High Court Of Calcutta
Asok Kumar Chakravarty
GREAVES LTD. - Appellant
Versus
STATE OF WEST BENGAL - Respondent
Matter 839 Of 1994
Decided On : 01/22/1996
FACTORIES ACT, 1948 - SECTION 2(N) - OCCUPIER OF A FACTORY - NOMINATION BY RESOLUTION OF BOARD OF DIRECTORS - VALIDITY - INTERPRETATION.
Fact of the Case:
The petitioner challenged the refusal of the respondent to renew the license of its factory on the ground that the directors of a company are not always in a position to have ultimate control over any factory and that under the law any person other than a director can be the "occupier" within the meaning of Section 2(n) of the Factories Act.
Finding of the Court:
The court held that if any person is nominated and appointed by a resolution of the board of directors of a company as "occupier" of the factory, he shall be the "occupier" of the factory within the meaning of Section 2(n) of the Factories Act, 1948. In the absence of any such resolution, one of the directors of a company shall be deemed to be the occupier of the factory.
Issues: Whether any person other than a director of a company can be said to be "occupier" of a factory within the meaning of Section 2(n) of the Factories Act, 1948.
Ratio Decidendi: The court interpreted Section 2(n) of the Factories Act, 1948 and held that the deeming provision in proviso (ii) of that section cannot be the criterion for determination of the actual "occupier" of the factory. The court further held that the legal fiction created by the deeming provision can come into play only in cases where the substantive provision is not attracted.
Final Decision: The court allowed the writ petition, set aside the impugned letters refusing to renew the license, and directed the respondent to renew the license of the petitioner's factory forthwith.
( 1 ) THE short point for consideration in this writ petition is whether any person other than a director of a company can be said to be "occupier" of a factory within the meaning of Section 2 (n) of the Factories Act, 1948.
( 2 ) THE facts of the case, in short, are that the petitioner-company has a factory at Plot Nos. B-9 and B-10 of Falta Industrial Growth Centre, Sector III, Falta, Diamond Harbour and is known as Power Transmission Unit 2, hereinafter referred to as "the said factory". By a resolution of the board of directors of the petitioner-company on May 27, 1993, Mr. A. B. Ghosh was nominated as the occupier of the said factory having ultimate control over the affairs of the said factory. The petitioner submitted two applications for renewal of licence in respect of the said factory for the years 1993 and 1994, respectively, to which respondent No. 2 sent a reply intimating that "the forms for 1993 and 1994 have not been signed by the occupier, i. e. , by ,any of the directors within the meaning of the Factories (Amendment) Act, 1987," and requested them to rectify the irregularities immediately. The said refusal of respondent No. 2 to renew the licence has been challenged in this writ petition on the ground that the directors of a company are not always in a position to have ultimate control over any factory as they may have to operate from a distance and that under the law any person other than a director can be the "occupier" within the meaning of Section 2 (n) of the Factories Act. Section 2 (n) reads as follows :" (n) 'occupier' of a factory means the person who has ultimate control over the affairs of the factory : Provided that- (i) in the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier ; (ii) in the case of a company, any one of the directors shall be deemed to be the occupier;"
( 3 ) IN the affidavit-in-opposition filed by respondent No. 2 it was alleged that there is no scope for nomination of a person other than one of the directors of the company as the "occupier" of the factory by such a resolution. It was denied that Mr. A. B. Ghosh at all material times had ultimate control over the affairs of the said factory. It was further submitted that the petitioners were directed to submit a fresh nomination in accordance with law showing one of the directors as "occupier" of the factory.
( 4 ) HEARD learned counsel for the petitioners. None appeared for the respondents though an affidavit-in-opposition has been filed.
( 5 ) IN order to appreciate the argument to Mr. Pradip Ghosh, learned advocate for the petitioner, the definition of the term "occupier" under Section 2 (n) of the Factories Act has got to be looked into.
( 6 ) LEARNED counsel for the petitioners submitted that the substantive provision for determination of the "occupier" of a factory being the person having actual control over the affairs of a company the deeming provision in proviso (ii) of that section cannot be the criterion for determination of the actual "occupier" of the factory. For this purpose he referred to the case of Kirloshar Pneumatic Company Ltd. v. V. A. More [1993] Lab IC 1802 ; [1993] 83 FJR 505 (Bom), where it was held (page 511) :"in the first instance the plain reading of the amended provisions of Section 2 (n) of the Factories Act makes it clear that Parliament never desired to wipe out the effect of the impact of decisions delivered prior to the amendment holding that the occupier need not necessarily be a director of the company. The amendment deleted the provisions of Section 100 of the Factories Act, which, inter alia, provided that where the occupier of the factory is a company, when any one of the directors thereof may be prosecuted and punished for any offence for which the occupier of the factory is punishable. The Legislature did not delete the entire provisions of Section 2 (n) but retained
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.