In a
landmark ruling on March 3, the Supreme Court held that activities such as
washing, cleaning, and dry-cleaning fall within the definition of
"manufacturing process" under the Factories Act, 1948. The Court
clarified that even though these activities do not create a new tangible
product, they still qualify as a manufacturing process under the Act.
A bench
comprising Justices B.R. Gavai and K.V. Viswanathan ruled that a laundry
business constitutes a "factory" under Section 2(m) of the Factories
Act, 1948, if it employs ten or more workers and operates with power-driven
machines for washing and cleaning clothes.
Case Background
The
ruling came in response to an appeal by the State of Goa challenging the High
Court's decision to quash the order of the Judicial Magistrate First Class
(JMFC), which had initiated proceedings against the respondent for violations
of the Factories Act.
The High
Court had previously ruled that dry cleaning does not constitute a
"manufacturing process," thereby exempting the respondent's laundry
business from being classified as a factory under the Act.
Supreme Court's Findings
Before
the Supreme Court, the State of Goa argued that under Section 2(k) of the
Factories Act, the laundry business qualifies as a "manufacturing
process" because washing and cleaning clothes involve treating articles
for use or delivery. Furthermore, since the respondent employed more than nine
workers and used power-operated machinery, the premises met the definition of a
"factory" under Section 2(m).
The
respondent, however, contended that washing and dry cleaning are merely
services and should be governed by the Shops and Establishments Act, not the
Factories Act.
Rejecting
this argument, Justice Viswanathan, in the judgment, held that the respondent's
laundry business falls within the definition of a "factory." The
Court emphasized that under Section 2(k), a manufacturing process includes
washing and cleaning "with a view to its use, sale, transport, delivery,
or disposal."
"The
linen deposited with the launderer is, after washing and cleaning, delivered to
the customer for use. The ingredients of the section are fully satisfied,"
the Court stated.
The
Supreme Court further held that there was no basis to exclude washing and
cleaning from the definition of a manufacturing process, as the law does not
require a product to be newly created or transformed into a different article.
Accordingly, the Court overturned the High Court’s ruling and reinstated the
JMFC’s order to proceed against the respondent.
Conclusion
With this
ruling, the Supreme Court has clarified that businesses engaged in large-scale
laundry services using power-operated machines are subject to the provisions of
the Factories Act, 1948. The judgment sets a precedent for the regulation of
similar establishments across the country.
Case
Title: State
of Goa & Anr. v. Namita Tripathi
