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M/S. P. Laxmanarao & Sons v. Addl. Inspector Of Factories & Another
Factual and Procedural Background
The petitioners are proprietors of three establishments in Vijayawada town—“Welcome Hotel”, “Welcome Coffee House”, and “Welcome Coffee Club”—which prepare and serve food and drink to the public. Since 1950, the petitioners had been obtaining licenses under the Factories Act, 1948 for these establishments, with no objection raised until the filing of this writ petition on 18-7-1956. The petitioners challenged the applicability of the Factories Act to their establishments and sought a writ of mandamus or other appropriate relief to restrain the respondents from enforcing the Act against them.
Legal Issues Presented
- Whether the three establishments qualify as “factories” under Section 2(m) of the Factories Act, 1948, specifically whether the preparation of food and drink constitutes a “manufacturing process” under Section 2(k) of the Act.
- Whether the Factories Act, 1948 is within the legislative competence of the Central Legislature insofar as it applies to hotels and restaurants, considering the distribution of legislative powers under the Government of India Act, 1935.
Arguments of the Parties
Petitioners' Arguments
- The petitioners contended that their establishments are not “factories” under Section 2(m) of the Factories Act because no “manufacturing process” as defined in Section 2(k) is carried out there, asserting that the preparation of food and drink does not qualify as manufacturing.
- They further argued that the Factories Act, 1948, insofar as it encompasses hotels and restaurants, is beyond the legislative competence of the Central Legislature since “inns and inn-keepers” fall under the Provincial List (List II, Entry 28) under the Government of India Act, 1935, and thus only the Provincial Legislature could legislate on this subject.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| New Taj Mahal Cafe Ltd. Mangalore v. Inspector of Factories, Mangalore, A.I.R. 1956 Mad. 600 | Definition and scope of “manufacturing process” under the Factories Act. | The Court agreed with Rajagopalan, J.'s view that culinary processes of preparing food and drink fall within the definition of manufacturing process under Section 2(k). |
| P.K. Mukkerjes v. The Batik of Commerce Ltd., Khulna, 1947 II M.L.J 6 | Principle of legislative competence and pith and substance test for overlapping legislative entries. | The Court applied the principle that the pith and substance of legislation must be examined to determine legislative competence, supporting the validity of the Factories Act even if it incidentally overlaps with provincial subjects. |
| Subramanyam Chettiar's case, 1941 1 M.L.J Supp. 1 F.C. | Overlap of legislative powers and the pith and substance doctrine. | Referenced to emphasize that legislation touching multiple subjects is valid if its true nature falls within the competence of the enacting legislature. |
Court's Reasoning and Analysis
The Court first examined the definitions under the Factories Act, 1948, particularly Sections 2(m) and 2(k). It concluded that the preparation of food and drink by the petitioners falls within the broad language of “manufacturing process” as it involves “making, altering or otherwise treating or adapting any article or substance with a view to its use, sale or disposal.” This interpretation was supported by precedent from the Madras High Court. The Court noted that the factual question of whether the establishments employed the minimum number of workers required to constitute a factory could not be resolved in the writ petition but observed that the petitioners’ own applications stated numbers exceeding the statutory minimum.
Regarding legislative competence, the Court applied the pith and substance doctrine to resolve the contention that the Factories Act was ultra vires the Central Legislature. It held that the Act’s primary object is the regulation of labour conditions in factories, which falls under the Concurrent List (List III, Entry 27) of the Government of India Act, 1935. Even if the Act incidentally touches on the provincial subject of “inns and inn-keepers” (List II, Entry 28), it remains valid because its true nature pertains to labour welfare. The Court relied on authoritative judicial pronouncements confirming that overlapping legislative powers are permissible when the impugned legislation’s main purpose lies within the enacting legislature’s competence.
Holding and Implications
The Court dismissed the writ petition with costs, holding that the three establishments qualify as factories under the Factories Act, 1948, and that the Act is validly enacted by the Central Legislature within its legislative competence.
The direct effect of this decision is that the petitioners must comply with the provisions of the Factories Act in relation to their establishments. The Court did not set any new precedent beyond affirming existing interpretations of the Act’s definitions and the legislative competence doctrine.
1. The petitioners are the proprietors of three establishments known as “Welcome Hotel”, “Welcome Coffee House” and “Welcome Coffee Club”, situated in Vijayawada town. These three establishments prepare articles of food and drink and cater them to the members of the public who visit them. For the purpose of preparing refreshments and other articles of food and for catering them to customers, the petitioners employ a number of persons. From the year 1950 the petitioners were taking out licences under the Factories Act, 1948, for these three establishments and the provisions of the Factories Act were being applied to them. Those licenses were being renewed from year to year and till this writ petition was filed on 18-7-1956, no objection was raised by the petitioners to the application or the applicability of the Factories Act to these three establishments.
2. In this petition filed under Art. 226 of the Constitution, the petitioners seek the issue of a writ of mandamus or any other appropriate writ, direction, or order directing the respondents herein (The Additional Inspector of Factories, Circle No. 1, Vijayawada, and the Additional Inspector of Factories, Circle No. Ill, Vijayawada) to forbear from enforcing any of the provisions of the Factories Act against the petitioners or their establishments.
3. The first contention on behalf of the petitioners is that none of the three establishments in question is a “factory” within the meaning of Sec. 2(m) of the Factories Act inasmuch as no “manufacturing process” within the meaning of Sec. 2(k) of the Act is carried on there. It is urged that the preparation of articles of food and drink is not a “manufacturing process” as contemplated by the Act.
4. To determine this question the relevant provisions of the Factories Act have to be noticed. Sec. 2(m) of the Act is as follows:
“Sec. a(m). ‘Factory’ means any premises including the precints thereof—
(i) Whereon ten or more workers are working or were working on any day of the preceeding twelvemonths, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
(ii) Whereon twenty or more workers are working, or were working on any day of the preceeding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on…………………”
5. As to what constitutes a ‘manufacturing process’ is defined in Sec. 2(k) of the Act which, so far as is material for the present purpose, is as follows:
“Sec. 2(k). ‘manufacturing process’ means any process for—
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport delivery or disposal.”
6. In these establishments meals, refreshments, coffee and other eatables and drinks are prepared and sold to customers. Although at the first blush it might seem incongruous that a culinary process should be regarded as a manufacturing process, yet the language employed in clause (k) of Sec. 2 is, in my opinion wide enough to include the process of preparing food-stuffs and other eatables which are supplied by these establishments. It does satisfy the test of “making, altering or otherwise treating or adapting any article or substance with a view to its use, sale or disposal”. This conclusion accords with the view taken by Rajagopalan, J., as to what constitutes a ‘manufacturing process’ in New Taj Mahal cafe Ltd. Mangalore v. Inspector of Factories, Mangalore . A.I.R 1956 Mad. 600., and I am in respectful agreement with the view taken by the learned Judge.
7. The further requirement as to the minimum number of workers employed in the manufacturing process, is a question of fact which cannot be determined in this writ petition; but it may be mentioned that the petitioners themselves in their application for the registration of these three establishments under the Factories Act gave the number of workmen employed in each of these establishments as much more than the required minimum. It follows that the three establishments are factories within the meaning of the Factories Act and the provisions of the Act are applicable to them.
8. The next contention put forward by Mr. K. Ramchandra Rao, learned advocate for the petitioners, is that the Factories Act of 1948, in so far as it seeks to take in hotels and restaurants, was beyond the legislative competence of the Central Legislature, by reason of the fact that in the distribution of legislative powers under the Government of India Act, 1935, the item “inns and inn-keepers” fell under entry 28 in List II in the Seventh Schedule, and therefore with regard to that topic, the Provincial Legislature alone had the power to make laws and the Central Legislature had not. Assuming that hotels and restaurants of the type which the petitioners are running are inns and the petitioners are inn-keepers, this contention is untenable because in List III the Concurrent Legislative List, entry 27, related to “welfare of labour and conditions of labour”; and therefore, the Central Legislature had the power to enact the Factories Act whose object is to regulate labour in factories and to require the employers to pay adequate attention to the health, safety and protection of their workers; and even if (this piece of legislation incidentally trenched upon a Provincial subject, it cannot be held to be ultra vires of the powers of the Central Legislature.) In this context the observations of the Judicial Committee of the Privy Council in P.K Mukkerjes v. The Batik of Commerce Ltd., Khulna . 1947 II M.L.J 6. are pertinent:
“Moreover, the British Parliament when enacting the Indian Constitution Act had a long experience of the working of the British North America Act and the Australian Commonwealth Act and must have known that it is not in practice possible to ensure that the powers entrusted to the several Legislatures will never overlap. As Sir Maurice Gwyer, C.J, said in the Subramanyam Chetttiar's case . 1941 1 M.L.J Supp. 1 F.C.”.
‘It must inevitably happen from time to time that legislation though purporting to deal with the subject in one list, touches also upon a subject in another list, and the different provisions of the enactment may be so closely interwined that blind observance to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee, whereby the impugned statute is examined to ascertain its pith and substance or its true nature and character for the purposes of determining whether it is legislation with respect to matters in this list or in that.’
Their Lordships agree that this passage correctly describes the grounds upon which the rule is founded, and that it applies to Indian as well as Dominion legislation.
No doubt experience of past difficulties has made the provisions of the Indian Act more exact in some particulars and the existence of the Concurrent List has made it easier to distinguish between those matters which are essential in determining to which list particular provisions should be attributed and those which are merely incidental. Hut the overlapping of subject-matter is not avoided by substituting three lists for two or even by arranging for a hierarchy of jurisdictions.
Subjects must still overlap and where they do, the question must be asked what in pith and substance is the effect of the enactment of which complaint is made and in what list is its true nature and character to be found”.
9. Applying the above test, it will be seen that the pith and substance of the impugned Act is, as is apparent from its preamble and its provisions, the regulation of labour in factories and the ensuring of good working conditions. This matter fell under item 27 of List III in the Seventh Schedule to the Government of India Act, 1935, and as such was within the legislative competence of the Central Legislature; and an establishment which answers the definition of a factory, would come within the purview of the Act notwithstanding that it is an inn and the person who runs it is an inn-keeper.
10. In the result, the Writ Petition fails and is dismissed with costs. Advocate's fee Rs. 100/-.
K.S.R
11. Petitions dismissed.
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