State Of Madhya Pradesh Vs Somdutt Sharma: Irrigation Department Of State Not An Industrial Establishment U/S 25L Of ID Act

DATE OF JUDGEMENT:
29/09/2021

CORAM:

• Hon’ble Justice Ajay Rastogi
• Hon’ble Justice Abhay Oka

PARTIES:

• Appellants: State of Madhya Pradesh and Ors
• Respondent: Somdutt Sharma

SUBJECT

The Supreme Court in this judgement has held that the Irrigation Department of the first appellant will not be an Industrial Establishment within the meaning of Section 25L of Industrial Disputes Act.Overall activities and functions of the Irrigation Department will have to be considered while deciding the question whether it is carrying on manufacturing.

OVERVIEW

• Somdutt Sharma, the respondent, was a daily wage employee of the Rajghat Canal Project of the Irrigation Department of the State of Madhya Pradesh. He was terminated on December 1, 1995.
• The Chief Minister directed for taking back his services on August 11, 2004, but he was terminated again on July 2, 2005. The Respondent raised a dispute referring to the Labour Court at Gwalior for the government's decision.
• The Labour Court has held that the Industrial Disputes Act, 1947 was applicable to the dispute between the respondents and the appellants. The Tribunal held that since the respondents did not follow the provisions of Section 25N of the ID Act, the respondent was entitled to reinstatement.
• The State, aggrieved by the tribunal's decision, approached the High Court. The Court's Division Bench on December 11, 2019, affirmed the decision of the single judge of High Court upholding the Tribunal's order. The State then approached the Supreme Court.

RELEVANT PROVISIONS

• Section 25L Industrial Disputes Act- It defines an industrial establishment as-

1. A factory under Section 2(m) of Factories Act, 1948
2. A mine as defined in clause (i) of subsection (1) of section 2 of the Mines Act, 1952
3. A plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951

• Section 2 of the Factories Act- Defines Factory under clause (m) as any premises including the precincts thereof ten or more workers or twenty of more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried.
• Clause (k) of section 2 of the Factories Act- defines “manufacturing process”
• Section 25K- It provides that the provisions of Chapter VB may apply to establishments that has not less than hundred workmen employed on an average per working day for preceding twelve months.

ISSUE

• Whether provisions of Chapter VB apply to the facts of the present case?
• Whether the Irrigation Department is an Industrial Establishment under Section 25L?

ANALYSIS

• The state argued that the Irrigation Department is not an industrial establishment under the ID Act, and cannot be considered an application under Chapter VB. Even though the Irrigation Department has more than a hundred workers, it does not fall within the meaning of factory under the provisions of the Factory Act 1948.
• The respondent submitted that the irrigation department was not in compliance with Section 25 F of the ID Act. Since it is involved in the pumping of water and sewage, the department is carrying out manufacturing process as per Section 2 of the ID Act. Thus, provisions of Chapter VB would apply and are under the obligation to comply with Section 25N of the ID Act of obtaining permission from the appropriate Government.
• The court noted that the Irrigation Department has met the test of having not less than hundred workers employed on an average. The department cannot be called a factory unless it is carrying out the manufacturing process. Manufacturing process is clearly defined in the provisions of the Factories Act.
• The court observed that the Labour Court has held that the irrigation department can be considered as factory under the provisions of Section 2(m) of the Factories Act, because of hundreds of employees being employed. However, the question as to whether the department is a factory under this Section 2(k) of the Act is not considered by labour court or the High Court.
• It was also noted that the Irrigation Department is entrusted with the maintenance and creation of irrigation potential by water resources department and deals with water calamity management. The provisions of the Section 2 (k) of Factories Act apply to the activities of pumping water and sewage, thus respondents affirmed that the irrigation department will be governed under it.
• The Department also deals with various other activities such as disaster management, reservoir operations, and maintenance of flood control works.
• The duties and responsibilities of an Industrial Establishment are not limited to those of employees engaged in the pumping of water and may not mean it is carrying manufacturing activities. As it is not carrying out manufacturing process, it is not an industrial establishment under section 2 of the Factories Act.
• And hence it will not be an Industrial Establishment under the meaning of Section 25L. Therefore, application of Chapter VB on this case does not stand. The Supreme Court allowed the appeal of the state, and held that Somdutt's termination was valid and legal.

CONCLUSION

A department cannot be called a factory unless it is carrying out the manufacturing process. Manufacturing process is clearly defined in the provisions of the Factories Act. The Department's overall activities and functions will have to be considered when it comes to deciding if it is carrying out manufacturing activities for further consideration of treating it as a factory.

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Hope you enjoyed reading this judgement. Here are a few questions for you-

• What are the essentials for a department to be considered as a factory under Factories Act?
• Which Section describes Industrial Establishment?