Composite factories under provident fund law are covered only when mainly engaged in a scheduled industry and meeting the employee threshold.

Section 1(3)(a) of the Employees' Provident Funds Act, 1952 was construed to cover a composite factory carrying on more than one industrial activity if, viewed as a business, it is mainly engaged in a scheduled industry and meets the employee-strength requirement. The threshold of fifty or more employees was held to apply to the factory or establishment, not to each industry separately. On the facts, the company's brass and utensils activity was substantial and brought it within the provision, while the mills' tin-container work was only incidental to its main hydrogenated vegetable oil business and did not attract coverage.

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Issues: (i) Whether, under section 1(3)(a) of the Employees' Provident Funds Act, 1952, a composite factory carrying on more than one industrial activity is excluded, and whether the requirement of fifty or more employees applies to the factory or to the particular industry. (ii) Whether the company and the mills, on the facts found, fell within section 1(3)(a) of the Act.

Issue (i): Whether, under section 1(3)(a) of the Employees' Provident Funds Act, 1952, a composite factory carrying on more than one industrial activity is excluded, and whether the requirement of fifty or more employees applies to the factory or to the particular industry.

Analysis: The expression "factories engaged in any industry specified in Schedule I" was held not to mean factories exclusively engaged in the specified industry. The statutory definition of "factory", the later introduction of the concept of "establishment", and the explanatory material added to Schedule I all supported the view that the provision was wide enough to include composite factories. The numerical requirement of fifty or more persons was held to qualify the factory or establishment, not the industry. The clause was construed as requiring that the factory be mainly or primarily engaged in the scheduled industry; a merely subsidiary, incidental, or minor activity would not suffice.

Conclusion: A composite factory is not excluded, and the employee-strength requirement applies to the factory or establishment. The governing test is whether the factory is mainly engaged in the scheduled industry.

Issue (ii): Whether the company and the mills, on the facts found, fell within section 1(3)(a) of the Act.

Analysis: The company carried on several industrial activities, one of which was the manufacture of brass, copper and kasa circular sheets and utensils therefrom, an activity covered by Schedule I. That activity was not minor or incidental to the others, and on the assumed employee strength the statutory conditions were satisfied. The mills, however, carried on the manufacture of hydrogenated vegetable oil as its main business, while the fabrication of tin containers was only a feeder activity for internal use, employed far fewer workers, and was merely incidental to the main undertaking.

Conclusion: The company fell within section 1(3)(a), but the mills did not.

Final Conclusion: The appeals were decided in opposite directions on the facts of the two respondents: the order against the company was set aside and the writ petition dismissed, while the order in favour of the mills was sustained.

Ratio Decidendi: For section 1(3)(a) of the Employees' Provident Funds Act, 1952, a composite undertaking is covered if, viewed as a business, it is mainly engaged in a scheduled industry and satisfies the employee-strength condition; a merely subsidiary or feeder activity does not bring an otherwise non-scheduled main undertaking within the provision.

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