Summary
The High Court quashed the summoning order in a complaint under Section 92 of the Factories Act, 1948 against the proprietor of a laundry, holding that dry cleaning is not a 'manufacturing process' because no transformation into a new commercially distinct article results. The Court held that Section 2(k) of the Act expressly includes 'washing' and 'cleaning' of any article with a view to its use, delivery or disposal, that the transformation test belongs to the Central Excise Act and cannot be imported into this welfare statute, that the laundry employing more than nine workers with power was a 'factory' under Section 2(m), and restored the complaint and summoning order.
Issues
- Whether the business of washing, cleaning and dry cleaning clothes amounts to a 'manufacturing process' within Section 2(k) of the Factories Act, 1948, so that the premises constitute a 'factory' under Section 2(m).
- Whether the requirement of 'transformation' into a new commercially distinct article, derived from the definition of 'manufacture' in the Central Excise Act, 1944, can be imported into the Factories Act.
- Whether the decisions in ESIC v. Triplex Dry Cleaners, rendered under the Employees' State Insurance Act before Section 2(14AA) was inserted, govern the meaning of 'manufacturing process' under the Factories Act.
- Whether the complaint should be remitted to the Magistrate because the order issuing process was cryptic.
Provisions considered
- Section 2(k) ('manufacturing process'), Factories Act, 1948On a plain reading, any process for 'washing, cleaning ... or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal' is a manufacturing process. Linen deposited with a launderer is washed, cleaned and delivered to the customer for use, so the respondent's laundry business, including dry cleaning, is squarely covered; nothing in the Act is repugnant in the subject or context so as to displace the definition. (¶¶ 14, 15, 16, 17, 33, 36, 42)
- Section 2(m) ('factory'), Factories Act, 1948Premises where ten or more workers work and a manufacturing process is carried on with the aid of power are a factory. The respondent admittedly employed more than nine workers at the central processing unit and used power, so the premises were a factory once the activity was held to be a manufacturing process. (¶¶ 4, 14, 15, 16, 33, 42)
- Section 6 read with Rules 3, 4 and 6 of the Goa Factories Rules, 1985, Factories Act, 1948The complaint alleged that the respondent operated without approved factory plans, without a factory licence and without applying for registration, as required by Section 6 and the Rules; these alleged contraventions founded the prosecution. (¶¶ 3, 4, 23)
- Section 92, Factories Act, 1948The general penalty provision under which the occupier and manager are punishable for any contravention of the Act or rules; the complaint before the JMFC alleged offences punishable under this section and the Court restored the complaint for trial. (¶¶ 2, 7, 27, 49)
- Section 105, Factories Act, 1948Noted as requiring cognizance only on complaint by or with the sanction of an inspector and trial only by a Magistrate of the first class, as part of the conspectus of the Act. (¶ 28)
- Section 2(g) ('manufacturing process'), Factories Act, 1934The earlier definition did not contain the words 'washing, cleaning'; applying the mischief rule, their specific insertion in the 1948 Act, read with the Statement of Objects and Reasons, showed a clear object of bringing within the Act undertakings excluded under the 1934 Act. (¶¶ 18, 20, 35, 36, 37)
- Section 2(f) ('manufacture'), Central Excise Act, 1944The High Court had extrapolated the excise concept of manufacture, which requires a change producing a new product (Crane Betel Nut, Kores India). The Court held that those decisions have no application because the Factories Act contains its own different definition of 'manufacturing process'. (¶¶ 38, 39, 40, 41)
- Sections 2(12) and 2(14AA), Employees' State Insurance Act, 1948Triplex Dry Cleaners was decided under the ESI Act when only Section 2(12) defined 'factory' and before Section 2(14AA) (w.e.f. 20.10.1989) adopted the Factories Act meaning of 'manufacturing process'; the Supreme Court in that case had expressly left open the position after 1989. Those decisions, and Super Cleaners, therefore had no application to a case arising directly under the Factories Act. J.P. Lights, applying the amended provision to servicing of electrical goods, was noted. (¶¶ 7, 43, 44, 45, 46, 47)
Held
- Where the words of a statute are clear, the plain meaning must be given effect. 'Washing or cleaning' of any article with a view to its use, sale, transport, delivery or disposal is clearly covered by the definition of 'manufacturing process' in Section 2(k) of the Factories Act, 1948; a laundry business involving washing and cleaning of clothes, including dry cleaning, carried on with more than nine workers and with the aid of power, is a manufacturing process carried on in a factory within Section 2(m). The contention that dry cleaning does not make a product usable or deliverable had only to be stated to be rejected: the linen is delivered to the customer for use after cleaning. (¶¶ 17, 33, 34, 42)
- The Factories Act, 1948 is a welfare statute intended to ameliorate the conditions of workers and protect them from occupational hazards, and such legislation must be construed liberally to give efficacy to the legislative intent, without doing violence to the language. In construing such a statute the court adopts a beneficent construction where two constructions are possible, but where the language is plain it must give effect to it without seeking ambiguity. (¶¶ 18, 19, 21, 22, 29, 30, 31, 32, 34)
- Applying the mischief rule: the definition in Section 2(g) of the Factories Act, 1934 did not contain the words 'washing, cleaning', and their specific insertion in the 1948 Act, read with the Statement of Objects and Reasons which sought to extend the Act to workplaces previously excluded, reinforces that washing and cleaning undertakings were deliberately brought within the Act. (¶¶ 35, 36, 37)
- The High Court's reasoning that a transformation must ensue and a new article commercially known as different must come into being was totally erroneous; it ignored the plain language of the section and the welfare nature of the statute and wrongly extrapolated the definition of 'manufacture' and its judicial interpretation under the Central Excise Act, 1944. Where a statute itself defines a term for its purposes, a court is bound to apply that definition except where the opening words 'anything repugnant in the subject or context' apply; words are to be understood in their natural, ordinary sense and no addition, substitution or rejection of words is permissible. (¶¶ 38, 40, 41)
- ESIC v. Triplex Dry Cleaners (P&H High Court, 1981, affirmed by this Court in (1998) 1 SCC 196) was decided under the ESI Act for a period before Section 2(14AA) adopted the Factories Act definition, and this Court there expressly left open the position after 20.10.1989; it, and Super Cleaners, have no application to a case arising squarely under the Factories Act whose definition expressly includes washing and cleaning. The respondent's ESIC registration as a factory for the same premises was noted but the conclusion was reached independently on the interpretation of the Act. (¶¶ 43, 44, 45, 46, 47)
- Although the order issuing process was cryptic and did not reflect application of mind, remitting the complaint for the Magistrate to exercise his powers afresh would be futile in view of the categorical findings on the applicability of the Act; the Court therefore declined that course and restored the complaint and the summoning order. (¶¶ 48, 49)
Result
Appeal allowed. The High Court's order dated 06.09.2021 in Stamp Number Main No. 944 of 2020 (F) set aside; the complaint and the order dated 04.12.2019 issuing process restored to the file of the JMFC, Panaji, to be proceeded with in accordance with law.