- (1.)Short point falling for consideration in this appeal is whether kitchen of the appellant-club and catering section thereon come within the meaning of "factory" and "manufacturing process" as defined in Employees' State Insurance Act, 1948 (for short 'ESI Act').
(2.)The appellant-Delhi Gymkhana Club is a member club, duly registered under the Companies Act. Appellant-club has a kitchen to cook food items to provide food and refreshment to its members. On 20.03.1975, a notification was issued by the Delhi Administration, in exercise of the powers conferred under Section 1(5) of the ESI Act, stating that the provisions contemplated under the Act shall be extended to the establishments specified in the Schedule thereon. In furtherance of the said notification, the respondent-ESI Corporation sought to apply the provisions of the Act on the appellant-club, on the ground that the preparation of food items amounts to "manufacturing process" and that the appellant club is a factory/establishment covered under the provisions of the ESI Act. After issuing the show cause notice, ESI Corporation passed the order on 4.8.1986 under Section 45-A of the ESI Act, holding that M/s. Delhi Gymkhana Club Limited is covered under the provisions of Employees State Insurance Act, directing the appellant to pay Rs.6,82,655.40 as a contribution of insurance in respect of employees for the period from 1.02.1980 to 31.08.1985, along with interest @ 6% per annum.
(3.)Aggrieved, the appellant filed a petition in the ESI Court which, by a judgment dated 25.11.1986, while allowing the petition of the appellant-club, held that preparation of eatables does not fall under "manufacturing process" and hence, ESI Act is not applicable to the appellant-club and the appellant was not liable to pay contribution. Aggrieved by the same, respondent-corporation preferred appeal before the High Court. The High Court allowed the appeal and held that the kitchen is an integral part of the club and that cooking of foodstuffs amounts to 'manufacturing process' falling within the meaning of sub-section (14AA) of Section 2 of the ESI Act, thereby falling within the meaning of 'factory' as defined under Section 2(12) of ESI Act. Being aggrieved, the appellant-club is in appeal before us.