MFA 77/2001 BEFORE THE HON’BLE MR JUSTICE B. P. KATAKEY JUDGMENT AND ORDER (ORAL) This appeal under Section 82 of the Employees’ State Ins urance Act, 1948 (in short, the Act ) is directed against the order dated 6th Au gust, 2001 passed by the learned Employees’ State Insurance Court, Dibrugarh in ESI Case No.2/1999, filed by the present respondent, allowing the application fi led under Section 75 of the said Act, by setting aside the various orders passed by the ESI Corporation/appellants for recovery of the contribution payable unde r the provisions of the said Act. 2. Since the appeal has been admitted vide order dated 1st October, 2001 without formulating the substantial question of law, it has become necessa ry to hear the learned counsel on the question of involvement of the substantial question of law and accordingly the following substantial questions of law have been formulated:- (i) Whether the learned Court below was justified in setting aside the orders pa ssed by the ESI Corporation for recovery of the contribution from the employer o n the ground that the question of use of power is not material for the purpose o f ascertaining whether the respondent is a factory within the meaning of Section 2 (12) of the Act? (ii) Whether in the proceeding before the learned Court below, the employees or their representative are necessary parties? 3. On the aforesaid substantial questions of law, I have heard Mr. N. Nandi, learned counsel for the appellants. None appears for the respondent d espite reflection of the names of the learned counsel appearing for it in the ca use list. 4. Referring to the impugned order dated 6th August, 2001 as well a s the definition of factory under Section 2(12) of the Act, it has been submit ted by Mr. Nandi, learned counsel for the appellants that the learned Court belo w was not justified in setting aside the various orders issued by the ESI Corpor ation for recovery of the contribution on the ground that the question of using the power is not material for the purpose of deciding as to whether the responde nt is a factory within the meaning of the Act. According to Mr. Nandi, facto ry has been defined in Section 2(12) of the Act and if the power is used in man ufacturing process in any establishment employing more than 10 persons by the em ployer, it comes within the definition of factory and when the power is not us ed in such manufacturing process, the minimum number of persons to be employed i s 20 so as to cover such establishment within the provisions of the Act. It has been submitted by Mr. Nandi that the learned Court below has not gone into that aspect of the matter and did not ascertain whether the respondent is a factory within the meaning of the Act though that is the relevant consideration, in vi ew of the definition of factory under Section 2(12) of the Act. Referring to the decision of the Apex Court in Bombay Anand Bhavan Restaurant Vs. Deputy Dire ctor, Employees’ State Insurance Corporation & Anr. reported in (2009) 9 SCC 61, it has been submitted by Mr. Nandi that the respondent admittedly being engaged in a restaurant business, is undertaking the manufacturing process within the m eaning of Section 2 (14-AA) of the Act and as such since the respondent has admi ttedly engaged more than 10 persons, they are coverable under the provisions of the Act. Mr. Nandi referring to another decision of the Apex Court in Employees ’ State Insurance Corporation Vs. Bhakra Beas Management Board & Anr. (Civil App eal No.8335/2004) has submitted that since the provisions of the Act is for the benefit of the employees, either they or one of them in the representative capac ity or their union has to be made party respondent, who may have a say in the ma tter and, therefore, the learned Court below ought not to have proceed without i mpleading them as party respondent in the proceeding. 5. I have considered the submission of the learned counsel for the appellants and also perused the impugned order passed by the learned Employees’ State Insurance Court. 6. It is not in dispute that the respondent herein being aggrieved by various orders passed by the appellants Corporation filed application under S ection 75 of the Act disputing the claim and contending inter alia that since th ey have not engaged more than 20 employees on any given day, they are not covere d by the provisions of the Act and as such, any claim for payment of contributio n is contrary to the provisions of the Act. The Apex Court in Employees’ State Insurance Corporation (supra) relying on the decision in Fertilizer & Chemicals Tranvancore Ltd. Vs. Regional Director, ESIC & Ors. reported in 2009 (11) SCALE 766 has held that since the provisions of the Act is for the benefit of the empl oyees, either employees or one of them in the representative capacity are to be impleaded as party, as in their absence the question as to whether they are enti tled to the benefit of the provisions of the said Act cannot be decided. 7. In the instant case, admittedly neither the employees nor any on e of them in the representative capacity have been impleaded as respondent. In the event, the application under Section 75 is allowed by setting aside various orders for recovery of the contribution payable by the employer issued by the Co rporation is set aside, it would eventually affect the right of the employee und er the provisions of the Act. Hence, they are necessary parties. Hence, either the employees or their union or one of them in the representative capacity has to be made party, which has not been done. The impugned order dated 6th August, 2001 passed by the learned Court below, therefore, is set aside with a directio n to proceed with the said proceeding afresh by impleading the employees or thei r union or one of them in the representative capacity, as respondent. 8. It also appears that the learned Court below has decided the app lication in favour of the respondent by holding that the question of use of the power is not relevant for the purpose of ascertaining as to whether the restaura nt is covered under the provisions of the Act. 9. Section 2(12) of the Act defines the ’’factory’’ as under:- 2(12) ’factory’ means any premises including the precincts thereof- (a) whereon ten or more persons are employed or were employed for wages on any d ay of the preceding twelve months, and in any part of which a manufacturing proc ess is being carried on with the aid of power or is ordinarily so carried on, or (b) whereon twenty or more persons are employed or were employed for wages on an y day of the preceding twelve months, and in any part of which a manufacturing p rocess is being carried on without the aid of power or is ordinarily so carried on, But does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed. 10. It, therefore, appears from the definition of factory , as quot ed above, that if in any premises including the precincts 10 (ten) or more perso ns are employed or were employed for wages on any day of the proceeding 12 (twel ve) 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, it comes within the defin ition of factory and in the event such manufacturing process is being carried ou t without the aid of the power than there has to be engagement of 20 persons so as to come within the definition of factory under the Act. 11. Manufacturing process has been defined in Section 2(14AA) of t he Act. It provides that it shall have the meaning assigned to it in the Factor ies Act, 1948. 12. Section 2(k) of the Factories Act, 1948 defines the manufacturin g process as under:- 2(k) ’Manufacturing process’ means any process for- (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washin g, cleaning, breaking up, demolishing, or otherwise treating or adapting any art icle or substance with a view to its use, sale, transport, delivery or disposal, or (ii) pumping oil, water, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photog ravure or other similar process or book binding; or (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels, or (vi) preserving or storing any article in cold storage. 13. The Apex Court in Bombay Anand Bhavan Restaurant (supra) has hel d that cooking and preparing food items qualifies as manufacturing process and c omes within the meaning of Section 2(k) of the Factories Act, 1948. 14. The learned Court below, however, has not gone into that aspect of the matter and allowed the application filed under Section 75 of the Act by s etting aside the various orders passed by the appellants Corporation for recover y of the contribution, on the ground that the use of the power is not the releva nt consideration, though, whether power is used or whether the respondent is und ertaking any manufacturing process are the relevant consideration for the purpos e of deciding the dispute relating to the applicability of the provisions of the Act to the respondent. 15. That being the position, the impugned order dated 6th August, 20 01 is set aside. 16. The matter is remitted to the learned ESI Court for deciding the said application afresh, keeping in view the observations/discussions made here inabove. The appellants are directed to appear before the learned Court below o n 10th January, 2011. Since the learned counsel for the respondent is not prese nt before this Court today, the learned Court below upon receipt of the records shall issue notice on the respondent. 17. The Registry is directed to remit the record to the learned Cour t below so as to reach the said Court on or before 23rd December, 2010. 18. The appeal is accordingly allowed as indicated above. No cost.