Parekh, J.:— This is a writ petition under Art. 226 of the Constitution, inter alia, seeking a declaration that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, are not applicable to the petitioners and for issue of an appropriate writ quashing the notices, dated 26 December 1985, 17 February, 1986 and 8 May 1986, and the proceedings adopted in pursuance thereof by the Regional Provident Fund Commissioner, Maharashtra and Goa.

2. The petitioners' case is that on 19 April 1985, Chowgule Metal Industries, Ltd., came to be incorporated under the Companies Act. That by a resolution, dated 13 December 1975, the name of the company was changed to Mandovi Pellets, Ltd., (here-. In after referred to as the petitioners). That in the year 1976, the petitioners put up an iron ore pelletization plant at Shiroda. That the same came to be duly registered under the Factories Act, 1948, on 7 August 1979. The factory started its trial runs in May 1979, and commenced commercial production by September 1979. However, due to shortage of electricity supply and high costs, difficulties arose and the production of the company for the first two years came to be restricted to 50 per cent of its capacity. In the circumstances, the petitioners approached the Central Government to grant them permission to “close” down the plant initially for a period of one year which sanction was duly accorded. Later on, this period was extended for a further period of two years and thereafter for a period of another three years. That, in so far as the workmen were concerned, a settlement was reached on 11 August 1981, under which 218 workmen agreed not to report for duty for a period of six months ending 15 February 1982, and the petitioners agreed to give them an ad hoc monthly payment equal to 75 per cent of their normal wages during the period of voluntary unemployment. This settlement was later extended by mutual consent up to 31 May 1982. In the fond hope that the plant would recommence its operation from June 1982, the petitioners and the union of the workmen again commenced negotiations for the revision of pay-scales but on the strict understanding that whatever settlement be arrived at, the same would be implemented if and when the factory reopened for commercial purposes. Hence, notwithstanding the decision to keep the plant closed for a period of three years, i.e, from April 1982 to March 1985, the management signed a settlement with the workmen on 14 July 1982, whereunder approximately 300 workmen including the 218 workmen, referred to earlier, accepted voluntary unemployment with an ad hoc monthly payment equal to 65 per cent of their revised wages. It was agreed by and between the petitioners and the said workmen that this “voluntary unemployment” was to be binding on the parties until such time as the plant resumed commercial production. However, things went from bad to worse and on 26 February 1985, at a meeting of the board of directors, it was decided that the pelletization plant be closed down permanently. Thereafter, another settlement was arrived at between the petitioners and the workers on 16 March, 1985 whereunder it was agreed that the employees of the company would voluntarily retire as and from 15 June 1985, and that they would be paid certain benefits listed in the said settlement. It is the petitioners' case that whilst all this was going on, somewhere in 1980–81, the union representing the workmen agitated with the Provident Funds Authorities that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952), be implemented and enforced. The Provident Fund Inspector thereupon visited the petitioners' plant on several occasions during 1982 and collected information on various points. According to the petitioners, the said Inspector was satisfied that the provision of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, could, not apply and so was the union. It is the petitioners' case that despite this position, they were surprised to receive a letter, dated 2 February, 1985 from the second respondent requiring the petitioners to fill in a questionnaire and furnish information. The petitioners, by their letter, dated 25 February 1985, furnished the requisite information but maintained that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, were not applicable to the pelletization plant and that the pelletization plant was not covered by Sch. I to the Act. The Regional Provident Fund Commissioner, by his letter, dated 26 December 1985, maintained that the petitioners' factory was engaged in the manufacture of “iron and steel” and that the Act was applicable to the petitioners' factory as and from 30 September 1982, and called upon the petitioners to implement the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, with effect from 1 October 1982, the Family Pension Fund Scheme, 1971, with effect from 1 January 1976, and the Employees' Deposit-Linked Insurance Scheme, 1976, with effect from 1 October 1982. The petitioners, thereafter, addressed a letter, dated 22 January 1986, to the Regional Provident Fund Commissioner setting out what was, according to them, a brief history of the case and further pointing out that the chemical composition of iron ore pellets on the one hand and iron on the other were wholly different and the pelletization plant could never fall under the entry “iron and steel” specified in Sch. I to the said Act. In the said letter, the petitioners further contended that, in any event, as the plant had started in 1979 and had closed down in 1981, i.e, during the infancy period of three years provided in S. 16(b) of the Act, the question of the applicability of the provisions of the said Act to the petitioners' industry did not arise. The petitioners, by their letter, dated 5 February 1986, also sought a personal hearing. It is the petitioners' case that instead of receiving a reply, they were saddled with a letter, dated 17 February 1986, whereby the petitioners were informed that the second respondent after examining the record was satisfied that the provisions of the Act were wholly applicable to the petitioners' industry. Further correspondence then ensued between the petitioners on the one hand and the respondents on the other. In the course of this correspondence, the petitioners received a letter, dated 29 March 1986, asking the petitioners to see the second respondent on 3 April 1986. The petitioners accordingly deputed their representative to attend before the second respondent. At this hearing, the petitioners' representative reiterated the stand taken by the petitioners. After the personal hearing was over, the petitioners made further submissions by their letter, dated 7 April 1976, to the same effect. The second respondent, by his letter, dated 8 May 1986, informed the petitioners that the second respondent had examined the entire position and was satisfied that the provisions of the Act were applicable and called upon the petitioners to comply with the requisitions contained in his earlier letter, dated 17 February 1986. The petitioners, by their letter, dated 19 May 1986, addressed to the second respondent intimated to him that since there was a difference of opinion between the petitioners on the one hand and the second respondent on the other as to the applicability of the Act, the second respondent should refer the matter to the Central Government. The petitioners followed up this letter by deputing their representative who called upon the Assistant Provident Fund Commissioner and enquired as to what steps the Office of the Provident Fund Commissioner was going to take on their letter. The Assistant Provident Fund Commissioner informed the petitioners' representative that the petitioners would receive a reply in due course. But nothing was heard on this point. On the other hand, the petitioners received a letter, dated 2 July 1986, calling upon them to report compliance of the earlier letters. Being aggrieved by the demands made by the second respondent, the petitioners have filed the present petition.

3. The petition is resisted by the respondents, inter alia, on the grounds

(a) that the provisions of the Act are clearly applicable to the petitioners' industry and the petitioners would hence be entitled to no relief,

(b) that the petitioners had at best suspended operations and the provisions of S. 16 of the Act did not apply to the facts of the case and the petitioners hence cannot escape their liability, and

(c) that if the petitioners were aggrieved by the action of the second respondent, then they must pursue the remedy provided under S. 19-A of the Act which was an efficacious remedy and in view of this the petitioners would be disentitled to relief on this writ petition.

4. The questions that arise for determination on this petition are:

(a) whether the petitioners who are manufacturing iron ore pellets fall within the ambit of the entry “iron and steel” (read with its explanation] specified in Sch. I to the Act;

(b) whether the provisions of the said Act are applicable to the petitioners' industry since the petitioners' industry had closed down its manufacturing activity within three years of commencement of the production, i.e, during the period of infancy specified in S. 16 of the said Act;

(c) whether S. 19-A affords the petitioner an alternative and efficacious remedy which the petitioners are bound to follow; and

(d) whether the petitioners would be entitled to any relief.

5. To determine the aforestated questions, it would be relevant to refer briefly to the broad features of the scheme. Section 1 refers to the short title, extent and application and Cl. (3) of S. 1 reads as follows:

“1. (3) Subject to the provisions contained in S. 16, it applies—

(a) to every establishment which is a factory engaged in any industry specified in Sch. I and in which twenty or more persons are employed, and

(b) to any other establishment employing twenty or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in this behalf:

Provided that 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 any establishment employing such number of persons less than twenty as may be specified in the notification…

(5) An establishment to which this Act applies shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below twenty.”

[emphasis supplied.]

Hence, what S. 1, Cl. (a), makes clear is that the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, do not apply to all industries but only such as specified in Sch. I to the said Act. Now, in the year 1952, only six industries were included in Sch. I. The relevant portion of the schedule read as follows:

“SCHEDULE I

(See Ss. 2(i) and 4)

Any industry engaged in the manufacture or production of any of the following, namely:

Cement.

Cigarettes.

Electrical, mechanical or general engineering products.

Iron and steel.

Paper.

Textiles (made wholly or in part of cotton or wool or jute or silk whether natural or artificial).”

By act 37 of 1938, the words “or production” were omitted from the schedule. Section 4 of the Act confers a power on the Central Government to add to Sch. I. Pursuant to the provisions of S. 4, various notifications came to be issued and other industries were included it the list of the six industries initially specified in Sch. I. By act 37 of 1953, an explanation also came to be added (in the schedule) and the relevant portion reads as follows:

“Explanation.— In this schedule, without prejudice to the ordinary meaning of the expressions used therein,—

(b) the expression “iron and steel” includes pig iron, ingots, blooms, billets and rolled or rerolled products into basic forms and tool and alloy steel.”

Section 5 of the Act provides for an Employees' Provident Funds Scheme. Section 6 is a charging section and provides for contribution and envisages certain penalties. Section 7-A refers to determination of moneys due from employers whilst S. 14-B speaks of power to recover damages where an employer makes a default in payment of the contribution to the fund. Section 16 provides as follows:

“16. Act not to apply to certain establishments.—(1) This Act shall not apply—

(a) to any establishment registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State relating to co-operative societies, employing less than fifty persons and working without the aid of power; or

(b) to any other establishment employing fifty or more persons or twenty or more, but less than fifty persons until the expiry of three years in the case of the former and five years in the case of the latter, from the date on which the establishment is, or has been, set up.

Explanation.— For the removal of doubts, it is hereby declared that an establishment shall not be deemed to be newly set up merely by reason of change in its location.”

(emphasis supplied)

Section 19-A provides as follows:

“19A. Power to remove difficulties.— If any difficulty arises in giving effect to the provisions of this Act, and in particular, if any doubt arises as to—

(i) whether an establishment which is a factory, is engaged in any industry specified in Sch. I;

(ii) whether any particular establishment is an establishment falling within the class of establishments to which this Act applies by virtue of a notification under Cl. (b) of Sub-sec. (3) of S. 1; or

(iii) the number of persons employed in an establishment; or

(iv) the number of years which have elapsed from the date on which an establishment has been set up; or

(v) whether the total quantum of benefits to which an employee is entitled has been reduced by the employer,

the Central Government may, by order, make such provision or give such direction, not inconsistent with the provisions of this Act, as appear to it to be necessary or expedient for the removal of the doubt or difficulty; and the order of the Central Government, in such cases, shall be final.”

Now, it is common ground that iron ore pellets are not physically or chemically identical to iron ore fines and lumps. That iron ore is mainly constituted of haematite which is found associated with geothite and limonite which are hydroxide ores containing molecular water. That the process of pelletization consists of upgrading the ore fines and crushing them very fine in order to give the pellets strength to resist degradation in handling and conveyance to heating equipment. The grit strength improves by adding quantities of bestonite or limestone as additives for the pellet mix and that mixture is made into a ball initially heated at 225 to 250°C. and then treated to temperature of 700 to 1000°C. with the result that they become hard and durable pellets. The pellets are then roasted or indurated at a temperature at 1325°C. In other words, pelletization is merely a benefication or preparation or ore-dressing which is necessary since run-of-mine ore (referred to as ROM) is not marketable. These pellets are used for feeding blast furnaces in the production of steel as well as in the production of sponge iron.

Iron, on the other hand, is produced in a blast furnace where the iron bearing oxide materials are melted at very high temperature (around 1400°C.) along with limestone and coke. In the process, carbon monoxide derived from the coke reacts with the Fe2O3 in the iron bearing raw materials causing oxygen to be removed and leaving only Fe. The impurities like alumina and silica react with limestone and float out as slag while only molten iron collects in a pool in the hearth, which is tapped out as “hot metal.” The liquid iron (hot metal) is subsequently refined in open hearth furnaces or oxygen convertors into steel. Alternatively, the “hot metal” may be cooled and cast into suitable form for disposal of iron to the foundries. The chemistry of the two products would hence be different, i.e, the chemistry of iron ore would be Fe2O3, while the chemistry of iron would be Fe. If this be the position, then it cannot be said that the industry manufacturing iron pellets is an industry engaged in the manufacture of iron or steel or an industry which can be included in the generality of the entry “iron and steel” appearing in Sch. I.

6. But the question still remains whether the petitioners' industry of manufacturing iron ore pellets falls within the ambit of the explanation (reproduced in Para. 5 above).

7. Sri Kakodkar submitted that the word “include” appearing in the explanation was a term of limitation and not extension. Sri Bhobe, for respondents 1 and 2, and Sri Rebello, for the interveners submitted that the items specified in the explanation were only illustrative. In other words, the word “includes” was a term of extension.

8. In support of his contention that the word “includes” was a term of limitation and not extension, Sri Kakodkar relied upon various decisions and we shall advert to the same.

9. The first case cited by Sri Kakodkar, learned counsel for the petitioners, was the case of South Gujarat Roofing Tiles Manufacturers Association v. State of Gujarat [1977 — I L.L.N 1]. The question in that case that arose was if entry (22), added by the Gujarat Government by a notification, dated 27 March, 1967 to Part I of the Schedule to the Minimum Wages Act, 1948, covered Mangalore pattern roofing tiles. That entry (22) reads as follows:

“Employment in potteries industry.

Explanation.— For the purpose of this entry, potteries industry includes the manufacture of the following articles of pottery, namely:

(a) crockery;

(b) sanitary appliances and fittings;

(c) refractories;

(d) jars;

(e) electrical accessories;

(f) hospital ware;

(g) textile accessories;

(h) toys; and

(i) glazed tiles.”

10. In dealing with the import of the word “includes,” it was held that:

“Though ‘include’ is generally used in interpretation clauses as a word of enlargement, in some cases the context might suggest a different intention. ‘Pottery’ is an expression of very wide import, embracing all objects made of clay and hardened by heat. If it had been the Legislature's intention to bring within the entry all possible articles of pottery, it was quite unnecessary to add an explanation. We have found that the explanation could not possibly have been introduced to extend the meaning of potteries industry or the articles listed therein added ex abundanti cautela. It seems to us, therefore, that the Legislature did not intend everything that the potteries industry turns out to be covered by the entry. What then could be the purpose of the explanation? The explanation says that, for the purpose of entry (22), potteries industry ‘includes’ manufacture of the nine articles of pottery named therein. It seems to us that the word ‘includes’ has been used here in the sense of ‘means’; this is the only construction that the word can bear in the context. In that sense, it is not a word of ‘extension’, but limitation; it is exhaustive of the meaning which must be given to potteries industry for the purpose of entry (22). The use of the word ‘includes’ in the restrictive sense is not unknown. The observations of Lord Watson in Dilworth v. Commissioner of Stamps [1899 A.C 99 P.C], which is usually referred to on the use of ‘include’ as a word of extension, followed by these lines:

‘But the word “include” is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to ‘mean and include’ and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, mutt invariably be attached to these words or expressions.’

It must, therefore, be held that the manufacture of Mangalore pattern roofing tiles is outside the purview of entry (22).”

11. Sri Kakodkar next relied upon the observations in Reserve Bank of India v. Peerless General Finance and Investment Company, Ltd. [(1987) 1 SCC 424]. That was a case under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, where again the interpretation of the word “includes” was considered and in this context, the learned Judges observed as follows:

“Much argument was advanced on the significance of the word ‘includes’ and what an inclusive definition implies. Both sides relied on Dilworth case [1899 A.C 99 P.C] (vide supra). Both sides read out the well-known passage in that case where it was stated:

‘The word ‘include’ is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word “include” is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to show that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to ‘mean and include’ and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions.’”

12. Sri Kakodkar next relied on the observations in Kamlakar Shankar Warde v. The Central Board Of Trustees* (Employees' Provident Funds Act) [1966-I L.L.J 553]. In that case, the question that arose was whether a factory manufacturing paper cones and tubes was covered by the item “paper” specified in Sch. I of the Employee's Provident Funds and Miscellaneous Provisions Act, 1952, or the explanation contained in the schedule. The said explanation reads as follows:

“Explanation.— In this schedule, without prejudice to the ordinary meaning of the expression used therein,—

(c) the expression ‘paper’ includes pulp, paperboard and strawboard.”

In dealing with this aspect, the learned Judge dwelt on the meaning of the words “manufacture” and “manufacturing process” appearing in S. 2(ic) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and held that the definition of the expressions “manufacture” and “manufacturing process,” as given in S. 2(ic) of the Act, is in very wide terms but if that definition is properly understood, all that it seeks to do is to include the various types of processes within the expression of manufacture or manufacturing process, but it could not be forgotten that by employing any one or the other of processes so included, what must result is the manufacture or production of the basic article or substance mentioned in the schedule; that it cannot include any process whereby the basic article or substance gets itself converted into an altogether different article or substance.

13. Sri Kakodkar submitted that these citations must make it clear that the word “includes” was a term of limitation and items set out in the explanation cannot be added too.

14. Sri Bhobe, learned counsel for respondents 1 and 2, in support of his contention that the word “includes” was a term of extension and that items specified in the explanation were only illustrative, placed reliance upon the observations in Regional Provident Funds Commissioner, Punjab v. Shibn Metal Works [A.I.R 1965 S.C 1076], and the case of Nagpur Glass Works, Ltd. v. Regional Provident Fund Commissioner [A.I.R 1957 Bom. 152].

15. Turning first to the case of Regional Provident Funds Commissioner, Punjab v. Shibn Metal Works [A.I.R 1965 S.C 1076] (vide supra), that was a case under the Employees' Provident Funds Act and the question which arose was whether the undertaking manufacturing brass utensils was covered under the electrial, mechanical or general engineering product, appearing in Sch. I, and in dealing with the explanation, the Supreme Court observed as follows:

“A glance at the items included in Cl. (a) of the explanation, as well as the items included in Cls. (b), (c) and (d) clearly shows that the object of the Legislature in enacting the explanation was to clarify the content of respective entries in Sch. I, to illustrate them by adding specific items, and to enlarge their scope in some material particulars. The fact that an explanation has been added with this purpose in 1953, must also be taken into account in construing the entry in question.”

However, in so far as the subject-matter of the case was concerned, the Supreme Court held that brass utensils came under the heading “electrical, mechanical or general engineering products” and its explanation.

16. Coming next to the decision in Nagpur Glass Works, Ltd v. Regional Provident Fund Commissioner [A.I.R 1957 Bom. 152] (vide supra), in that case, the queetion that arose was as to whether the burners and metal lamps manufactured by the petitioners came under S. 1, Sub-cl. (3) Sch. I (Explanation)—electrical machanical or engineering products. The arguments canvassed on behalf of the manufacturers were that the expression “electrical, mechanical or general engineering products” added by virtue of the explanation becomes limited to the products expressly specified therein and that burners and metal lamps were not included within the explanation and they did not fall within the explanation “electrical, mechanical or general engineering products.” In dealing with this contention, the Court observed:

“The fact that the products cover a very wide range shows that their specification in the explanation is by way of illustration. Thus, though, “electric lamps” and “hurricane lanterns” are specified in the explanation, it would not be right to say that lamps of other kinds were intended to be excluded. On the other hand, the proper interpretation would be to say that by specifying two kinds of lamps the Legislature intended to include every kind of lamp. Any other interpretation would render the opening words of the explanation nugatory and defeat the clearly expressed intention of the Legislature.”

Sri Bhobe argued that the aforesaid citations must show that the items specified in the explanations were illustrative, and in so far as the present case is concerned, iron ore cannot be excluded from the heading of “iron and steel” read together with its explanation.

17. Sri Rebello, learned counsel for the interveners, drew our attention to the case of Kapur Textile Finishing Mills v. Regional Provident Fund Commissioner [1955 (8) F.J.R 141]. In that case, the party concerned was carrying on operations only of bleaching textiles and the question arose was whether such an industry would fall within Sch. I which includes “textiles.” In considering this question, the Court held that bleaching was only a part of a process of textile and hence fell within the entry of “textiles.” Sri Rebello argued that in the present case, iron ore pellets ultimately found their way in the blast furnaces and were used for the manufacture of iron, and, therefore, must now fall within the entry of “iron and steel.”

18. Sri Rebello then relied upon the case of Bankim Chandra Chakravarty v. Regional Provident Fund Commissioner [1958 (15) F.J.R 183]. That was also a case under the Employees' Provident Funds Act and the question that arose was whether the expression “electrical, mechanical or general engineering products,” in item (3) of Sch. I to the Employees' Provident Funds Act, was wide enough to include high pressure incandescent lamps. There the Court held that the same fell within the ambit of “electrical, mechanical or general engineering products.” It was argued by Sri Rebello that the explanations are, therefore, illustrative in character and that if this be so, then in the present case, iron ore pellets must be included in iron and steel.

19. Now, cosidering the above citations, what is apparent is that explanations have been afforded either to clarify or modify the content of an entry. Hence, where the Legislature felt that certain items must come within the generality of an entry an explanation has been afforded to include such specified items in the generality of the entry, in other words, the content of an entry is clarified to the said extent. In the present case, the entry in Sch. I is “iron and steel.” By the explanation other items such as ingots, etc., have been added. The content of the entry “iron and steel” to that extent hence stands modified inasmuch as the entry must now be read as comprising the said items specified in the explanation. If the Legislature wants to include any other specific items, it is open to the Legislature to issue a notification and do so. The word “includes” must be read only as to clarify the content of an entry to the extent that the explanation spells the same out, and it would not be open to the Court to expand the list of items mentioned in the explanation by treating the explanation as being illustrative. By this, we do not mean that an explanation whittles down the entry. The proper course would be to look at the entry and see if a particular item, in this case, iron ore pellets, can be included in the generality of the entry “iron and steel” and then consider whether the same falls within the ambit of the explanation of the entry. In this view of the matter, we are unable to persuade ourselves to equate an industry manufacturing iron ore pellets which is nothing more than dressing of iron ore with an industry engaged in the manufacture of iron and steel or items specified in the explanation thereto.

20. Now, in so far as Sri Rebello's submissions based on the case of Kapur Textile Finishing Mills v. Regional Provident Fund Commissioner [1955 (8) F.J.R 141] (vide supra), is concerned, we may only point out that in that case the Court was considering the words “manufacture or production” originally appearing in the schedule. It is in view of the words “or production” that the Court held that bleaching being a process concerning textiles the said industry must be deemed to be engaged in textile production and hence held that the Act was applicable. As earlier stated, by act 37 of 1953, the words “or production” have been deleted and the citation is besides the point. In so far as the cases cited by Sri Bhobe and Sri Rebello are concerned, they seem to fortify us when we say that if an item, as in this case an industry manufacturing iron ore pellets, falls within the generality of an entry, then it must be held to be so and if not, to see if it comes within the ambit of the explanation, for, explanations do not cut down the generality of an entry, but, as observed earlier, merely clarify its content.

21. Sri Kakodkar, learned counsel for the petitioners, next contended that that the petitioners' industry of manufacturing iron ore pellets could not be considered as an industry engaged in the manufacture of iron and steel or such items as were specified in the explanation thereto is also evident from the terminology used by the Legislature in various legislations. That, under the Industries (Development and Regulation) Act, 1951, certain industries such as specified in the schedule require a licence. That, S. 3(i) of the said Act reads as follows:

“3(i) ‘scheduled industry’ means any of the industries specified in the First Schedule;”

That, turning to the First Schedule, the relevant portion reads as follows:

“THE FIRST SCHEDULE

(See Ss. 2 and 3(i))

Any industry engaged in the manufacture or production of any of the articles mentioned under each of the following headings or subheadings, namely:

1. Metallurgical industries:

A. Ferrous:

(1) Iron and steel (metal).”

That, when the petitioners set up this pelletization plant, they had written to the Government of India enquiring whether in view of the Industries (Development and Regulation) Act, 1951, their plant would require a licence. The Government of India, by their letter, dated 4/5 November 1977, (exhibit D to the petition), informed the petitioners that no industrial licence was required under the said Act for the setting up of an undertaking/industry for the manufacture of iron ore pellets. Sri Kakodkar submitted that this must make it amply clear that the industry engaged in the manufacture of pellets was not an industry engaged in the manufacture of “iron and steel.”

22. Sri Kakodkar next argued that there are schedules annexed to the Goa, Daman and Diu Sales Tax Act, 1964, indicating items on which sales tax is leviable and items on which sales tax is not leviable. That the Third Schedule of the said Act provides for items which are taxable and iron and steel is one of them. That the relevant portion of the Third Schedule reads as follows:

“THE THIRD SCHEDULE

(See Cl. (b) of Sub-sec. (i) of S. 7)

(Taxable at 2 per cent from 1 November, 1964 to 6 September 1972, 3 per cent from 7 September, 1972 to 31 July 1975, and 4 per cent from 1 August 1985, onwards).

6. Iron and steel.”

That the Second Schedule to the said Act sets out the items on which no sales tax is payable and item (67) speaks of mineral ores which albeit includes iron ore. That the relevant portion of the Second Schedule reads as follows:

“THE SECOND SCHEDULE

(See S. 10)

Tax-free goods, 67. Mineral ores.”

That this must also make it clear that the Legislature at all times has clearly distinguished between an industry engaged in the manufacture of iron and steel and an industry dealing with iron ore.

23. Sri Kakodkar next urged that under the Customs Tariff Act, 1975, iron and steel are dealt with under S 16 and ore is dealt with under S. 5. That Chap. 73 speaks of iron and steel articles but keeps iron ore outside its purview. That Chap. 26 speaks of mineral ores (which includes iron ore) and the same is treated differently. That this again must support the position that even the Legislature at all times has made a clear distinction between the industry concerned with iron ore and an industry manufacturing iron and steel.

24. Turning next to the Central Excise Tariff of India 1986–87, Sri Kakodkar urged that Chap. 72 deals with iron and steel and sets out the various items of iron and steel. That Chap. 26 deals with ores, slag and ash. That hence, here again, what is evident is that the Legislature has treated an industry concening the manufacture of iron ore as wholly different from an industry manufacturing iron and steel.

25. Sri Kakodkar submitted that all this must make it evident that the Legislature has consistently maintained that these two industries, viz., the industry concerning iron ore or its pellets on the one hand and an industry concerning manufacture of iron and steel on the other are wholly different and the Legislature has consistently understood it as such. That it would not hence be open to the Provident Fund Commissioner, respondent 2, herein to contend that this industry of pelletization can be equated to an industry manufacturing iron and steel and be included in the entry “iron and steel” appearing in Sch. I.

26. Sri Bhobe, learned counsel for respondents 1 and 2, contended that whilst Sri Kakodkar has referred to several Acts, one position is clear and that is that the Acts are not in pari materia. Hence, a particular item may have been classified in one statute to achieve a certain object and may have been classified in a different way in a different statute for a wholly different purpose and to achieve a wholly different object. Hence, in the interpretation of a given statute, it is not open to import the meaning given by a statute, with regard to an item in interpreting another statute. Such extrinsic aid invoked by Sri Kakodkar would hardly be permissible. In support of this contention, Sri Bhobe relied upon a decision in Jintan Clinical Thermometer Company India (Private), Ltd. v. Union of India [1974-II L.L.N 266].

27. The contention of Sri Bhobe is not with out merit but the exercise of Sri Kakodkar is not to press into service the classification of iron ore on the one hand and iron and steel on the other referred to in different statutes, but rather to emphasise that in day-to-day parlance also, manufacture of iron ore pellets is conceptually different from manufacture of “iron and steel” as specified in Sch. I to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. In other words, an industry engaged in iron ore pelletization, on the one hand, and an industry engaged in the manufacture of iron and steel, on the other, are understood differently even in commercial parlance. The point sought to be made by Sri Kakodkar is not without merit.

28. To hark back, as stated in Para. 21 above, at the time when the petitioners set up this plant, they seem to have made an enquiry with the Government of India, Ministry of Steel and Mines, Department of Steel, as to whether their plant requires a licence under the Industries (Development and Regulation) Act, 1951. The said Ministry, by its letter, dated 4/5 November 1977, informed the petitioners that no such licence was required for a pelletization plant. This is significant because if an industry for iron and steel did require a licence to carry on the said industry, then, surely, if a pelletization plant came within the meaning of iron and steel, the Ministry would have insisted on the petitioners securing a licence. This must again emphasise the position that a plant engaged in pelletization of iron ore has not been equated even by the Government authorities to a plant engaged in the manufacture of iron and steel.

29. Sri Kakodkar has next urged that the petitioners have annexed to the petition an opinion of experts, viz., Italab (Goa) Private, Ltd. That a perusal of the experts' opinion shows that the experts have briefly discussed the process of manufacture of iron ore pellets and also the process of manufacture of iron and steel. That from this opinion, it is clear that the two processes are wholly different. That the experts have also stated that the chemical composition of the two products are different, viz., iron ore pellets would be Fe2O3 while iron ore would be Fe. That the experts' opinion is hence to the effect that iron ore pellets are not metal but only agglomerated raw material, whilst this is not so in the case of iron and steel. That this opinion is in no way controverted and/or challenged by the respondent. That, on behalf of the respondents, one K.P Joseph, who is an Enforcement Officer, has filed an affidavit in reply to the petition stating that he has authority to file this affidavit. That the petitioners have challenged that he has any such authority, and even till this date, the respondents have not been able to produce any document to satisfy the position that the said Joseph had any authority to make and file an affidavit on 20 August 1987, i.e, the date on which the affidavit in reply was made and filed. That the authority now produced is a letter authorising the said Joseph in September 1987, to make and file an affidavit. That Joseph's affidavit is, therefore, of no consequence whatsoever. But be that as it may, the only averments in Joseph's affidavit are that he does not admit the contentions of the petitioners or otherwise denies the same for want of knowledge. That these are no denials at all. That the expert's opinion is in no way controverted. That in view of this, the opinion of Italab must stand and must go to satisfy the position that an industry engaged in the manufacture of iron ore pellets can never be equated to an industry engaged in the manufacture of iron and steel. That this opinion must now prevail and in view of this, the petitioners would will be entitled to relief. It may here only be added that the respondents have made no attempt to refute this submission.

30. Sri Kakodkar has urged that it is settled law that where the authorities contend that a particular matter falls under a particular entry in the schedule, the burden of proof is on the authorities and not on the party. That, in the present case, the burden of proof that the petitioners' industry falls within the entry in the schedule is on the respondents. That the respondents have made no attempt whatsoever to discharge this burden. That the affidavit in reply filed by Joseph is wholly evasive in character. Secondly, a reading of the affidavit must show that it is cursorily made inasmuch as every statement made by the petitioners is denied not because they are untrue but because he has no knowledge of the same and/or otherwise he denies the averments made by the petitioners by saying that he does not know anything about the same or otherwise says he does not admit the same. The affidavit in reply is no affidavit at all and the averments contained in the petition must now stand. That since the respondents are under an obligation to discharge this burden, they should have placed material before this Court or brought such data before this Court to substantiate their contention. The respondents have not in their affidavit in reply breathed a word nor do they even at this stage place any material before this Court or tell the Court as to how this industry engaged in pelletization can be equated to an industry engaged in the manufacture of “iron and steel” and can come within the entry “iron and steel” in Sch. I. We may here add that the respondents have not even touched upon this argument or attempted to refute the same.

31. What emerges from the above discussion is that iron ore pelletization is merely dressing of the fine powdery iron ore so that the same can be handled more effectively. That iron ore pellets and iron are two totally different things. The chemistry of the two products is also different, and an industry manufacturing iron ore pellets cannot come within the generality of the phrase “iron and steel” appearing in Sch. I nor can the same come within the ambit of the explanation thereto. Further, the concept of iron ore pellets on the one hand and iron and steel on the other are also different in work-a-day parlance. Even the Ministry of Iron and Steel has treated the industry of manufacturing iron ore pellets as not forming part of the industry of iron and steel. The experts' opinion, viz., the opinion of Italah, to the effect that an industry engaged in the manufacture of iron ore pellets cannot be equated to an industry engaged in the manufacture of iron or steel is in no way dislodged by the respondents, and above all the burden cast on the respondents to establish that the petitioners' industry of manufacturing iron ore pellets falls within the entry “iron and steel” (and its explanation) contained in Sch. I is not at all discharged. If this be the position, the respondent's contention that the petitioners' industry engaged in the manufacture of iron ore pellets comes within the ambit of the entry “iron and steel” (read together with its explanation) appearing in Sch. I cannot be accepted. If this be so, then there can be no question of the application of the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, to the industry of the petitioners, and consequentially, the demands made against the petitioners must also fail. The petitioners would well be entitled to relief now claimed.

32. This takes us to the next argument of Sri Kakodkar based on S. 16 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Sri Kakodkar contended that a reading of Cl. (b) of S. 16 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, makes it clear that even if an industry is included in the schedule, the Act does not apply for an initial period of three years. That the provisions of the Act can only apply after the said period of three years. But this postulates that at the end of three years, the industry must be in operation. That, in the present case, the pelletization plant was set up in 1976 and the same went into production by about September 1979. That in 1981, by reason of a power shortage and other difficulties, the plant could hardly maintain its production level at 50 per cent and that too at great cost, That the plant having become not viable, the petitioners sought the permission of the Central Government to “close dawn” the plant temporarily. After considering the pros and cons, the Government granted permission to “close down” the plant temporarily but initially for a period of one year and thereafter extended this period by two years and then again granted an extension for a period of three years. That it is now an admitted position that the plant has never opened thereafter but has totally closed down. That hence at the end of three years (from its commencement) time, the plant was not in operation. Hence, at no point of time could the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, have become applicable to the petitioners' industry. That since this was the position, the question of the provisions of the Act applying to the petitioners' industry cannot arise and the demands made by the respondents must fail.

33. Sri Bhobe, learned counsel for respondents 1 and 2, has contended that it is an admitted position that the plant had commenced in 1979. That merely because the petitioners ran into difficulty and had suspended their operations, it cannot mean that the plant had “closed down” totally. That, on the petitioners' own showing, the plant was closed down temporarily initially for a period of one year, thereafter, for two years and thereafter, for three years. In other words, there was merely a temporary suspension of work but this does not amount to “closure.” That the suspension of the work cannot affect the computation of the period of three years. That for the purpose of S. 16(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, the computation of the period begins from the date on which the plant has commenced and this is exactly what the respondents have done and have based their demands on the said footing. That this being the position, the demand was proper. In support of his argument, Sri Bhobe placed reliance on the ratio in the case of Provident Fund Inspector, Trivandrum v. N.S.S Co-operative Society [(1970) 1 SCC 50 : A.I.R 1971 S.C 82],

34. Sri Rebello, learned counsel who has appeared on behalf of the workers as interveners, has supported Sri Bhobe in his argument and further commented upon the case cited by Sri Bhobe and also pressed into service the decision in the case of Soyaji Mills, Ltd. v. Regional Provident Fund Commissioner [1985-I L.L.N 582].

35. Although we have set out the rival contentions in so far as they touch upon S. 16 of the Act, it may be stated that in view of what we have held above, it is wholly unnecessary for us to deal with this question.

36. This takes us to the question as to whether S. 19-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, provides an efficacious remedy to the petitioners, and if the answer is in the affirmative, ought the petitioners to have pursued the remedy or in view of their failure to do so would they be disentitled to relief.

37. On this aspect of the matter, Sri Kakodkar submitted that S. 19-A contemplates a situation where a doubt or a difficulty arises which may be referred to the Central Government for removal or clarification thereof. That S. 19-A further provides that the Central Government may on such a reference give such directions if it deems fit. That S. 19-A of the Act does not confer any jurisdiction on the Central Government to adjudicate upon a dispute such as arising in this matter. That assuming that a dispute such as this can fall within the province of S. 19-A, the only party which can invoke and move the Central Government under S. 19-A would be the authorities under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and not a private party. In support of his contention that it was not open to private parties to move the Central Government under S. 19-A, Sri Kakodkar placed reliance on the following cases: Wadi Stone Marketing Company (Private), Ltd v. Regional Provident Fund Commissioner [1964 (27) F.J.R 43], Central Hindustan Orange and Cold Storage Company, Ltd., Motibag v. Prafullachandra Ramchandra Oza [A.I.R 1967 Bom. 126] (vide supra), and Regional Provident Fund Commissioner v. Glamour, Proprietor Seth Hassaram and Sons (India), (Private), Ltd. [1982 L. & I.C 1787].

38. Sri Bhobe, learned counsel for respondents 1 and 2, on the other hand, maintained that S. 19-A was designed hot only to remove and clarify difficulties and doubts but also conferred powers on the Central Government to adjudicate upon disputes such as arising in this case. That as a matter of fact, S. 19-A must be read to include revisional and appellate powers. That the submission made on behalf of the petitioners that the provisions of S. 19-A could only be invoked by the authorities and not by private parties, i.e, the employers, was wholly untenable because there was nothing in S. 19-A that prevented a private party or the employers from making a reference under the said section to the Central Government. On the other hand, it was wholly competent for a private party and/or employers to do so. In support of his argument that it was not only the authorities under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, that could move the Central Government but it was open to a private party and/or employers to do so, Sri Bhobe relied upon the decisions in Ess Dee Carpet Enterprises, Jaipur v. Union of India [1985 L. & I.C 1116], Dhanalakshmi Weaving Works v. Regional Provident Fund Commissioner [A.I.R 1963 Ker. 219], T.R Raghava Iyengar and Company v. Regional Provident Fund Commissioner [1963 (23) F.J.R 28], Nagpur Glass Works, Ltd. v. Regional Provident Fund Commissioner [1959 (15) F.J.R 243] and Delhi Cloth and General Mills Company, Ltd. v. Regional Provident Fund Commissioner [A.I.R 1961 All. 309].

39. Sri Rebello, appearing on behalf of the workers union, the interveners, adopted the argument of Sri Bhobe and submitted that the observations contained in the case of Central Hindustan Orange and Cold Storage Company, Ltd., Motibag v. Prafullachandra Ramchandra Oza [A.I.R 1967 Bom. 126] (vide supra), to the effect that only the authorities under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, could move under S. 19-A and not a private party were obiter

40. Now, in so far as the submissions on the applicability of S. 19-A is concerned, in view of the findings in Para. 7 above, it is unnecessary to dwell on the same or decide the same. However, in the passing, we may observe that we have considered all the aforestated cases in depth and what is apparent is that there is a divergence of view as to whether only the authorities under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, can move under S. 19-A or whether employers can also do so There is also a divergence of viewpoints as to what can be considered by the Central Government under the provisions of S. 19-A. But, assuming that it was open to a private party, i.e, employers to move under S. 19-A and assuming that a dispute such as this can also be referred to the Central Government, a reading of S. 19-A shows that, on such a reference being made, the Central Government “may, by order, make such provisions or give such direction as appear to it to be necessary or expedient.” In other words, the Central Government has a discretion to give or refrain from giving directions. Such a remedy cannot in the facts and circumstances of this case be said to be an efficacious remedy available to the petitioners.

41. In the result, the petitioners would well be entitled to the relief prayed. Rule is made absolute in terms of prayers (a) and (b) with costs.

42. At this stage, Sri Bhobe applies that leave be granted to move the Supreme Court. Application rejected.