Factories Act conviction overturned as prosecution failed to prove employment relationship under Sections 6, 7, and 92

Kerala HC set aside petitioner's conviction under Sections 6 and 7 read with Section 92 of the Factories Act. Court held prosecution failed to prove the 23 persons found garbling pepper were petitioner's employees. Evidence showed workers were employed by a third party working at petitioner's premises with permission. Court found Factories Act inapplicable as no notification under Section 85 was issued for the premises. Petitioner acquitted and fine ordered to be refunded if realized.

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Issues Involved:
1. Definition of "Factory" under the Factories Act.
2. Definition of "Worker" under the Factories Act.
3. Applicability of the Factories Act to the petitioner's business.
4. Compliance with Sections 6 and 7 of the Factories Act.
5. Interpretation of employment and control over workers.

Issue-wise Detailed Analysis:

1. Definition of "Factory" under the Factories Act

The primary issue was whether the petitioner's premises qualified as a "factory" under the Factories Act. The definition under Clause (m) of Section 2 states that a factory is any premises where:
- 10 or more workers are working with the aid of power, or
- 20 or more workers are working without the aid of power.

The court noted, "The prosecution has no case that at the premises of the Gujarat Travancore Agency any manufacturing process is being carried on with the aid of power." Therefore, the focus was on whether 20 or more workers were engaged without the aid of power.

2. Definition of "Worker" under the Factories Act

The court examined whether the individuals engaged in the petitioner's premises were "workers" as defined in Clause (1) of Section 2. The definition includes any person employed, directly or through any agency, whether for wages or not, in any manufacturing process. The court emphasized, "It is enough if the person concerned is shown to be engaged in any of the items of work specified in the definition."

3. Applicability of the Factories Act to the Petitioner's Business

The court had to determine if the petitioner's business operations fell under the purview of the Factories Act. The court found that the process of garbling pepper, which includes washing, drying, and winnowing, constitutes a "manufacturing process" as defined in Clause (k) of Section 2. However, it was crucial to establish whether the individuals performing these tasks were employed by the petitioner.

4. Compliance with Sections 6 and 7 of the Factories Act

Sections 6 and 7 mandate the occupier to obtain prior permission and provide written notice before using any premises as a factory. The petitioner admitted non-compliance but argued that his premises did not qualify as a factory. The court noted, "If the evidence on record is sufficient to make out that the petitioner is running a factory as defined in the Factories Act, the conviction entered against him by the lower courts has only to be confirmed."

5. Interpretation of Employment and Control Over Workers

The court scrutinized whether the 23 individuals engaged in garbling pepper were employed by the petitioner. The court observed, "The work of garbling pepper had been given by the petitioner to P.W. 3 under a contract." It was P.W. 3 who employed and paid these workers. The court concluded, "It is impossible to hold that the 23 persons mentioned in the mahazar Ext. A and the list Ext. B were persons employed by the petitioner."

The court further clarified that the Factories Act could not be applied unless the workers were employed by the person having ultimate control over the business. The court stated, "It follows, therefore, that these 23 persons were not 'workers' under the Gujrat Travancore Agency and that the firm could not be deemed to be a 'factory' as defined in the Factories Act."

Conclusion:

The court concluded that the petitioner's premises did not qualify as a factory under the Factories Act because the individuals engaged in the manufacturing process were not employed by the petitioner. Consequently, the petitioner's failure to comply with Sections 6 and 7 of the Act did not constitute an offense. The court stated, "The petitioner's failure to comply with the requirements of Sections 6 and 7 of the Act or of Rules 3, 4, and 12 of the Rules framed thereunder, cannot amount to the commission of any offense punishable under Section 92 of the Act."

Judgment:

The revision petition was accepted, and the conviction and sentence awarded by the lower court were set aside. The petitioner was acquitted of the charges, and any fine paid was ordered to be refunded.

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