Indraprastha Medical ... vs Nct Of Delhi And Ors.
2006 Latest Caselaw 322 Del

JUDGMENT

Markandey Katju, C. J.

1. This writ appeal has been filed against the impugned judgment of the learned single Judge dated June 1, 2001 by which he has dismissed the writ petition.

2. Heard learned Counsel for the parties and perused the record.

3. The facts in detail have been set out in the judgment of the learned single Judge and hence we are not repeating the same except where necessary.

4. The petitioner/appellant is a company incorporated under the Companies Act which runs a Hospital called Indraprastha Apollo Hospital at Sarita Vihar, New Delhi. The respondent No. 2, a Certifying Officer under the Industrial Employment (Standing Orders) Act, 1946 (hereinafter referred to as the Standing Orders Act (sic)) issued a letter to the petitioner dated October 7, 1999 stating that as per a complaint filed by the employees Union of the Hospital there are more than 100 workers working in the establishment and hence the Industrial Employment (Standing Orders) Act is applicable to it. Hence, the petitioner was directed to submit five copies of the Draft Standing Orders for certification within thirty days of the receipt of this letter, failing which legal action will be taken against it. True copy of letter dated October 7, 1999 is Annexure P-l to the writ petition.

5. The petitioner filed its written submissions dated November 4, 1999 before the respondent No. 2, inter alia, challenging the applicability of the Act to the Hospital. It was alleged that the petitioner is not an 'industrial establishment' within the meaning of the definition in Section 2(e) of the Standing Orders Act which states:

2(e) "industrial establishment" means-

(i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act, 1936, or

(ii) a factory as defined in Clause (m) of Section 2 of the Factories Act, 1948 or

(iii) a railway as defined in Clause (4) of Section 2 of the Indian Railways Act, 1890, or the establishment of a person who, for the purpose of fulfillling a contract with the owner of any industrial establishment, employs workmen;

6. However, by the order dated July 11, 2000 which was impugned in the writ petition, the Certifying Officer held that the Hospital is an industrial establishment and hence the Standing Orders Act applies. Aggrieved, the petitioner filed the writ petition which .was dismissed and hence this appeal.

7. The short question in this case is whether the Standing Orders Act applies to a Hospital or not.

8. Section 1(3) of the Standing Orders Act states that it applies to every industrial establishment wherein 100 or more workmen are employed or were employed on any day of the preceding 12 months, and to such class or classes of other industrial establishments as the appropriate Government may from time to time, by notification in the Official Gazette.

9. Hence, the establishment can be covered by the Standing Orders Act if it is an industrial establishment.

10. Section 2(e) of the Standing Orders Act defines Industrial Establishment and it has already been quoted above.

11. Clause (i) of Section 2(e) states that an industrial establishment will include an industrial establishment as defined in Section 2(ii) of the Payment of Wages Act. We have carefully perused Section 2(ii) of the Payment of Wages Act and we find that a Hospital is not mentioned therein.

12. As regards the submission of the respondent that a Hospital will be covered by Section 2(ii)(f) of Payment of Wages Act, 1936, we do not agree with this submission. That Clause refers to "workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale.

13. In our opinion, a Hospital is certainly not a workshop or establishment in which articles are produced, adapted or manufactured. A hospital is a place where medical treatment is given to those who are suffering from some disease or ailment. That is the main function of a hospital. If incidentally some articles are produced in a Hospital that would not mean that its main function is that incidental function. In our opinion, such incidental activity would not bring a Hospital within the scope of Section 2(ii)(f) of the Payment of Wages Act. We have to see the main activity of the establishment and not the incidental activity.

14. The next question which arises is whether a Hospital is a factory under 2(m) of the Factories Act.

15. Section 2(m) states: -

2(m) "factory" means any premises including the precincts thereof-

(i) whereon 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 is ordinarily so carried on, or

(ii) whereon 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, or is ordinarily so carried on.

16. The expression manufacturing process has been defined in Section 2(k) of the Factories Act which states:

2(k) "manufacturing process" means any process for-

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

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

(Hi) generating, transforming or transmitting power, or

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

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

17. Mr. Prashant Bhushan, learned Counsel for the workmen in the Hospital strongly contended that the Indraprastha Apollo Hospital does the work of washing, cleaning, repairing etc. and hence it is covered by the definition of the expression "manufacturing process".

18. In this connection Mr.Prashant Bhushan invited our attention to the counter affidavit filed on behalf of respondent Nos. 1 and 2. In para 4 of the same it is stated that the petitioner Hospital was engaged in various kinds of activities including cooking, washing etc. It was further contended that various food items were prepared and manufactured with the aid of power in the Bakery and Cafetaria of the hospital for sale to patients as well as their attendants. The petitioner Hospital also has a Dental Department where manufacturing of dentures etc. takes place for replacement of the teeth of the patients. It also has an Engineering Department where various kinds of preparatory as well as manufacturing activities take place.

19. It is true that the expression 'manufacturing process' gives a much wider meaning to the word 'manufacture' than what is understood in common parlance. The Legislature is free to make such deeming provisions which amounts to a legal fiction, and legal fictions are well known in law.

20. However, in our opinion, an establishment would be a factory if the main work of the establishment is the work of making, altering, repairing, finishing, packing, oiling, washing, cleaning, breaking up or generating, transforming power or composing types for printing, or preserving or storing any article in a cold storage. Such activity will come within the ambit of Section 2(k) provided it is the main activity of the establishment. For instance, if there is a laundry shop which is doing the main work of washing and cleaning clothes, it will amount to a manufacturing process because the definition of "manufacturing process" is wide enough to include washing and cleaning. Similarly, if there is power station doing the main work of generating power, or if there is cold storage doing the main work of storage of food and other articles, it will amount to a manufacturing process. However, where such activities of cleaning, washing, generating of power, preserving articles in cold storage etc., are only incidental activities, then that will not make the establishment a factory.

21. The main activity of a Hospital is to cure diseases and ailments and not to do washing, cleaning, generating, cold storage etc. These latter are only incidental activities. In other words, to determine whether an establishment is a factory or not under Section 2(m) of the Factories Act, we have to see what is the main activity which is being conducted in the establishment. If the main activity is of repairing, washing, cleaning, power generating etc. then it will certainly be a factory, but not if that is only an incidental work.

22. In our opinion, by no stretch of imagination can it be said that the main work of a Hospital is cleaning, washing, packing, oiling, generating power etc. No doubt cleaning of the floor, washing of the linen etc. has to be done in a Hospital so as to ensure that the hospital remains free from infection. However, that is not the main function of a Hospital. They are only incidental activities to ensure proper cleanliness etc. in a hospital.

23. If we accept the submission of Mr. Prashant Bhushan then every establishment will have to be held to be a factory, because in every establishment there has to be washing and cleaning. Surely that was not the intention of the legislature.

24. Learned single Judge has relied on the decision of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. in which it has been held that a Hospital is an industry. That decision was given while interpreting Section 2(k) of the Industrial Disputes Act. In the present case we are not concerned with the Industrial Disputes Act, but with the Standing Orders Act where the definition of 'industrial establishment' is very different from the definition of 'industry' in the Industrial Disputes Act. Hence, in our opinion, the decision in Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors. etc. (supra) has no application.

25. The learned single judge in the impugned judgment has observed:

By adopting a proactive approach and not imparting an insular meaning to 'industrial establishment', hospital would also be construed as an 'industrial establishments'.

26. With respect, we cannot agree. As already stated above, the definition of 'industrial establishment' in the Standing Orders Act is very different from that of 'industry' in the Industrial Disputes Act. Hence, the decision of the Supreme Court interpreting the word 'industry' in the Industrial Disputes Act has no application to the interpretation of the words 'industrial establishment' in the Standing Orders Act.

27. For the reasons given above, this appeal is allowed and the impugned judgment of the learned single Judge as well as the impugned order of the Certifying Officer dated October 7, 1999 are quashed.