THE HON’BLE SRI JUSTICE V.V.S. RAO AND THE HON’BLE SRI JUSTICE B.N. RAO NALLA C.M.A. Nos. 4 and 672 of 2001 COMMON JUDGMENT: (per Hon’ble Sri Justice V.V.S.Rao) These two appeals are filed under Section 82 of the Employees State Insurance Act, 1948 (for short ‘the ESI Act’) against the same order dated 24.10.2000 in E.I. Case No.40 of 1998 passed by the Chairman, Industrial Tribunal-I, Hyderabad. Therefore, they are being disposed of by a common order. Be it also noted that the appellant in C.M.A.No.672 of 2001 namely M/s.Rayalaseema Mill Mazdoor Sangh was not a party before the ESI court, but they filed the appeal after obtaining leave from this court. The brief facts of the matter as follows. M/s.Rayalasema Mills Limited (RML) is engaged in manufacturing and processing of raw cotton. Accordingly they undertake cotton ginning. The operations include separating seeds and cotton lint from the raw cotton (kappas) and packing into bales. On 02.4.1998, due to financial problems, RML declared lock out. About a week thereafter, the Recovery Officer of Employees State Insurance Corporation issued a direction to the State Bank of India, Adoni to transfer the amount of Rs.12,08,580/- to the credit of ESI Corporation. Assailing the said notice, RML instituted E.I. Case No.40 of 1998. They contended that being a seasonal factory, in the absence of a notification under Section 1(5) of the ESI Act, demand for ESI contribution cannot be made. ESI opposed the case inter alia contending that RML is covered under Section 1(4) of the ESI Act and that it was already allotted Code No.52-2318-11 with effect from 24.2.1952. ESI Court enquired into the matter. RML examined its Director as PW.1 and marked Exs.P1 to P3. ESI Corporation examined three witnesses RWs 1 to 3 and marked Exs.R1 to R32. Learned ESI Court considered the controversy having regard to Sections 1(5), 2(19A) of the ESI Act and came to the conclusion that being seasonal factory, RML is not covered under the ESI Act. It is also relied on decisions in Employees State Insurance Corporation, Hyderabad v. M/s.Jayalakshmi Cotton and Oil Products (P) Ltd.,[1] and Regional Director, Employees’ State Insurance Corporation v. High Land Coffee Works of P.F.N. Saldanha and Sons,[2] and Regional Director, Employees’ State Insurance Corporation v. High Land Coffee Works of P.F.X. Saldanha & Sons & another[3]. Having regard to statute as well as precedent law, ESI Court came to the conclusion that the demand made by the Recovery Officer is not sustainable. Accordingly, petition is allowed. Aggrieved by the same, these two appeals are filed. The learned counsel for the appellants submit that RML had been covered under ESI Act from 24.2.1952 and, therefore, after lapse of about 50 years they cannot agitate about the applicability of ESI Act. Nextly, he contends that when RW.1 and RW.2 inspected the factory premises, they found minimum 2500 employees were engaged in the factory operations. Therefore, it cannot be considered as a seasonal factory. Section 2(19A) defines ‘seasonal factory’ which reads as under. “ ‘Seasonal factory’ means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year- (a) in any process of blending, packing or repacking of tea or coffee; or (b) in such other manufacturing process as the Central Government may, by notification in the official Gazette specify.” A plain reading of the definition would reveal that any factory, which is exclusively engaged in cotton ginning and cotton pressing, is a seasonal factory. Even if such cotton ginning and cotton pressing is carried on throughout the year, this is made clear by the latter part of the definition that any factory engaged in the process of blending, packing or repacking of tea or coffee for a period of not exceeding seven months is also a seasonal factory. The intention is very clear. If tea or coffee blending and packing factory works for more than seven months, even though it is seasonal, it cannot be construed as a seasonal factory. The same definition is conspicuous by its absence insofar as cotton ginning is concerned. In Jayalakshmi Cotton and Oil Products (p) Ltd., case (supra), this court considered this aspect of the matter and laid down that cotton ginning factory which is also engaged in cotton seed decortication or cotton seed oil extraction come within the definition of ‘seasonal factory’. Therefore, unless and until there is a notification under section 1(5) of the ESI Act covering the cotton ginning factory as a seasonal factory, it is not covered under the provisions of ESI Act. Therefore, we do not find any error in the impugned order nor the appellants are able to show a question of law, much less a substantial question of law requiring exercise of appellate jurisdiction of this court. In the result, for the above reasons, these two appeals fail and are accordingly dismissed. No costs. _____________ (V.V.S. RAO,J) ____________________ (B.N. RAO NALLA, J) 10.12.2009 Stp [1] 1980 Lab. I.C page 1078, [2] 1977 Lab. I.C. (Karnataka ) 770 [3] 1992(1) LLJ SC. Page 287