Overreaching jurisdiction

Small changes over time can make a huge difference. Law is a lot about interpretation. Even a few words can have huge consequences for years. Sometimes, just small modifications in complex provisions can make a huge difference for many daily issues, making it sluggish for our economy.

The Factories Act of 1948 was promulgated with the objective of regulating the working conditions of workers. It has some very ambiguous compliances. A mere amendment to one provision, the definition of “manufacturing process” under the Factories Act of 1948, could save small employers and simplistic entities from everyday rigorous compliances that aren't practically needed.

Currently, the definition of "manufacturing process" as per the current provisions is too wide, elastic, and comprehensive. Even the simplest of entities have to follow its complex provisions. It includes 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; pumping oil, water, sewage, or any other substance; generating, transforming, or transmitting power; composing types for printing, printing by letterpress, lithography, photogravure, or other similar process or bookbinding; constructing, reconstructing, refitting, finishing, or breaking up ships or vessels; preserving or storing any article in cold storage. Many of these words have vast interpretations. Needless to say, with many entities now looking forward to investing, such age-old provisions need amendments.

Owing to this vast definition, various dictums have held various entities to be covered under the wriggles of the said statute that normally are not engaged in hardcore manufacturing. For example, in the case of P Natarajan, M/s Coimbatore Co-operative Milk Supply Union Ltd v. Employees State Insurance Corporation 1972, the Madras High Court mentioned that the pasteurization of milk, a process consisting of heating the milk to bring it under a particular temperature and then chilling it to destroy germs harmful to the health of the community, is considered a manufacturing process. In Amri Naran v. Suken Employees Co-operative Society Ltd. 1986, the Gujarat High Court stated that if one reads the definition of "manufacturing process," it is clear that when buffaloes are milked, and the milk is filled in pots and taken to shops for distribution, this process would be covered by the phrase "otherwise treating or adapting any article or substance with a view to use, sale, transport or disposal or delivery" in the Factories Act. In Kumbakonam Milk Supply Co-operative Society v. Regional Director, ESI Corporation, Madras, 2003, it was held that preserving or storing any article in cold storage is deemed to be a manufacturing process. The processes of moistening, stripping, and packing sun-cured tobacco leaves were held to be a factory in VP Gopala Rao v. Public Prosecutor, 1969, by the Apex Court. The Supreme Court, in the State of Kerala v. VM Patel, 1960, held that winnowing, cleaning, washing, and drying of ginger constitute a "manufacturing process." In New Taj Mahal Café Ltd. v. Inspector of Factories, 1955, the Madras High Court held that the preparation of food has been considered making, alteration, and thus a "manufacturing process" under the Factories Act. Cooking and preparing food in the kitchen of a hotel is also considered a factory, as per GL Hotels v. TC Sarin, 1993. The preparation of food in the kitchen and pantry of a cricket club for selling to the members and their guests was also held to be a factory, as per Cricket Club of India v. ESI Corporation, 1994, Bombay High Court.

Entities not involved in hardcore manufacturing do not need to be covered under such a statute. They can always be covered under the Shops and Establishments Act. Pursuant to being covered by the provisions of the Factories Act, not only do the everyday compliances become difficult, but it also becomes arduous from the Industrial Disputes Act, 1947 perspective. Under the said provisions, one needs permission from the appropriate government before closure or retrenchment when there are a hundred or more workers.

Provisions are needed to cater to current structures, especially considering many entities are wanting to invest in India. Needless to say, this would also make it simpler for already existing entities. The legislature has been wanting to revamp antique laws, which is the need of the hour. In the interim, small changes to some provisions can also make a huge difference.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal