Decided on March 02,1970

The Reliance Motor Co. Pte. Ltd. Madras Appellant
The Regional Director Of Employees State Insurance Corporation, Madras Respondents


A.S. Venkatachala Moorthy, J. - (1.) The Reliance Motor Co. (P) Ltd, carrying on business at premises No. 160 Mount Road, Madras are dealers in Ambassador cars and Jawa motor cycles. They also deal in spare parts. They have got a workshop with a separate entrance in the same building as a service station and they render service for the new cars before they are delivered to the customers They are about 40 workers in this workshop besides four clerks and it is in evidence that all these persons are covered under the Employees' State Insurance Act, 1948. This company has also get as administrative office in the same premises attending to the sale etc of these vehicles. There is also a separate spare parts Sec. dealing with the sales, of spare parts to the public One Subblah is in charge of the stores and one Srinivasa Rao is a clerk therein. One Swaminathan is an accountant. One Senthilnathan is his assistant. These two persons maintain the accounts, correspondence, etc. One N. Chakravarthi is the stenographer in the administrative department. Treating these persons along with several others as employees within the meaning of clause (a) of S 2 of the Act, the Corporation called upon the company to pay the employer's contribution due under the Act. This resulted in the company filing E.I.O.P. No. 12 of 1965 in the Employees State Insurance Court at Madras, for a declaration that the persons referred to in the notice issued by the Corporation were not employees as stated and that as such they were not liable to pay any contribution. The Tribunal which dealt with the matter agreed with the contention in respect of seven of the persons mentioned in the list; but said that the five persons referred to above were employees within the meaning of clause (9) of S. 2 of the Act. The correctness of this decision is now canvassed in this appeal. "Employees" as defined in clause (9) of S. 2 of the Act means any person employed for wages in or in connection with the work of a factory or establishment, to which this Act applies and who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere............" Subblah is the person in charge of the stores and his duty as stated in Ex. B. 2 is to sell spare parts to customers The stores Sec. is a separate unit. Whenever any spare part is needed of required in the service Sec. some one comes and takes it from this section. Srinivasa Rao is the Assistant in the stores. At no stretch of imagination; we can say that these two parsons are employed on any work direct, incidental or preliminary to or connected with the work of the servicing station. Swaminathan is the accountant and Senthilnathan is his assistant. They attend to the work in the office and also attend to the supervisory work on the account side. They also are not directly connected with the workshop. Then remains for consideration the case of Chakravarthy, the stenographer. He is attached to the administrative Sec. and he is in charge of the day today business affairs of the office. The averment in Ex. B. 2 is that a separate typist has been deputed to the workshop and that this typist is already covered under the Act. This is not controverted. Thus, none of these persons come under the purview of the definition in clause (9) of S. 2 of the Act. The work they are doing is not connected either directly or incidentally or in any preliminary manner to any work in the factory.
(2.) Learned Counsel appearing for the Corporation relies upon the decision in Employees S. I. Corporation v/s. Ganapathia, A.I.R. 1961 Mad 176 Thiagaraja v/s. E.S.I. Corporation : A.I.R. 1963 Mad 361 and N.E L.P. Co v/s. E.S.I Corporation, A.I.R. 1967 S.C. 1357. The facts in the present case are entirely different from the facts in those cases. The persons involved in those cases were connected with the factory either directly or indirectly. Here, it is not the case. The result is the civil miscellaneous appeals allowed. But in the circumstances of the case, I make no order as to costs.;

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