- Bookmark
- Share
- CaseIQ
Ess Dee Carpet Enterprises v. Union Of India And Others
Factual and Procedural Background
The appellant, a partnership firm operating three carpet-manufacturing factories in Rajasthan, was directed by the Regional Provident Fund Commissioner to comply with the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (“the Act”). Disputing the directive, the appellant contended that carpets are not “textiles” under Schedule I of the Act and therefore its establishment was outside the Act’s coverage.
After a hearing, the Commissioner ruled on 27 July 1979 that carpets constitute textiles, bringing the appellant within the Act. The appellant sought clarification under Section 19-A of the Act, but the Central Government affirmed the Commissioner’s view on 4 May 1981. A writ petition to the Rajasthan High Court (Jaipur Bench) was dismissed on 15 October 1984, and a subsequent intra-court appeal was dismissed on 29 January 1986. The present appeal was heard by the Supreme Court of India on special leave.
Legal Issues Presented
- Whether carpets manufactured from wool fall within the expression “textiles” in Schedule I to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, thereby subjecting the appellant’s establishment to the Act.
Arguments of the Parties
Appellant's Arguments
- Carpets are not “textiles” as contemplated by Schedule I to the Act; therefore, the Act does not apply to the appellant’s factories.
- The manufacturing process involves knotting rather than weaving, allegedly placing carpets outside the statutory meaning of textiles.
- A certificate from the Handicrafts Board classifies carpets as handicrafts, purportedly reinforcing their exclusion from “textiles.”
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Porritts & Spencer (Asia) Ltd. v. State of Haryana, (1979) 1 SCC 82; (1979) 1 SCR 545 | The term “textiles” has a dynamic, expanding meaning; any woven fabric produced from yarn, irrespective of material, size, or use, qualifies as a textile. | The Court relied on this principle to hold that carpets—being woven from wool yarn—are textiles even though their manufacture involves knotting. |
Court's Reasoning and Analysis
The Court began by examining Schedule I, which expressly covers textiles made wholly or in part from wool. It noted that carpet production uses wool yarn and fundamentally entails weaving—defined as interlacing warp and weft yarns to form fabric. The presence of knots does not alter the nature of the process; the final product remains a woven fabric.
Invoking Porritts & Spencer, the Court emphasized that the concept of textiles is not static; any fabric produced by binding yarn into a fabric matrix constitutes a textile, regardless of weight, strength, or end-use. The statutory Explanation’s omission of the term “knotting” was deemed immaterial, as knotting is merely a variant of weaving.
The Court dismissed the relevance of the Handicrafts Board certificate, concluding that such administrative classifications cannot override the statutory definition. Consequently, the establishment squarely falls within Schedule I, triggering mandatory compliance with the Act.
Holding and Implications
Appeal Dismissed. The Supreme Court affirmed the orders of the Regional Provident Fund Commissioner, the Central Government, and the Rajasthan High Court, holding that carpet-manufacturing establishments are covered by the Act.
Implications: The ruling clarifies that carpet manufacturers using wool yarn are “textile” establishments under the Act, obligating them to contribute to the Employees' Provident Fund. While the decision applies directly to the parties, it reinforces an expansive interpretation of “textiles” for similar industries, though it does not announce a novel legal doctrine beyond existing precedent.
Venkataramiah, C.J— The question for consideration in this appeal is whether an establishment which is manufacturing carpets is subject to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (Act 19 of 1952) (hereinafter referred to as ‘the Act’). The appellant is a partnership firm carrying on the business of manufacturing and selling carpets in the State of Rajasthan at three factories belonging to it. When steps were taken to direct the appellant to comply with the provisions of the Act by the Regional Provident Fund Commissioner the appellant contested the applicability of the Act on the ground that the establishment owned by it was not manufacturing ‘textiles’ included in Schedule I to the Act. The Regional Provident Fund Commissioner after giving opportunity of being heard to the appellant passed an order on July 27, 1979 holding that the business of manufacturing carpets carried on by it made the Act applicable to the appellant as carpets were textiles. Aggrieved by the said order the appellant filed a petition under Section 19-A of the Act before the Central Government. The Central Government passed an order on May 4, 1981 holding that the appellant's establishment was engaged in the manufacture of ‘textiles’ and accordingly the order of the Regional Provident Fund Commissioner was upheld. The appellant thereafter filed a petition under Article 226 of the Constitution before the Rajasthan High Court (Jaipur Bench). The High Court by its order dated October 15, 1984 dismissed the writ petition. The appellant then appealed to the Division Bench of the High Court and the Division Bench of the Rajasthan High Court dismissed the appeal on January 29, 1986. This appeal by special leave is filed against the order of the Division Bench of the High Court of Rajasthan.
2. The only point urged before us by the learned counsel for the appellant is that the products, namely, carpets which are being manufactured by the appellant did not come within the meaning of the expression ‘textiles’ described in Schedule I to the Act and hence the Act was inapplicable. Clause (a) of sub-section (3) of Section 1 of the Act provides that subject to the provisions contained in Section 16, the Act applies to every establishment which is a factory engaged in any industry specified in Schedule I and in which 20 or more persons are employed. The relevant part of Schedule I to the Act reads thus:
“Any industry engaged in the manufacture 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.....”
3. Clause (d) of the Explanation contained in Schedule I to the Act reads thus:
“(d) the expression “textiles” includes the products of carding, spinning, weaving, finishing and dyeing yarn and fabrics, printing, knitting and embroidering.”
4. It is not disputed that the material with which the carpets are made is wool which is one of the materials mentioned in the Schedule, namely, textile made wholly or in part of cotton or wool or jute or silk, whether natural or artificial. The activity of manufacturing carpets is generally understood as the weaving of carpets and the man who is engaged in such activity is popularly known as a ‘carpet weaver’. Weaving means to form a fabric by interlacing yarn on a loom. It also means the method or pattern of weaving or the structure of a woven fabric. The warp means yarn arranged lengthwise on a loom. The fabric which is woven includes the weft which means yarn woven across the width of the fabric through the lengthwise yarn. Thus the activity of the weaving involves passing of the weft through the warp. While doing so even if there are any knots in the yarn still the activity is weaving. The mere fact that there is knotting of the yarn, the fabric which is ultimately produced does not cease to be a textile fabric. The fact that the Handicrafts Board has issued certificate under the Import Trade Control Policy Handbook of Rules that carpet is a product of handicrafts does not in any way improve the matter. Even then the carpets do not cease to be textiles. That certificate is not enough since we are very clear that the activity of making carpets though it involves knotting, in substance, amounts to weaving and the carpet is a fabric which is woven. Thus it comes within the meaning of the expression “textiles” as explained in clause (d) to the Explanation of Schedule I to the Act.
5. We are, therefore, of the view that the establishment in question comes within Schedule I to the Act.
6. In Porritts & Spencer (Asia) Ltd. v. State of Haryana (1979) 1 SCC 82, (1979) 1 SCR 545 this Court held that the concept of ‘textiles’ is not a static concept. It has, having regard to newly developing materials, methods, techniques and processes, a continually expanding content and new kinds of fabric may be invented which may legitimately without doing any violence to the language be regarded as textiles. The word ‘textiles’ is derived from Latin ‘texere’ which means ‘to weave’ and it means woven fabric. When yarn, whether cotton, silk, woollen, rayon, nylon or of any other description made out of any other materials is woven into a fabric what comes into being is a ‘textile’ and is known as such. Whatever be the mode of weaving employed, woven fabric would be ‘textile’. What is necessary is no more than the meaning of yarn and weaving would mean binding or putting yarn together by some process so as to form a fabric. A textile need not be of any particular size or strength or weight. The use to which it may be put is also immaterial and does not bear on its character as a textile. The fact that the ‘dryer felts’ are used only as absorbents of moisture in the process of manufacture in a paper manufacturing unit, cannot militate against ‘dryer felts’ falling within the category of textiles, if otherwise they satisfy the description of textiles.
7. It is not necessary to refer to the other decisions cited before us in this case.
8. The non-inclusion of knotting in the Explanation to Schedule defining ‘textiles’ is, therefore, immaterial. No other point was pressed before us in this case. We, therefore, hold that the Regional Provident Fund Commissioner, the Government of India and the High Court were right in holding that the establishment of the appellant came within the scope of the Act and the appellant was liable to comply with the requirements of the Act in all respects. The appeal, therefore, fails and it is dismissed.
Writ petition No. 736 of 1987
9. In view of our judgment in Ess Dee Carpet Enterprises v. Union of India and Others (Civil Appeal No. 1372 of 1987) delivered by us today, the writ petition is dismissed. There will be no order as to costs.
Alert