Industrial company status depends on proof of factory operations and worker threshold on the relevant dates.

A company seeking sick industrial company status under the Sick Industrial Companies (Special Provisions) Act, 1985 had to show that it was an industrial company owning an industrial undertaking carried on in a factory, and that the statutory worker threshold was met on the relevant dates. The term "factory" under the Industries (Development and Regulation) Act, 1951 was read broadly to cover premises where manufacturing was being carried on or ordinarily carried on, but the inquiry depended on the material dates, including erosion of net worth, reference, and decision. Because the record did not prove that any unit had 50 or more workers in the relevant twelve-month periods, and no reliable employee records or statutory returns were produced, the company failed to establish industrial company status and therefore did not qualify as sick.

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Issues: Whether the appellant company satisfied the definition of an industrial company and a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985 in view of the closure of its units and the requirement of 50 or more workers in a factory under the Industries (Development and Regulation) Act, 1951.

Analysis: The statutory scheme required the company to be an industrial company owning an industrial undertaking carried on in a factory, and the term "factory" under the Industries (Development and Regulation) Act, 1951 had to be read with its inclusive language covering premises where manufacturing was being carried on or was ordinarily so carried on. The relevant inquiry was not confined to the physical existence of plant or license, but whether the units qualified as factories on the material dates, including the date on which the accumulated losses eroded net worth, the date of reference, and the date of decision. The record did not establish that any unit had 50 or more workers in the relevant twelve-month periods, and the appellant failed to produce reliable documentary proof such as employee records or statutory returns to show that the units satisfied the statutory threshold. Later material relating to 2007 was not relevant to the decisive dates.

Conclusion: The appellant company did not prove that it was an industrial company within the meaning of the Act on the relevant dates, and it consequently did not qualify as a sick industrial company.

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