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Nagpur Glass Works Ltd., Nagpur v. Regional Provident Fund Commissioner, Bombay, .
Structured Summary of the Opinion (Mudholkar, J.)
Factual and Procedural Background
The petitioner is principally a glass manufacturer which also manufactures burners and metal lamps (composed of glass oil containers and globes and metal burners and reflectors). Following enactment of the Employees' Provident Funds Act, 1952, applicability depends on whether a factory is engaged in an industry specified in Schedule I and employs fifty or more workers. The Schedule did not explicitly include the "glass industry."
By Act 37 of 1953 an Explanation was added to Schedule I listing industries taken to be included by the expression “Electrical, mechanical or general engineering products”; that Explanation listed certain items (including “hurricane lanterns” and “electric lamps”) but did not explicitly list the glass industry, burners or metal lamps.
The Regional Provident Fund Commissioner (Nagpur) wrote to the petitioner (16-3-1955) stating that of the petitioner's 420 workers, 187 were employed in the section manufacturing metal lamps, burners and hurricane lanterns, and that the Act was therefore applicable not only to that section but to the whole factory. The petitioner protested and sought relief by way of a writ under Article 226, apprehending recovery action under S. 8 of the Act.
Legal Issues Presented
- Whether the expression “Electrical, mechanical or general engineering products” in Schedule I of the Employees' Provident Funds Act, 1952 includes metal lamps and burners.
- Whether, if that expression includes burners and metal lamps, the Act applies to the entire factory (all 420 workers) or only to the specific section producing those goods (187 workers).
- Whether the Regional Provident Fund Commissioner was obliged to refer the dispute over Schedule interpretation to the Central Government under S. 19-A before taking enforcement action.
Arguments of the Parties
Petitioner's Arguments (as represented by Shri Bobde)
- The burners and metal lamps produced by the petitioner are not parts or accessories of hurricane lanterns (a fact denied by the respondent).
- After Act 37 of 1953, an Explanation was added to Schedule I which, the petitioner contends, limited the meaning of “Electrical, mechanical or general engineering products” to the products expressly specified in that Explanation; because burners and metal lamps are not listed, they should be excluded.
- The Explanation was in force for a substantial part of the period for which contributions were demanded (1-11-1952 to 31-3-1955); this fortifies the argument that the Explanation narrows the scope.
- Because there was a dispute whether the petitioner's section was engaged in an industry prescribed in S.1, S. 19-A required the respondent to refer the matter to the Central Government before taking action; accordingly, the respondent had no right to make any demand without complying with S. 19-A.
- The petitioner relied also on the decision of Mehrotra J. in Great Eastern Electroplaters Ltd. v. Regional Provident Fund Commr., U.P., AIR 1956 All 495, for a narrower interpretation of “electrical and mechanical products.”
Respondent's Position (as reflected in the opinion)
- The Regional Provident Fund Commissioner maintained that 187 of the petitioner's workers were employed in the section manufacturing "metal lamps, burners and hurricane lanterns" which fall within the expression “Electrical, mechanical or general engineering products,” and therefore the Act applied.
- The respondent denied the petitioner's factual assertion that burners and metal lamps are not parts or accessories of hurricane lanterns.
- The respondent sought to demand contributions and returns for (initially) the whole factory on the basis that the Schedule entry was triggered by the relevant section and the 50+ employee threshold.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Great Eastern Electroplaters Ltd. v. Regional Provident Fund Commr., U.P., AIR 1956 All 495 | The decision was cited for the proposition that the words “electrical and mechanical products” should not be read to cover all products made by mechanical or electrical process, but rather products utilised for producing electricity or implements and apparatus (e.g., fans, radios, battery cells). | The court considered and respectfully disagreed with the interpretation in that case, holding instead that the adjectives “electrical, mechanical and general” relate to the process of manufacture rather than the ultimate use of the article. The court therefore declined to accept the narrower construction urged in Great Eastern Electroplaters. |
Court's Reasoning and Analysis
The court analysed the core phrase “Electrical, mechanical or general engineering products” by reference to ordinary meaning (including dictionary definitions) and statutory context:
- Semantic analysis: The court took dictionary meanings of the adjectives — "electrical" as relating to or connected with electricity and "mechanical" as acting, worked, or produced by a machine or mechanism — and concluded these adjectives describe the mode or process of manufacture rather than the use to which the finished article is put.
- Application to the products in issue: Burners and metal lamps were found to be engineering products which could be produced by machine or by a craftsman employing a design or invention; therefore they fall within the general expression “Electrical, mechanical or general engineering products.” Consequently, the section of the factory solely devoted to producing and marketing these items would fall within the Schedule.
- Interpretation of the Explanation to Schedule I: Shri Bobde argued the Explanation (added by Act 37 of 1953) narrowed the phrase to the listed items. The court concluded the opening words of the Explanation (“without prejudice to the ordinary meaning”) demonstrated that the listed items were illustrative rather than exhaustive. The broad range of specified items (from ships to bolts, nuts and rivets) supported the view that specification was by way of illustration and did not cut down the ordinary meaning.
- On apparent exceptions: The court acknowledged seeming difficulties where certain items expressly excluded parts (e.g., glass bulbs excluded from "Electric lamps") or excluded machinery. It treated such exclusions as deliberate and limited in scope, not defeating the generality of the opening expression.
- Assessment of precedent (Great Eastern Electroplaters): The court examined the prior judge's reasoning that the words should be read narrowly and rejected that analysis, stating respectfully that the words refer to the manufacturing process and not to the ultimate use of the item produced.
- Scope of application within the factory: Although the court found the section producing burners and metal lamps fell within the Schedule, it held that the Act did not apply to the whole glass factory (because "glass" per se was not included in the Schedule at the relevant date). Thus, provident fund liability is confined to employees of the relevant section (187 workers), not all 420 employees.
- On S. 19-A (power to remove difficulties): The court interpreted S. 19-A as permissive rather than mandatory. It concluded that the provision does not oblige the Regional Commissioner to refer every interpretive dispute to the Central Government; omission to move the Central Government does not affect the Commissioner's powers under the Act to realise amounts.
Holding and Implications
PETITION PARTLY ALLOWED
Direct effect on the parties:
- The court issued a writ restraining the respondent from enforcing compliance with the provisions of the Employees' Provident Funds Act, 1952 against the petitioner except insofar as they relate to 187 workers engaged in the section manufacturing burners and metal lamps.
- Provident fund contribution and returns may be demanded only with respect to those 187 employees; the respondent may not enforce demands in respect of all 420 employees.
- Costs were directed to be borne as incurred and the amount of security deposited by the petitioner was to be refunded.
Broader implications:
The opinion confines its decision to the statutory interpretation and its application to the facts before the court. The text does not discuss the setting of a broader precedent beyond its conclusion on semantic interpretation of the Schedule wording and the limited application of S. 19-A.
Mudholkar, J.:— This is a petition under Art. 226 of the Constitution for the issue of a writ of prohibition or any other writ to the respondent prohibiting him from enforcing the provisions of the Employees' Provident Funds Act, 1952, against the petitioner.
2. The relevant facts are as follows: The principal business of the petitioner is the manufacture of glass. It is also engaged in the business of manufacture of burners and metal lamps (consisting of glass oil containers and globes and metal burners and reflectors). In the year 1952, the Employees' Provident Funds Act was passed. Sub-section (3) of S. 1, of the Act applies to all factories engaged in any industry specified in Schedule I of the Act provided that they employ fifty or more workers in that industry. The Schedule to the Act however does not include a ‘glass industry’.
3. By act 37 of 1953, this act was amended and an Explanation was added in Schdule I. This Explanation gives a list of industries which are lowered by the expression “Electrical, mechanical or general engineering products” used in the Schedule. Neither the ‘glass industry’ nor burners and metal lamps are included in the aforesaid Explanation. This Explanation also added an entry “hurricane lanterns” as included in the expression “Electrical, mechanical or general engineering products”.
4. According to the petitioner, burners and metal lamps produced by it are not parts and accessories of hurricane lanterns. This fact is however denied by the respondent.
5. On 16-3-1955, the petitioner received a letter from the Regional Provident Fund Commissioner, M.P Nagpur stating that out of the total strength of 420 workers working in the petitioner's industry only 187 workers were employed in the section manufacturing metal lamps, burners and hurricane lanterns which are included under the term “Electrical, Mechanical or general engineering products” and that as such the Act was applicable not only to this section of the factory but to the whole factory.
6. The petitioner protested against this interpretation without any avail. It apprehends that the Regional Provident Fund Commissioner will now proceed to recover the amount due from it under the provisions of S. 8 of the Act and has therefore come up to this Court under Art. 226 of the Constitution.
7. The question is whether the expression “Electrical, mechanical or general engineering products” includes metal lamps or burners. We assume for the purposes of this case that they are not fit for being used in hurricane lanterns. Now, the expression “Electrical, mechanical or general engineering products” is a vary 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. Burners and metal lamps will thus fall within the expression inasmuch as they are engineering products and could be produced by a machine or mechanism and could also be produced by a craftsman employing a certain design or invention. In our opinion, therefore, the section of the petitioner's factory which is solely devoted to the production and marketing of these products would fall within the Schedule.
8. Shri Bobde who appeared for the petitioner then argued that the expression “Electrical, mechanical or general engineering products” has, by virtue of the explanation added thereto by act 37 of 1953, become limited to the products expressly specified therein and that as metal lamps and burners are not included within the explanation they did not fall within the expression “Electrical, mechanical or general engineering products”. The period for which the demand for returns and contribution is made is between 1-11-1952 and 31-3-1955. The explanation was thus in force during a considerable portion of this period. Now, by enacting this explanation the Legislature has provided that without prejudice to the ordinary meaning of the expressions used in the Schedule, the expression “Electrical, mechanical or general engineering products” would include products specified in the 25 items set out in the explanation. Clearly, therefore it could not be the intention of the Legislature to cut down the generality of the expression “Electrical, mechanical or general engineering products”. Curiously however, the Legislature has made a specific mention in the explanation of electric lamps and hurricane lanterns, but not of lamps of any other kind. It is because of this that Shri Bobde argued that lamps of other kinds or parts and accessories of such, lamps were intended to be excluded. But for the fact that the Legislature has clearly said that the specification of the items in the explanation was without prejudice to the ordinary meaning of the expression “Electrical, mechanical or general engineering products” and the further fact that the items cover a wide range of products, from ‘ships’ to bolts, nuts and rivets', we would have accepted the contention of the learned counsel. 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 act 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.
9. An apparent difficulty is no doubt created by the exclusion of certain products in certain items such as glass bulbs from item (3) “Electric lamps”, and electric machinery and machine tools, from, item (7) “Machinery used in industry”. But this difficulty is not real. It is evident that despite the wide scope of the expression “Electrical, mechanical or general engineering products” the Legislature deliberately intended to exclude from its compass these particular articles. That is all.
10. It was however contended on behalf of the petitioner on the strength of the decision of Mehrotra J. in Great Eastern Electroplaters Ltd. v. Regional Provident Fund Commr., U.P, AIR 1956 All 495 (A) that the expression “Electrical, mechanical & general engineering products” has to be interpreted in a different way. In that case the learned Judge observed:
“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 cells”.
11. 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.
12. We are however of the opinion that the Act cannot apply to the whole factory inasmuch as at the relevant date ‘glass’ was not included in the Schedule. It applies only to the section producing ‘burners and metal lamps’. These products are final products manufactured for sale and their production is an industry in itself. Therefore, while provident fund contribution cannot be demanded in respect of all the 420 workers it can be demanded in respect of 187 workers engaged in the particular section manufacturing burners and metal lamps.
13. It was finally argued on behalf of the petitioner that no steps could be taken against it by the respondent without resorting to the provisions of S. 19-A of the Act. Section 19-A reads as follows:
“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 a factory is engaged in any industry specified in Schedule I, or
(ii) whether fifty or more persons are employed in a factory; or
(iii) whether three years have elapsed from the establishment of a factory; or
(iv) 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.”
14. It is argued that since there is a dispute regarding the question as to whether the petitioner's section was engaged in an industry prescribed in S. 1, it was incumbent upon the respondent to refer the matter to the Central Government for its decision and that he had no right to make any demand from the petitioner without complying with this provision. As we read the provision, it was not obligatory upon the respondent to do so though it may have been desirable for him to refer a matter of this kind to the Central Government for its decision. Again, this provision does not apply to every case where an interpretation put upon any entry in the Schedule is disputed, but applies only where the Central Government or the Regional Provident Fund Commissioner finds that there is a difficulty in regard to the interpretation to be placed upon the Schedule. The omission of the Regional Commissioner to move the Central Government in this regard does not, in any way, affect his powers under the Act to realise the amount.
15. However, in respect of one matter the petition is well founded. The respondent wants the petitioner to submit returns and make contribution in respect of the employees engaged in the entire glass industry, that is, including the employees who are engaged in the manufacture of articles other than burners and metal lamps. That is clearly wrong. As already pointed out, the Act does not apply to the glass industry. Upon the view we have taken it does apply to that section which is engaged in the manufacture of burners and metal lamps inasmuch as these articles are manufactured for sale. No doubt, this section is a part of the Nagpur Glass Works. But merely because that is so, it cannot be said that all the employees of the Glass Works are employed in the “factory” (i.e the section) engaged in the manufacture of burners and metal lamps. We are therefore clear that the liability of the petitioner to comply with the demands made upon it by the respondent must be confined to the section engaged in the manufacture of burners and metal lamps.
16. In this view, we allow the petition in part and direct that a writ be issued to the respondent restraining him from enforcing compliance by the petitioner with the provisions of the Act except with respect to 187 workers engaged in the section manufacturing burners and metal lamps.
17. Costs shall be borne as incurred. The amount of security deposited by the petitioner will be refunded to it.
V.B.B
Petition partly allowed.
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