ABC Limited has five factories in Madhya Pradesh and having a turnover of ₹1,000.00 crore. Sharad Acharya, General Manager, Commercial was appointed as an occupier of all the factories. During the inspection of one of th

CS Professional · Multidisciplinary Case Studies · PYQS · December 2022
ABC Limited has five factories in Madhya Pradesh and having a turnover of ₹1,000.00 crore. Sharad Acharya, General Manager, Commercial was appointed as an occupier of all the factories. During the inspection of one of the factories, Factory Inspector has taken objection and raised a show cause notice to the Company for appointment of General Manager as an Occupier of the Factory. The objection taken by Factory Inspector is right in the eyes of the Factories Act, 1948. Explain the position of Factory Inspector. What would be your answer if ABC Limited is Partnership firm?

Answer & Explanation:

According to Section 2(n) of the Factories Act, 1948, "occupier" of a factory means the person who has ultimate control over the affairs of the factory. Provided that: In the case of a firm or other association of individuals, any one of the individual partners or members thereof shall be deemed to be the occupier; In the case of a company, any one of the directors shall be deemed to be the occupier; In the case of a factory owned or controlled by the Central Government or any State Government, or any local authority, the person or persons appointed to manage the affairs of the factory by the Central Government, the State Government or the local authority, as the case may be, shall be deemed to be the occupier. In case of a Company, only a Director of the Company will be the occupier of the Factory. (J.K. Industries Limited Etc. vs. The Chief Inspector of Factories... on 25 September, 1996). Considering the provisions of the Factories Act and relevant case law as stated above, the objection raised by the factory inspector is right as a general manager cannot become the occupier of a factory in the case of a company. If ABC Limited were a partnership firm, then also the objection raised by the factory inspector would be right, as in the case of a partnership firm, only an individual partner can become the occupier of the factory.

Topics: Labour Laws

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