Business Of Laundry Including Dry Cleaning Covered By ‘Manufacturing Process’ Under Factories Act: Supreme Court
The Supreme Court allowed a Criminal Appeal of the Goa State against the Bombay High Court's Judgment, which quashed the JMFC's Order issuing summons.
The Supreme Court held that the business of laundry involving cleaning and washing of clothes including dry cleaning would be covered by the expression ‘manufacturing process’ under the Factories Act, 1948.
The Court held thus in a Criminal Appeal filed by the Goa State against the Judgment of the Bombay High Court, Goa by which it quashed the Order of the Judicial Magistrate First Class (JMFC).
The two-Judge Bench comprising Justice B.R. Gavai and Justice K.V. Viswanathan observed, “Reverting to the statutory provisions, it is clear on a plain reading of Section 2(k) of the Act of 1948 that ‘washing or cleaning’ of any article or substance with a view to its delivery is clearly covered by the phrase “manufacturing process”. Where the words of statute are clear, the plain meaning has to be given effect. We have no doubt in our mind that the business of laundry carried on by the respondent involving cleaning and washing of clothes including dry cleaning would be squarely covered by the expression “manufacturing process”. Admittedly, they employed more than 9 workers in the centralized processing unit and also used the aid of power.”
The Bench explained that where a statute under consideration itself defines for the purposes of the said Act a certain phrase, a Court of law is bound to apply the term as defined except in exceptional cases where the opening part of a definition, “anything repugnant in the subject or context” applies.
Advocate Ruchira Gupta appeared for the Appellants while Advocate Shivan Desai appeared for the Respondent.
Facts of the Case
Pursuant to the inspection conducted in the premises of the Respondent wherein the business of Professional Laundry Service was carried on, it was found that the Respondent did not possess factory approved plans as required under Rule 3 of the Goa Factories Rules, 1985 read with Section 6 of the Factories Act. It was further found that the premises were being used as a factory without obtaining a valid factory licence in violation of Rule 4 read with Section 6 and that the Respondent had not submitted any application for registration and grant of licence in violation of Rule 6 read with Section 6. An inspection report was drawn up and the same was furnished by a covering letter. The report set out that at the time of inspection, there were more than 9 workers employed; that there was no muster roll maintained for the month of May 2019; and that the manufacturing process of cleaning and washing of clothes was carried on.
Thereafter, the JMFC issued summons to the Respondent pursuant to a Complaint filed by the Appellants alleging violation of the provisions of the Factories Act and thereby committing offences punishable under Section 92 thereof. Being aggrieved by this, the Respondent went to the High Court seeking to quash and set aside the summons as well as the Complaint primarily on two grounds alleged namely, that the Order issuing summons is unreasoned and suffers grave errors of facts and law and it does not reflect application of mind; and that the process of “Dry cleaning of clothes” does not constitute “manufacturing process” as defined under the Act. It was also averred that business of laundry is a service and the premises are not manufacturing unit for the purpose of the Act. The High Court quashed the JMFC’s Order and hence, the Appellants approached the Apex Court.
Reasoning
The Supreme Court in the above context of the case, noted, “The reasoning of the High Court that a transformation has to ensue and the new article must come into being and that it should be commercially known as another and different article is a totally erroneous finding. The High Court has clearly ignored the plain language of the Section and has been completely oblivious about the welfare nature of the Statute. The High Court has extrapolated the definition of “manufacture” as is in vogue in the Central Excise Act 1944.”
The Court remarked that the High Court has been carried away by the interpretation given by Courts while interpreting the Central Excise Act, 1944.
Furthermore, the Court said that Factories Act defines “manufacturing process” and “washing, cleaning” and the activities carried out by the Respondent with a view to its use, delivery or disposal are squarely attracted.
“The contention of the respondent that dry cleaning does not make any product usable, saleable or worthy of transport, delivery or disposal has only to be stated to be rejected. “Manufacturing process” has been defined to mean any process for washing or cleaning with a view to its use, sale, transport, delivery or disposal”, it elucidated.
The Court added that the linen deposited with the launderer is, after washing and cleaning, delivered to the customer for use and the ingredients of the Section are fully satisfied.
“There is nothing in the Act of 1948, which is repugnant in the subject or context, constraining us to jettison the definition. Hence, we reject the findings of the High Court and hold that the activity carried out which on facts is not disputed is clearly covered by the definition of “manufacturing process” under Section 2(k) which, in turn, would bring the premises in question of the respondent under the definition of “factory” under Section 2(m)”, it held.
Accordingly, the Apex Court allowed the Appeal, set aside the High Court’s Order, and restored the JMFC’s Order as well as the Complaint.
Cause Title- The State of Goa & Anr. v. Namita Tripathi (Neutral Citation: 2025 INSC 306)
Appearance:
Appellants: AOR Shishir Deshpande, Advocates Ruchira Gupta, Pooja Tripathi, Amit Kumar, and Abhishek Verma.
Respondent: AOR Narender Kumar Verma, Advocates Shivan Desai, Vibhuti Sushant Gupta, Jatin Ramaiya, and Anirudh Sardesai.
