Central State Farm Hissar vs State of Haryana and Others

K. Kannan, J.�The present writ petition was filed to quash the inspection report and notice issued by the respondent under the terms of which an amount of Rs. 2,79,401/- accumulated as unpaid wages was directed to be transferred to the State Welfare Board. The petitioner seeks for restraint against giving effect to this order, contending that the amount which is sought to be transferred to the Welfare Board constituted under the Punjab Labour Welfare Fund Act, 1956, is not applicable to the petitioner-establishment, since it Civil Writ Petition No. 12788 of 1997 (O&M) - 2 - is a Society registered under the Societies Registration Act, 1860, and does not fall within the expression "establishment" defined under Section 2(4)(i) and (ii). His further contention is that if ever the petitioner is to be treated as an ''establishment'', the petitioner has spent the amount of unpaid wages for the welfare of the workers themselves and hence it need not be transferred to welfare fund under the Act. Section 26 of the Act details the "establishment" to which the provisions of the Act would be applicable. The Section reads:-

"Application of the Act to certain establishments of Central and State Governments.

This Act shall apply to such establishments belonging to the Central Govt. or any State Govt. as are referred to in sub-clause (i) and (ii) of clause (4) of Section 2."

Since the applicability of the Act is to the establishment under Section 2(4)(i) and (ii), the said Provision would also required to be reproduced:-

"establishment" means:

i) a factory;

ii) a motor omnibus service;

iii) any establishment, including a society registered under the Societies Registration Act, 1860, and a charitable or other trust, which carries on any business or trade or any work connected therewith or ancillary thereto and has been employing on any working day during the preceding twelve months more than twenty person.

The argument is that since it is only a Society which comes within the definition of 3(iii) but which is not included in (i) or (ii) by virtue of Section 26, the Act will not be extended.

The point that would required to be noticed is whether the petitioner organization would come within the definition of factory set out in Section 2(4)(i). The expression "factory" itself is not defined under the Act and, therefore, I will invoke the provisions of the Factories Act itself for understanding the expression. "Factory" is defined in 2(m) of the Factories Act of 1948 and it is reproduced:-

"factory" means any premises including the precincts thereof - (i) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,

(ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on,

but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a mobile unit belonging to the armed forces of the Union, railway running shed or a hotel, restaurant or eating place.

Explanation I-....

Explanation II-......."

The definition describing "manufacturing process" is also reproduced in Section 2(k) of the Factories Act as follows:-

"Manufacturing process" means any process for-

(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use sale, transport, delivery or disposal, or

(ii) pumping oil, water, sewage or any other substance; or

(iii) generating, transforming or transmitting power; or

(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or

(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or

(vi) preserving or storing any article in cold storage."

It would seem that the seed production involves activities that come within the definition of "manufacturing process" such as, activities of finishing, packing, washing, cleaning, breaking up or otherwise treating the seeds with a view to sale, transport, delivery or disposal.

The relevant scientific literature (extracted from the cite:http://howtosaveseeds.com) would show the following activities as going towards the seed production:

"Seeds Benefit From Careful Harvesting and Drying After you''ve given your plants the help they needed to produce healthy seeds, you must harvest and store the seeds properly to keep them healthy until you are ready to plant them.

How you treat your seeds during harvest and storage can have a large impact on their viability and vigor when planted. For best results your seeds should be harvested at the right time, properly cleaned and dried (some seeds need to be ''fermented'' before cleaning and drying and then stored under conditions favorable to their long-term health

Dry Seeds

''Dry'' seeds include beans, okra, peppers, basil and members of the Onion and Carrot Families. Cleaning dry seeds usually involves simply drying and crumbling the pods or husks, then screening or ''winnowing'' the seeds to separate them from the chaff. Cleaning wet seeds requires washing to clean the seeds and to separate them from the surrounding pulp.

Drying Wet Seeds After Cleaning

To initially dry your seeds after cleaning, drain them of excess moisture in a strainer. Pat the bottom of the strainer with a cloth towel to pull extra water from the seeds after they have drained. Then spread the seeds on a piece of glass or a shiny ceramic plate to dry (they will stick to paper, even waxed paper). Place the glass or ceramic plate in a cool, dry shady spot for several days. After the seeds are dry, they can be carefully removed from the glass or plate and final-dried before being stored in jars"

From the enumeration of the details of seed production it could be easily inferred that they partake the character of manufacturing process and hence, will come within the definition of "factory", which, in turn, will fit in the larger expression "establishment" that the Act of 1956 employees. I have, therefore, no doubt that the provisions of the Act are attracted to the activities engaged by the petitioner and the amount of unpaid wages shall be transferred to the welfare fund under the Act.

The further contention is that the petitioner has itself transferred the unpaid wages to the welfare of the workers and therefore, there is no requirement for transfer of the said amount to the welfare amount. This contention is not tenable for the Act which creates a fund does not grant any exemption for an establishment to transfer its own unpaid wages to a fund created by the establishment and claim an exemption to transfer the amount of the fund, in the manner contemplated under Section 3. Section 3(1) defines what constitutes the fund and Section 9 states that all unpaid accumulations paid in accordance with the Provisions of Section 3 shall discharge the employer of liability to make payment. There is no one particular provision which allows for the exemption to be applied. There is no scope for interference. The writ petition is dismissed.