# REGIONAL PROVIDENT FUND COMMISSIONER v. SHIBU METAL WORKS - **Citation:** [1965] 2 S.C.R. 72 - **Court:** Supreme Court of India - **Decided:** 1964-11-09 - **Bench:** P. B. Gajendragadkar, K. N. Wanchoo, B M. HiDAYATULLAH - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/regional-provident-fund-commissioner-v-shibu-metal-works-3440 - **Pages:** 13 ## Headnote Emplaytts Provident Fund Act, 1952, s. 1 (3) read with Schedule /- Industry engaged in manufacturing brass utensils-Whether this product fell within entry 'electrical mechanical and general engineering productlfTherefore whether Act applicable to the industry. The re8pondent firm, which ran a factory manufacturing brass utenoils, filed a Writ Petition for the issue of a mandamus, restraining the appellant C from recovering contributions alleged to be due under s. 1 ( 3), read with Schedule 1, of the Employees Provident Fund Act, 1952, contending, inter alia, that the manufacture of brass utensils did not fall within the relevant entry in Schedule 1, i.e. it was not an industry engaged in the manufacture of 'electrical, mechanical or general engineering products'. The learned Single Judge, who heard the petition, rejected the respondent's contention, holding that brass utensils were, in substance, 'drums D and containers' I.e. they fell within item (24) and cl. (a) of the Expfanation to Schedule 1, and that therefore their manufacture was covered by Schedule I. On appeal, however, the Division Bench reversed this finding and issued a writ as prayed for. . · It was contended on behalf of the respondent that the products to which the entry referred were products which were useful in, or meant for, electrical engineering, mechanical engineering, or general enginl'efE. ing. On the other hand, it was the appellant's contention, that the entry would take in every industry which was enga~ed in the manufacture of products that were manufactured by an electncal, mechanical or gener&I engineering process. HELD : In construing the relevant entry in Schedule 1, it was neces- •ary to bear in mind that this entry occurred in an Act which W3" intended . to serve a beneficent purpose. If the words used in the entry were capable of a narrow or broad construction, each construction being reasonably F· 'possible, and if it al?peared that the broad construction would help the furtherance of the ob1ect, then it would be necessary to prefer that construction. [78 C-Fl The nature of the items included in the Explanation to Schedule 1 clearly showed that some of the items could not reasonably be included within the restricted interpretation canvassed by the respondent; on the other hand, the mention of several of items would be redundant if the wide interpretation advocated by the appellant was to be accepted; [Sl B-H; 82 A-Fl The content of the entry 'electrical, mechanical and general engineering products' was that all products which were generally known as electrical engineering products or mechanical engineering products or general engineering products were intended to be covered by the entry, and· the object of Schedule 1 was to include within the scope of the Act ever/ industry which was engaged in the manufacture of electrical engineering. products · mechanical engineering products or general engineering products. It wea the chafacter of the products that helped to determino tho content· of tho entry. · [82 G-H; 83Al G H - • A B COMl>fiSSIONER v. SIDBU METALS (Gajendragadkar, C.J.) 73 .f .•.•• . . ·-- . Thus considered the ·manufacture of brass utensils must be regarded as an activity the object of which was the manufacture of general engineering products. [83 F] · Case law reviewed. Civll. APPELLATE JURISDICTION ; Civil Appeal No. 1059 of 1963. Appeal from the judgment and order dated April IO, 1962 of the Punjab High Court in L.P. Appeal No. 312 of 1959. B. Sen and R: N.c Stichthey, for the appellant., C. B. Agarwala, ' I. · B. Dadachanji, 0. C. Mathur and c Ravinder Narain, for the rispondent. · · .·· · . ## Text REGIONAL PROVIDENT FUND COMMISSIONER A v. SHIBU METAL WORKS November 9, 1964 (P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO AND B M. HiDAYATULLAH, JJ.] Emplaytts Provident Fund Act, 1952, s. 1 (3) read with Schedule /- Industry engaged in manufacturing brass utensils-Whether this product fell within entry 'electrical mechanical and general engineering productlfTherefore whether Act applicable to the industry. The re8pondent firm, which ran a factory manufacturing brass utenoils, filed a Writ Petition for the issue of a mandamus, restraining the appellant C from recovering contributions alleged to be due under s. 1 ( 3), read with Schedule 1, of the Employees Provident Fund Act, 1952, contending, inter alia, that the manufacture of brass utensils did not fall within the relevant entry in Schedule 1, i.e. it was not an industry engaged in the manufacture of 'electrical, mechanical or general engineering products'. The learned Single Judge, who heard the petition, rejected the respondent's contention, holding that brass utensils were, in substance, 'drums D and containers' I.e. they fell within item (24) and cl. (a) of the Expfanation to Schedule 1, and that therefore their manufacture was covered by Schedule I. On appeal, however, the Division Bench reversed this finding and issued a writ as prayed for. . · It was contended on behalf of the respondent that the products to which the entry referred were products which were useful in, or meant for, electrical engineering, mechanical engineering, or general enginl'efE. ing. On the other hand, it was the appellant's contention, that the entry would take in every industry which was enga~ed in the manufacture of products that were manufactured by an electncal, mechanical or gener&I engineering process. HELD : In construing the relevant entry in Schedule 1, it was neces- •ary to bear in mind that this entry occurred in an Act which W3" intended . to serve a beneficent purpose. If the words used in the entry were capable of a narrow or broad construction, each construction being reasonably F· 'possible, and if it al?peared that the broad construction would help the furtherance of the ob1ect, then it would be necessary to prefer that construction. [78 C-Fl The nature of the items included in the Explanation to Schedule 1 clearly showed that some of the items could not reasonably be included within the restricted interpretation canvassed by the respondent; on the other hand, the mention of several of items would be redundant if the wide interpretation advocated by the appellant was to be accepted; [Sl B-H; 82 A-Fl The content of the entry 'electrical, mechanical and general engineering products' was that all products which were generally known as electrical engineering products or mechanical engineering products or general engineering products were intended to be covered by the entry, and· the object of Schedule 1 was to include within the scope of the Act ever/ industry which was engaged in the manufacture of electrical engineering. products · mechanical engineering products or general engineering products. It wea the chafacter of the products that helped to determino tho content· of tho entry. · [82 G-H; 83Al G H - • A B COMl>fiSSIONER v. SIDBU METALS (Gajendragadkar, C.J.) 73 .f .•.•• . . ·-- . Thus considered the ·manufacture of brass utensils must be regarded as an activity the object of which was the manufacture of general engineering products. [83 F] · Case law reviewed. Civll. APPELLATE JURISDICTION ; Civil Appeal No. 1059 of 1963. Appeal from the judgment and order dated April IO, 1962 of the Punjab High Court in L.P. Appeal No. 312 of 1959. B. Sen and R: N.c Stichthey, for the appellant., C. B. Agarwala, ' I. · B. Dadachanji, 0. C. Mathur and c Ravinder Narain, for the rispondent. · · .·· · . The Judgment of the Court was delivered by Gajendragadkar, C.J. This appeal raises a· short question as to the content of the entry "Electrical, Mechanical or general engineering products" used in Schedule 1 to the Employees' ProviD dent Fund Act, 1952 (No. 19 of 1952) (hereinafter called the Act).. The respondent firm, Shibu Metal Works, runs a factory which manufactures brass utensils. Under the Act and the scheme framed thereunder, the employer to whose factory the Act applies is required to deposit with the appellant, the Regional Provident Commissioner, his share of the contribution as well as • E that of · the employees coupled with the administrative charges within 15 days of each succeeding month. It appears that the respondent had been making such deposits in the past.. If the employer makes a delayed payment, the Government is entitled to impose damages not exceeding 25 per cent of the amounts payable F by the employer. In respect of the period between Jui:te, 1955 to October, 1955, and for the months of June, August, September and Novem':ier, 1956, delayed payments were made ·by the respondent. Thereupon, the appellant called upon the respondent to flay the damages. The respondent, in tum, made explanation8 and contended that there was really no delay in the making of G payments in regard to some months, and in respect of the others where delay was admitted, it claimed that the same should be •.· . condoned. The appellant did not accept either of the pleas raised by the respondent, and demanded the payment of damages. That led to the present writ proceedings commenced by the respondent in the High Court of Punjab. II In its writ petition filed. on the. 3rd November; 1958, the • reoporident contended that the appellant was not entitled to recover either the contributions alleged to be due under the Act or LlSup./65-6 . . SUPJlBMB OOU&T llEPOllTS [196SJ 2 S.C.ll. damages alleged to be due on the ground that there ·was delay in A payment, because the manufacture of brass utensils which was the work carried on in the respondent's factory did not come within the purview of the Act. On this ground, the respondent urged that the demand made by the appellant was illegal, ultra vires and without jurisdiction. The writ petition asked for the issue of a writ of mandamus restraining the appellant from reB covering any amount from the respondent under the Act. The appellant resisted the writ petition and urged that the entry "Electrical, Mechanical or general engineering products" included manufacture of brass utensils, and so, the respondent's factory fell within the purview of the Act. The appellant also c urged that if the respondent entertained any doubt as to the applicability of the Act to its factory, it should have approached the Central Government for removal of the doubt and not rushed to the court for a judgment. The learned Single Judge who heard the writ petition held that . the manufacture of brass utensils fell witliin the provisions of D the relevant entry in Sch. I, because, in his opinion, the said utensils were, in substance, drums and containers. · He, therefore, held that the appellant was entitled to demand from the respondent the deposit of the contributions as prescribed by the Act. He, however, took the view that the demand for damages made by E the appellant was not justified. On these findings the writ petition was partly alfowed in that a writ was issued against the appellant restraining hill) from making a demand for the payment of damages. In regard to the claim made by the respondent that it was not liable to deposit the contributions under the Act, the learned Judge held that the said claim was not justified. F The respondent then preferred an appeal under the Letters Patent before a Division Bench of the Punjab High Court. The Letters Patent Bench has upheld the respondent's contention that the manufacture of brass utensils does not fell within the entry "Electrical, Mechanical or general engineering products" enumerated in Sch. 1 to the Act. In the result, the respondent's G appeal was allowed and a writ was issued against the appellant in terms of the prayer made by the respondent in its writ petition. The appellant then moved the said High Court for a certificate and with the certificate granted to him, he has come to this Court in appeal. That is how the only question which arises for our decision is : what is the true content of tJie entry "Electrical, H Mechanical or general engineering products" included in Sch. 1 of the Act? COMMISSIONER v. SHIBU METALS (Gajendragadkar, C.J.) 75 A Before dealing with this point, it would be relevant to refer briefly to the broad features of the scheme prescribed by the Act, and its purpose. This Act was passed in order to provide for the institution of provident funds for employees in factories and other establishments. Section 1, sub-section ( 3), originally provided that subject to the provisions contained in s. 16, the B Act would apply (a) to every establishment which is a factory engaged in any industry specified in Sch. I and in which 50 or more persons are employed, and (b) to any other establishment employing 50 or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify ·in that behalf. There is a proviso to this subC section which it is unnecessary to set out Later, in 19.60, the requirement that 50 workmen should be employed has been modified and now, the employment of 20 workinen is enough to attract the application of the Act. Section 2(g) defines a "factory" as any premises, including the precincts thereof, in any part of , D which a manufacturing process is being carried on or is ordinarily ' so carried on, whether with the aid of power or without the aid of power. This shows that if the test prescribed by s. 1 (3) is satisfied and the undertaking is shown to be engaged in a manufacturing process, the Act applies. It makes no difference to the applicability of the Act that in a given factory, the manufacE turing process is carried on without the aid of power. It is the manufacturing process which is the decisive factor. Section 2(i) defines "industry" as meaning any industry specified in Sch. I , and includes any industry added to the Schedule by notification under s. 4. This definition shows how entr.ies in Sch. 1 assume significance. Whenever a question arises as to whether any F industry is governed by the Act, the answer is to be found by looking at Sch. 1. It is also clear that additions can be made to Sch. 1 from time to time by notification by the Central Government. Section 4 specifically confers this power on the Central Government. It provides that the Central Government may add any industry to Sch. 1 and it lays down that after the notification G is issued by the Central Government in that behalf, the industry so added shall be deemed to be an industry specified in Sch. 1 for the purposes of the Act. Section 4(2) provides a safeguard by requiring that notifications issued under sub-section ( 1) shall be laid before Parliament, as soon as may be, after they are issued. Section S is the key section of the Act and it provides for the H institution of Employees' , Provident Fund Schemes. It is not necessary for our purpose to refer to the details of these schemes. It would thus be seen that the basic purp- priate provision should be made for the employees employed in D the establishments to which the Act applies; and that means that in construing the material provisions of such an Act, if two views are reasonably possible, the courts should prefer the view which helps the achievement of the object. If· the words used ·in the entry are capable of a narrow or broad construction, each construction being reasonably possible, and it appears that the broad E construction would help the furtherance of the object, then it would be necessary to prefer the said construction. This rule postulates that there is a competition between the two constructions, each one of which is reasonably possible. This rule does not justify the straining of the words or putting an unnatural or F unreasonable meaning on them just for the purpose of introducing a broader construction. The other circw;nstauce which has to be borne in mind in interpreting the entry is that the interpretation should not concentrate on the word "products" used in it. If this word had been used, say for instance in the material provisions of the Sales-tax G Act, the decision as to· whether a particular product is liable to pay the tax, would depend upon the consideration whether the product in question falls within the scope of the said Act or not, and in that con~ext, interpretation would naturally concentrate on the character and nature of the product in question.. Jn the preH sent case, the entry takes us back to the first clause of Sch. I which refers to any industry engaged in the manufacture of any of the products enumerated by the different entries in Sch. J. So, in I· COMMISSIONER v. SffiBU METALS (Gajendragadkar, C.J.) 79 A construing the relevant entry, what we have to ask ourselves is : is the industry of the respondent engaged in the manufacture of any of the products mentioned in the entry ? It is the character of the industrial activity carried on by the respondent's undertaking that falls to be determined, and the question is not so much as to what is the product produced as what is the nature of the B activity of the respondent's undertaking; is the respondent's undertaking engaged in the manufacture of the products in question ? This consideration is relevant for the purpose of determining the content of the entry. There is no doubt that the establishment of the respondent is c a factory within the meaning of s. 2(g), and it would be an industry within the meaning of Sch. I if its manufacturing activity is found to be an activity connected with the products enumerated in the entry. The entry refers to engineering products. It is, therefore, necessary to clear the ground by referring to the word "engineering" which qualifies the word "products". To engineer, D according to the dictionary meaning, is to act as an engineer, or to employ the art of the engineer upon; to construct or manage as an engineer. "Engineering", according to the Encyclopaedia Britannica, Vol. 8, in its early uses referred specially to the operations of those who constructed engines of war and executed works intended to serve military purposes. Such military engineers E were Jong the only ones to whom the title was applied. But about the middle of 18th century a new class of engineers arose who concerned themselves with works which, though they might be in some cases of the same character as those undertaken by military engineers, as in the making of roads, were neither excluF sively military in purpose nor executed by soldiers, and those men by way of distinction came to be known as civil engineers. Thus, civil engineering came to be known as the "art of directing the · great sources of power in nature for the use and convenience of man, as the means of production and of traffic in states, both for external and internal trade, as applied in the construction of G roads, bridges, aqueducts, canals, river navigation and docks for internal intercourse and exchange, and in the construction of ports, harbours, moles, breakwaters and lighthouses, and in the art of navigation by artificial power for the purposes of commerce. ·and in the construction and adaptation of machinery, and in the drainage of cities and towns". ( p. 444) . H Gradually, however, specialisation set in. The first branch of engineering which received recognition as a separate bran~h, was rnechatlical engineering. This branch is concerned with 80 SUPREME COURT REPORTS [1965] 2 S.C.R. steam engines, machine tools, millwork and moving machinery in A general, and it was soon followed by mining engineering, which deals with the location and working of coal, ore an_d other minerals. Subsequently, numerous other more or less strictly defined groups and sub-divisions came into existence; they are : civil, mining and metallurgical, mechanical, electrical, chemical, aeronautical and industrial. There are o.ther less clearly· defined B branches of engineering, such as sanitary, structural, drainage, hydraulic, highway, railway, electric power, electrical communications, steam power, internal combustion, marine, welding, production, petroleum production, fire protection, safety, architectural, nuclear, and management or administrative engineering (p. 448). c It would thus appear that the area covered by engineering which was originally occupied only by military engineering, is now split up into several sub-areas which are covered by special branches of engineering known by special names. The entry in question refers to electrical and mechanical engineering; and it is D easy enough to determine what the denotation of these two expressions is. In the context, 'general engineering' which is also mentioned in the entry must not be construed in a general comprehensive sense which the words may, prima facie, suggest, because. if that was the scope of the said words, there was hardly any point in referring to electrical and mechanical engineering separately. E Therefore, we are inclined to hold that the expression "general engineering" does not include electrical or mechanical engineering which are specifically mentioned in the entry, and it also does not include other branches of engineering which are known by specific or special titles. These specific branches of engineering F have already been indicated by us by reference to the Encyclo- . paedia Britannica. After the first six entries had been included in Sch. I in 1952, an Explanation was added to it in 1953 which purports to indicate what items are intended to be included in the entry "Electrical, mechanical or general engineering products". This ExplanaG lion consists of four clauses; cl. (a) enumerates the items falling under the entry with which we are concerned in the present appeal, whereas clauses (b). ( c) and ( d) afford similar explanation in regard to entries relating to "Iron and Steel", "Paper", and ''Textiles" respectively. A glance at the items included in cL (a) of the Explanation, as well as the items included in clauses (b), ( c) H & ( d) clearly shows that the object of the legislature in enacting the Explanation was to clarify the content of the respective entries COMMISSIONER v. SHIBU METALS (Gajendragadkar, C.l.) 81 A in Sch. I, to illustrate them by adding specific items, and to enlarge their scope in some material particulars. The fact that an Explanation has been added with this purpose in 1953, must also be taken into account in construing the entry in question. Mr. Agarwala for the respondent has contended that the 11 learned single I udge was in error in holding that the respondent's industry was engaged in the manufacture of drums and containers specified as item (24) introduced- in cl. (a) of the Explanation. He argues that the core of the entry is engineering products, and while construing the entry, the significance of this core should not C be overlooked. According to him, the entry really takes in engineering products like machinery and equipment for generation of electrical energy. He suggests that in det~rmining the content of this entry, we should ask ourselves what ~mid this entry mean to an ordinary citizen in a commercial sense ? It would mean that the products to which the entry refers are products which are I]) useful in, or meant for, electrical engineering, mechanical engineering or general engineering. This entry may also take in machines or their parts which are similarly useful in or meant for electrical, mechanical, or general engineering. If this narrow construction is accepted, then, of course, production of brass utensils would be plainly outside the entry. E There are, however, several considerations which suggest that this narrow construction cannot be accepted. As we have already indicated, a glance at the items mentioned in cl. (a) of the Explanation and the extended meaning attributed to the respective entries covered by clauses (b), (c) and (d) -of the Explanation, '.F clearly indicates that none of the said entries can be reasonably read in that restricted manner. If this restricted interpretation is accepted, then several items included in cl. (a) of the Explanation would be so completely foreign to the original content of the entry that their inclusion would appear to be unjustified. Take for instance, item (15) in cl. (a) of the Explanation which is G bicycles; item (17) which is sewing and knitting machines; item (22) which is safes, vaults and furniture made of iron or steel or steel alloys; or item (23) which is cutlery and surgical instruments. Clause (a) of the Explanation nrovides that these items should be included in the entry in question, "without prejudice to the ordinary meaning of the expressions used therein". If the H narrow construction for which Mr. Agarwala contends is accepted, it would look unreasonable that the Legislature should have introduced these items under cl. (a) of the Explanation. Besides, 82 SUPREME COURT REPORTS [1965) 2 S.C.R. this construction lays undue emphasis on the concept of products A and erroneously treats engineering products as the core of the expression. What the entry really means is electrical engineering products, mechanical engineering products or general engineering products and in determining the content of the entry, we have to hark back to the relevant consideration that this entry is intended to describe an industry as falling within the scope of the B Act if the said industry is engaged in the manufacture of the products in question. Now, if we take the other entries which were initially included in Sch. I, the construction for which Mr. Agarwala contends cannot obviously be applied in respect of them; and so, we think it would not be possible to adopt the narrow C construction which Mr. Agarwaln has suggested for our acceptance. On the other hahd, Mr. Sen for the appellant suggested that the proper way to construe this entry would be to ho!