EMPLOYEES STATE INSURANCE CORPORATION Vs. SRI SAKTHI TEXTILES P LIMITED

JUDGEMENT

(1.) THIS appeal filed by the Employees' State Insurance Corporation against the judgment of the Employees' State Insurance Court and the District Judge, Coimbatore, holding that the workers engaged by the mills for putting up additional constructions are not employees within the definition of the term in the Act.

(2.) THE short facts necessary are as follows : Sri Sakthi Textiles Private Limited was granted additional spindleage and it expanded its premises by putting up new buildings. For that purpose, it employed a large number of workers. The plea of the respondent-mills is that no muster roll was kept regarding these workers whose work was to last only till the building was completed and that the workers thus recruited were working on an ad hoc basis just when required. The Employees' State Insurance Corporation is of the view that the workmen thus employed fell within the ambit of the definition of the term in the Act and that the appellant is bound to pay the contribution. The Employees' State Insurance authorities fixed the contribution payable at Rs. 24,356-27 and sought to recover that sum under the Revenue Recovery Act. The mills objected to the proceedings and took up the matter before the Employees' State Insurance Court under Section 75 of the Act questioning the right of the Employees' State Insurance Corporation to collect the sum of Rs. 24,356-27, The lower Court on a consideration of the question, and relying on the decision of this Court in South India Flour Mills Pvt. Ltd. v. Employees' State Insurance Corporation (1969) 37 F. J. R. 101, held that he workers concerned were not employees under the Act.

(3.) SECTION 2 (9) of the Act defines an "employee" in the following terms: employee' means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies. The definition proceeds to enumerate three classes of workers and the relevant portion will be referred to presently. It has also an inclusive definition which was introduced as an amendment by Act 44 of 1966. The definition mainly refers to a person employed for wages in or in connection with the work of a factory or establishment to which the Employees' State Insurance Act applies. Section 2 (9) (i) provides that the word employee applies to any person "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. . . . " Reading the two portions of the definition together, it appears that in order to be an employee, a person must be employed for wages in connection with the work of a factory or establishment and when directly employed by the principal employer must be on any work of or incidental or preliminary to or connected with the work of the factory or establishment. "factory" is defined in Section 2 (12) of the Act as meaning: any premises including the precincts thereof Whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months and in any part of which a manufacturing process is being carried on. . . . Therefore, a factory means any premises including the precincts thereof where twenty or more persons are employed and where in any part of it a manufacturing process is being carried on.