IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH F.A.O. No.596 of 1986 Date of decision:16.01.2009 Employees State Insurance Corporation, ....Appellant Sector 16, Faridabad versus Enkay (India) Rubber Company Pvt. Ltd., ....Respondent Basai Ground, Gurgaon. CORAM: HON'BLE MR. JUSTICE RAKESH KUMAR JAIN. Present: Mr. Vikas Suri, Senior Standing counsel with Mr. Rajiv Kumar Saini, Advocate for the appellant. Mr.Piyush Bansal, Advocate for Mr. Amit Aggarwal, Advocate for the respondent. Rakesh Kumar Jain, J. (Oral) Learned counsel for the appellant submits that the question involved in this appeal is, whether the construction of the factory buildings for the expansion of the existing factories is incidental or preliminary to or connected with the work of the factory or not. In the present case, the dispute is with regard to recovery of Rs.7,000-70 paise towards the contribution of wages which has been held illegal and void by the Employees' Insurance Court, Gurgaon, vide impugned order dated 09.05.1986. Learned counsel for the appellant has submitted that Rattan Sagar Jain, Senior Accounts Officer of the respondent-factory has stated on oath that the labour engaged for addition of new construction was never engaged for the job of old F.A.O. No.596 of 1986 - 2 - factory. The work of construction of new building was never connected with the work of the factory and benefit of the ESI Act does not extend to the other premises within same compound wall because the construction was unconnected with any manufacturing process of the petitioner-factory. Learned counsel for the appellant has submitted that in para 14 of the impugned judgment it has been argued by the learned counsel for the employer that employees employed by the Company did not do any work of the petitioner-factory or any work incidental or preliminary to or connected with the work of the petitioner-factory as the petitioner has merely raised an additional building. Learned counsel for the appellant has submitted that the matter is no more res integra in view of the decision of the Hon'ble Supreme Court in the case of Regional Director, Employees' State Insurance Corporation, Madras versus South India Flour Mills (P) Ltd.- 1986(3), Supreme Court Cases, 238, wherein it was held as under :- 12. Therefore, the investigation under the principal question formulated above boils down to this, namely, whether the construction of factory buildings for the expansion of the existing factories is incidental or preliminary to or connected with the work of the factory or not. It has been already noticed that the definition of the term 'employee' under Section 2(9) of the Act is very wide. It includes within it any person employed on any work incidental or preliminary to or connected with the work of the factory or establishment. It is difficult to enumerate the different types of work which may be said to be incidental or F.A.O. No.596 of 1986 - 3 - preliminary to or connected with the work of the factory or establishment. It seems that any work that is conducive to the work of the factory or establishment or that is necessary for the augmentation of the work of the factory or establishment will be incidental or preliminary to or connected with the work of the factory or establishment. In the instant cases, the additional buildings have been constructed for the expansion of the factories in question. It is because of these additional buildings that the existing factories will be expanded and, consequently, there will be increase in the production, that is to say, increase in the work of the factories concerned. So the work of construction of these additional buildings has a link with the work of the factories. It cannot be said that the construction work has no connection with the work or the purpose of the factories. So it is difficult to hold that the work of construction of these additional factory buildings is not work incidental or preliminary to or connected with the work of the factories. 13. The Act is a piece of social security legislation enacted to provide for certain benefits to employees in case of sickness, maternity and employment injury. To hold that the workers employed for the work of construction of buildings for the expansion of the factory are not employees within the meaning of Section 2(9) of the Act on the ground that such construction is not incidental or preliminary to or connected with the work of the factory will be against the object of the Act. In an enactment of this nature, the endeavour of the court should be to interpret the provisions liberally in favour of the persons for whose benefit the enactment has been made. F.A.O. No.596 of 1986 - 4 - 15. In our opinion, the work of construction of additional buildings required for the expansion of a factory must be held to be ancillary, incidental or having some relevance to or link with the object of the factory. It is not correct to say that such work must always have some direct connection with the manufacturing process that is carried on in the factory. The expression “work of the factory” should also be understood in the sense of any work necessary for the expansion of the factory or establishment or for augmenting or increasing the work of the factory or establishment. Such work is incidental or preliminary to or connected with the work of the factory or establishment.” In view of above, it is now well settled that the employees engaged in the construction of an additional building are also the employees falling under Section 2 (9) of the ESI Act and for this reason, ESI is entitled for recovery of the contribution of the employee. In view of above, the present appeal is allowed and the impugned order is partially set aside and resultantly modified to the extent that the demand of payment of contribution to the tune of Rs.7000-70 paise is legal and valid. No costs. (RAKESH KUMAR JAIN) JUDGE 16.01.2009 sanjeev