The central legal point established in the judgment is the interpretation of the amended provisions of the Factories Act, specifically regarding the nomination of a Director as the Occupier and the requirement of ultimate control over the factory's affairs.

Permod Kohli, J. (Oral)

1. The petitioners are aggrieved of the order dated 7.6.1988 (Annexure P-3) whereby the application of the petitioners for renewal of licence has not been considered and the petitioners have been asked to appoint one of the Directors as the Occupier and file a fresh application in Form No.2 signed by the Occupier Manager and after depositing the fee, be sent to the Office of respondent no.2.

2. The short point involved in this petition is that petitioner No.1 is a Public Limited Company incorporated under the Indian Companies Act, 1956 and is carrying on its business activities of manufacturing of Textile items. The Company has factories at various places including at Rajpura (Punjab). Petitioner no.2 is shareholder of petitioner no.1 and petitioner no.3 is Chief Executive of the Company at Rajpura (Punjab) with the designation of Vice President and has also been nominated as Occupier of the Factory of the Company at Rajpura by virtue of power of attorney duly executed in his favour and resolution passed by the Board of Directors of the Company in the meeting held on 28.1.1988. It is stated that he has been entrusted with the ultimate control over the affairs of the factory at Rajpura and has been nominated, constituted and appointed as “Occupier” of the said factory. The factory requires the licence under the Factories Act. Such an application in the prescribed form is to be made by a person who is nominated as the Occupier of the factory and the said Occupier is required to name another person as a “Manager” of the factory. Petitioner no.3, on being nominated as “Occupier” of the Factory at Rajpura, submitted application to respondent no.2 for renewal of the licence for the year 1988. It is stated that the application was filed within the specified period i.e. before 1.12.1987 and was accompanied by treasury receipt regarding payment of the renewal fee. In this application, petitioner no.3 who is the Vice President of the Company and Incharge of the Factory at Rajpura has been shown as the “Occupier” of the factory. Respondent no.2 has refused to renew the licence on the ground that only a Director of the Company could be nominated as “Occupier” and none else and accordingly vide letter (Annexure P3), the petitioner-Company has been asked to nominate a Director. In view of the amended provisions of Section 2 (n) of the Factories (Amendment) Act (20 of 1987), only a Director can be nominated as Occupier. The amended provisions of Section 2 (n) reads as under:-

“2(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 occupier;

(iii)In the case of a factory owned or controlled by the Central Government or any State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be shall be deemed to be the occupier......”

Section 100 of the unamended Act i.e. Factories Act, 1948 reads as under:-

“100-Determination of Occupier in certain cases.

(1)Where the occupier of a factory is a firm or other association of individuals, any one of the individual partners or members thereof may be prosecuted and punished under this Chapter for any offence for which the Occupier of the factory is punishable: Provided that the firm or association may give notice to the Inspector that it has nominated one of its members, residing within (.......) India to be the occupier of the factory for the purpose of this Chapter, and such individual shall, so long as he is so resident, be deemed to be the occupier of the factory for the purposes of this Chapter, until further notice cancelling his nomination is re