Regional Provident Fund Commissioner vs Shibu Metal Works

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 1059 of 1963

Decision Date: 09/11/1964

Coram: P.B. Gajendragadkar, K.N. Wanchoo, M. Hidayatullah

In this case, the Supreme Court of India heard a petition filed by the Regional Provident Fund Commissioner against Shibu Metal Works. The judgment was delivered on 9 November 1964 by a bench consisting of Chief Justice P.B. Gajendragadkar, Justice K.N. Wanchoo and Justice M. Hidayatullah. The petitioner was the Regional Provident Fund Commissioner and the respondent was Shibu Metal Works. The citation for the decision is 1965 AIR 1076 and 1965 SCR (1) 72. The case involved the Employees Provident Fund Act, 1952, specifically section 1(3) read with Schedule 1, and concerned whether an industry engaged in manufacturing brass utensils fell within the entry titled “electrical, mechanical and general engineering products” and therefore whether the Act applied to that industry. The respondent, which operated a factory producing brass utensils, filed a writ petition seeking a mandamus to restrain the petitioner from recovering contributions alleged to be due under the aforesaid provision. The respondent argued that the manufacture of brass utensils did not belong to the class of “electrical, mechanical or general engineering products” listed in Schedule 1 and therefore the Act should not be applicable. The single judge who first heard the petition rejected that argument, observing that brass utensils were essentially “drums and containers.” The judge concluded that such items fell within item (24) and clause (a) of the Explanation to Schedule 1, and consequently the manufacture of brass utensils was covered by Schedule 1. On appeal, a Division Bench reversed the single judge’s finding and granted the writ that the respondent had prayed for. The respondent contended that the entry in Schedule 1 referred only to products that were useful in, or intended for, electrical, mechanical or general engineering. The petitioner, on the other hand, maintained that the entry should be interpreted to include every industry that manufactured products by an electrical, mechanical or general engineering process. The Court held that while construing the entry “electrical, mechanical and general engineering products” in Schedule 1, it was necessary to keep in mind the benevolent purpose of the Act. The Court observed that if the words of the entry could be given either a narrow or a broad meaning, and if a broader construction would better advance the object of the legislation, then the broader interpretation must be preferred. The Court examined the items listed in the Explanation to Schedule 1 and noted that some of those items could not be accommodated within the respondent’s restricted interpretation, while accepting the petitioner’s wide interpretation would render several items redundant. Consequently, the Court explained that the content of the entry was intended to cover all products that are generally recognised as electrical engineering products, mechanical engineering products or general engineering products.

In this case, the Court observed that the purpose of Schedule 1 was to bring within the ambit of the Act every industry engaged in manufacturing electrical engineering products, mechanical engineering products, or general engineering products. The Court explained that the character of the products determined the meaning of the entry. It cited authorities at pages 82 G‑H and 83 A to support this view. Accordingly, the Court held that the manufacture of brass utensils should be regarded as an activity whose object is the production of general engineering products, as indicated at page 83 F.

The matter before the Court was a civil appeal numbered 1059 of 1963, arising from a judgment and order dated 10 April 1962 of the Punjab High Court in L.P. Appeal No. 312 of 1959. Counsel for the appellant were listed as B. Sen and R. N. Sachthey, while counsel for the respondent were C. B. Agarwala, J. B. Dadachanji, O. C. Mathur and Ravinder Narain. The judgment was delivered by the Chief Justice Gajendragadkar. The appeal presented a concise question concerning the interpretation of the phrase “Electrical, Mechanical or general engineering products” as used in Schedule 1 of the Employees’ Provident Fund Act, 1952 (No. 19 of 1952), hereinafter referred to as the Act.

The respondent, Shibu Metal Works, operated a factory that manufactured brass utensils. Under the Act and its accompanying scheme, the employer of a factory to which the Act applies must deposit with the Regional Provident Commissioner his share of the contribution, the employees’ share, and the administrative charges within fifteen days after the close of each month. The records indicated that the respondent had previously complied with this deposit requirement.

The Act stipulates that if an employer makes a delayed payment, the Government may impose damages not exceeding twenty‑five per cent of the amounts payable by the employer. The Court noted that the respondent had made delayed payments for the period from June 1955 to October 1955, and for the months of June, August, September and November 1956. Consequently, the appellant demanded that the respondent pay the prescribed damages.

The respondent responded by offering explanations, asserting that there was no delay for certain months and, for the months where delay was admitted, requesting that the delay be condoned. The appellant rejected both contentions and continued to demand payment of damages. This dispute gave rise to the present writ proceedings initiated by the respondent in the Punjab High Court.

In the writ petition filed on 3 November 1958, the respondent argued that the appellant was not entitled to recover either the contributions alleged to be due under the Act or the damages under Section 65‑6, on the ground that the manufacture of brass utensils did not fall within the scope of the Act. The respondent therefore contended that the appellant’s demand was illegal, ultra vires, and beyond the jurisdiction of the Act.

The appellant countered by asserting that the entry “Electrical, Mechanical or general engineering products” included the manufacture of brass utensils, and thus the respondent’s factory was covered by the Act. The appellant further argued that if the respondent harboured any doubt about the applicability of the Act to its factory, it should have approached the Central Government for clarification rather than seeking immediate judicial intervention.

The learned Single Judge hearing the writ petition held that the manufacture of brass utensils fell within the relevant entry of Schedule 1, reasoning that, in substance, such utensils were drums and containers. Accordingly, the Judge concluded that the appellant was entitled to demand the contribution deposits prescribed by the Act. However, the Judge expressed the view that the demand for damages made by the appellant should be considered separately, a point that formed part of the subsequent appellate discussion.

The writ petition sought a mandamus directing the appellant to refrain from recovering any sum from the respondent under the provisions of the Act, contending that the court lacked both jurisdiction and authority to entertain the claim. The petition asked that the respondent be protected from any demand for contributions or damages. The appellant opposed the petition and argued that the description “Electrical, Mechanical or general engineering products” in Schedule 1 was broad enough to encompass the manufacture of brass utensils, and consequently the respondent’s factory fell within the scope of the Act. The appellant further submitted that if the respondent harboured any doubt about the applicability of the Act to its establishment, the proper course was to approach the Central Government for clarification rather than to approach the court for an immediate judgment. The learned Single Judge who heard the matter held that the production of brass utensils did fall within the relevant entry of Schedule 1, reasoning that, in substance, the utensils were equivalent to drums and containers. On that basis the Judge concluded that the appellant was entitled to demand that the respondent deposit the contributions prescribed by the Act. However, the Judge expressed the view that the appellant’s claim for damages was not justified. Accordingly, the writ petition was partially allowed: a writ was issued restraining the appellant from demanding any payment of damages, while the claim that the respondent was not liable to pay contributions under the Act was rejected as untenable. Dissatisfied with this decision, the respondent filed an appeal under the Letters Patent before a Division Bench of the Punjab High Court. The Letters Patent Bench upheld the respondent’s contention that the manufacture of brass utensils did not fall within the “Electrical, Mechanical or general engineering products” category enumerated in Schedule 1. In consequence, the respondent’s appeal was allowed and a writ was issued against the appellant in accordance with the relief sought in the original writ petition. The appellant then applied to the same High Court for a certificate of fitness to appeal, obtained the certificate, and brought the matter before this Court by way of appeal.

The sole question that now arises for determination is the precise meaning of the entry “Electrical, Mechanical or general engineering products” as it appears in Schedule 1 of the Act. Before addressing that issue, it is appropriate to set out briefly the broad framework and purpose of the legislation. The Act was enacted to establish a system of provident funds for employees employed in factories and other establishments. Section 1, sub‑section (3), as originally framed, provided that, subject to the provisions of Section 16, the Act would apply (a) to every establishment that is a factory engaged in any industry specified in Schedule 1 and that employs fifty or more persons, and (b) to any other establishment employing fifty or more persons or to any class of such establishments that the Central Government may, by notification in the Official Gazette, specify. The provision therefore linked the applicability of the Act to two criteria: the nature of the manufacturing activity, as defined by the entries in Schedule 1, and the number of persons employed. This scheme is designed to bring factories and similar workplaces within the protective net of the provident‑fund system, ensuring that employees receive the benefits intended by the legislation.

The provision allows the Central Government, by publishing a notification in the Official Gazette, to specify industries for the purpose of the Act. Although the subsection contains a proviso, the text notes that it is unnecessary to reproduce that proviso in detail. In 1960 the statutory requirement concerning the size of an establishment was altered; the earlier threshold of fifty workers was reduced, and thereafter an establishment employing twenty workers became sufficient to bring the Act within its scope. Section two sub‑g defines a “factory” as any premises, together with the surrounding area, where a manufacturing process is being carried out or is ordinarily carried out, irrespective of whether the process uses power or proceeds without power. This definition indicates that once the conditions laid down in section one sub‑3 are satisfied and the concern is shown to be engaged in a manufacturing process, the Act becomes applicable. The presence or absence of power assistance in the manufacturing process does not affect the applicability of the legislation; the decisive element is the existence of a manufacturing process itself. Section one sub‑1 defines “industry” as any industry listed in Schedule 1 and also includes any industry that is later added to the Schedule by means of a notification under section four. Consequently, the entries contained in Schedule 1 acquire great significance because any query as to whether a particular industry falls under the Act is resolved by referring to that Schedule. It is also clear that the Schedule may be amended from time to time through notifications issued by the Central Government. Section four expressly vests this power in the Central Government, authorising it to add any industry to Schedule 1, and provides that once a notification is issued, the added industry shall be deemed to be a Schedule 1 industry for all purposes of the Act. Sub‑section two of section four supplies a safeguard, mandating that every such notification be laid before Parliament as soon as practicable after issuance. Section five, which constitutes the core provision of the Act, establishes the framework for Employees’ Provident Fund Schemes; the detailed contents of those schemes are not necessary for the present discussion. From these provisions it follows that the fundamental aim of the Act is to ensure that appropriate provident‑fund provisions are made for the benefit of employees working in establishments to which the Act applies. The rules governing the establishment of the funds require contributions from both employees and employers, and it is evident that the legislative intent is benevolent, seeking to guarantee that the covered employees receive the stipulated provident‑fund amounts in a timely manner. Schedule 1, which is pivotal in deciding whether a particular industry is subject to the Act, originally comprised six entries and stipulated that any industry engaged

The Schedule to the Act originally stated that any industry engaged in the manufacture or production of the six items listed therein would be deemed an industry for the purposes of the Act. In 1953 the words “or production” were removed, so that the entry now applied only to any industry engaged in the manufacture of the items mentioned in Schedule 1. Among the items subsequently inserted was the category “Electrical, Mechanical or general engineering products.” At the same time that the statutory requirement regarding the number of work‑men needed to bring an establishment within the ambit of the Act was relaxed—from a threshold of fifty work‑men down to twenty—the list of items in Schedule 1 was also broadened through a series of additions. The purpose of the legislation was expressly to provide a provident fund scheme for the benefit of industrial employees in a cautious and pragmatic manner. This purpose explained why the Central Government progressively extended the Act’s applicability to a wider range of industrial branches. The process of adding entries to Schedule 1 continued with noticeable speed, and by examining the items incorporated through successive amendments up to 15 May 1964 it became apparent that the scope of Schedule 1 had been considerably enlarged. Various High Courts had, from time to time, examined the precise content of the entry relating to “Electrical, Mechanical or general engineering products”; their interpretations differed, prompting the Court to briefly outline the effect of those decisions in order to illustrate the lack of uniformity in judicial approach.

In the case of Regional Provident Commissioner, U P, Kanpur v. M/s Great Eastern Electroplator Ltd., a Division Bench of the Allahabad High Court held that an electric torch case, being the receptacle in which torch batteries are kept, qualified as a container within the meaning of item 24 of the Explanation to Schedule 1, and therefore must be deemed an “electrical, mechanical or general engineering product.” It was necessary to note that in 1953 an Explanation had been added to Schedule 1 to specify the items falling under the said entry, and item 24 of that Explanation listed “drums and containers.” The Division Bench reversed the view of the learned single judge of the same High Court and concluded that an electric torch case fell within the definition of a container under item 24. That decision was appealed to this Court in appeal No. 580 of 1960, decided on 18 December 1962. The Supreme Court examined the Division Bench’s conclusion that an electric torch case was a container within the meaning of item 24 of the Explanation to Schedule 1 and adopted the view articulated by the Division Bench.

The Court observed that the earlier conclusion that item (24) of the Explanation to Schedule 1 was correctly understood remained valid. It then reviewed several earlier decisions to illustrate how different courts have interpreted the entry “electrical, mechanical or general engineering products.” In the case of Nagpur Glass Works Ltd. v. Regional Provident Fund Commissioner, the Bombay High Court held that burners and metal lamps were products that fell within the Schedule under that entry. In Haji Nadir Ali Khan and Others v. The Union of India and Others, Justice Falshaw, then sitting as a judge of the High Court, expressed the view that musical instruments, whether made of metal or of other materials, although not specifically listed in Schedule 1, nevertheless fell within the scope of the expression “electrical, mechanical or general engineering products.” In Hindustan Electric Co., Ltd. v. Regional Provident Fund Commissioner, Punjab & Anr., Justice Grover of the Punjab High Court similarly held that stoves should be regarded as falling within the same expression. In the Madras decision of T. R. Raghava Iyengar and Co. v. The Regional Provident Fund Commissioner, Madras, Justice Jagadisan stated that the conversion of metal sheets and circles into vessels produced products of metal rolling and re‑rolling, which are covered by the Schedule to the Act, and therefore an industry engaged in manufacturing vessels and utensils from brass and copper sheets and circles is subject to the Act. The Court also referred to the matter before it in The Regional Provident Fund Commissioner, Bombay v. Shree Krishna Metal Manufacturing Co., Bhandara, and Oudh Sugar Mills Ltd., noting that one of the questions raised was whether the manufacture of metal circular sheets fell within Schedule 1. Both parties conceded that such manufacturing did fall within Schedule 1, and consequently the company carrying out that work was a factory engaged in an industry attracted by the provisions of the Act. The Court clarified that these authorities were cited only to show how courts have attempted to interpret the relevant entry when confronted with different products, and that the courts have not followed a single uniform approach; the reasons given and the tests applied in each case vary and are not identical. The Court expressly refrained from expressing any opinion on the merits of the cited decisions. Returning to the question of construing the entry in Schedule 1, the Court emphasized that the entry must be read in the context of an Act whose purpose is benevolent. The object of the legislation is to ensure that appropriate provision is made for employees working in establishments to which the Act applies, and this purpose requires that, when two reasonable constructions are possible, the courts should adopt the construction that best furthers the statutory objective.

In interpreting the statutory entry, the Court said that the interpretation which best furthers the purpose of the Act should be preferred. When the language of the entry can be understood in either a narrow sense or a broad sense, and both understandings are reasonable, the Court held that if the broader construction would better promote the object of the legislation, the broader construction must be adopted. The Court explained that this principle creates a competition between the two plausible constructions, but it does not allow the Court to stretch the words beyond their ordinary meaning or to impose an artificial or unreasonable sense on them merely to achieve a wider construction. The Court further observed that, in construing the entry, attention should not be fixed solely on the term “products”. The Court illustrated that if the same word appeared in the substantive provisions of, for example, the Sales‑tax Act, the question of whether a particular item was liable to tax would depend on whether that item fell within the scope of the Act, and the interpretative focus would naturally be on the character and nature of the item itself. In the present matter, however, the entry must be read in the context of the first clause of Schedule 1, which describes any industry engaged in the manufacture of any of the products listed in the various entries of Schedule T. Accordingly, the Court instructed that the enquiry should be whether the respondent’s industry is engaged in the manufacture of any of the products specified in the entry. The Court emphasized that the relevant enquiry was not so much about the specific product that the respondent produced, but rather about the character of the industrial activity carried out by the respondent’s undertaking—whether that activity amounted to manufacturing the products mentioned in the entry. This determination was essential for ascertaining the scope of the entry. The Court noted that there was no doubt that the respondent’s establishment qualified as a factory within the meaning of Section 2(g). Consequently, the establishment would also qualify as an “industry” within the meaning of Schedule 1 if its manufacturing activity was found to be connected with the products enumerated in the entry. The entry in question referred to “engineering products”. Therefore, the Court found it necessary to examine the meaning of the qualifier “engineering”. The Court cited a dictionary definition of “to engineer” as to act as an engineer, to employ engineering skill, or to construct or manage as an engineer. The Court also referred to the Encyclopedia Britannica, Volume 8, which explained that the early use of the term “engineering” was limited to activities of those who built engines of war and performed works for military purposes, and that for a long period the term was applied only to military engineers. The Court then indicated that around the middle of the eighteenth century a new class of engineers arose who concerned themselves with works that, although sometimes similar to those undertaken by military engineers, were neither exclusively military in purpose nor executed by soldiers, and these men came to be known as civil engineers.

In this case, the Court traced the evolution of the engineering profession from its early military origins to the diverse specialised branches that exist today. It explained that during the eighteenth century a new class of engineers emerged who, although sometimes engaged in work resembling that of military engineers such as road construction, were not exclusively devoted to military purposes and were not soldiers. These professionals came to be identified as civil engineers. The Court noted that civil engineering was consequently described 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 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). The Court then observed that, over time, engineering became increasingly specialised. It identified mechanical engineering as the first branch to receive separate recognition; this branch dealt with steam engines, machine tools, millwork and moving machinery in general. The Court added that mining engineering followed, focusing on the location and extraction of coal, ore and other minerals. Subsequently, a number of additional branches and sub‑divisions were created, including civil, mining and metallurgical, mechanical, electrical, chemical, aeronautical and industrial engineering. The Court also listed other, less clearly defined branches 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). From this historical survey, the Court concluded that the field originally occupied only by military engineering has now been divided into several sub‑areas, each covered by a distinct specialised branch. The entry under consideration refers specifically to electrical and mechanical engineering, and the Court found that the meanings of these two expressions are readily determinable. It cautioned that the term “general engineering,” also mentioned in the entry, must not be interpreted in a broad, all‑encompassing manner that the words might suggest at first glance. If “general engineering” were given such an expansive meaning, there would be little reason to refer separately to electrical and mechanical engineering. Accordingly, the Court was inclined to hold that “general engineering” does not include electrical engineering or mechanical engineering, which are expressly listed in the entry, nor does it encompass other branches that are identified by specific titles. The Court reaffirmed that these particular branches have already been defined by reference to the Encyclopaedia Britannica. Finally, the Court recalled that after the first six entries were placed in Schedule 1 in 1952, an Explanation was added in 1953 to indicate the items intended to be covered by the entry.

The Explanation attached to the entry “Electrical, mechanical or general engineering products” was composed of four separate clauses. Clause (a) listed the particular items that fell within the entry and were the subject of the present appeal, while clauses (b), (c) and (d) gave comparable explanations for the entries dealing with “Iron and Steel”, “Paper” and “Textiles”. A review of the items enumerated in clause (a) together with those set out in clauses (b) through (d) demonstrated that the legislature’s intention in adding the Explanation in 1953 was to clarify what each entry in Schedule 1 meant, to illustrate the entries by naming specific articles, and, in certain respects, to broaden the scope of the entries. The fact that the Explanation was introduced for this purpose in 1953 was therefore relevant to the construction of the entry in question.

Mr Agarwala, appearing for the respondent, contended that the learned single Judge had erred in concluding that the respondent’s industry was engaged in the manufacture of drums and containers identified as item (24) in clause (a) of the Explanation. He argued that the essential core of the entry consisted of engineering products and that this core should not be ignored when interpreting the entry. According to his submission, the entry was intended to cover engineering products such as machinery and equipment used for the generation of electrical energy. He suggested that, to determine the meaning of the entry, one should ask how an ordinary citizen would understand it in a commercial context. He maintained that the entry would be read as referring to products that are useful for, or intended for, electrical engineering, mechanical engineering or general engineering, and that it might also include machines or parts that serve similar purposes. Under this narrow view, he said, the manufacture of brass utensils would clearly fall outside the entry.

The Court observed, however, that several reasons made the narrow construction untenable. As already indicated, a simple inspection of the items listed in clause (a) of the Explanation, together with the broader meanings given to the entries covered by clauses (b), (c) and (d), showed that none of those entries could be reasonably confined to the limited interpretation proposed by the respondent. If the restricted reading were adopted, many of the items specifically mentioned in clause (a) would appear completely alien to the original sense of the entry, rendering their inclusion inexplicable. For example, clause (a) listed item (15), bicycles; item (17), sewing and knitting machines; item (22), safes, vaults and furniture made of iron, steel or steel alloys; and item (23), cutlery and surgical instruments. Clause (a) expressly stated that these items were to be included in the entry “without prejudice to the ordinary meaning of the expressions used therein”, indicating that the legislative intent was to admit such items even if they did not fit a narrow ordinary meaning of engineering products.

The Court observed that if the narrow construction urged by counsel for the petitioner were adopted, it would appear unreasonable that the Legislature had placed the items enumerated in clause (a) of the Explanation under that limited meaning, because such a construction would imply that those items were introduced without any rational basis. Moreover, the Court noted that this narrow view places excessive emphasis on the notion of “products” and mistakenly treats engineering products as the sole core of the expression, ignoring the broader context of the entry. The Court explained that the entry actually refers to electrical engineering products, mechanical engineering products, or general engineering products, and that, in determining the content of the entry, one must recall the purpose that the entry is intended to describe an industry as falling within the ambit of the Act when the industry is engaged in the manufacture of the relevant products. The Court further stated that when the other entries originally included in Schedule 1 are examined, the narrow construction advocated by counsel for the petitioner cannot be consistently applied to those entries; consequently, the Court found it impossible to adopt the petitioner’s suggested narrow construction. On the other hand, counsel for the appellant, Mr Sen, proposed that the entry should be construed to encompass every industry that manufactures products produced by an electrical, mechanical, or general engineering process, thereby making the process of production the central element of the entry. The Court warned that if such a broad construction were accepted, the scope of the entry would become overly expansive, rendering several other entries in the Schedule apparently redundant because the entry itself would be sufficiently comprehensive to absorb them. In that scenario, the Explanation added in 1953 would seem superfluous, since most, if not all, of the items introduced by that clause would already fall within the original wording of the entry. The Court held that such a wide‑ranging interpretation was not justified, because the essential factor in construing the entry is not the manufacturing process but the character of the activity with which the industry is concerned. Accordingly, the Court declined to endorse the very broad construction suggested by counsel for the appellant. The Court concluded that the proper method for determining the content of the entry is to hold that all products commonly recognized as electrical engineering products, mechanical engineering products, or general engineering products are intended to be covered, and that the purpose of Schedule 1 is to include within the scope of the Act every industry engaged in the manufacture of those categories of products. The Court emphasized that it is the nature of the products that determines the entry’s coverage, and that the question remains whether the product in question can be reasonably described as an electrical engineering product, a mechanical engineering product, or a general engineering product.

The Court observed that the proper inquiry was whether a product could be reasonably described as an electrical engineering product, a mechanical engineering product, or a general engineering product. That question, the Court held, must be asked in every case. In examining whether a product falls within the category of general engineering product, the Court explained that the term “general engineering” should be construed in the limited sense previously described. The Court noted that although in many instances the products listed in the entry may be produced by electrical, mechanical, or general engineering processes, such process considerations were not the essence of the inquiry. Rather, the industrial activity that manufactures any of the three categories of products—electrical, mechanical, or general engineering—places the industry within the scope of Schedule 1, thereby bringing it within the ambit of the Act.

When the three broad categories of products are kept in mind, the Court found it easy to understand the items enumerated in clause (a) of the Explanation. The Court stated that, in general terms, items 1 to 6 may be regarded as electrical engineering products; items 7 to 10 as mechanical engineering products; and the remaining items as general engineering products. The Court admitted that the inclusion of each individual item in clause (a) could not be explained with complete ease, but overall it appeared that the object of the Explanation was to clarify, illustrate, and expand the content of the entry so that no doubt would remain about the classes and categories of industry intended to be covered by the Act.

Applying this approach, the Court concluded that the manufacture of brass utensils could readily be characterised as an activity whose object is the manufacture of general engineering products. This interpretation was described as neither as narrow as the view advanced by the counsel of Mr Agarwala nor as broad as the view advanced by the counsel of Mr Sen, and it fitted the scheme of Schedule 1 when viewed in light of the purpose behind the insertion of the Explanation in 1953 and the later amendments to Schedule 1. Consequently, the Court was satisfied that the Letters Patent Bench of the Punjab High Court had erred in holding that the respondent’s factory did not fall within the material provisions of the Act. The Court further noted that, prior to the present dispute between the respondent and the appellant, the respondent had been making the required Provident Fund deposits under the Act. Accordingly, the appeal was allowed, the order of the Letters Patent Bench was set aside, the order of the learned single Judge was restored, and costs were awarded throughout.