Important Point
Factories run by Indian Oil Corporation which are effectively and really owned and controlled by the Central Government, would fall within the purview of clause (iii) of first proviso to Section 2(n) of the Factories Act, 1948 and the person appointed by the Central Govt. to manage the affairs of the factories would be deemed to be the occupiers of those factories for the purposes of Section 2(n) of the Factories Act, 1948.

Judgment

Nanavati, J.-Leave granted. Heard learned counsel for the parties.

2. A short but an interesting question of law arises for consideration in these appeals. The question is : who is to be deemed ‘occupier’ of a factory of a government com­pany incorporated under the Indian Compa­nies Act? If the government company is to be treated like any other company then according to clause (ii) of the first proviso to Section 2(n) of the Factories Act, 1948 any one of the directors of that company is deemed to be the occupier; but, if its factory is consid­ered as a factory owned or control­led by the Govenment as provided by clause (iii) of the proviso the person appointed to manage the affairs of the factory by the Government is to be deemed the occupier.

3. The appellant, Indian Oil Corporation Limited, is a government company as defined by Section 617 of the Companies Act. It is almost wholly owned and controlled by the Government. It is, inter alia, engaged in the supply and distribution of petroleum and petroleum products including L.P.G. In order to ensure an effective and effi­cient supply system it is required to establish and maintain storage facilities at many places in the country. At Namkum, in Ranchi Dis­trict, it already had large storage facility. With the object of increasing storage capacity at Namkum it established a new storage unit in 1992 after obtaining approval of the Central Government. As storage facilities are also covered by the definition of ‘factory’ as defined by the Factories Act, the Depot Manager posted at the Namkum Depot made an application on 10.4.92 for obtaining a licence for the new unit. He also made an application on 30.12.91 for renewal of the licence of the existing unit. While granting the licence earlier, for the existing unit, the Inspector of Factories had recognized the Depot Manager as the ‘occupier’ and the occupancy certificate etc. were issued in his name. But this time, the new Inspector of Factories, by his letter dated 28.4.92 refused to grant the licence showing Depot Manager as the occupier, on the ground that Indian Oil Corporation is a company and in case of a company any one of the directors only can be deemed to be the occupier. He directed the appellant to submit proper applications duly signed by one of the directors of the compa­ny. In view of this refusal the appellant filed C.W.J.C. No. 443 of 1991 in the Patna High Court. On 11.5.92 the Corporation wrote to the Ministry of Petroleum and Natural Gas apprising it of the stand taken by the Inspector of Factories at Ranchi and seeking its guidance in the matter. On 26.5.92 the Inspector of Factories passed an order grant­ing permission to the Corporation to start pumping of oil and to do other allied processes in its new unit at Namkum on certain condi­tions and on temporary basis till the disposal of the said writ peti­tion. In that order also he reiterated that he would recognise only the Board of Directors of the Corporation in general and Director (Marketing) in particular as the occupier of the factory and not the local Depot Manager. On 2.7.92 the Government of India, in the Ministry of Petroleum and Natural Gas, wrote to the Chief Inspector of Factories that the Ministry had already issued notifications declaring the unit incharge as the occupier for the purpose of the Act. He was according­ly advised to recognise the officer incharge of the concerned depot as the occupier of that factory. Rejecting this request the Inspector of Factories reiterated the stand taken by him and refused to recognise the officer incharge as the occupier. Thereupon the Corporation filed a more comprehen­sive petition, C.W.J.C. No. 2456 of 1992 challenging the action of the Inspector of Factories.

4. Before the High Court two questions were raised on behalf of the appellant. One was whether in the case of a company one of the direc­tors of the company only can be recognised as an occupier of the factory owned by it and the second was wh