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1988 Supreme(Pat) 382
HIGH COURT OF PATNA
D. K. Sen, and S. N. Jha, JJ.
M/s Cee Bee Stone Works - Appellant
Vs.
Union of India and others - Respondents
Letters Patent Appeal No. 44 of 1988
Decided on: 24.11.1988
For the appellant: Mr. S. K. Mishra.
For the respondents: Mrs. Renuka Sharma.
The court held that section 1(3)(b) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, applied to non-factory industries only.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 1(3)(A) AND 1(3)(B) - INTERPRETATION - STONE QUARRY - MANUFACTURING PROCESS - FACTORY - INDUSTRY - APPLICABILITY OF THE ACT.
Fact of the Case:
The appellant, a lessee of a stone quarry under the Mines and Minerals (Regulation and Development) Act, 1957, carried out operations consisting of blasting stones from the quarry, reducing them in size by chipping, and then pressing them through mechanised crushers to obtain stone chips. The appellant contended that it was a factory within the meaning of section 1(3)(a) and section 2(g) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act), and that the industry to which it belonged could only be brought under the purview of the Act by including it in Schedule I of the Act under section 4(1). The appellant challenged the inclusion of stone quarries under item LXXXII in Chapter I in paragraph 1(3)(b) of the Scheme as ultra vires the powers under section 1(3)(a) of the Act.
Finding of the Court:
The court held that the appellant was not exclusively a factory within the meaning of section 1(3)(a) of the Act, as its primary activity was running a stone quarry, and the operation of reducing stones to smaller sizes was a subsidiary and incidental industry. The court further held that the Act was a beneficial social legislation and should be given a wider ambit to extend its benefits to a larger number of persons.
Issues: 1. Whether the appellant was a factory within the meaning of section 1(3)(a) and section 2(g) of the Act. 2. Whether the inclusion of stone quarries under item LXXXII in Chapter I in paragraph 1(3)(b) of the Scheme was ultra vires the powers under section 1(3)(a) of the Act.
Ratio Decidendi: 1. The court interpreted section 1(3)(a) and section 1(3)(b) of the Act and held that section 1(3)(b) applied to non-factory industries only. 2. The court held that the appellant's operation of reducing stones into smaller sizes was a subsidiary and incidental industry to the primary activity of running a stone quarry, and therefore, the appellant could not claim to be exclusively a factory within the meaning of section 1(3)(a) of the Act.
Final Decision: The court dismissed the appeal, holding that the appellant was not exclusively a factory within the meaning of section 1(3)(a) of the Act and that the Act was a beneficial social legislation that should be given a wider ambit to extend its benefits to a larger number of persons.
D. K. Sen, C. J. - The material facts on record and the proceedings leading up to this Letters Patent Appeal are, inter alia, that M/s Cee Bee Stone Works of Pakur, the appellant, is a lessee under the Government of Bihar of a stone quarry. The said lease was granted in favour of the appellant under the provisions of the Mines and Minerals (Regulation and Development) Act, 1957, and the rules framed thereunder. The operation carried on by the appellant under the said lease is, inter alia, quarrying stones. The operation consists of blasting stones from the quarry by explosives. Big pieces of stones obtained on blasting are reduced in size by chipping after which the same along with boulders are pressed through mechanised crushers and reduced to small pieces known as 'stone chips'. The crushed pieces ale graded according to sizes by passing them through sieves and thereafter disposed of.
2. On the 31st January, 1977, a notification was published in the Gazette of India dated the 15th February, 1977, under G. S. R. No. 204 whereby in exercise of the powers under section 1 (2) (b) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, the Central Government specified that an establishment of stone quarries producing stone chips, stone sets; boulders and ballasts and employing 20 or more persons would be a class of establishment to which the said Act of 1952 would apply on and from the 28th February, 1977. Subsequently, a further notification dated the 19th February, 1977, being G. S. R. No. 305 was published in the Gazette of India dated the 5th March, 1977, whereby, in exercise of the powers conferred under section 5 and section 7 (1) of the said Act of 1952 the Central Government in the Scheme known as the Employees Provident Fund (Amendment) Scheme, 1977, inserted sub-clause No. (LXXXII) in paragraph 1 (3) (b) thereof. The said sub-clause read as follows:-
"Stone quarries producing stone chips, stone sets, stone boulders and ballasts."
3. The appellant contends that it is a factory within two meaning of section 1 (3) (a) and section 2 (g) of the said Act of 1952 and carries on manufacturing process under section 2 (1-e) of the said Act and as such the appellant and the industry, to which the appellant belongs, can be brought under the purview of the said Act of 1952 only by including the said industry in Schedule I of the said Act in the manner as provided under section 4 (1) of the said Act of 1952. Till the above was done the inclusion of stone quarry under item LXXXII under Chapter I in paragraph 1 (3) (b) of the said Scheme would be ultra vires the powers under section 1 (3) (a) or the said Act, 1952. The Central Government could not override the specific provisions of the said Act under which power was delegated to it. The appellant contended before the Provident Fund authorities that the said Act of 1952 was not applicable to the appellant.
4. The appellant along with others in the said industry filed a representation on the 15th April, 1982, which was rejected by the Regional Provident Fund Commissioner, Bihar by his order dated the 22nd April, 1982.
5. Being aggrieved the appellant filed a civil writ petition under Articles 226 and 221 of the Constitution on the 18th May, 1982, praying, inter alia, for a writ in the nature of certiorari for quashing the impugned order of the Regional Provident Fund Commissioner dated the 22nd April, 1982, and the said notifications respectively dated the 31st January, 1977, and the 19th February, 1977. The appellant also prayed for a writ for a declaration that section 7A of the Act of 1952 was ultra vires the Constitution and further a writ in the nature of mandamus restraining the respondents from taking any coercive steps, including criminal prosecution against the appellant on the basis of the said impugned notifications.
6. A counter affidavit, affirmed by one Atul Chandra Jana, a Provident Fund Inspector, on 8th January, 1986, was filed in answer to the writ p
