GREAVES FOSECO LIMITED v. CHIEF INSPECTOR OF FACTORIES
1977-06-17
CHITTATOSH MUKHERJEE
body1977
DigiLaw.ai
CHITTATOSH MUKHERJEE, J. ( 1 ) THE petitioner is a Company registered under Indian Companies Act, 1956 and it has a factory at Taratala Road, Calcutta. The petitioner has inter alia prayed for a writ in the nature of Mandamus commanding the Chief Inspector of Factories, Government of West Bengal and other respondents to this Rule to accept the appointment of Mr. Pradip Kumar Sandell as the Occupier of the petitioner's factory at Taratala Road, Calcutta for the year 1973. The petitioner has also prayed for a writ of Certiorari inter alia for quashing the criminal proceeding in Case No. C 3135/73 against M. F. C. Elliott and also for a writ in the nature of Prohibition prohibiting the respondents to forbear from proceeding with the said criminal case against M. F. C. Elliott. In brief the case of the petitioner is that the respondents have acted illegally and without jurisdiction by refusing to accept the petitioner's nomination, of Pradip Kumar Sandell as the Occupier of the petitioner's factory at Taratala Road, Calcutta within the meaning of S. 2 (n) of the Factories Act, 1948 and by treating M. F. C. Elliott, who was one of the Directors of the petitioner's Company as the Occupier of the said Factory. ( 2 ) THE facts of the case may be briefly stated. On July 1, 1962 the petitioner Company which was then known as Greaves Foundry Services Limited had made an application to the respondent No. 1 for registration and grant of a licence under the Factories Act, and also gave a notice of occupation specified in Ss. 6 and 7 of the Factories Act, 1948. In column 9 of the said application in form 2, name of M. F. C. Elliott was mentioned as the person nominated as the Occupier under S. 100 of the Act. A list of names and addresses of the Directors of the said Company was submitted which showed that said M. F. C. Elliott was one of the Directors of the petitioner Company. The respondent No. 1 accordingly granted licence No. 88-TP/x 62 dated 11th August 1962 to the petitioner Company. Thereafter, the petitioner company obtained successive renewals of the said licence from the respondent No. 1. The original application for grant of licence and also renewal applications up to the year 1971 were signed by the aforesaid Director of the company as the Occupier.
Thereafter, the petitioner company obtained successive renewals of the said licence from the respondent No. 1. The original application for grant of licence and also renewal applications up to the year 1971 were signed by the aforesaid Director of the company as the Occupier. ( 3 ) ON January 12, 1973 an application in Form 2 for renewal of the said factory licence issued in the name of M. F. C. Elliott was again mentioned as the Occupier under S. 100 of the Factories Act. In Column 7 name of Pradip Kumar Sandell was mentioned as the Manager of the Company for the purpose of Factories Act. The Chief Inspector of Factories by his letter dated 13th March, 1973 informed the petitioner Company that the said form had not been signed by the Occupier. A form was enclosed to the said letter for signature of the Occupier. On April 18, 1973 Pradip Kumar Sandell as the Works Manager of the petitioner Company wrote a letter to the Chief Inspector of Factories stating that due to oversight in Column 9 of the form the name of the Occupier had been mentioned as M. F. C. Elliott, whereas the name of said Pradip Kumar Sandell should have been mentioned. In support of the said claim a certified copy of a Power of Attorney in favour of Pradip Kumar Sandell was furnished. The application for renewal of the factory licence for the year 1973 was resubmitted with Pradip Kumar Sandell's name as the Occupier. ( 4 ) ON 17th May, 1973 the Chief Inspector of Factories, Government of West Bengal, the respondent No. 1, wrote a letter to the petitioner Company advising to nominate one of the Directors of the petitioner Company as an Occupier of the factory. The respondent No. 1 declined to accept the nomination of Pradip Kumar Sandell as an Occupier because he was not a Director of the petitioner Company. The Works Manager of the petitioner Company in reply requested the respondent No. 1 to return the application for renewal of the licence for the year 1973 to enable the petitioner to get it signed by one of their Directors as the Occupier. On 20th August, 1973 the Chief Inspector of Factories forwarded a duplicate copy of Form 2 dated 12th January, 1913 for signature of the Occupier.
On 20th August, 1973 the Chief Inspector of Factories forwarded a duplicate copy of Form 2 dated 12th January, 1913 for signature of the Occupier. ( 5 ) ON 19th November, 1973 the Works Manager of the petitioner Company again submitted the said renewal application in Form 2 for the year 1973 singed by Pradip Kumar Sandell as the Occupier. In Column 9 of the form his name was mentioned. The Works Manager furnished to the respondent No. 1 an extract from the minutes of the 104 Meeting of the Directors of Company held on 8th October, 1973. The Directors by the said resolution had resolved that "mr. Pradip Kumar Sandell, Manager of the Company's factory at Taratala Road, Calcutta, in whom are vested the necessary authority and powers for running the said factory with ultimate control over the affairs thereof as per the requirements of the Factories Act, 1948, be and is hereby appointed as the Occupier of the said Factory within the meaning of that term defined in the said Act. " ( 6 ) THE respondent No. 1 did not make any endorsement upon the said Form 2 that the petitioner's licence for the year 1973 be renewed. ( 7 ) ON 29th November, 1973 an Inspector of Factories, West Bengal fled a petition of complaint in the Court of the Police Magistrate, Alipore, 24-Parganas against the said M. F. C. Eliott as the Occupier and Pradip Kumar Sandell as the Manager of the petitioner's factory at Taratala Road, Calcutta, inter alia praying that process be issued under S. 92 of the Factories Act for the alleged contravention of S. 54 of the Factories Act, 1948. The learned Police Magistrate had summoned the aforesaid two persons to appear before him on 9th January, 1974. ( 8 ) ON February 7, 1974 the petitioner Company obtained the present Rule. On the prayer of the petitioner Company an interim order was granted staying further proceedings in the aforesaid criminal case against M. F. C. Elliott and Pradip Kumar Sandell. During the pendency of this Rule the petitioner Company had obtained renewal of its factory licence for 1974 and the succeeding years. In these renewal applications name of Pradip Kumar Sandell and thereafter the name of one Sitangshu Sekhar Bhattacharya were mentioned as the Occupier of the petitioner's factory.
During the pendency of this Rule the petitioner Company had obtained renewal of its factory licence for 1974 and the succeeding years. In these renewal applications name of Pradip Kumar Sandell and thereafter the name of one Sitangshu Sekhar Bhattacharya were mentioned as the Occupier of the petitioner's factory. The said renewal of the petitioner's licence for 1974 and the subsequent years are not the subject-matter of the present Rule. ( 9 ) THE only point in this Rule is whether the respondents have acted illegally and I contravention of the S. 100 (2) of the Indian Factories Act, 1948 by refusing to accept the nomination of Pradip Kumar Sandell as the Occupier of the petitioner's factory at Taratala Road, Calcutta for the year 1973. ( 10 ) SECTION 2 (n) of the Factories Act, 1948 defines 'occupier' of a factory as the person who has the ultimate control over the affairs of the factory and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the Occupier of the factory. The Supreme Court in John Donald Mackenzie and another v. The Chief Inspector of Factories, Bihar and Ranchi and others AIR 1962 SC 1351 , observed "undoubtedly the expression 'occupier' is not to be equated with owner. But it must be borne in mind that the ultimate control over the factory must necessarily be with an owner unless the owner has completely transferred that control to another person". In John Donald Mackenzie and another v. The Chief Inspector of Factories, Bihar and Ranchi and Others (supra), the Supreme Court upheld the decision of a Division Bench of the Patna High Court which had dismissed a writ application made by the Manager of Bata Factory inter alia for quashing the orders of the Chief Inspector of Factories Bihar and Ranchi refusing to accept the said Manager as the Occupier of the factory. The previous Manager claiming to the Occupier of the same had obtained the said under the Factories Act. The licence had been renewed for several years. The petitioner of the said case after assuming charge as the new Manager also had obtained renewal of the licence up to 31st December, 1956.
The previous Manager claiming to the Occupier of the same had obtained the said under the Factories Act. The licence had been renewed for several years. The petitioner of the said case after assuming charge as the new Manager also had obtained renewal of the licence up to 31st December, 1956. At this stage the Chief Inspector of Factories had intimated his decision that the Manager was not the Occupier of the factory in question and the application for renewal of the licence and the notice of occupation were required to be filed by a Director of the Company. A Division Bench of the Patna High Court inter alia held that it was within the jurisdiction of the Chief Inspector to examine if the conditions for renewal of a factory licence had been fulfilled and, therefore, he has necessarily to decide whether the application has been made by the Occupier and the notice of occupation has been signed by him. The Supreme Court while dismissing the appeal from the decision of the Ptna High Court did not differ from the above pronouncement of the Division Bench of the Patna High Court and the Supreme Court had observed that the petitioner did not lay before the Chief Inspector of Factories necessary materials showing that the Company in some manner had transferred the entire control over the factory to the petitioner No. 1. Therefore, the Chief Inspector of Factories was perfectly right in refusing to act on the application signed by the Manager of the factory. ( 11 ) IT is a mixed question of law and fact whether a particular person has ultimate control over the affairs of a factory. Actual and immediate control over the affairs of a factory does not necessarily mean ultimate control. The expression 'ultimate control' means final control. Therefore, in order to determine whether a person is an Occupier, the nature and extent of his control over the affairs of the factory have to be considered. The decision on the question whether a person is an Occupier may be made by ascertaining who has the right of regulating and controlling it and who is in predominate position and has general superintendence over it. In Emperor v. Jamshedji Naserwanji Modi AIR 1931 Bombay 308, Beaument CJ.
The decision on the question whether a person is an Occupier may be made by ascertaining who has the right of regulating and controlling it and who is in predominate position and has general superintendence over it. In Emperor v. Jamshedji Naserwanji Modi AIR 1931 Bombay 308, Beaument CJ. and Murphy J. with reference to the definition of the word 'occupier' under the Factories Act, 1911 held that the word 'occupier' in general means the person who occupied the factory either by himself or his agent. He may be an owner, he may be a lessee or even mere licencee; but he must have the right to occupy the property and dictate how it is to be managed. Therefore, the conviction of the owner of a factory who had left the whole conduct of its affairs to a Manager was upheld. ( 12 ) THE Supreme Court in State of Maharashtra v. Jamunabai Purushottam Asar AIR 1968 SC 53 upheld an order of acquittal of an owner against a charge under S. 92 of the Factories Act, 1948 read with rule 3a of the Bombay Factories Rules, 1956. The owner had closed the factory. Thereafter, he had made over the factory to five partnership firms in return for periodical payments. Licensees carried on manufacturing process on their own and the person who had originally established the factory had no more control over them. Therefore, he was found not to be an Occupier. ( 13 ) THE petitioner was admittedly the owner of the factory in question. The petitioner which was previously known as Greaves Foundry Services Limited by submitting application in Form 2 had obtained registration on the basis that the Company was in occupation of the said factory at Taratala Road, Calcutta and had obtained renewal of the licence up to 1972. The Form 2 prescribed under S. 4, 7 and 13 of the West Bengal Factory Rules, 1958 required the name and address of the persons nominated as the Occupier under S. 100 of the Act be mentioned in Column 8 of the form, and the name and address of the person nominated as the Occupier under S. 100 should be set out in the Column 9 of the Form 2. ( 14 ) SECTION 100 of the Factories Act, 1948 deals with determination of occupier for the purpose of Chapter X of the Factories Act.
( 14 ) SECTION 100 of the Factories Act, 1948 deals with determination of occupier for the purpose of Chapter X of the Factories Act. The said Occupier deals with penalties and procedure. In case, a Company is the Occupier of a factory, according to S. 100 (2) any one of the Directors of the said company may be prosecuted and punished under Chapter X for any offence for which the Occupier of the said factory is punishable. The proviso to sub-s. (2) enabled a Company to nominate one of its Directors as the Occupier of the factory for the purpose of Chapter X. On a plain reading of S. 100 (2) proviso it is clear that Company for the purpose of Chapter X can only nominate one of its Directors as the occupier. No provision has been made for nomination of any other kind of person by a Company under S. 100 (2) proviso. In the instant case, the Company in its original application for registration had notified in terms of S. 100 (2) proviso of the Act that M. F. C. Elliott had been nominated as the Occupier. Under S. 100 (2) the said M. F. C. Elliott would be deemed to be Occupier of the factory until further notice canceling his nomination was received by the Inspector or until he ceased to be a Director or shareholder. In the instant case, the petitioner Company did not lawfully notify to the Chief Inspector of Factories canceling the nomination of M. F. C Elliott. Subsequently, the petitioner factory had purported to nominate its Factory Manager, Pradip Kumar Sandell, as an Occupier in terms of proviso to S. 100 (2) of the Factories Act for the year 1973. The Chief Inspector had acted with his authority by proceeding to determine whether the said Pradip Kumar Sandell had the ultimate control over the affairs of the factory in question. Originally the petitioner Company had only produced a Power of Attorney in favour of Pradip Kumar Sandell authorizing him to sign all applications, documents, declarations etc. required by various authorities. The said power did not vest Pradip Kumar Sandell with general Power of Attorney.
Originally the petitioner Company had only produced a Power of Attorney in favour of Pradip Kumar Sandell authorizing him to sign all applications, documents, declarations etc. required by various authorities. The said power did not vest Pradip Kumar Sandell with general Power of Attorney. Only in November 1973 the petitioner Company produced before the Chief Inspector of Factories a copy of the resolution of the Board of Directors vesting him with 'the necessary authority and powers for running the said factory with ultimate control over the affairs thereof as per requirements of the Factories Act, 1948' and appointing him as the Occupier of the said factory. ( 15 ) THE Chief Inspector of Factories as already observed had power to determine whether the said Pradip Kumar Sandell was the Occupier and whether he had been duly nominated. As already observed so long as the Company is the Occupier it may choose to make any nomination, then any one of its Directors would be liable to be prosecuted and punished under Chapter X for any offence for which the Company as the Occupier would be punishable. In case the Company chooses to make a nomination under S. 100 (2) proviso, such nominee must be a Director of the Company. ( 16 ) THE petitioner's grievances regarding the criminal prosecution lodged against M. F. C. Elliott and Pradip Kumar cannot be entertained in this case. In the first place, persons who are accused in the id criminal case have not themselves moved this Court. They are not even parties to this writ petition. Secondly, I cannot pre-judge the said criminal case; the accused persons are entitled to take appropriate defences in the said case. Therefore, they have alternative remedy. Accordingly, Article 229 (3) of the Constitution would be a bar to the aggrieved persons at this stage seeking remedy against the criminal case in question. In the above view, I discharge this Rule. There will be no order as to costs. Rule discharged.