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J.K. INDUSTRIES LIMITED V.

THE CHIEF INSPECTOR OF FACTORIES


AND BOILERS & ORS

ROUGH DRAFT MADE BY :


PRASENJIT TRIPATHI
ROLL NO. 1748, 4TH SEMESTER, B.A.LL.B.(HONS.)

SUBMITTED TO :
DR. PALLAVI SHANKAR

RESEARCH PROJECT SUBMITTED ON PART AND FULFILMENT FOR THE COURSE


LABOUR LAWS-I

FOR ATTAINING THE DEGREEE


B.A.LLB (HONS.)

FEBRUARY, 2019

CHANAKYA NATIONAL LAW UNIVERSITY, NYAYA NAGAR, MITHAPUR


PATNA, 800001
INTRODUCTION:
The concept of an “occupier", in the context of labour laws, is of significant importance and over
the years has been the subject of much judicial scrutiny and legislative attention. The reason for
this is that an occupier of a factory assumes statutory liability for non-compliance by the factory
establishment under most labour-related statutes in India. It is the designated “occupier" who is
responsible, right from the basic compliance such as maintenance of health standards, safety
standards, amenities, etc., to all statutory payments such as bonus, gratuity, provident fund, etc.

Before 1987, the liberal provisions in the Act allowed a designation of any employee managing
the affairs of the factory as an occupier of the factory.
To no surprise, this led to the top tier decision makers—the owners—appointing mid-level officials
as occupiers of the factory, so that the liability, if any, actually befell the latter and exposure was
limited to a certain rung of the corporate ladder.
In 1987, however, as a spin-off, the Bhopal gas tragedy and similar industrial disasters that led to
public consensus for demand of higher responsibility, an occupier was redefined, deeming
mandatorily that any one of the directors of a company running a factory would be the occupier of
such factory. As a result, the opportunity available with companies to, in some sense, shield its
management by appointing an employee as an occupier was taken away.
Naturally, this did not appeal to companies that wanted to designate persons other than directors
as occupiers under the Act, leading to various lawsuits. One such landmark case was JK Industries
Ltd and others v. Chief Inspector of Factories and Boilers and others (Supreme Court, 1996). In
this case, the Supreme Court noted that where a company owns or runs a factory, it is the company
that has ultimate control over the affairs of the factory and would therefore be the occupier.
However, since a company is a legal abstraction, it can act only through its directors, who are the
directing mind and will of the company and are the centre of its personality. The court went on to
say that the word “ultimate" in common parlance means last or final. There is a vast difference
between a person having ultimate control of the affairs of a factory and one who has immediate or
day-to-day control over the affairs of the factory. The manager or any other employee, of whatever
status, can be nominated by the board of directors of the owner company to have immediate or
day-to-day or even supervisory control over the affairs of the factory. However, the ultimate
control over the affairs of the factory will always be with the board of directors of the company
and cannot be vested in any other person, without completely transferring the control over the
factory to the other person. Essentially, the law as declared by the Supreme Court was that a
company cannot nominate any one of its employees or officers, except a director of the company,
as the occupier of the factory.

AIMS AND OBJECTIVES:


The main aims and objectives of the researcher is to thoroughly study and analyse the background
and judgement of the Supreme court and also the developement in law since then.

RESEARCH METHOD USED:


This is the project work which requires exhaustive and careful reading of the various texts and
journals; particuraly of the modern concepts based on books, and journals. So for this project the
researcher will rely upon the doctrinal sources.

TENTATIVE CHAPTERIZATION:
1. Introduction
2. Facts of the case
3. Expert opinion and judgement
4. Legal effects of this judgement
5. Conclusion