Does the Factory Act Apply to Design Firms with Occasional Printer Use? Let's Discuss!

Application of the Factory Act to Design Establishments

An establishment engaged in the development of designs, with over 150 employees, is registered under the S&E Act. This establishment has one HP Indigo printer, which is large in size. The printer is operated occasionally and not regularly, as needed. The prints are sent to clients as samples for design approval. This printer is attended to by only one person, who is not appointed solely for this task.

Under these circumstances, my question is whether the provisions of the Factory Act apply to this establishment. I expect a discussion by experts on this subject. If yes, why? And if not, why?

In my opinion, I believe that the Factory Act will not be applicable to your organization.

As per my view, I think the Factory Act will not be applied to your organization. However, I am still awaiting other valuable inputs too.

My view is as follows: The manufacturing process, i.e., printing, is carried out on the premises of the establishment not on a regular basis and seems to be very casual in nature. Hence, the provisions of the Factories Act should not be applied. Please refer to the case of Jain Movie Palace v. State of Bihar 2007 I LLJ 916 (Jhark JC).

One can have a different view here. Experts are requested to comment.

The establishment, at the first stage, is registered under the S&E Act, and as such, there are no manufacturing activities carried out in the establishment. Therefore, the Factories Act should not be applied.

Regards,
Satishkumar

The basic premise of the Factories Act is that any raw material brought inside a facility and then modified in terms of shape (resulting in finished goods) or repacked in various sizes or weights using electric and machine power will be considered a factory.

In your specific case, only the laws pertaining to the printing industry will be applicable, as it may fall under the Safety and Environment Act.

Regards,
K R Ravi
Bangalore

In my opinion, the question of the size of the printer, whether it is used occasionally or regularly, or whether the said printer is used by only one person for a very short period, etc., is not so material and not important. The only question is whether the "development of designs" and printing of the same with the help of one HP Printer is a "manufacturing process" as mentioned in section 2(k)(iv) read with section 2(m) of the Factories Act, 1948.

The case of Jain Movie Palace v. State of Bihar, as mentioned by Sh. Korgaonkarji, perhaps relates to the use of a generator in a cinema hall for use as and when there was no electricity supply. The honorable court in that case held that the use of the said generator set was not the use of power in the "ordinary" sense as laid down in the section of the Factories Act, 1948, as mentioned above.

In my opinion, the establishment qualifies to be covered as a "factory" under the provisions of the Factories Act, 1948, because the use of power is there for the manufacturing process, i.e., for printing designs, which are (as reported) further sent to clients for approval.

However, if the case is contested in the honorable court, then it can be a matter of new controversy because now, with the advancement of science and technology, the printers/printing machines and their process have changed, and automation has taken place. I could not find relevant case law on the use of HP printers as a manufacturing process. Perhaps seniors and experts may also guide on the matter.

Regards

It should be registered under the Factory Act-1948 as it's applicable here. All seasonal and non-seasonal manufacturing units should be registered under the Factory Act-1948. However, as you mentioned, this unit has been run under the required conditions. Please also contact the Factory Inspector for a better conclusion.

Defining a Factory

It is not a factory. A factory means 10 persons working with power and 20 persons working without power, wherein manufacturing activity takes place. Taking out prints from the printer is not a manufacturing activity.

Understanding the Definition of a Factory

Please see that as per the definition of a factory in the Factories Act, the railway running shed, hotel, restaurant, or eating place is excluded from the definition even though power may be used there. In explanation 11, it says that the mere fact that an EDP unit or computer unit is installed on a premise will not make it a factory if no other manufacturing activity is carried on there. This shows that it is the core activity that determines the manufacturing activity/factory. As such, having a printer will not make the firm a factory unless it is the core activity. This is worth considering for a test case.

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I agree with the remarks of Shri Harsh Mehta. The development of designs and their printing falls within the definition of manufacturing under section 2(k) of the Factories Act 1948. Even the establishments engaged in computer software development are also covered in certain states under section 2(m)(1) of the Act.

Regards

In my opinion, the preparation of drawings and design is not a manufacturing activity; it would fall under the category of service. The Factory Act is not applicable. The case is identical to any IT company; they work with similar infrastructure.

Regards,
Satish Akut

My dear Anonymous, you have diverted the mind of the members by mentioning that the said establishment has one big HP Indigo printer, which runs occasionally. However, what I could perceive is that your main activity remains the "development of designs" for which 150 plus employees are engaged. In my opinion, the development of designs is nothing but COMPOSING, which is already covered under the definition of 'manufacturing process' given under Section 2(k) of the Factories Act, 1948. Though you have mentioned that the prints are sent to the clients as samples for approval of designs, you have not mentioned what your next step of activity is. I am sure these designs are printed for commercial use. If I am correct, the whole process matches the ingredients of the definition under 2(k) of the Act, and hence it is the 'manufacturing process.' Therefore, your establishment needs to be registered under the Factories Act.

Regards,
BS Kalsi Member since Aug 2011

While going through the facts of the case and also the definition of section 2k, Mr. Kalsi is right. The manufacturing process with the aid of power and employing merely 10 employees falls within the purview of the Factories Act. I totally agree with Mr. Kalsi.

Regards