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1990 Supreme(Kar) 690

IN THE HIGH COURT OF KARNATAKA AT BANGALORE
S. Rajendra Babu, J.
W.S. Industries (India) Ltd. and another —Appellant
Vs.
The Inspector of Factories and others —Respondent
Writ Petition Nos. 5767 and 5768/1990, 18788/1988 etc.
Decided on : 15-06-1990

Headnote:

Factories Act - Constitutional Validity - Section 2(n) - Act 20 of 1987 - Articles 19(1)(g) and 14 of the Constitution - [Section 2(n) of the Factories Act, 1948 as amended by Act 20 of 1987] - Summary: The court discussed the constitutional validity of Section 2(n) of the Factories Act, 1948 as amended by Act 20 of 1987, in relation to Articles 19(1)(g) and 14 of the Constitution. The court analyzed the contentions raised by the petitioners and the respondents, and interpreted the provisions of the Act as per the original and amended Acts. The court highlighted the interpretation of the term 'occupier' and the effect of the proviso introduced by the amendment, emphasizing the meaning attributed to 'occupier' and the liability of nominated persons. The court also discussed the effect of the deeming provision and the interpretation of the proviso, ultimately quashing the impugned endorsements and directing the authorities to reconsider the matter in accordance with the law.

Fact of the Case:

The petitioners challenged the constitutional validity of Section 2(n) of the Factories Act, 1948 as amended by Act 20 of 1987, and the endorsements issued by the Chief Inspector of Factories and Boilers, calling upon the petitioners to file applications for renewal of registration or licence of their respective factories by nominating the director as the 'occupier'.

Finding of the Court:

The court quashed the impugned endorsements and directed the authorities to reconsider the matter in accordance with the law, emphasizing that the authorities had not applied their mind to the relevant provisions of the Act. The court did not delve into the constitutional validity of the provisions of the Act, as it was unnecessary to do so.

Issues: Constitutional validity of Section 2(n) of the Factories Act, 1948 as amended by Act 20 of 1987, and the endorsements issued by the Chief Inspector of Factories and Boilers.

Ratio Decidendi: The court interpreted the provisions of the Act, discussed the effect of the proviso introduced by the amendment, and emphasized the meaning attributed to 'occupier' and the liability of nominated persons. The court also discussed the effect of the deeming provision and the interpretation of the proviso.

Final Decision: The petitions stood allowed, and the impugned endorsements issued by the Inspector of Factories or any other respondent and proceedings relating thereto in each of the petitioners were quashed. The respondents were directed to once again apply their mind and decide the matter afresh in the light of the court's order and in accordance with the law.

JUDGMENT

S. Rajendra Babu, J.--In this batch of cases the petitioners have called in question the constitutional validity of Section 2(n) as amended by Act 20 of 1987 of the Factories Act, 1948 (hereinafter referred to as the Act) as violative of Articles 19(1)(g) and 14 of the Constitution. They have also contended that the endorsements issued by the Chief Inspector of Factories and Boilers calling upon the petitioners to file an application for renewal of registration or licence of their respective factories by nominating the director as the 'occupier'.

2. The petitioners are all running factories of various kinds and are seeking either registration or renewal of their factories' licence. When they filed applications in the necessary forms the same having not been acted upon but the petitioners have been asked to file applications signed by the "director of company who owns the factory." It is also stated that the authority cannot act upon the Board resolution authorising the general manager to be the 'occupier' of the factory.

3. The contentions raised by the petitioners are as follows : That Section 2(n) of the Act restricts the freedom to carry on business inasmuch as the Companies Act controls the activities to be carried on by a company and the rights and liabilities of the director are controlled of 'occupier' restricting that such responsibility should be entrusted only to a director of a company, the legislature has interfered with the freedom to carry on business and the restriction imposed therein is not reasonable. It is submitted that a director of a company is as much an officer of a company as any other officer and as such there could be no distinction in the matter of nomination of a responsible officer of the company. It is, therefore, submitted that the provision is also violative of Article 14 of the Constitution. It is further submitted that interpretation place by the authorities in not acting upon the application signed by an officer who is duly authorised by resolution of Board of Directors could not have been rejected on unreasonable grounds and by no stretch of imagination could it be said that the petitioners ought to nominate only a director as an 'occupier' and have, in this context, relied upon various decisions of the Supreme Court in The Commissioner of Income Tax, Mysore, Travancore-cochin and Coorg, Bangalore Vs. The Indo Mercantile Bank Limited, AIR 1959 SC 713 , Abdul Jabar Butt Vs. State of Jammu and Kashmir, AIR 1957 SC 281 , Vishesh Kumar Vs. Shanti Prasad, AIR 1980 SC 892 , Consolidated Coffee Ltd. and Another Vs. Coffee Board, Bangalore, AIR 1980 SC 1468 , E.S.I. Corpn. Vs. Kailashchandra and Others, (1990) 1 LLJ 486 MP and Suresh Tulsidas Kilachand and others Vs. Collector of Bombay and others, ( 1984. Lab.IC. 1614)

4. Controverting these contentions, the respondents contended : that the endorsements made by the respondents are fully in conformity with the provisions of the Act, that it was open to legislature to give a definition to promote the intent and objects of the Act and overcome certain decisions wherein it had been held that the 'occupier' of a factory need not necessarily be either a director or an owner of a factory and the legislature has therefore, provided the meaning or definition of the word 'occupier' separately; that to set the matter at rest and to resolve the controversy as to expression 'occupier' of factory, the legislature has defined the meaning of 'occupier' by the amendment to Section 2(n) of the Act, impugned herein. It was also submitted that inasmuch as the amendment carried out the objects of the Act, the same could not be said to be violative of either Article 14 or 19 of the Constitution. It was also submitted that the interpretation placed by the respondents is consistent with the decision of the Allahabad High Court in Bhatia Metal Containers (Pvt.) Ltd. Vs. State of U.P. and Others, (1990) 2 LLJ 534 All, and therefore the meaning attributed by the re






















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