Case Note & Summary
The petitioner, Parvati Cooperative Industrial Estate Ltd., is a cooperative society formed by owners of various industrial plots. The society has 325 members who have erected independent factories on their respective plots. On 22nd September 2009, an agreement purportedly under Section 125 of the Bombay Village Panchayats Act, 1958 was entered into between the petitioner society and the Village Panchayat (fourth respondent) for payment of a lump sum contribution by members in lieu of property taxes for the years 2004-05, 2005-06, and 2006-07. The agreement was based on a resolution passed by the Managing Committee on 31st May 2009. However, on 10th July 2007, the Divisional Commissioner, Pune Division, acting on a report from the Zilla Parishad and in connection with Public Interest Litigation No.16 of 2007, submitted a report to the Registrar of the High Court. In that report, the Divisional Commissioner observed that the concession under Section 125 of the said Act was available only to factories within the meaning of the Factories Act, 1948, and that the petitioner society itself was not a factory. Consequently, the agreement was not legal and valid. On 11th November 2011, the Chief Executive Officer of the Zilla Parishad allegedly agreed that the petitioner was entitled to the benefit of lump sum contribution. However, on 20th September 2012, the Divisional Commissioner passed an order/communication to the Chief Executive Officer, Kolhapur, recording that the petitioner does not fall under the definition of 'factory' under the Factories Act, and therefore the proposal for grant of approval to the agreement could not be considered. The petitioner challenged this order. The court, after hearing the parties, held that the petitioner society itself is not a factory as defined under the Factories Act, 1948. The benefit under Section 125 of the Bombay Village Panchayats Act, 1958 is available only to factories. Since the petitioner society does not carry out any manufacturing activity and is merely a society of plot owners, it cannot be treated as a factory. The court dismissed the petition, upholding the order of the Divisional Commissioner.
Headnote
A) Bombay Village Panchayats Act, 1958 - Section 125 - Lump Sum Contribution - Cooperative Society not a Factory - The petitioner, a cooperative society formed by owners of industrial plots, entered into an agreement under Section 125 for payment of lump sum contribution in lieu of property tax. The Divisional Commissioner held that the society itself is not a 'factory' under the Factories Act, 1948, and therefore the agreement was invalid. The court upheld this view, holding that the benefit under Section 125 is available only to factories as defined under the Factories Act, 1948, and a cooperative society which does not carry out manufacturing activity cannot be treated as a factory. (Paras 1-5)
Issue of Consideration
Whether a Cooperative Society formed by owners of industrial plots, which itself does not carry out manufacturing activity, can be considered a 'factory' under the Factories Act, 1948 for the purpose of entering into an agreement under Section 125 of the Bombay Village Panchayats Act, 1958 for payment of lump sum contribution in lieu of property tax.
Final Decision
The court dismissed the writ petition, upholding the order of the Divisional Commissioner dated 20th September 2012. The court held that the petitioner society is not a factory under the Factories Act, 1948 and therefore the agreement under Section 125 of the Bombay Village Panchayats Act, 1958 is not valid.
Law Points
- Section 125 of Bombay Village Panchayats Act
- 1958
- Definition of Factory under Factories Act
- 1948
- Cooperative Society not a factory
- Lump sum contribution in lieu of property tax
