Is a Factory License Needed for Our Casting Yard Despite BOCW Registration? Seeking Advice

Dear Seniors, please update on the Factories Act and BOCW Act regarding license obtaining for the casting yard. We, the construction company, have completed registration under BOCW and acquired licenses for CLARA, PCB, and ISMW. We are required to obtain a factory license for our casting yard where our construction activities, such as segments and structures, take place. Despite being registered under BOCW, is it mandatory to obtain a factory license for our casting yard? Seeking all your valuable advice. Thanks in advance.

Dear Colleague, The nature of the casting yard and the definition of "Manufacturing Process" under The Factories Act 1948 are the key deciding factors. If you employ 20 or more workers without the aid of power or 10 or more workers with the aid of power and you are involved in "Manufacturing," then YES, you are a factory.

A casting yard is a place where concrete components like segments and boundary wall panels are cast, shifted to their stack yard, cured for a specific period, and then shifted to the working site after they gain their required strength. This covers some or other parts of the definition of a manufacturing process as per the Factories Act. In the Factories Act, 1948, section 2(k) defines a manufacturing process as: "Manufacturing process" means a process for making, altering, repairing, oiling, washing, cleaning, ornamenting, finishing, packing, breaking up, or otherwise treating or adapting any article or substance with a view to its use.

Hence, it is suggested to have a discussion with the Directorate of Industrial Safety and Health of your location to get more clarity, then apply for the necessary licenses, approvals, or compliance as may be required.

Dear CiteHR member John S. Peter,

Greetings. Your question has been appropriately commented upon by our senior member Dr. P. Sivakumar, who noted that the work of a casting yard is covered under the 'manufacturing process' as defined in Section 2(k)(i) of The Factories Act 1948. However, it is seen from your query that the company is a contractor company as you have taken registration under the BOCW Act, CLARA, PCB, and ISMW Acts. In view of this, it is necessary to examine the NIT and contract agreements to determine whether the casting yard has been provided by the Employer (i.e., the contract awarding company) and what the terms and conditions are. Only then can an appropriate opinion be offered on your particular query.

Nonetheless, it may be clarified that the BOCW Act 1996 does not apply to factories.

For adequate and appropriate customized advice in confidence, you may send an individual request.

With regards to senior Dr. P. Sivakumar and all Experts of the CiteHR Forum.

Chandra Mani Lal Srivastava
Master Consultant
Contract Management, Tender, Works, and Service Legal Expert
[Phone Number Removed For Privacy-Reasons]
[Email Removed For Privacy Reasons]
New Delhi/06.02.2022/6:23 pm

Sir, Thanks for your inputs. I just want to convey that, as you said, the principal employer doesn't provide us the land for constructing our casting yard. We, the contractor, have identified the land for our precast yard, which is a temporary setup; hence, it was taken on lease. Here, we will construct our own segment for our projects, and we are not dealing with any stakeholders for sales activities. Once our project activities are completed, we will hand over the land to the lessor in the same condition.

Definition of Segment Activities

BOCW Rule definition 2, subclause (ZY) — segment — includes a cast iron or precast concrete segmented structure formed to the curvature of the tunnel cross-section and used to support the ground surrounding the tunnel.

Hence, we have registered under BOCW for our construction activities. As per our tender, we may deal with different places, but our workmen and nature of work are covered under BOCW. Therefore, the Factories Act 2k may not be implemented in this case. But if there are any provisions regarding the same, please update, sir.

Thanks in advance, sir.

Dear Mr. John S. Peter,

Thank you for your question posted on 6th Feb 2022 seeking clarification on the definition under Rule 2 (zy) regarding the term 'segment' under BOCW Central Rules, and the definition under Section 2(k) of The Factories Act 1948. After carefully considering both definitions in the specific context of their application, I will offer my opinion as follows:

1. Your company has obtained registration under the BOCW Act, and you believe that according to the definition in Rule 2(zy), the Casting Yard is part of construction work, and no additional license is required for the Casting Yard.

2. A close examination of the definition in Rule 2(zy) reveals that 'segment' is defined as a cast iron or "pre-cast" segmented structure. It is important to note that the rule specifies the term "pre-cast," indicating that the segmented structure should not be made on-site but should be a "pre-cast" structure used for construction activities. Therefore, the definition in Rule 2(zy) does not apply to the Casting Yard where activities involve "preparing casted segments."

3. Given that the activity of preparing/making a casting segment falls under the definition of "manufacturing process" as defined in Section 2(k) of The Factories Act 1948, it would be advisable to comply with the directives of the Factories Inspector and obtain a license under the Factories Act for the Casting Yard.

4. If your company chooses not to comply with the directives of the Factories Inspector, an appeal can be filed before the Chief Inspector or the designated authority.

I trust this response adequately addresses your query. While you may disagree with my opinion, the final decision will rest with the Competent Authority in case of an appeal. I would appreciate your validation if you feel I have made a fair attempt to address your concerns.

With regards and best wishes,

Chandra Mani Lal Srivastava
Master Consultant
Contract Management, Tender, Works, And Service Laws Expert
New Delhi
11.02.2022
00:01 hrs