Coverage Of Petrol Pumps Under Factories Act,1948 - PDF Download

Dear all,
Greetings of the day. In my opinion and in the light of the definition of "Manufacturing process", petrol pumps falls within the definition of the factories. Even power distribution is also a factory whereas the power is generated by someone and somewhere and is distributed by the Electricity Boards etc.
Regards.

Dear Members ,
I am grateful to the CiteHR members for whole-heartedly partcipating in the discussion and dissemination of their experience and knowledge.Similarly during my search on the internet, I came across a jugement reported in Labour law Reporter, page no. 1066, Supreme Court of India, October 2009, where it has been held that in M/S Qazi Noorul H.H.H Petrol Pump and Another Vrs Deputy Director, E.S.I. Corporation that "Pumping oil is a manufacturing process".
A copy of the extract is attached for the members perusal.
BS Kalsi

Dear Members,
Due to some error in the link page, I am sorry I have not been to upload of the judgement inspite of best effforts. I shall take somebody's help and try again.
BS Kalsi

Dear Mr.kalsi

It is a great and interesting discussion on the vexatious question whether pumping oil falls within the definition of manufacturing process under Sec.2(k) of the Factories Act. There are indeed valuable contributions from all learned members each of which has it’s own merit and substance. I can’t but agree with them. The question nevertheless is baffling as Mr.Umakantan has rightly said. Yes it is puzzling to accept the process of pumping oil as a manufacturing process because it defies the normal understanding of manufacturing process that is etched even in prudent minds and for all purposes the petrol pump after all engages in the sale of petrol and should qualify to be a shop.

We normally associate the idea of manufacturing process with any process which either transforms or converts a substance into a different article/substance that is marketable. However the case of Baranagar Service Station V.ESIC 1987(54) FLR 635(Cal.DB) has dispelled this notion by holding that manufacturing process need not cause any transformation of an existing substance or result in the emergence of new product. For example washing and cleaning are also included in the definition of manufacturing process though they do not result in the emergence of a new product.

Then the question that arises is whether the process of pumping oil in order to be a manufacturing process shall be linked to pumping oil from a refinery or any processing unit. This question was addressed exactly by the case of ESIC v. Bhag Singh 1988 II LLN 417.Repelling the same view in the said case, the Hon’ble Punjab & Haryana High Court held that the expression ‘manufacturing process’ shall not be understood in a narrow and restricted sense of bringing out a different product. Even if a process brings out a special result in the goods or substance, it falls within the definition of manufacturing process. The court cites the example of washing or cleaning or oiling which are included as manufacturing process. Though these processes do not make a new car out of the ones that are brought to the service station for the said purposes, they nevertheless bring out a special result in the vehicle namely a lubricated and cleanse vehicle and pumping oil too shall similarly be understood as bringing out special result in the car that is brought for filling fuel.

Thus the above case law together with Quazi Nurul petrol Pump furnished by learned member Mr.Harsh Kumar Mehta may largely address your query. Though the cases cited were under ESI Act , they are nevertheless relevant to the subject under discussion since the definition of manufacturing process under Sec.2(14 AA) of ESI Act is pari materia with that under Factories Act

The courts have given such plain and liberal meaning to the manufacturing process under Factories Act keeping in view the social objectives of the factories Act namely the health and safety of workers employed at work places. Therefore the meaning of manufacturing process needs to be understood in the sense the legislature gave it but not in the ordinary sense of the meaning.

B.Saikumar

In-House HR & IR Advisor

navi Mumbai

Please see the definition of Factory under sec 2(m) of The Factories Act.By an amendment to it w.e.f 26.10.1976 the following are excluded from the definition of factory;
1.mobile unit attached to armed forces of the union,
2.Railway running shed,
3.hotel,restaurant or eating place.
Though hotel etc are not factories under Factories Act due to the above exclusion,they are factories under ESI Act because in the definition of factory in ESI Act they are not excluded.(sec2(12) of ESI Act.)
Varghese Mathew

Dear BS Kalsi ji,
The said judgement is already uploaded today morning in this thread by our learned member Harsh Kumar ji.

I feel petrol pumps are not come under factory Act beacuse it is only selling point there is not repairy process & productive activity

Dear all friends,

With the views put forward and the arguments advanced by Harsh Kumar and Loginmiracle about the classification of retail outlets mechanically distributing petroleum products as " factories" under cross reference to various cognate definitions in different Statutes associated with the subject-matter as per the ratio decidendi of the decisions of the Apex Court and various High Courts bring the present discussion to its finality. And the well-thought-out and convincingly drafted explanation by Saikumar adds beauty to the finality.As we all are well-aware, all our Labour Laws could be brought under the following classifications - (1) Laws relating to particular type of establishments (2) Laws relating to service conditions (3) Laws relating to Industrial Relations (4) Monetary Labour Laws and (5) Laws relating to social security of Labour. So, my reply to Mr. Korgaonkar is : Unless and until there is a direct judicial decision on the classificatory aspect arising out of any two establishment-oriented Laws, these petroleum retail out-lets or petrol bunks as commonly called are "factories" because of the supremacy of the law declared by the Supreme Court as per Art.141 of our Constitution.