Case Summary: State of Goa & Anr. v. Namita Tripathi (2025) | Laundry & Dry Cleaning under the Factories Act

The Supreme Court of India in State of Goa & Anr. v. Namita Tripathi (2025 INSC 306) examined whether the operation of a professional laundry service constituted a "manufacturing process" under Section 2(k) of the Factories Act, 1948, thereby bringing the premises under the purview of "factory" as defined in Section 2(m).

The appeal was filed against the judgment of the Bombay High Court at Goa, which had quashed the process issued by the Judicial Magistrate First Class (JMFC), Panaji, against the respondent.

Background of the Case

The case arose from an inspection conducted on May 20, 2019, at the respondent's premises, which operated under the name "White Cloud," a professional laundry service. The inspection report found violations of the Factories Act, 1948, and the Goa Factories Rules, 1985. Specifically, the respondent did not have factory-approved plans, a valid factory license, or registration under the Act.

The inspection report recorded that more than nine workers were employed, no muster roll was maintained, and a manufacturing process (cleaning and washing of clothes) was being carried out with machinery and power. Based on these findings, the Chief Inspector of Factories and Boilers initiated prosecution against the respondent for offences punishable under Section 92 of the Act.

The JMFC, Panaji, issued a summons to the respondent on December 4, 2019, finding a prima facie case against her. The respondent challenged this order before the Bombay High Court at Goa, contending that laundry services did not constitute a "manufacturing process," and thus, the Factories Act did not apply. The High Court accepted this contention and quashed the summons, prompting the State of Goa to appeal before the Supreme Court.

Issues

• Whether the professional laundry service operated by the respondent fell within the definition of "manufacturing process" under Section 2(k) of the Factories Act, 1948.
• Whether the premises of the respondent constituted a "factory" under Section 2(m) of the Act.
• Whether the High Court was justified in quashing the process issued by the JMFC.

Analysis by the Supreme Court:

Statutory Interpretation and Object of the Factories Act, 1948:

The Court examined the legislative intent behind the Factories Act, emphasizing its purpose as a welfare legislation designed to regulate the health, safety, and working conditions of laborers in factories. The Act applies to establishments engaging in "manufacturing processes," and Section 2(k) explicitly includes "washing" and "cleaning" of any article or substance with a view to its use, sale, transport, delivery, or disposal.

The Court noted that the Factories Act had been enacted to address deficiencies in the earlier Factories Act of 1934, which excluded several establishments from its scope. The addition of "washing" and "cleaning" in the definition of "manufacturing process" under the 1948 Act was a conscious legislative decision to broaden its applicability.

Plain Meaning Rule:

Applying the rule of plain interpretation, the Court held that the term "manufacturing process" under Section 2(k) explicitly covers "washing" and "cleaning". Since the respondent’s business involved cleaning and washing clothes using machinery and employed more than nine workers, it squarely fell within the definition of "manufacturing process."

Rejection of the High Court’s Reasoning:

The Supreme Court found the High Court’s reliance on Employees’ State Insurance Corporation, Jullundur v. Triplex Dry Cleaners & Others (1982) misplaced. That case was decided under the Employees’ State Insurance Act before the 1989 amendment, which adopted the definition of "manufacturing process" from the Factories Act. The Supreme Court noted that subsequent amendments had aligned the ESIC Act with the Factories Act, and therefore, the reasoning in Triplex Dry Cleaners no longer held relevance.

The High Court’s interpretation that a "manufacturing process" necessitated the creation of a new marketable commodity was erroneous. The Court clarified that transformation into a new product is a requirement under the Central Excise Act, 1944, but not under the Factories Act, 1948. The Factories Act aims to regulate labour welfare and industrial safety rather than the taxation of goods.

Application of the Mischief Rule:

The Court applied the mischief rule, recognizing that the legislative intent behind the amendment to the Factories Act was to extend regulatory safeguards to workplaces involved in processes like washing and cleaning. Given the respondent’s activities, the Court concluded that excluding such a business from the purview of the Factories Act would defeat its purpose.

Consideration of Prior Registration Under ESIC Act:

The Court also took judicial notice of the fact that the respondent was already registered as a factory under the Employees' State Insurance Act and had an ESIC code assigned. This fact, though not solely determinative, reinforced the conclusion that the establishment met the criteria of a "factory."

Legality of the Summons Issued by the JMFC:

The respondent contended that the JMFC’s order was unreasonable and did not reflect proper application of mind. The Supreme Court observed that while a more detailed reasoning could have been provided, the magistrate’s order was not perverse or arbitrary. Since a prima facie case was made out, the summons was legally valid. Given the Supreme Court’s findings, remanding the case for reconsideration would be unnecessary and futile.

Decision

The Supreme Court allowed the appeal, setting aside the High Court’s judgment. It reinstated the complaint and the process issued by the JMFC, Panaji, holding that:

• The laundry service constituted a "manufacturing process" under Section 2(k) of the Factories Act.
• The respondent’s premises met the definition of "factory" under Section 2(m).
• The High Court erred in quashing the proceedings, as the allegations in the complaint made out a prima facie case.
• The case was remanded to the JMFC, Panaji, for trial in accordance with the law.

Significance of the Judgment:

This ruling has important implications for businesses engaged in service-oriented activities that involve machinery and labour. By affirming that professional laundry services come under the purview of the Factories Act, the Court has reinforced worker protection in such establishments. The decision also serves as a precedent in statutory interpretation, emphasizing the importance of reading welfare legislation in a broad and purposive manner to achieve its intended objectives.

Thus, State of Goa & Anr. v. Namita Tripathi reaffirms the principle that statutory definitions must be interpreted in light of the legislative intent, particularly when dealing with labour welfare laws. The ruling strengthens the applicability of the Factories Act, ensuring that businesses employing workers in substantial numbers comply with its health, safety, and welfare provisions.

Click Here to Read the Official Judgment