Decided on November 27,1978



- (1.) Petitioner No. 1 is a public Company with its registered office at Brajarajnagar in the district of Sambalpur while petitioner No. 2 is its Vice-President. Petitioner is a 'factory' within the definition of the term given in S. 2 (m) of the Factories Act of 1948 (hereinafter referred to as the Act') and was obtaining the requisite licence valid for a year ending with every calendar year. S. 2 (n) of the Act defines "occupier of a factory". The Company had nominated Sri A. L. Goenka as the occupier and his name had been duly registered as such. Goenka was occupier in respect of Company's two factories, one at Brajarajnagar and the other located at Amlai. This led to administrative difficulties and practical inconvenience and, therefore, on 30th July, 1976, the Company's Board of Directors resolved:- "......Shri P. D. Bagri, Vice-President of the Company's Division at Brajarajnagar, be and is hereby vested with ultimate and complete control over the affairs of the factory of the company situate at Brajarajnagar in the district of 'Sambalpur, Orissa and appointed as Occupier of the said factory. He will have full power to exercise and do all such acts that may be necessary to look after the affairs of the factory and in particular, to comply with the requirements and provisions of the Factories Act, 1943, as in force from time to time. " The Company made an application on 3rd of August, 1976, to the Inspector of Factories in Form-2 as prescribed by Rule 4 of the Orissa Rules made under the Act notifying the said Bagri as the occupier of the factory and applied for renewal of the application with Bagri as occupier. On 9th of September, 1976, the Chief Inspector of Factories informed the Company that he was not in a position to accept Bagri as the occupier as he was not a Director of the Company and of the Company wanted replacement of Goenka and no other Director is nominated as a substitute, each of the Directors would be responsible individually and severally for any offence under the Act in accordance with Section 100 (2) thereof. The Company preferred an appeal under Section 107 of the Act to the Secretary to Government in the relevant department and by order dated 31-3-1977, the appeal was allowed and the appellate authority quashed the order of the Chief Inspector and held: "......The Chief Inspector of Factories is directed to accept Sri P. D. Bagri as the Occupier of the Factory, M/s. Orient Paper Mills Ltd., Brajarajnagar." On 3-5-1977, the Company applied to the Chief Inspector to amend the licence by incorporating the name of Bagri as Occupier. Without disposing of the said application, the Chief Inspector called for the application for renewal for the year 1978 before 31st of October, 1977. The Company thereafter sent an application for renewal with a covering letter requesting that Bagri may be shown as the Occupier and referred to the appellate direction in respect of 1976. On 17th of December, 1977, the Chief Inspector sent the renewed licence which ran thus :- "Licence is hereby granted to Orient Paper Mills Limited valid only for the premises described below for use as a factory employing not more than 4500 (four thousand and five hundred only) persons on any one day during the year and using motive power not exceeding 25,300 (twentyfive thousand and three hundred only) H. P. subject to the provisions of the Factories Act, 1948 and the Rules made thereunder. This licence shall remain in force till the 31st day of December, 1978". and appended the following covering letters to it :- "Since the application for renewal of licence has not been received from a person/persons specified in sub-section (2) of S. 100 of the Factories Act, the licence of your factory is renewed in the name of the company and is sent herewith the receipt of which please acknowledge." On 16th January, 1978, the Company wrote to the Chief Inspector pointing out: "It may be stated that earlier shri A L. Goenka was nominated as occupier of this factory. But as it had not been convenient for him or for any other Director who are normally residing in Calcutta, to discharge the obligation as Occupier under the Factories Act and as it was considered that an Officer of the local Management to be more suitable for the purpose, Shri P. D. Bagri was nominated as Occupier. Accordingly, he made an application to renew the licence in his name. But as the licence was not issued in his name, we are faced with a difficult situation and would once again request you kindly to reconsider the matter............" As the Chief Inspector did not take any further steps, petitioners have ultimately made this application for a direction that the appellate decision in respect of the licence for 1976 may be given effect to; the licence issued on 17th of December, 1977, may be appropriately amended and for other consequential directions.
(2.) The Chief Inspector, the Inspector of Factories and the State of Orissa who are opposite parties 1, 2 and 3 respectively have made a return to the rule nisi and in the affidavit by the Inspector f Factories, it has been pleaded that Bagri not being a Director of the Company did not qualify to be 'Occupier' in terms of S. 100 (2) of the Act and the Chief Inspector was, therefore, not in a position to accept him as the substitute in place of Goenka. The Company which was the owner of the factory was the Occupier unless and until a valid nomination in conformity with the provision of S. 100 (2) of the Act was made. It was pleaded that the Company's appeal under S. 107 of the Act in respect of the year 1976 was not maintainable and as the appeal was disposed of without notice to the Chief Inspector, the decision rendered in the appeal was not binding on him. The Company filed a rejoinder disputing the stand taken in the counter affidavit.
(3.) It is necessary to examine the correctness of the stand of the opposite parties as to the maintainability of the appeal and as to whether the Chief Inspector was bound by that decision because Mr. Das for the petitioners during hearing of the application has stated that he would not press for the first relief, namely, a direction for giving effect to the appellate order and the petitioners would be satisfied if a direction is given to appropriately modify the licence for current year.;

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