ALAVAI INDUSTRIES PRIVATE LIMITED Vs. EMPLOYEES STATE INSURANCE CORPORATION

JUDGEMENT

(1.) THIS appeal is directed against the order of the Employees' State Insurance Court, Madurai, dismissing the appellant's petition under Section 75 of the Employees' State Insurance Act and holding that the appellant is a factory within the meaning of Section 2 (12) of the Employees' State Insurance Act and is liable to pay employees' contribution of Rs. 621 demanded by the Employees' State Insurance Corporation, Madras (respondent ).

(2.) THE appellant is the Alavai Industries (Private), Ltd. , carrying on the business of manufacturing bricks at Kozhimedu in Madurai. In Kozhimedu village, the appellant is preparing wire-cutting bricks, tiles and hand-made country bricks. In the petition, it is alleged that the unit, which is engaged in the manufacture of the hand-made country bricks is separate from and independent of the unit, which is engaged in the manufacture of wire-cutting bricks and tiles and that electric power is used only in the manufacture of wire-cutting bricks and tiles. It is not stated in the petition whether the two units are situate in two different premises or in different portions of the same premises, In the course of the evidence, however, P. W. 1. , the clerk of the appellant, started saying that the two units are separated by a distance of 3/4 furlong or one furlong. He, however, admitted that both the premises belong to the appellant and the intervening space between the two premises also belongs to the appellant. Prosecution witness while admitting that the entire factory is situate in 3 1/2 acres of land, would try to make out that the two units of the factory are separated by a pathway. Prosecution witness 3 who is the accountant of the appellant, admits that as per the accounts, both the sections of the factory are treated as one unit. The acquitance registers maintained by the factory (exhibits A4 and A5) go to show that the employees are treated as employees of one and the same unit. Exhibit B2. a return made by the managing director of the Alavai Industries (Private), Ltd. , to the Employees' State Insurance Corporation, as early as on 23rd December, 1963, lets the cat out of the bag; it says that the Alavai Industries is engaged in the manufacture of tiles, that power came to be used in the factory since 15th December, 1963, that the total number of persons employed including those employed through immediate employers, was about thirty or forty, that the number of male manual workers was about twenty-five and the number of female workers was about five and that the total number of clerical or supervisory employees was eight. It is important to note that exhibit B2 makes no reference either to the separate and independent existence of the two units or to the fact that they are situate in separate premises, It is also found that since 1963, the appellant has been paying the employer's contribution without any protest. For the first time in 1970, the appellant stated protesting against the levy after the employer's contribution had been raised from 3/4 per cent to 3 per cent. Even in exhibit A3, the registered notice sent by the appellant to the Regional Director of the Employees' State Insurance Corporation, Madras, on 19th February, 1970, no distinction was sought to be made between the hand-made country bricks unit and the wire-cutting bricks and tiles unit. This is what the appellant stated in exhibit A3 ; In Kozhimedu village we are preparing wire-cutting bricks and tiles and also hand-made country bricks. So far as hand-made country bricks are concerned, there is no power in the process of manufacturing bricks. Further, the persons engaged in the work are only casual labourers. Hence, we are not liable to pay any contribution in respect of those casual workers. We submit that power is used only in the manufacture of wire-cutting bricks and tiles. But the persons engaged in the work are only casual contractors. They have been paid at the rate of Rs. 9-50 per thousand for supply of unburnt. bricks and Rs. 5 10 per thousand for carrying unburnt bricks to choolai and removing unburnt bricks from chonlai and arranging the same. Further, twenty or more persons are not doing work incidental or preliminary to or connected with the work of the factory with the aid of power. In the circumstances, we are not liable to pay any contribution as claimed in your notice. The above passage shows that the appellant had no consciousness of the existence of two independent and separate units in the Kozhimedu village; one concerned with the manufacture of hand-male country backs, and the other with that of the wire-cutting bricks and tiles.

(3.) NOW, the question for determination is: whether the Alavai Industries (Private), Ltd. , is a factory within the meaning of the Employees' State Insurance Act. Section 2 (12) of the Act defines the factory to mean: any premises including the precincts thereof whereon twenty or more persons are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Indian Mines Act, 1923 (4 of 1921), or a railway running shed. The word, '"premises" has been defined in the "concise Oxford Dictionary" to mean house, building, with ground and appurtenances. According to the same dictionary "precincts" (in the plural) would mean the environs of. By using the expression "including the precincts thereof" the Legislature has made it clear that the premises of the factory should be given the widest meaning so as to include the environs of the premises. If, in any part of the premises of the factory or its environs, a manufacturing process is carried on with the aid of power or is ordinarily so carried on, the factory would fall definitely within the meaning of Section 2 (12) of the Act.