Factory threshold controls industrial undertaking status, so Section 11 licensing was not required for potable alcohol manufacture.

A unit employing fewer than the prescribed worker threshold does not qualify as a factory, and therefore cannot be treated as an industrial undertaking for the purpose of the Central licensing regime under Section 11 of the Industries (Development and Regulation) Act, 1951. On the facts noted, the appellant employed 22 workers, so the statutory condition for factory status was not met and the licensing requirement for new industrial undertakings did not apply. The State's regulatory competence over intoxicating liquors was also acknowledged, but no separate Central licence was shown to be necessary. The tender for manufacture of potable alcohol was therefore to be considered in accordance with law without insisting on Section 11 licence.

---

---

Issues: Whether the appellant, employing fewer than fifty workers, was an industrial undertaking requiring a licence under Section 11 of the Industries (Development and Regulation) Act, 1951 to manufacture potable alcohol.

Analysis: The statutory scheme treats a premises as a factory only if the prescribed worker threshold is met. An industrial undertaking under the Act is one carried on in one or more factories. Since the appellant employed only 22 workers, its unit did not qualify as a factory and therefore did not fall within the definition of an industrial undertaking. On that footing, the licensing requirement for new industrial undertakings under Section 11 was inapplicable. The State's power under Entry 8 of List II was also recognised in relation to intoxicating liquors, and nothing in the material showed any separate necessity for a Central licence in the appellant's case.

Conclusion: The appellant was not required to obtain a licence under Section 11 of the Industries (Development and Regulation) Act, 1951, and its tender for manufacture of potable alcohol had to be considered in accordance with law.

Ratio Decidendi: A unit that does not satisfy the statutory definition of a factory cannot be treated as an industrial undertaking for the purpose of the Central licensing regime under Section 11 of the Industries (Development and Regulation) Act, 1951.

---