Widening the Interpretation of “Manufacturing Process” under the Factories Act: The State of Goa v. Namita Tripathi (2025)

Introduction

The Supreme Court of India, in the case of The State of Goa & Anr. v. Namita Tripathi (2025 INSC 304), has laid down a significant precedent regarding the interpretation of “manufacturing process” under the Factories Act, 1948. At the center of the dispute was whether a commercially run laundry/dry cleaning service could be classified as a “factory,” thus making the respondent liable for compliance with the safety, health, and welfare provisions mandated by the Factories Act, 1948.

The background of this matter involved an inspection conducted by the authorities, which revealed that the respondent’s laundry facility employed more than nine workers while carrying out processes that the State of Goa (the complainant) claimed were covered under the definition of “manufacturing process.” The High Court of Bombay at Goa initially quashed the summons issued against the respondent, holding that their business was merely a service that did not generate a new, marketable commodity. However, the Supreme Court reversed this finding, emphatically ruling that the Act’s definition of “manufacturing process” explicitly includes washing and cleaning, bringing establishments engaged in these activities under the Act’s protective umbrella.

The case thus clarifies and expands the scope of “manufacturing process,” ensuring that the welfare and safety provisions enshrined in the Factories Act, 1948, extend to a broader category of workers, including those in laundry/dry cleaning services.

Summary of the Judgment

The Supreme Court allowed the appeal by the State of Goa, setting aside the High Court’s judgment that had quashed the summons and complaint.
The Court focused on the definition of “factory” and “manufacturing process” as contained in Sections 2(m) and 2(k) of the Factories Act, 1948, respectively.
The Court held that laundry or dry cleaning services, which involve washing or cleaning articles “with a view to its use, sale, transport, delivery, or disposal,” fall squarely within the statutory definition of “manufacturing process.”
Consequently, because the respondent’s business employed more than nine workers with the aid of power, it qualified as a factory under Section 2(m) of the Factories Act, 1948.
The Supreme Court concluded that the lower court’s routine order summoning the respondent might have been short on reasoning, but, given the undisputed facts and the correct legal position, no purpose would be served by quashing and directing a re-issuance of summons.

Analysis

A. Precedents Cited

The judgment closely scrutinized the decisions and principles from several earlier cases, highlighting how certain courts have approached whether dry cleaning or similar activities meet the criteria for “manufacturing process.” Notable precedents and references include:

Triplex Dry Cleaners Case (Punjab & Haryana High Court): This case, which had arisen under the Employees’ State Insurance Act (ESI Act), concluded that a dry cleaning establishment did not amount to a factory because no new commodity was produced. The Supreme Court in the present case distinguished this ruling because, at the relevant time, the ESI Act did not incorporate the Factories Act’s specific definition of “manufacturing process.” After 1989, the ESI Act included Section 2(14AA), which mirrors the Factories Act definition.
Employees’ State Insurance Corporation v. Triplex Dry Cleaners (1998) 1 SCC 196: The Supreme Court upheld the earlier decision on the basis that the period in question predated the ESI Act’s 1989 amendment that brought in the Factories Act’s definition. The Supreme Court here took care to limit that ruling to situations prior to the statutory change and signaled that after 1989, the result could be different.
J.P. Lights India v. Regional Director E.S.I. Corporation (2023 SCC OnLine SC 1271): The Supreme Court reaffirmed that a premises using workers to alter, repair, wash, or clean an article for delivery, disposal, or continued use, with the aid of power and meeting the threshold worker requirements, must be treated as a factory.
References to Central Excise Act cases (e.g., Crane Betel Nut Powder Works v. Commr. of Customs & Central Excise) were categorically set aside, emphasizing that the definition of “manufacture” in excise law works differently from the definition of “manufacturing process” in the Factories Act, 1948.

B. Legal Reasoning

The Court underlined the Factories Act’s objective as a welfare statute. According to Sections 2(m) and 2(k) of the Act, any premise employing the requisite number of workers and carrying out a “manufacturing process” is covered. Section 2(k) explicitly states that “washing” or “cleaning” any article for its use, sale, transport, delivery, or disposal qualifies as a manufacturing process.

Rejecting the High Court’s belief that dry cleaning does not create a new or distinctly marketable commodity, the Supreme Court emphasized the following factors:

Plain Meaning of the Statute: The statutory text clearly includes “washing, cleaning” within the scope of manufacturing process, making it unnecessary to prove transformation into a new product.
Mischief Rule and Legislative History: The Court noted that the Factories Act, 1948, expanded the older 1934 Act to include more categories of workplaces. The explicit mention of “washing, cleaning” is a direct legislative remedy to ensure better regulatory coverage.
Beneficial Interpretation: As a social welfare legislation designed to protect workers, the Factories Act must be given a broad reading. The Court refused to interpret the law in a manner that would exclude large numbers of employees from statutory safeguards.
Non-Applicability of Central Excise Precedents: Cases dealing with “manufacture” for excise purposes were distinguished because the Factories Act separately defines “manufacturing process.”

C. Impact

This decision paves the way for bringing more commercial establishments—especially those performing laundry, washing, or cleaning services—within the ambit of the Factories Act, 1948. As a result:

Regulatory Compliance: Similar businesses must ensure compliance with provisions concerning worker safety, welfare, and health (including licensing, registration, and maintenance of proper facilities).
Worker Benefits: Employees in such establishments are entitled to the Act’s protective measures, such as regulated working hours, overtime pay, safety standards for machinery, and sanitation requirements.
Interpretation of Other Welfare Laws: By reaffirming a broad, “plain meaning” approach under a beneficial statute, future courts may adopt a similarly expansive reading when analyzing definitions in other social welfare legislations.

Complex Concepts Simplified

“Factory” under the Factories Act, 1948: A premise employing at least 10 workers (if power is used) or 20 workers (if no power is used) to carry out prescribed activities. Once these numeric and process thresholds are met, the law applies automatically.
“Manufacturing Process”: Involves making, altering, washing, cleaning, packing, or adapting any article for use, sale, transport, delivery, or disposal. In this case, the Court clarified that “washing” or “cleaning” garments meets the definition, even if the article’s outward identity is unchanged.
Overlap with ESI Act: After 1989, the ESIC Act incorporated the Factories Act definition of “manufacturing process,” which means that certain commercial services (like laundry or dry cleaning) may also fall under the ESI coverage if they meet the Act’s employee thresholds.
Beneficial Legislation: Statutes designed with social welfare in mind (like the Factories Act) should be interpreted liberally to protect the broader interests of workers, rather than restrict coverage to the narrow reading of “manufacture” used in tax or excise contexts.

Conclusion

In The State of Goa & Anr. v. Namita Tripathi, the Supreme Court unequivocally confirmed that the processes of washing and cleaning, when performed by an establishment employing sufficient workers and using power, are squarely within the scope of “manufacturing process” under the Factories Act, 1948. This ruling marks a crucial precedent, clarifying that the question of whether a “new” commodity emerges is irrelevant under the Factories Act.

By restoring the complaint and summons against the respondent, the Court not only underscored the plain statutory language but also reinforced the overarching beneficial purpose behind the Factories Act. Businesses in service sectors previously doubtful about their inclusion under the Act should take heed of this broad reading and ensure full compliance. Equally important, workers in these establishments stand to benefit from the strengthened protection and welfare measures, which was the legislative intent behind the Act from its inception.

Overall, this judgment is a reminder of the Court’s consistent approach that in welfare legislations such as the Factories Act, ambiguities must resolve in favor of worker protection. It signals to all service-based or maintenance-oriented industries that so long as they engage in activities listed under Section 2(k) and satisfy Section 2(m)’s numerical threshold, they are within the statute’s protective fold. This assures the workforce of safer, healthier, and fairer working conditions in an expansive range of establishments.