REGIONAL PROVIDENT FUND COMMISSIONER Vs. MADRAS PENCIL FACTORY

JUDGEMENT

(1.) THE respondent is a pencil factory employing 114 persons. It would appear that the factory has attached to it a foundry and workshop in which certain spare parts required for the machinery employed in the manufacture of pencils are fabricated. In this factory and workshop, 23 out of the 114 persons are employed.

(2.) THE appellant, the Regional Provident Fund Commissioner. Madras, informed the respondent factory that as it was engaged in manufacture of general engineering products, it came within the purview of the Employees' Provident Funds Act, 1952, and called upon the respondent to implement the provident fund scheme. The respondent contended that the Act did not apply to it, and under the threat of penal action under the provisions of the Act, moved this Court in Writ Petition No. 249 of 1957. Balakrishna Ayyar, J. , held that the factory of the respondent was engaged in manufacture of pencils, an industry not included in the schedule to the Act, and that its fabrication of general engineering goods for the purpose of keeping its machinery in good condition did not bring it within the scope of the requirement that it should be engaged in a scheduled industry. The rule nisi was therefore made absolute and it is against the abovesaid order that the present appeal is filed.

(3.) BEFORE the learned Judge two contentions were raised. One was that in order to come within the scope of Section 1 (3) of the Employees' Provident Funds Act, 1952, the number of persons employed in that part of the factory's activities, that is, in the making of general engineering products, not less than fifty persons should be employed, (It may be mentioned that subsequently the Act was amended by substituting "twenty" for "fifty" in the relevant provisions.) The other contention was that the expression "engaged in" connotes the principal activity of the factory and not an incidental occupation which had no connexion with the marketable or the marketed output of the factory. The learned Judge found in favour of the latter contention. It is the correctness of this finding that is canvassed in this appeal.