Which Factory Act Or Shops & Establishments Act Does A Car Showroom Come Under? - CiteHR
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Respected Seniors,
Plz tell me A car showroom cum service center comes in which act Factory Act or Shops & Establishment Act for Noida,,,
As per act plz send me all forms & formats,,,
Regards,
Nadeem Ahmad
9654700786

If both are in same premises it is factory if it together has 10 or more workers..If in different premises the showroom will come under Shop & Commercial Est Act and service centre will be a factory if it alone has 10 or more workers.
Varghese Mathew
9961266966

Check about your electricity power, if it is H.T it is definitely coming under Factories Act. Thanks & Regards B. RAVIMURUGAN Chief Manager - HR, Legal & Admin Natrust/Chennai M: 09884623097
Mr Nadeem Check with your Delhi factories rules for HT/LT criteria.for registration.In the Factories Act there is no such criteria. Varghese mathew
Dear Nadeem,

To answer your query, we need to find out from you as to how many persons you have employed for your car showroom cum service center.

I would like to quote Section 2(m) of Factories Act,1948. which is defined 'Factory' as under:-

(i) Wherein ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or (ii) Wherein twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power.

It was held by Rajsthan High court that "where an auto service station is run for cleaning, washing and oiling of the vehicles, it is 'manufacturing process' within the meaning of Section 2(k) of Act and if the requisite number of workers are employed, then the premises is a factory within the meaning of Section 2(m) of Act and under such situation, a licence is necessary under Section 6 of Factories Act. (Citation-1993 AIR 117(125) (Raj. HC),1993 Cri LJ )

If your car showroom is located in the same premises then it shall be treated as part of the Factory otherwise you need to take registration under UP Shops & Establishments Rules.



In the light of above explanation, you may take suitable action.

BS Kalsi

Member Since Aug 2011

Dear friend,

The expression "manufacturing process" is defined in Clause (k) of Section 2 of the Factories Act. The said Clause (k) is as follows :

(k) `manufacturing process' means any process for-

(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherewise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or

(ii) pumping oil, water, sewage or any other substance, or ;

(iii) generating, transforming or transmitting power, or

(iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or

(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels ; or

(vi) preserving or storing any article in cold storage.

Thus, the different processes set out in Sub-clause (i) of Clause (k) of Section 2 must be with a view to the use, sale, transport, delivery or disposal of the article or substances manufactured."

A 'factory' and `manufacturing process' as given in the Act: Section 2(m) of the Act defines `Factory' as under:- "factory" means any premises including the precincts thereof- (i) ............ (ii) whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on. The mere labour bestowed on an article even if the labour is applied through machinery will not make it a manufacture, unless it has progressed so far that a transformation ensues, and the article becomes commercially known as another and different article from that as it had began its existence.

The Factories Act, 1948 defines a worker by s. 2 (1) as meaning, it a person employed, directly or through any "a person employed, directly or thought any agency, whether for wages or not, in any manufacturing process or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process." and a factory is defined by s. 2(m) as meaning any premises including the precints thereof wherein a specified number of workers on any day of the preceding twelve months is employed. By the combined operation of these definitions, persons employed in any manufacturing process or in cleaning any part of the machinery or part of the premises used for the manufacturing process or any other kind of work incidental to or connected with the manufacturing process or the subject of the manufacturing process are deemed to be workers in a factory.

More are discussed in the attachment.


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it comes under shops and establishment act and show room is not a factory
Are you all sure that servicing vehicles comes under factories act ? There is nothing being manufactured. It is a pure serviced business, so how can it be a factory ?
Pl read sec 2 (k ) of Factories Act.It defines the activities constituting manufacturing process.You will find the activities such as washing,cleaning,pumping water etc as manufacturing process .These activities are done in service stations with the aid of power .Hence it is a factory if it has 10 or more workers.
Varghese Mathew

Employees State Insurance ... vs Bhag Singh on 19 May, 1988

This judgement is opposite of what u said

please go through in details

it specifically says somewhere in the middle that

Similarly, the "manufacturing process" in sub-clause (I) of section 2(k) would take in only a case where a new marketable commodity comes into being after the process which can be used, sold, transported, delivered or disposed of. As no new marketable commodity comes into being after washing and cleaning of the cars, it will not come within the meaning of sub-clause (1) of Section 2(k). In the decision reported in 1982 P.L.R. 600, the same learned Judge held that the business of dry-cleaners would not fall within the definition of "factory" in the view that whenever a washing or cleaning is done of any article by a dry-cleaner with a view to its use, no separate commercially different marketable commodity comes into being, which could be used, sold, transported or delivered or disposed of and that, therefore no manufacturing process can be said to be involved.

another part says :

"As regards service station for repairing motor cars, etc. the counsel for the Corporation wants it to be brought within the definition of 'manufacturing process' as per section 2(k)(i) of the Factories Act wherein the word 'repairing' has been used. But this word has to be read along with the words "any article or substance with a view to its use sale, transport, delivery or disposal" coming thereafter. So, the process of repairing has to be with any of these views which would be completely missing in the business carried on in this case.



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