V. D. BHARGAVA, J.

( 1 ) THIS is an appeal by the State against an order of acquittal passed by the Sessions Judge, saharanpur, in a case under Section 14 (2) of the Employees Provident Funds Act, 1952.

( 2 ) THE respondent Jagraj was the managing director and occupier of the Regmal Mills Straw board Manufacturing Company, Saharanpur. According to the prosecution the aforesaid company was engaged in manufacturing grinding wheels and had in their employment 50 or more persons with effect from 1-1-54 and they were not making contribution towards provident fund of the employees and paying administrative charges. They were further required to submit monthly returns as prescribed under the Scheme, and as they failed to comply with these provisions they were liable to conviction under Section 14 (2) of the Employees Provident Funds act, as also under paras 76 (a), (c) and (e) of the Provident Fund Scheme. The prosecution was launched after obtaining the required sanction of the Labour Commissioner, uttar Pradesh. The respondent pleaded not guilty and inter alia raised two grounds (1) that the act and Scheme did not apply to the Regmal Mills as they were not manufacturing any goods, and (2) that the Regmal Mills had not contributed towards the provident fund during this period nor had they paid administrative charges and submitted the monthly return because the Act did not apply to the Mills. The trial court had convicted the respondent, and imposed a fine of Rs. 500/ -. An appeal was filed and the appellate court has acquitted the accused.

( 3 ) THE term occupier of a factory has been defined in Section 2 (k) of the Act as the person who has ultimate control over the affairs of the factory, and there cannot be any doubt that Jagraj was the occupier in that sense. There appears to have been a mistake in writing the name; instead of jagraj tegraj has been mentioned. But since Jagraj had appeared we do not think that that would make any difference now.

( 4 ) SO far as the question whether the Regmal Mills comes under the definition of factory is concerned, there cannot be any doubt that it would come under the definition. factory has been defined as

"any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on Or is ordinarily so carried on, whether with the aid of power or without the aid of power. "

manufacture means "making, altering, ornamenting, finishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal. "

Therefore when grinding wheels were being prepared and they were being transported for sale, in any event it would be a manufacturing process.

( 5 ) WE need not discuss this matter further at any great length, because we think that the appeal when it was allowed by the appellate court, was allowed on valid grounds. During the period for which this trial was started,. e. , from March to July 1954 and also October 1954 the number of employees, permanent or temporary, was less than fifty. That was supported by the respondent by his own evidence as well as by producing the various registers. This part of his statement was accepted by the appellate court and we do not see any reason why it should not be accepted. There is no evidence on behalf of the prosecution that during this period more than fifty persons were employed. It is true that some time before for the purpose of white-washing and repairs some more persons had been employed and this number had exceeded fifty.

( 6 ) ACCORDING to the argument of learned counsel for the State, if once a mill employs more than fifty persons then if after some time the number is reduced, the mill will continue to be under the operation of the Employees Provident Funds Act, and, therefore, the employment of less than 50 persons during the period for which the respondent has been charged would make no difference it was contended that once the Act was applicable to a factory it

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