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PETITIONER: ROHTAS INDUSTRIES LTD.

       Vs.

RESPONDENT: RAMLAKHAN SINGH AND ORS.

DATE OF JUDGMENT16/02/1978

BENCH: UNTWALIA, N.L. BENCH: UNTWALIA, N.L. KAILASAM, P.S. TULZAPURKAR, V.D.

CITATION:  1978 AIR  849            1978 SCR  (3)  93  1978 SCC  (2) 140

ACT: Right to file a complaint u/s 26(2) r/w s. 2(4) of the Bihar Shops and Establishments Act, 1953. Words  and  Phrases--Scope  of the  words  "subject  to  the manufacturing process" occurring in s. 2(1) of the Factories Act (LXIII) 1948.

HEADNOTE: The  services of Respondent Ramlakhan Singh who was  working as  sectional officer in the Waste Paper department  of  the paper  factory of the appellant at Dalmianagar, Bihar  State was terminated with immediate effect by a notice dated 10-6- 1970,  with an offer of one months wages in lieu of  notice. The  respondent  assailed the order of  his  termination  by making  a  complaint  u/s.  26(2)  of  the  Bihar  Shops   & Establishments  Act,  1953.   The  appellant  contested   on merits,  as well as on the technical ground that it was  not maintainable  under the Bihar Act as the respondent was  not an  employee within the meaning of s. 2(4) of the Act.   The Labour  Court, by its order dated 29-5-1972, held  that  the respondent was not a factory worker within the meaning of s. 2(1)  of the Factories Act, 1948 and hence was  an  employee within  the  meaning of the Bihar Act.   The  Writ  Petition filed  by the appellant in the Patna High Court against  the said  order was dismissed asking him to agitate  this  point after the final decision was made by the Court.  The  Labour Court,  on merits, decided the matter on 28-2-1973,  allowed the petition of the respondent and ordered his reinstatement with full back wages.  A fresh writ petition challenging the said orders was also dismissed by the Patna High Court. Allowing the appeal by special leave, the Court, HELD:     Only a. person who is an employee u/s 2(4) of  the Bihar  Shops  and Establishments Act, 1953,  could  file  an application u/s 26(2). [95B] Even (persons employed in a factory by the inclusive  clause in  the  second  sentence  the definition  in  S.  2(4)  are employees  within  the meaning of the Bihar  Act.   But  two exceptions  have been carved our from the category of  such, persons. namely, (1) "Who are not workers within the meaning of  the Factories Act", such a worker does not  come  within the  inclusive definition of the term employee; (2) who  are

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not working in a managerial capacity.  In other words even a person employed in a factory and who is not a worker  within the meaning of the Factories Act will not be an employee u/s 2(4)  of  the Bihar Act, if he is working  in  a  managerial capacity. [95D-F] Reading  clause  (1)  of s. 2 of the  Factories  Act,  1948, together with clause (k) and (m) thereof, it is clear that a person  to be a worker within the meaning of  the  Factories Act  must  be  a  person employed in  the  premises  or  the precincts of the factory. [96C] State  of  U.P.  v. M. P. Singh & Ors.,  [1960]  2  SCR  605 reiterated. Raw   materials  used  in  the  manufacturing  process   for producing paper and its various products, undoubtedly,  will be  a  "subject  of the manufacturing  process’  within  the meaning  of  clause  1 of section 2 of  the  Factories  Act, whatever also may be or may not be such subject. [97A-B] In  the  instant case, the respondent was not working  in  a managers  capacity.   Though  he was not  employed  "in  any manufacturing  process  or  in  cleaning  any  part  of  the machinery or premises used for a manufacturing process",  he was engaged in a work which was connected with the 94 "Subject of the manufacturing process" and therefore, he was a factory worker within the meaning of clause (1) of s. 2 of the  Factories  Act,  1948.  Hence he was  not  an  employee within  the  meaning of the Bihar Shops  and  Establishments Act, 1953.  The petition of complaint filed by him u/s 26(2) was not maintainable. [96G, 97B-C]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1821  of 1977: (Appeal  by Special Leave from the Judgment and Order  dated 19th  August,  1976  of a Bench of High Court  of  Patna  in C.W.J.C. a No. 650 of 1973). A.   B. N. Sinha, B. P. Maheshwari and Suresh Sethi for  the Appellant. Lal Varain Sinha, P. P. Singh & H. S. Marwah for  Respondent No. 1. The Judgment of the Court was delivered by UNTWALIA, J.-This is an appeal by special leave.  Shri  Ram- lakhan  Singh, respondent no.  1 (for  brevity,  hereinafter called  the  respondent)  was, an  employee  of  M/s  Rohtas Industries Ltd., the appellant.  The appellant runs a  Paper Factory at Dalmianagar in the State of Bihar, wherein  paper is  manufactured for sale from rawmaterials such as  bamboo, cotton  rags  and  waste  paper  etc.   The  respondent  was appointed and employed in the Waste Paper Department of  the Paper  Factory and had been working as Sectional Officer  in the  said  Department since 1964.  The  management  received information  from  one of its dealers, M/s G. D.  Bansal  of Gwalior, that the respondent was acting against the interest of   the   Company  and  was  divulging  its   secrets   and confidential    matters    to   outsiders    for    monetary considerations.   Thereupon  the management  terminated  the services  of  The respondent by a notice dated the  10th  of June, 1970 with immediate effect, and according to its case, it  had offered one month’s wages’ in lieu of  notice.   The respondent assailed the order of his termination by making a complaint  in  writing  to the  Labour  Court,  Patna  under section  26(2)  of  the Bihar Shops  &  Establishments  Act, 1953--hereinafter  called the Bihar Act.  His case was  that

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he was discharged from service without any rhyme and reason, no  domestic  enquiry was held to prove any  charge  against him,  nor  was be offered any wages in lieu of  one  month’s notice.   The appellant contested the respondent’s  petition of  complaint on merits as well as on the  technical  ground that it was not maintainable under the Bihar Act inasmuch as the  respondent  was not an employee within the  meaning  of section 2 (1) of the said Act. The  Labour Court tried the issue of maintainability of  the petition  of  complaint as a preliminary issue  and  by  its order dated the 29th May, 1972 held that the respondent  was not  a factory worker within the meaning of section 2(1)  of the Factories Act, 1948 and hence was an employee within the meaning  of  the Bihar Act.  The appellant  moved  the  High Court  by  a  writ petition against the said  order  of  the Labour Court but was asked to agitate this point after 95 the  final  decision  was made by that  Court.   The  Labour Court,  on  merits,  decided  the  matter  on  the  28th  of February,  1973 and allowed the petition of  the  respondent and  ordered  his reinstatement with full back  wages.   The appellant  challenged  the orders of the Labour Court  by  a fresh  writ petition but the Patna High Court dismissed  it. Hence this appeal. We  need not discuss or decide the merits of the  respective cases  of  the parties, as in our opinion,  the  application filed  by the respondent tinder section 26(2) of  the  Bihar Act was not maintainable. Only  a person who is an employee under section 2(4) of  the Bihar  Act could file an application under section  26  (2). If he was not such an employee, be had no right to file  the complaint.  Section 2(4) reads as follows :               " employee’ means a person wholly or partially               employed  for  hire, wages  including  salary,               reward,  or commission in, and  in  connection               with, and establishment and includes 4   apprentice’,               but   does  not  include  a  member   of   the               employers’  family.  It also includes  persons               employed  in  a factory who  arc  not  workers               within the meaning of the Factories Act,  1948               (LXIII  of  1948) and who are not  working  in               managerial  capacity, and for the purposes  of               any  proceeding  under this  Act,  include  an               employee who has been dismissed, discharged or               retrenched for any reason whatsoever." On  a plain reading of the definition aforesaid, it  follows that  even persons employed in a factory by  the,  inclusive clause   in  the  second  sentence  of-the  definition   are employees  within  the meaning of the Bihar  Act.   But  two exceptions  have been carved out from the category. of  such persons, namely, (1) "who are not workers within the meaning of  the Factories Act"; such a worker does not  come  within the inconclusive definition of the term ’employee’; (2)  who are  not working in managerial capacity’.  In  other  words, even a person employed in a Factory and who is not a  worker within  the  meaning  of the Factories Act will  not  be  an employee  under  section  2 (4) of the Bihar Act  if  he  is working  in a managerial capacity. it is not  disputed  that the  second exception was not attracted in this  case.   The respondent was not working in a managerial capacity.  He was employed  in the Paper Factory.  But the only  question  for determination is whether be was a worker within the  meaning of the Factories Act. For  the  purpose  of deciding the point  at  issue,  it  is necessary  to refer to certain-provisions of  the  Factories

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Act as they stood at the relevant time before the  Factories Amendment Act, 1976.  The title and the preamble of the  Act would show that this is an Act "to consolidate and amend the law regulating labour in factories." Clause (1) of section 2 runs as follows               "worker’ means a person employed, directly  or               through any agency  whether for wages or  not,               in  any manufacturing process, or in  cleaning               any part of the machinery or premises               96               used  for a manufacturing process, or  in  any               other kind of work incidental to, or connected               with,   the  manufacturing  process,  or   the               subject of the manufacturing process."               The  definition of "factory" given  in  clause               (in)  starts  by  saying that  it  "means  any               premises  including  the  precincts  thereof."               Manufacturing  process  has  been  defined  in               clause (k) to mean any process for-               (i)   making,       altering,       repairing,               ornamenting,   finishing,   packing,   oiling,               washing,  cleaning, breaking up,  demolishing’               or otherwise treating or adopting any  article               or  substance with a view to its  use-,  sale,               transport,      delivery     or      disposal,               or...................." Reading  these provisions together, it is  quite  reasonable and legitimate to bold that a person   to be a worker within the  meaning of the Factories Act must be a person  employed in the premises or the precincts of the factory.  As held by this Court in The State of Uttar Pradesh v. M. P. Singh  and others(1)   field  workers  who  are  employed  in   guiding supervising  and controlling the growth and supply of  sugar cane  to be used in the factory are not employed  either  in the  precincts  of  the factory or in the  premises  of  the factory.   Hence the provisions of the Factories Act do  not apply to  them. According to the finding of the Labour Court, the respondent was   engaged  in  supervising  and  checking  quality   and weighment of waste papers and rags which are the basic  raw- materials for the manufacture of Duplex Board and Vulcanised fibre.   He used to deal with receipts and maintain  records of stocks.  He also used to pass the bills of the  suppliers of the waste paper and rags and used to check the quality of the supplies.  The respondent had admitted that the used to- work  in  the  precincts  of the  factory  and  in  case  of necessities  had to work inside the factory.  He used to  go to the paper sorting house when there were instructions  for it.   But thinking that checking of rags and  their  quality was  not the main duty of the respondent, the Court came  to the   conclusion  that  his  work  was  not  incidental   to manufacturing process The High Court thought that the Labour Court  bad  found  as a fact that  the  respondent  was  not concerned with the manufacturing of paper either directly or incidentally and hence he was not a factory worker.  In  our opinion,  the judgments of the Courts below in  this  regard cannot be sustained. The  respondent  was  not  employed  "in  any  manufacturing process or in cleaning any part of the machinery or premises used  for,  a manufacturing process." But the  question  for consideration is whether he was employed in "any other  kind of  work incidental to or connected with, the  manufacturing process  or the subject of the manufacturing process."  This Court in State of U.P. v. M. P. Singh (supra) did (1)  [1960] 2 S.C.R. 605.

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97 not  decide  as to what was the precise  meaning     of  the expression "subject of the manufacturing process" in section 2  clause (1) of the Factories Act.  We are called  upon  to decide  this question in this appeal.  Raw material used  in the  manufacturing  process  for  producing  paper  and  its various  products,  undoubtedly, will be a "subject  of  the manufacturing process," whatever else may or may not be such subject.   If  that be so, the respondent was engaged  in  a work   which   was  connected  with  the  subject   of   the manufacturing process.  And as we see the evidence discussed in the order of the Labour Court, there cannot be any  doubt that he was workin in the factory premises or its  precincts in  connection  with  the  working of  the  subject  of  the manufacturing  process  namely, the raw-materials.   In  our judgment,  therefore,  he was a factory  worker  within  the meaning  of  clause (1) of section 2 of the  Factories  Act, 1948.   Hence he was not an employee within the  meaning  of the  Bihar  Act and the petition of complaint filed  by  him under section 26(2) was not maintainable. We accordingly allow this appeal, set aside the judgment and order  of the High Court as also those of the  Labour  Court and   dismiss  the  petition  of  complaint  filed  by   the respondent.  As per the order of this Court made earlier the appellant must pay the cost in this appeal to Respondent No. 1. Before  we  part  with this case, we would like  to  put  on record  that Mr. A. B. N. Sinha appearing for the  appellant management  assured us that whatever money has been paid  to the  respondent  in  lieu of wages so far  pursuant  to  the interim order of the High Court or of this Court will not be claimed  back  from him.  We think that the amount  so  paid should  furnish a sufficient compensation to the  respondent for losing his service. S.R. Appeal allowed. 98