FA/239819/1992 1/3 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD FIRST APPEAL No. 2398 of 1992 For Approval and Signature: HONOURABLE MR.JUSTICE KS JHAVERI : ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= REGIONAL DIRECTOR EMPLOYEES' & 2 - Appellant(s) Versus K KHODIDAS PATEL & 1 - Defendant(s) ========================================================= Appearance : MR HEMANT S SHAH for Appellant(s) : 1 - 3. MR HEMANT S SHAH for Defendant(s) : 1, M/S TRIVEDI & GUPTA for Defendant(s) : 1, NOTICE SERVED for Defendant(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE KS JHAVERI Date : 29/08/2008 ORAL JUDGMENT 1. This appeal is directed against the judgment and order dated 30.04.1991 passed by the Employees State Insurance Court, Ahmedabad in E.S.I. Application No.65 of 1989 whereby, the said application was allowed and it was held that the provisions of the Employees' State FA/239819/1992 2/3 JUDGMENT Insurance Act were not applicable to the respondent – Company prior to 01.04.1988 and the Notices issued on 01.11.1988 and 30.01.1989 by the appellant – Corporation was quashed and set aside. 2.0 The facts in brief are that the respondent – Company was engaged in the business of manufacture / sale of synthetic detergents since 01.09.1982 and for the said process, it does not use any electricity. However, the appellant – Corporation issued Notices to the respondent – Company demanding an amount of Rs.7,00,486.80 on the ground that the respondent – Company was a 'factory' as per the provision of Section 12(2) of the E.S.I. Act. 2.1 Being aggrieved by the aforesaid action of the appellant – Corporation, the respondents preferred an application before the Court below praying to quash the Notices issued against it. It is the case of the petitioners that the provisions of Section 2(12) of the E.S.I. Act are not applicable to it in view of the amendment provisions. The Court below, after considering the entire evidence on record, allowed the application of the respondents. Hence, this appeal. 3. Heard learned counsel for the respective parties ad perused the documents on record. It is not in dispute that the respondent – Company was engaged in the business of manufacture / sale of synthetic detergents and that for the said purpose, it had employed more than 20 workers. However, from the evidence on record, it does not appear that the respondent – Company was using any electricity in its manufacturing process. Had it been so, then the respondent – Company would definitely come under the ambit of Section 2(12) of the FA/239819/1992 3/3 JUDGMENT E.S.I. Act. Apart from that the relevant provision of the said Act shall also not apply to the respondent – Company in view of the Amendment Act No.29 of 1989. 4. Considering the facts of the case, it would relevant to refer to a decision of the Hon'ble Apex Court in the case of The Nagpur Electric Light and Power Co. Ltd. & Ors. v. The Regional Director, E.S.I.C. & Ors. reported in A.I.R. 1967 S.C. 1364. In that case, the following observations made in Para – 5 are relevant, which reads as under; “......The premises constituting a factory may be a building or open land or both. Inside the same compound wall, there may be two or more premises; the premises used in connection with manufacturing processes may constitute a factory and the other premises within the same compound wall may be used for purposes unconnected with any manufacturing process and may form no part of the factory.....”. 5. In view of the principle laid down in the aforesaid decision and looking to the facts of the case on hand, I am of the view that the respondent – Company will not fall under the definition of Section 12(2) of the E.S.I. Act and the Court below has rightly allowed the application of the respondents. I am in complete agreement with the reasonings given by and the findings arrived at by the Court below and therefore, find no reasons to interfere in this appeal. 6. For the foregoing reasons, the appeal stands dismissed. No order as to costs. [K. S. JHAVERI, J.] Pravin/*