Madras High Court
Leos Mercantile Corporation By Its ... vs The Secretary Ministry Of Labour, ... on 7 August, 1986
Equivalent citations: (1987)2MLJ332
ORDER Nainar Sundaram, J.
1. By the impugned order passed under Section 19A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (Act 19 of 1952) hereinafter referred to as the 'Act' the bringing of the petitioner within the purview of the Act has been upheld. The petitioner filed an application under Section 19A of the Act raising a dispute that the provisions of the Act would not apply to its establishment. Notice for enquiry into this petition was given on 16th January, 1980 and it was duly served. The enquiry by the legal adviser, the authority under S.19A of the Act, was proposed to be held at Madras on 30th January, 1980. The petitioner on 23rd January, 1980 sent a petition for adjournment, the body of which runs in the following terms:
Dear Sir, We have been advised by the Under-Secretary to the Government of India, Ministry of Labour, New Delhi, - vide his letter cited above that our representation has been fixed for hearing by your goodselves at Madras in the Office of the Regional Provident Fund Commissioner, Madras, on 30th January, 1980 at 11 a.m. In this connection we wish to inform you' that our proprietor is out of station and expected back at Madras only after the third week of February, 1980. As such, we would request you to kindly adjourn the same for any day after the third week of February, 1980.
and we will definitely attend the hearing with all records. Please note that we are applying for adjuournment due to circumstances beyond our control which was unexpeccted and would therefore request you to advise us the date on which the same has been adjourned to enable us to be present for the hearing. Thanking you.
In this letter, there is no explanation as to what were the compelling circumstances, which obliged the proprietor of the petitioner to go out of station in spite of the fact the notice of enquiry waas given well in advance. Even in the affidavit filed in support of the writ petition, no such circumstance is disclosed. I am referring to this aspect, because I heard Mr. P. Ibrahim Kalifulla, learned Counsel for the petitioner, complaining that the impugned order had come to be passed without affording the petitioner an adquate opportunity to substantiate its case that its 'establishment' could not be covered by the Act. The petitioner was given due and full opportunity to substantiate its case and in spite of it, the petitioner did not participate in the enquiry and the bald statement that the proprietor of the petitioner was out of station without disclosing the cirumstances under which he was obliged to go put of station in spite of the fact due notice well in advance was given to the petitioner cannot be taken note of to sustain the present grievance of lack of opportunity to substantiate the stand of the petitioner. For the hearing on 30th January, 1980, the Manager of the petitioner, one N. Sankararaman was sent, and he could, have represented and substantiated the cause of the petitioner. But, he did nothing except to ask for an adjournment. What are the peculiar and special facts available to the knowledge of the proprietor alone, and which could not be advanced by the Manager, we do not get any exposition. Rightly the legal adviser turned down the request for adjournment, and proceeded to consider the case on merits.
2. On merits, learned Counsel for the petitioner, would contend that the petitioner has a factory at Guindy, Madras and it has got offices at Madras and Bombay and the staff strength of the factory and the offices at Madras and Bombay should not be aggregated for the purpose of finding out the employment strength within the meaning of the provisions of the Act. In the affidavit filed in support of the writ petition, it is not claimed the offices at Madras and Bombay have nothing to do with the factory at Guindy, Madras, and such offices function for independent and separate businesses of their own. Section 1(3)(a) of the Act reads as follows:
Subject to the provisions contained in Section 16, it applies:
(a) to every establishment which is a factory engaged in any industry specified in Schedule 1and in which twenty or more persons are employed.
Section 2A of the Act runs in the following terms:
For the removal of doubts, it is hereby declared that where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment.
Though 'factory' stands defined under Section 2(g) of the Act, yet it falls within the general category of 'establishment' and to such an 'establishment' Section 2A of the Act would certainly be attracted. An 'establishment' may involve the running of a factory as well as the administrative offices, whether at one place or at different places and the employment strength, of all these units, if they go to constitute an integral whole must be aggregated to find out whether the mischief of the Act is attracted or not. As already stated, it is not claimed in the affidavit filed in support of the writ petition that offices at Madras or Bombay have got independent existence and they carry on separate businesses, which have nothing to do with the functioning of the factory at Guindy, Madras. A similar question came up for consideration before Ramakrishnan, J. in P.S.N.S.A. Chettiar and Co. v. Regional Provident Fund Commissioner, Madras , and the learned Judge annexing the meaning 'house of business' to the word 'establishment' in the Act as per the earlier pronouncements of this Court, proceeded to consider the question as to whether a factory at one place and office , at another place constitute one 'house of business' so as to form a single establishment for the purposes of the Act. The following observations of the learned Judge are worth noting:
An establishment which involves the running of a factory may also require a staff for procuring raw materials and disposing of the manufactured products and also for the maintenance of accounts. There can be integral relation between all these items of work and it may not be proper to separate the process of manufacture in the factory from the office establishment which attends to work connected with the factory and its raw materials or products and its accounts. Establishment for this purpose must be viewed in a larger sense than the process of manufacture.
3. Though there could be an 'establishment' falling within the meaning of the 'factory, under Section 2(g) of the Act, yet, if it has administrative offices or branches, which go for the working and running of the factory, they cannot be dissociated from the factory as such and they have to be viewed as a single unit. The petitioner annexed statements to its petition under Section 19A of the Act and the combined employment strength as disclosed in the said statements did demonstrate that the employment strength was twenty and more in a number of years. Once such an 'establishment' is covered, the falling of the employment strength below twenty subsequently would not take that 'establishment' out of the purview of the Act. This is the implication of Section 1(5) of the Act. A Bench of this Court, to, which I had been a party, in Management of Antiseptic v. Gangadharan , dealt with a case where there was an attempt to disassociate the publication office of two medical journals from the printing press. After adverting to the case law on the subject, the position has been summed up in the following terms:
As observed in the above decision, the real purpose of the test must be to find out the true relation between the parts, branches, units, etc., and if in their true relation they constitute one integrated whole, then it must be held that the 'establishment' is one. But on the contrary, if they do not constitute one integraed whole, then each unit must be held to be independent and a separate one.
As I have already noted, the petitioner itself did not plea and in any event, it has not been substantiated before this Court that the officers at Madras and Bombay were functioning for different purposes and carrying on different business dissociated from the running of the factory at Guindy, Madras, and under these circumstances, there is no escape from the result that all these parts should be treated as one integrated whole for determining the employment strength of the petitioner for the purpose of the Act. The Legal Adviser has taken note of the relevant features and the very statements furnished by the petitioner to come to the conclusion that all the units should be treated as parts of the same 'establishment' and it will not be proper to separate the process of manufacture in the factory from the office establishment, which attends to work connected with the factory. I do not find any merit in this writ petition and accordingly the writ petition fails and the same is dismissed.