Holding

Carpet manufacturing is a form of weaving and thus constitutes "textiles" under Schedule I, making the establishment subject to the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

Summary

Ess Dee Carpet Enterprises, a partnership engaged in manufacturing and selling carpets in Rajasthan, challenged the applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, on the ground that carpets were not "textiles" under Schedule I of the Act. The Regional Provident Fund Commissioner, the Central Government and the Rajasthan High Court held that carpet manufacturing involves weaving, which falls within the definition of textiles as explained in clause (d) of the Schedule. The Supreme Court affirmed that the activity of making carpets, even though it includes knotting, is essentially weaving of a fabric and therefore qualifies as a textile. Relying on the definition of textiles and the precedent in Porrits & Spencer (Asia) Ltd. v. State of Haryana, the Court held that the establishment is covered by the Act. Consequently, the appellant was required to comply with all provisions of the EPF Act and the appeal was dismissed.

Issues considered

Whether the manufacturing of carpets falls within the meaning of "textiles" as defined in Schedule I of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Whether the appellant is liable to comply with the EPF Act on that basis.

Legislation cited

Employees' Provident Funds and Miscellaneous Provisions Act, 1952s. Schedule I (clause d of the Explanation), s. Section 1(3)(a), s. Section 19A

Subjects

Employees' Provident Funds ActTextiles definitionCarpet manufacturingSchedule IWeavingStatutory interpretationLabor law

Judgment

ESS DEE CARPET ENTERPRISES A
v.
UNION OF INDIA AND ORS.

DECEMBER 7, 1989
B
[E.S. VENKATARAMIAH, CJ, K.N. SINGH AND
N.M. KASLIWAL, JJ.]

Employees Provident Funds and Miscellaneous Provisions Act,
1952: Section 1(3)(a) and Schedule 1 clause (b)-Carpet weaving-
Whether comes under the expression "textiles"-Carpet manufacturing
industry-Whether comes within the scope of the Act. c
The appellant is a partnership firm carrying on business of
manufacturing and selling carpets in the State of Rajasthan. It owns
three factories. When the Regional Provident Fund Commissioner took
steps to direct the appellant firm to comply with the provisions of the
D
Employees' Provident Funds and Miscellaneous Provisions Act. 1952,
the appellant contested .the applicability of the Act on the ground that it
was not manufacturing textiles included in Schedule I of the Act. The
Regional Provident Fund Commissioner held that the business of
manufacturing carpets carried on by the appellant included textiles and
that the Act was applicable to the appellant.
E
Aggrieved by the said order, the appellant approached the Cent-
ral Government under section i9A of the Act, which upheld the order of
the Regional Provident Fund Commissioner. Thereafter the appellant
moved the High Court under Article 226 of the Constitution. The writ
petition was dismissed. The appellant preferred an appeal to the Divi-
F
sion Bench of the High Court and that appeal was also dismissed.

This appeal, by special leave, is against the order of the Division
Bench.

Dismissing the appeal, this Court,
G
HELD: 1.1 The activity of manufacturing carpets is generally
understood as th~ weaving of carpets and the man who is engaged in
• such activity is popularly known as a ~carpet weaver'. Weaving means
to form a fabric by interlacing yarn on a loom. It also means the method
or pattern of weaving or the structure of a woven fabric. [420B-C]
H

417
418 SUPREME COURT REPORTS [1989) Supp. 2 S.C.R.

1.2 Though there may be knotting of the yarn, the fabric which is
A ultimately produced does not cease to be a textile fabric. The fact that
the Handicrafts Board has issued certificate under the Import Trade
Control Policy Handbook of Rules that carpet is a product of handi-
crafts does not in any way improve the matter. Even then the carpets do
not cease to be textiles. That certificate is not enough since it is very
B clear that the activity of making carpet though it involves knotting,
in substance, amounts to weaving and the carpet is a fabric which
is woven. Thus it comes within the meaning of the expression '"texti-
les" as explained in clause (d) to the Explanation of Schedule I to the
Act. [4200-F]

1.3 The non-inclusion of knotting in the explanation to Schedule
c defining 'textiles' is, therefore, immaterial. [421D)
...
r

Porrits Spencer (Asia) Ltd. v. State of Haryana, [1979) I SCR
545, relied on.

D 2. The Regional Provident Fund Commissioner, the Govern-
ment of India and the High Court were rjght in holding that the
establishment of the appellant came within the scope of the Act and
the appellant was liable to comply with the requirements of the Act
in all respects. l42IDJ

E CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1372
of 1987.

From the Judgment and Order dated 29. 1. 1986 of the Rajasthan
High Court in Sp!. Appeal No. 336 of 1984.

F Soli. J. Sorabjee, Roxena Swamy, Sushi! Kr. Jain and L.C.
Agarwala for the Appellant.

Anil Dev Singh, Hemani Sharma. C. V .S. Rao, Mrs. Sushma Suri
(N.P.) and Ms. A. Subhashini (N.P.) for the Respondents.

G The Judgment of the Court was delivered by

VENKATARAMIAH, CJ. The. question for consideration in
.
this appeal is whether an establishment which is manufacturing carpets
is subject to the Employees' Provident Funds and Miscellaneous Pro-
visions Act, 1952 (Act XIX of 1952) (hereinafter referred to as 'the
H Act'). Th.: appellant is a partnership firm carrying on the business of
" [VENKATARAMIAH, CJ.]
ESS DEE CAROET v. U.0.1. 419

manufacturing and selling carpets in the State of Rajasthan at three
factories belonging to it. When steps were taken to direct the appellant A
to comply with the provisions of the A:ct by the Regional Provident
Fund Commissioner the appellant contested the applicability of the
Act on the ground that the establishment owned by it was not
manufacturing 'textiles' included in Schedule I to the Act. The
Regional Provident Fund Commissioner after giving opportunity of B
being heard to the appellant passed an order on 27th July, 1979 hold-
ing that the 'business of manufacturing carpets carried on by it made
the Act applicable to the appellant as carpets wer.e textiles. Aggrieved
by the said order the appellant filed a petition under section 19A of the
Act before the Central Government. The Central Government passed
an order on 4th May, 1981 holdmg that the appellant's establishment
was engaged in the manufacture of 'textiles' and accordingly the order c
of the Regional Provident Commissioner was upheld. The appellant
thereafter filed a petition under Article 226 of the Constitution before
the Rajasthan High Court (Jaipur Bench). The High Court by its order
dated 15th October, 1984 dismissed the writ petition. The appellant
then appealed to the Division Bench of the High Court and the Divi- D
sion Bench of the Rajasthan High Courfdismissed the appeal on 29th
January, 1986. This appeal by special leave is filed against the order of
the Division Bench of the High Court of Rajasthan.

The only point urged before us by the learned counsel for the
appellant is that the products, namely, carpets which are being E
manufacture.d by the appellant did not come w.ithin the meaning of the
expression 'textiles' described in Schedule I to the Act and hence the
Act was in applicable. Clause (a) of sub-section (3) of section I of the
Act povides that subject to the provisions contained in section 16, the
Act applies to every establishment which is a factory engaged in any
industry specified in Schedule I and in which 20 or more persons are F
employed. The relevant part of Schedule I to the Act reads thus:
"Any industry engaged in the manufacture of any of
the following, namely:
Cement.
Cigarettes.
Electrical, mechanical or general engineering pro- G
ducts. -
Iron and Steel.
Paper.
Textiles (made wholly or in part of cotton or wool or
jute or silk, whether natural or artificial . . . . . . . . . H
"
420 SUPREME COURT REPORTS [1989] Supp. 2 S.C.R.

Clause ( d) of the Explanation contained in Schedule I to the Act
A reads thus:

"(d) the expression "textiles" includes the products of
carding, spinning, weaving, finishing and dyeing yam and.
fabrics, printing, knitting and embroidering."
B
It is not disputed that was material with which the carpets are
made is wool which is one of the materials mentioned in the Schedule,
namely, textiles made wholly or in part of cotton or wool or jute or
silk, whether natural or artificial. The activity of manufacturing
carpets is generally understood as the weaving of carpets and the man
C who is engaged in such activity is popularly known as a 'carpet
weaver'. Weaving means to form a fabric by interlacing yam on a
loom. It also means the method or pattern of weaving or the structure
of a woven fabnc. The warp means yarn arranged length wise on a
loom. The-fabric which is woven includes the weft which means yarn
woven across the width of the fabric through the length wise yarn.
D Thus the activity of the weaving involves passing of the weft through
the warp. While doing so even if there are any knots in the yam still
the activity is weaving. The mere fact that there is knotting of the yam,
the fabric which is ultimately produced does not cease to be a textile
fabric. The fact that the Handicrafts Board has issued certificate under
the Import Trade Control Policy Handbook of Rules that carpet is a
E product of handicrafts does not in any way improve the matter. Even
then the carpets do not cease to be textiles. That certificate is not
enough since we are very clear that the activity of making carpets
though it involves knotting, in substance, amounts to weaving and the
carpet is a fabric which is woven. Thus it comes within the meaning of
the expression "textiles" as explained in clause (d) to the Explanation
F of Schedule I to the Act.

We are, therefore, of the view that the establishment in question
comes within Schedule I to the Act.

In Porritts & Spencer (Asia) Ltd. v. State of Haryana, [1979] 1
G S.C.R. 545 this Court held that the concept of 'textiles' is not a static
concept. It has, having regard to newly developing materials, methods
techniques and processes, a continually expanding content and new
kinds of fabric may be invented which may legitimately without doing
any violence to the language be regarded as textiles. The word
'textiles' is derived from Latin 'texere' which means 'to weave' and it
H means woven fabric. When yam, whether cotton, silk, woollen, rayon,
\
· F$S DF.E CAROET v. U.0.1. [VENKATARAMIAH, CJ.) 421
'
. • . '
i .
nylon or of any other description made out of any other material is A
woven into a fabric what comes into being is a 'textile' and is known as
such. Whatever be the mode of weaving employed, woven fabric
would be 'textile'. What is necessary is no more than the meaning of
yam and weaving would mean binding or putting yam together by
some process So as to form a fabric. A textile need not be of any
. particular size or strength or weight. The use to which it may be put is · B
'. also immaterial and does not bear on its character as a textile. The fact
that tile ··dryer felts' are used only as absorbents of moisture in the
process of manufacture in a paper manufacturing unit, cannot militate
against 'dryer_ felts' falling within the category of textiles, if otherwise
they satisfy the description of textiles'. .
c
/ It is not necessary to refer to the other decisions cited before us
in this case

. The non-inclusion of knotting in the Explanation to Schedule
defining 'textiles' is, therefore, immaterial. No other point was pressed
before us in this case. We, therefore, hold that the Regional Provident D
Fund ConUnissior er, the Government of India and the High Court
/ were right in h !ding that the establishment of the appellant came
- within the scope of the Act and the appellant was liable to comply with
the requirements of the Act in all respects. The appeal, therefore, fails
and it is dismissed. /

G.N. \ Appeal dismissed.

/

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