanical or general engineering products', I would, first of all dispose of the alternative argument of Mr. Sompura, the learned Assistant Government Pleader, that the aforesaid three articles or some of them are included in the aforesaid specified items Nos. 7, 20, 24 and 25 read with 7 mentioned in the Explanation to Schedule I, already referred to.

4. Item No. 7 is as follows: 'machinery used in industry (including textile machinery) other than electrical machinery and machine tools'. Item No. 20 is at follows: 'wires, pipes, tubes and fittings'. Item No. 24 is 'drums and containers' and item No. 26 is 'parts and accessories of products specified in items 1 to 24'. Mr. Sompura's contention was that all the three items aforesaid were machinery used in textile industry and, therefore, would come within the purview of item No. 7. His further contention was that wire healds and reeds were wires within the meaning of item No. 20 and that all the three articles, shuttles, wire healds and reeds, were fittings within the meaning of the said item. He also contended that the shuttles were containers within the meaning of item No. 24. In any case, Mr. Sompura contended that even if the aforesaid three items were not machinery used in textile industry, they must be regarded to be parts or accessories of such machinery and as such would be included in item No. 25 read with item No. 7. Now, Mr. Nanavati's contention was that such was not the case which was put by the department either in the pleadings or in the evidence or at the time of the arguments in any of the two lower Courts and that, therefore, there was no factual basis for the aforesaid contentions of Mr. Sompura in the present case, whatever evidence, documentary or oral, relevant on the aforesaid question has been adduced mainly by plaintiff. The documentary evidence adduced in the case is not very helpful for the purpose of deciding as to whether the aforesaid articles would or would not fall within the purview of any of the aforesaid four items. The oral evidence in the case is that of witness Champaklal Purshottam Mehta. The positive evidence of this witness as regards shuttle is that it is no part of textile machinery. There is nothing positive, however, in the evidence to show that the other two articles, wire healds and reeds, were either textile machinery or part thereof. In the plaint, the aforesaid articles have been described as mill store items. In the evidence of Mr. Mehta, the aforesaid items are also described as mill store items. Mr. Nanavati seems to be right in contending that this admission by plaintiff that the three items were mill store items would not necessarily mean that they were textile machinery or parts thereof. In my judgment, it would not be proper to lie down plaintiff by its mere admission that the afore said items were mill store items and conclude that they were parts of textile machinery specially because having regard to the fact that such a definite case was not put up by the department, plaintiff had no chance obviously of pointing out the distinction, if there was any, between textile machinery and mill store items. As regards the contention that the wire healds and reeds are wires and that all the three items are fittings, it is true that the evidence of Mr. Mehta establishes that wires are used in the aforesaid first two items. But. reading the Explanation as a whole, it does not appear that Hem No. 20 deals with wires as raw materials. The evidence of Mr. Mehta, in effect, is that wires are used by plaintiff as raw materials for the purpose of manufacturing wire healds and reeds. According to him, wires are purchased in the open market by plaintiff and, in the preparation of wire healds, they are cut and given shape and, in the preparation of reeds, they are cleaned and cut. Therefore, it cannot be stated that the evidence establishes that plaintiff is engaged in the manufacture of wires. Mr. Sompura, however, relied upon the definition of the word 'manufacture' as given in Section 2, Clause (ia), and he contended that this definition would include the aforesaid operations in regard to wires In my judgment, the latter question is entirely different from the question as to whether the item 'wires' is or is not an item which would bring that item under the expression 'electrical, mechanical or general engineering products'. As to whether the aforesaid operations which have been described by Mr. Mehta do or do not bring it within the meaning of the expression 'mechanical or general engineering products. I propose to discuss it a moment hereafter. But, for the present, the question is as to whether the aforesaid operations described by Mr. Mehta would bring the articles, wire healds and reeds, within the item 'wires' used in item No 20. In my judgment, having regard to the aforesaid evidence, it is impossible to agree with Mr. Sompura's contention specialty when the same happens to be raised for the first time in this Court. In my opinion, unless there is some more evidence on the subject, it is not possible to agree with the aforesaid contention off-hand. As regards the contention that the three items came within the purview of the expression 'fittings', Mr Sompura's contention was that all the three items aforesaid were intended for the purpose of being fitted to the mechanisms of a textile machinery and should be so regarded. It is not necessary for me to determine the question as to whether the term 'fittings' takes its colour from the three words 'wires', 'pipes' and 'tubes' with which it is juxtaposed. But, even assuming that the term 'fittings', as Mr. Sompura contends, has a general connotation and includes all items which are used as 'fittings', even then. I am not convinced that there is anything on the record which would show that the aforesaid items were used as 'fittings' for textile machinery I have been taken through the whole of the evidence of Mr. Mehta and I am not convinced that there is anything in his evidence which would justify the aforesaid conclusion As regards the contention that shuttles are containers. Mr Sompura's argument was that the hollow space in the shuttle is used for the purpose of fitting a bobbin therein and that, having regard to that fact, the shuttle must be regarded to be a container for a bobbin, which, according to Mr Sompura, is used as a part of textile machinery Here again, in my judgment, the contention must be rejected for want of proper evidence on the subject Having regard to the fact that serious consequences follow from any conclusion which may be reached on the aforesaid subject and having regard to the lad that both the parties had enough opportunity to plead their respective cases in the trial Court it would be improper to deride the question on the aforesaid new ground specially when the parties could have submitted specific pleadings on the subject and led evidence on that point. Mr. Nanavati seriously disputed the propositions on which the submission of Mr. Sompura was based and having regard to the fact that the point is raised for the first time in the Second Appeal, I do not propose to rest my judgment on that new ground. Having regard to my conclusion that the evidence does not establish that the aforesaid three articles were textile machinery or parts thereof, the argument that the three articles came within the purview of item No. 7 read with Hem No. 25 must also be rejected.

5. That brings me to the main question in dispute between the parties as to whether all or any of the aforesaid three items came within the purview of the general expression 'mechanical or general engineering products'. Mr Nanavati's contention was that there was no evidence in the case to establish that the aforesaid three articles or any of them was either a mechanical or a general engineering product. But, before one can answer this question, it is quite clear that one must understand as to what exactly the Legislature meant by a mechanical or a general engineering product. Now, on this subject, Mr. Nanavati very strongly relied upon the observations made by Mehrotra, J of the Allahabad High Court in Great Eastern Electroplaters Ltd v. Regional Provident Fund Commissioner. U. P., AIR 1956 All 495 In this case, the question which Mehrofra. J. had to decide was whether a torch-case was or was not an item which was included in the aforesaid general expression. The contention which the learned Judge was considering was whether the term 'electrical pro duct' meant anything produced through electrical process. In repelling this contention, the learned Judge made the following observations:

'In my opinion, such a wide meaning cannot be given to the words 'electrical, mechanical or general engineering products'. If such a wide meaning is to be given, then it will include even chemical products and textile goods There may be many textile goods and chemical products which are being produced by means of electrical process or mechanical process. The words 'electrical and mechanical' have not, in my opinion, been used in the Schedule only in contradistinction with the handmade products but they have to be given a narrower meaning

From the nature of the articles mentioned in the amended Schedule, it will be clear that the scope of the words 'electrical and mechanical products' is not to cover all products which are made by means of mechanical or electrical process but it means products which are utilised for purposes of producing electricity or implements and other apparatus and machinery or goods like fans, radio and battery shells A torch case is only an article for purposes of keeping batteries and not for purposes of generating electricity The fact that torch cases are produced by cutting, shaping and soldering brass and iron sheets by means of machineries does not make them mechanical or electrical products.

From the aforesaid passages, It appears that the learned Judge laid down one negative and one positive test for determining the connotation of the general expression 'electrical, mechanical or general engineering products'. The negative test was that it did not include all products produced by means of electrical or mechanical process. The positive test was that it was the use for which the product was made for producing electricity or implements and other apparatus or machinery or goods like fans, radio and battery shells that determined the connotation of the word. In fairness, I may mention that, though Mr. Nanavati strongly pleaded for the adoption of the negative test, he did not rely upon the positive test which was laid down in this case. It appears that the positive test was formulated on a perusal of the various items mentioned in the Explanation. Mr. Sompura, on the other hand, contended that the decision of Mehrotra, J., was reversed In appeal in Regional Provident Fund Commissioner, U. P., Kanpur v. Great Eastern Electroplator Ltd., AIR 1956 All 133 and that, therefore, the aforesaid observations of the learned Judge were no longer good law even in the Allahabad Court. However, a perusal of the appellate judgment in the case shows that Mehrotra, J., was reversed on the ground that a torch-case came within the purview of item No. 24. It is on this ground that Mehrotra, J., was reversed and there is nothing in the judgment of the Division Bench which suggests that the test which was laid down by Mehrotra, J. was not approved. However, Mr. Sompura was perfectly justified in contending that the aforesaid two tests which have been laid down by Mehrotra, J. have not been approved by a judgment delivered by a Division Rench of the Bombay High Court, which judgment is binding on this Court too. The case is Nagpur Glass Works Ltd. v. Regional Provident Fund Commissioner, 59 Bom LR 760: ( (8) AIR 1957 Bom 152). Mudholkar, J. in delivering the judgment in that case made the following observations at page 762 (of Bom LR): (at p. 164 of AIR) in regard to the tests laid down by Mehrotra. J.. in the Allahabad case:

'In that case, it may be mentioned, the learned Judge observed that a torch-case is only, an article for purposes of keeping batteries and not for purposes of generating electricity and the unit which produced this article did not fall within the schedule. The learned Judge has not stated why in his opinion the products which are made by means of electrical and mechanical process are excluded from the expression 'Electrical, mechanical or general engineering products' With utmost respect to the learned Judge, we find it difficult to agree with the interpretation placed by him on the expression in our opinion, as already stated, the words 'electrical, mechanical and general have reference to the process of manufacture and not to the use to which the articles produced could be put'.

Under the circumstances, it is impossible for me to uphold the contention of Mr. Nanavati as to the correct meaning of the aforesaid expression based upon the Allahabad case. Nagpur Glass Works Ltd's case, 59 Bom LR 760: ( (S) AIR 1957 Bom 152), however, has interpreted the aforesaid general expression and Mr. Sompura is again right in contending that that interpretation is binding on this Court. In an earlier passage at page 761 (of Bom LR): (at p. 158 of AIR), this is what Mudholkar J., has stated regarding the genera! expression:

'The question is whether the expression 'Electrical, mechanical or general engineering products' includes metal lamps or burners. .... Now, the expression 'Electrical, mechanical or general engineering products' is a very wide one, and even though metal lamps and burners are not included in the Explanation to the Schedule, it would seem that they would fall within the general expression. The only limitation that could be placed on the 'product' Is that it must be an engineering product. The adjective 'electrical' means, according to the Shorter Oxford Dictionary, 'relating to or connected with electricity': while the adjective 'mechanical' means, in this context, according to that Dictionary. 'Acting, worked, or produced by a machine or mechanism.' Thus, the expression 'Electrical, mechanical or general engineering products' means engineering products relating to or connected with electricity, or engineering products acting or worked or produced by a machine or mechanism, or products produced by a craftsman employing a certain design or invention.'

Mr. Nanavati was ultimately constrained to concede that this interpretation was binding on this Court too. But. his contention was that, though the aforesaid passage explains the two adjectives 'electrical' and 'mechanical', it docs not explain what 'an engineering product' was and, according to Mr. Nanavati, those two words are the core of the general expression 'electrical, mechanical or general engineering pro-duels' It appears from the aforesaid passage that the three words 'electrical, mechanical or general' have been construed as being adjectives to the expression 'engineering products', and, therefore, though a product may be related or connected with electricity or may be 'acting, worked, or produced by a machine or mechanism', still it would not come within the purview of the general expression unless it is also an engineering product. Therefore, Mr. Nanavati appears to he right in contending that the expression 'engineering products' is the core of the aforesaid expression. The same view has been taken by the Punjab High Court in Shibu Metal Works, Jagadhri v. Regional Provident Fund Commissioner. Punjab, Ambala CantonmenI, AIR 1963 Punj 19. Dua J., in delivering the judgment of the Bench observed as follows:

'Construing the expression 'electrical, mechanical or general engineering products' in the light of what has just been stated. I am Inclined to hold that the legislative emphasis is intended to be more prominent on the words 'engineering products' which represent the core of the entry and the words 'electrical, mechanical' and 'general' have to be construed as qualifying the words 'engineering products'.'

The aforesaid interpretation would also do away with the difficulty which was envisaged by Mehrotra J., in pointing out that, if a wide meaning were to be given to the aforesaid expression, it would include chemical and textile products and consumer goods of all kinds.

6. From the aforesaid discussion, it it crystal clear that, in order that an article may crime within the purview of the aforesaid general expression, it is necessary to be established, in the first instance, that it is an engineering article. However, Mr. Nanavati is not wholly right in contending that the latter expression has not been interpreted by their lordships in Nagpur Glass Works Ltd.'s case, 59 Bom LR 760: ((S) AIR 1957 Bom 152) The following passage in the judgment deals not merely with the expression the general article', but directly deals with 'a general engineering article' :

'.....products produced by a craftsman employing a certain design or invention.' However, Mr. Nanavati is right in contending that though the aforesaid passage may relate to an interpretation of the words 'general engineering products', there is no discussion whatsoever in the judgment itself as to why and how the aforesaid test is laid. On the other hand, Mr. Sompura contends that, though there is no definition of the expression 'engineering products' to be found in any of the books which he has consulted, aid may be taken from the following definition of the expression 'mechanical engineering' which is to be found in the Dictionary of Terms used in the Theory and Practice of Mechanical Engineering by J. G. Homer, Seventh Edition Revised and Enlarged by Staton Abbey. The definition on which Mr. Sompura relies is to be found at page 222 of the book and it is as follows: 'The art of construction of mechanism generally, comprising both prime movers and machines. It embraces designing, drawing, pattern-making, moulding, smiths' work, turn ing, boring, drilling, shaping, planing, fitting, millwright's work, boiler and platers' work, and erecting.'

It is difficult to accede to the request of Mr. Sompura specially in view of the fact that the definition on which he relies is not of the expression 'engineering article' but of 'mechanical engineering'. But, at the same time, it cannot be denied that in the absence of any other guide, the Court may bear in mind the aforesaid definition for the purpose of determining the exact connotation of the expression 'engineering product'. Before I deal further with the question as to what the expression 'engineering product' connotes, I may dispose of an argument made by Mr. Nanavati based upon the aforesaid passage in Nagpur Glass Works Ltd.'s case, 59 Bom LR 760: ( (S) AIR 1957 Bom 162) which deals with 'general engineering product', Mr. Nanavati contends that, even if the aforesaid definition is taken as the norm, that definition is not satisfied by the facts of the present case. Mr. Nanavati contends that there is no evidence that the aforesaid three products were produced by craftsmen and that there is also no evidence that a design or an invention was employed in their production. Mr. Nanavati is right in contending that there is no evidence that the aforesaid three products are the handiworks of craftsmen. In fact, the trend of the evidence is that all the aforesaid three products were being manufactured by machines. The expression 'manufacture' has been defined in the Act in Section 2(ia) as meaning 'making, altering, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal'. It is true that this definition does not necessarily envisage the process of manufacturing by machine and that a product may be the result of the handiwork of a craftsman. But, at the same time, there is no reason to believe on the evidence that the aforesaid articles were being manufactured by the hands of craftsmen and that machinery was not employed therein Nor is there any definite evidence in the case to show that there was any design or invention in the making of the production of those articles. However, in advancing the aforesaid argument, Mr. Nanavati confuses a general engineering product with an engineering product. If may be that the distinction between an electrical or a mechanical engineering product on the one hand and a general engineering product on the other may consist in the fact that, in the latter class of products, the article may be one which is made by a craftsman. But that is not the test for the purpose of determining as to what an engineering article is. As the whole of the aforesaid expression shows, an engineering article is one which may be either an electrical or a mechanical or a general article. Therefore, the aforesaid passage which has been used by their Lordships in the above judgment can hardly be applied as a test for determining what an engineering article is. Therefore, in my judgment, though the aforesaid passage is useful for the purpose of determining what an engineering article is, the passage cannot be used as a test for determining what an engineering article is and that, in any case, it cannot be regarded as an exhaustive definition of that kind of article. Having regard to the fact that there is no definition of the expression 'engineering article' in the Act, nor is any definition of any such expression brought to my notice in any of the standard books, it is obvious that it will be risky to hazard an exhaustive definition of that particular expression. However, one thing is quite certain that the whole of the expression which is the subject-matter of construction is not either a technical expression or an expression of art. There is internal evidence in the Act itself which shows that the Legislature regarded that expression as having an ordinary meaning. This is quite clear from the fact that, in the Explanation, the Legislature itself has stated that the various items as specified by it are included in that expression without prejudice to 'the ordinary meaning of the expression'. Some indication as to the connolation of the expression 'engineering article' can be had also from the various items which have been included in that definition in the Explanation itself. A perusal of those items shows that an engineering product is not necessarily an article of use only but it may be an article which may itself be used as a means of producing articles of use. For example, items Nos. 1, 2 and 7 are not engineering products in the sense that they are products which are the results of an activity designed to product articles of use. They are themselves items which are used for the purpose of producing some other electrical, mechanical or general engineering products. On the other hand, the list contains such articles as bolts, nuts, rivets, drums and containers, which themselves do not produce articles of the aforesaid nature but which are used in industries for the purpose of either producing or marketing articles. On the contrary, a perusal of the aforesaid list shows that the common bond which binds all the aforesaid articles in the expression 'electrical, mechanical or general engineering products' is that, in the production of those articles, engineering knowledge or skill has to be employed. Therefore, broadly speaking, whenever yon have an article in the production or the making of which a higher type of knowledge or skill which one associates with the profession of an engineer has to be employed and not merely ordinary knowledge or skill which one associates with a mere artisan, then, that article would be an engineering article. Although, as already stated, it would be hazardous to formulate an exhaustive definition of the aforesaid expression, in my judgment, for the purposes of the present case, the criterion as stated above may be regarded as a useful test for determining the nature of the three articles in question. In the two lower Courts, the plaintiff laid emphasis upon the test that an article comes within the purview of the aforesaid definition only if it is so regarded in the commercial or the industrial world and the plaintiff's case was based upon the testimony of Mr. Mehta, which, according to plaintiff, showed that it was not so regarded in the commercial and the industrial world. However, this test was not pressed for acceptance in my Court. Mr. Nanavati very fairly conceded that that test was not a satisfactory or a reliable test as the result of it would be to abdicate the function of this Court to the opinion of more or less interested persons. The evidence given by Mr. Mehta was very strongly relied upon by Mr. Nanavati in support of his proposition that the evidence definitely established that none of the three articles was an engineering article. Now, if the evidence of Mr. Mehta is to be read for the purpose of reaching the negative conclusion that they were not engineering articles. I have no doubt whatsoever that the evidence is not at all useful. As regards the shuttles, the evidence of Mr. Mehta is that the shuttle consists of the shuttle proper, the tips, iron hooks, iron tongues and iron pins. His evidence is that the last four articles are not manufactured in the plaintiff's factory but they are produced in the open market and that all that plaintiff does in regard to those four articles is to fix them in the shuttles. As regards the wire healds, the evidence of Mr. Mehta is that wires are purchased by plaintiff in the open market and all that plaintiff does is to cut them and give a certain shape to those wires in order to constitute them into wire healds. As regards the reeds, Mr. Mehta's evidence is that plaintiff purchases wires in the open market, cleans them, cuts them and then fixes them into the reeds. As regards the shuttles. Mr. Mehta's evidence is that no engineering work is being done in regard to them in the factory. As already stated, he has also deposed that shuttle is not a part of textile machinery. However, Mr. Mehta in conformity with the pleadings does state that all the three articles are items of mill stores. Now if is difficult to rely upon the mere ipse dixit of Mr. Mehta that in regard to shuttles, no engineering work is being done by the factory and il is nut an item of textile machinery. No details are furnished in regard to the operations as to how shuttles are prepared by the factory. It is also difficult to rely upon the mere negative evidence that shuttles do not constitute a part of textile machinery. But, apart from these unsatisfactory features of Mr. Mehta's evidence, there is enough in the description of the various processes given by Mr. Mehta to lead one to conclude that the aforesaid three articles are engineering articles. In the first instance, some of the operations which have been described by Mr. Mehta would certainly come within the purview of the definition of the word 'manufacture' as given in the Act itself. Aid can also be derived from the definition of 'mechanical engineering', which has already been reproduced, on which Mr. Sompura relied. What distinguishes the work of an ordinary artisan from that of an engineering is that, in performing his work, an engineer resorts to such devices as designing, drawing, moulding, shaping and such other operations which require the skill of an engineer, it may be that, in making the shuttles, plaintiff may be purchasing some of the articles from outside. But the operations which are done with respect to the purchased articles and the wooden part of the shuttle all show prima facie that they do demand the knowledge or the skill of an engineer. Even though wires may be purchased from outside, the skill of an engineer or his knowledge would be necessary in culling, cleaning and shaping those wires for the purpose of converting them into wire healds and reeds. That these articles are not merely articles produced by an ordinary artisan is also quite clear from the fact that these articles are used not as ordinary consumer goods, but they are used as items of mill stores. It is not disputed by Mr. Nanavali that shuttles are used for the purpose of weaving cloth and that wire healds and reeds are used for the same purpose. Having regard to the purposes for which these articles are used, the nature of those articles and the skill and the knowledge which are required to be employed for the purpose of producing them--it is obvious that they are not ordinary articles, such as are used for the purposes of consumption in the ordinary day-to-day life but are articles which constitute parts of a mechanism used for the purpose of producing cloth. Under the circumstances, prima facie, there is good evidence in the case to show that the articles are engineering articles and the evidence given by Mr. Mehta, apart from rebutting the presumption which arises from the nature of the articles, to a certain extent, supports the aforesaid conclusion.

7. In the final analysis, the argument of Mr. Nanavati boiled down to this, that, having regard to the fact that plaintiff alone had led evidence in the case and that there was no positive evidence adduced by defendants, defendants must be taken to have Failed to discharge the burden which lay on them of proving a positive fact, namely, that the articles were engineering articles. Therefore, Mr. Nanavati very strenuously contended, basing himself upon a passage in the judgment delivered in AIR 1963 Punj 19 already referred to, that it was for the department to make out the case that the industry was a shuttle industry. I do not think that the approach suggested by Mr. Nanavati would be the correct approach. The suit is filed by the company. It is the company which seeks a declaration to the effect that it is not liable under the Act and also seeks a permanent injunction restraining the department from enforcing the provisions of the Act. Therefore, the reliefs which plaintiff claims are equitable reliefs and it is quite clear that the initial burden of proving that it is entitled to these equitable reliefs is upon plaintiff. It is quite clear that if no evidence were led on either side, the suit would come to be dismissed and the aforesaid reliefs would not be granted. Therefore, the question in all such cases is as to whether plaintiff has discharged the initial burden which lies upon it to prove that the Act did not apply. It is true that, in considering the question as to whether the burden is discharged or not, the Court must bear in mind the fact that plaintiff is called upon to prove a negative fact. It may he that very slight evidence may be sufficient to satisfy the Court that the burden has been discharged. It may be that, in some cases, slight evidence may be considered as sufficient to shift the burden of proof on the other side. But, the important point to notice is that there must be some such reliable evidence adduced by plaintiff in the first instance which would permit the Court to hold that the burden has either been discharged or that it has been shifted on the other side. Approaching the case in this particular manner, the evidence given by Mr. Mehta does not satisfy any of the aforesaid tests. Mr. Mehta's evidence is not quite forthright inasmuch as he does not disclose all the processes which are employed in the manufacturing of the aforesaid articles and the manner in which they are manufactured. Moreover, as already stated by me, Mr. Mehta's evidence itself shows that some of the processes described by him are such and specially the nature of the articles which have been produced and the use to which those articles are being put, all converge to show that the articles are more engineering articles rather than ordinary non-engineering ones. Therefore, the finding recorded by the first appellate Court that the three articles in question come within the purview of the expression 'mechanical or general engineering' articles was correct and must be upheld.

8. As regards the second point, one important fact which has got to be borne in mind is that the question as to whether the number of workers employed by plaintiff exceeded fifty has got to be determined with reference to the point of time at which the dispute arose between the parties or, in any case, at the point of time when the suit was filed. Now, on that subject, the admitted facts are that, even till today, the buildings in which shuttles and reeds are being manufactured are situated in Gomtipur area in one and the same compound. As regards the building in which the wire healds are manufactured, the plaintiff's case is that that building is now no longer being used for that particular purpose. But plaintiff admits that, till 1954, the aforesaid building, also situated in the same compound, was being used for the same purpose. According to plaintiff, it was sometime in 1954 that the manufacture of the wire healds was shifted to Amraivadi locality. But plaintiff has not stated anywhere, nor has it clarified, as to when the shifting took place. In the absence of any such clarification or evidence, the present case must be decided on the footing that, at the relevant time, all the three articles were being manufactured in three buildings in Gomtipur locality, situated within one compound. It is admitted by plaintiff that the number of workers which were employed in the three buildings aforesaid at the relevant time exceeded fifty. The plaintiff's case in the lower Courts appeared to be that, after the shifting took place, the workers engaged in the manufacture of wire healds should not be computed for counting the number required under the Act. However, it is obvious that such an approach would not help plaintiff in obtaining the reliefs sought for. If, in 1954, the number of workers in the three buildings exceeded fifty, the Act would apply and it is not the plaintiff's case that the provisions of the Act would cease to apply to plaintiff or to the workers employed in the manufacture of wire healds by the mere fact of shifting the place for manufacturing wire healds The question as to what exactly would be the legal effect of shifting the place of the manufacture of wire healds after 1954 was never put in issue and does not arise for consideration in the present appeal at all. Mr. Nanavati was on the horns of a dilemma in placing this part of plaintiff's case. Firstly, having regard to the above position, the Act would certainly apply to plaintiff and its workers. Secondly, Mr. Nanavati admitted that even if the workers engaged in the manufacture of wire healds are excluded, the workers engaged in the manufacture of shuttles and reeds exceeded fifty at all material times. Therefore, it is obvious that the provisions of the Act would apply to plaintiff in regard to the workers engaged in the manufacture of those two articles and the suit would deserve to he dismissed. Therefore, in order to escape the dilemma, Mr. Nanavati urged that, though the three or two articles were being manufactured in one and the same compound, the buildings in which the articles were being manufactured must be regarded as distinct factories for the purposes of the Act inasmuch as each article was being manufactured in a separate building. Therefore, Mr. Nanavati's contention was mat, even if all the three articles were manufactured in the same compound at the relevant period of time, for the purpose of considering whether the provisions of the Act did or did not apply, the correct legal position was that, in fact, there were three factories, each engaged in the manufacture of one of the aforesaid three articles. Mr. Nanavati contended that, in none of the aforesaid three factories, the number had ever exceeded fifty and that, therefore, the provisions of the Act did not apply. Therefore, the question for consideration is whether, for the purposes of the aforesaid Act, there were three separate factories, each manufacturing a separate article or there was only one factory consisting of three separate buildings in which all the three articles were being manufactured. The answer to this question must depend upon the definition of the word 'factory' as given in the Act. That definition is as follows: ''factory' 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'. The crucial words in the aforesaid definition for the purpose of resolving the present controversy appear to be 'premises, including the precincts thereof'. According to Mr. Nanavati, the expression 'premises' means a building and not buildings or a series of buildings. Mr. Nanavati said that he was prepared to concede that if one article was being manufactured in a number of buildings situated in one and the same compound, the same article being subjected to a number of processes in each of the aforesaid buildings, then, all the buildings would constitute premises within the meaning of the aforesaid definition. But Mr. Nanavati emphasised the fact that, in the present case, a separate article, complete by itself, was being manufactured and that all the processes which were necessary for the purpose of producing each of the aforesaid articles were complete in themselves in each building; that, therefore, each building must be regarded as separate premises and consequently a separate factory Mr. Nanavati contended that the tests which were Applied in the two lower Courts for determining this question were not proper or legal. He contended that the fact that the same company owned all the three units which manufactured the three articles was of no consequence. He contended that it was open to one and the same individual to start a number of factories and so long as he keeps the manufacturing process in respect of each of the articles in a separate way in a separate build-big, each must be regarded to be a separate factory and not one and the same factory. He contended that plaintiff itself had regarded all the three as separate units and that this is borne out by a number of facts deposed by Mr. Mehta. For example, according to Mr. Mehta, separate muster rolls are kept for each kind of workers; that the timings of workers engaged in manufacturing each article differed from the timings of those manufacturing the other article; and that the workers were never transferred from one section to another. Mr. Nanavati contended that the facts that one set of books was employed for all the three manufacturing processes, that a common balance-sheet was drawn up for all the three of them, and that bonus was paid on the basil of profits earned by all the three units to the workers of all the three articles are absolutely irrelevant circumstances which do not have any bearing for the purpose of determining a question whether each one is a separate factory or not. In my judgment, none of the circumstances on which Mr. Nanavati relies is determinative of the question in hand. As already stated by me, the real question is determination of the connotation of the expression 'premises, including the precincts thereof'. Now, the expression 'premises' is a wide expression and takes within itself not merely a building but a series of buildings also. That this is so la also quite clear from the use of the word 'precincts' which, according to some authorities, mean a place which is bounded by metes and bounds. Therefore, the true test for the purpose of determining whether a particular place is or is not 'premises, including the precincts thereof' is whether the place is such as is defined by metes and bounds. It cannot be disputed that the aforesaid expression does not merely include a building, but also the place surrounding it, such as the compound. The aforesaid expression, therefore, lakes within its connotation not merely the building, but the open area or the compound roundabout that particular building. If the latter is included in the connotation of the aforesaid expression, in my judgment, all buildings which are included in the precincts and which are defined by a common compound and separated by a common metes and hounds must be regarded as one premises for the purposes of the Act. Under the circumstances, at the relevant time, although the aforesaid three articles were being manufactured in separate buildings, having regard to the fact that all the buildings were situated in one and the same compound and that each building was situated within the precincts of the other building, all the three buildings must be regarded to be a single factory within the meaning of the aforesaid Act. That the term 'factory' has got a wide meaning was held by their Lordships of the Supreme Court in Regional Provident Fund Commissioner, Bombay v. Shree Krishna Metal Manufacturing Co., Bhandara, AIR 1962 SC 1536, as shown by the following passage in the judgment at page 1540 :

'The definition of the word 'factory' proscribed by Section 2(g) of the Act shows that a 'factory' 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. Thus, the word 'factory' used in Section 1(3)Ca) has a comprehensive meaning and it includes premises in which any manufacturing process is being carried on as described in the definition. This definition of the word 'factory' shows that the factory engaged in any industry specified in Schedule I cannot necessarily mean a factory exclusively engaged in the particular industry specified in the said Schedule.'

In this case, it was decided that the Act applies to a composite factory manufacturing more than one article provided that the activity producing the scheduled article was the principal or the main activity of the factory. In my judgment, if a narrower interpretation were to be given to the word 'factory', then, it would introduce practical difficulties in the application of the aforesaid test laid down by their Lordships. The matter can be tested in this way also. Supposing if all the three articles were being manufactured in one and the same building, then, it is crystal clear that, for the purpose of computing the number of workers, the workers engaged in the manufacture of all the three articles would be included. It does not stand to reason that the workers should be denied the benefit of the provisions of the Act by the mere fact that, for economic or other reasons, the employer accommodates the workers in separate buildings, but in the same compound. This is apart from the question as to whether the separation was designed to avoid the provisions of the Act. Even apart from the latter question, in the present case, all the three buildings together must he regarded as constituting one factory having regard to the fact that they were situated in one and the same compound specially because when we find that plaintiff is engaged in the activity of producing articles which arc used in one and the same industry, namely, the textile industry

9. For the aforesaid reasons, there is no substance in this appeal and the same deserves to be dismissed with costs

10. Appeal dismissed with costs.


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