Case: Royal Western India Turf Club Ltd Vs. E.S.I. Corporation &amp; Others

in which the casual workers were employed by the respondent company, namely, Shri Shakthi Textiles Mills Pvt. Ltd., not being the work of the factory or incidental or preliminary to or connected with the work of the factory, such workers cannot be employees within the meaning of Section 2(9) of the Act. The contention of the learned counsel is that the work of the factory being “weaving”, an employee within the meaning of Section 2(9) must be employed on any work incidental or preliminary to or connected with the work of weaving that is carried on in the mill or factory. Counsel submits that the work of construction of factory buildings cannot be said to be an activity or operation incidental to or connected with the work of the factory, which is weaving. Mr D.N. Gupta, learned counsel appearing on behalf of the respondent companies in the other cases adopts the contention of Dr. Chitaley and submits that the workers employed for the construction of the factory buildings do not come within the purview of the definition of “employee” under Section 2(9) of the Act.” In view of the aforesaid decision it is apparent that the submission raised by Royal Turf Club that casual workers are not covered under the ambit of ESI Act is too tenuous for its acceptance. 12. Mr. Cama, learned senior counsel has pressed into service a decision of this Court in Employees’ State Insurance Corpn. v. Premier Clay Products (1994) Supp. 3 SCC 567. In the said case the work itself was of a sporadic nature. The coolies were available for work to others and on the very day worked for several others who also engaged them for loading and unloading of goods. Thus it was held that coolies could not be said to be casual workmen under the ESI Act. The said decision has absolutely no application to the fact situation of the instant case where work is not sporadic in nature. The employees’ work for the day of racing which is perennial activity of Royal Turf Club and in view of the provisions of the Act, Rules, Regulations and notification dated 18.9.1978, there is no doubt that such employees are covered and consequently are entitled for benefit of the Act. 13. Coming to the submission that the ESI Corporation should be held bound by the consent terms, the submission is factually incorrect, misconceived, legally untenable and otherwise also devoid of the substance. In Application (ESI) No.16/1976 filed by the Turf Club, the ESI Corporation agreed on the basis of Inspection Report dated 29.11.1975 and in Memorandum dated 14.4.1976 it was mentioned that employees of the Turf Club in the electrical and mechanical workshop, factory division, general department - motor-garage (factory division), security department, carpentry shop, personnel department and accounts department would be covered under the ESI Act with effect from 28.1.1968. It was agreed that such employees of the Turf Club have already been covered and shall continue to be covered as before and the employees of Racing Administration Department, casual labour engaged on race track, temporary staff engaged on race days for issue of tickets/dividends were not covered. In the aforesaid case the period involved was as specified in the notification dated 26.2.1976 which was prior and not related to the period in question 1978-79 to 1982-83 involved in C.A. No.49/2006 and in other appeals also the period is subsequent thereto. After issuance of the notification dated 18.9.1978 by the Government of Maharashtra, the remaining departments of Turf Club which were left out earlier were specifically covered under the purview of the ESI Act. Thus, the demand in the instant case is based upon the notification dated 18.9.1978 which left no room to entertain any doubt that the establishments of the aforesaid department in question were also covered under the ESI Act. Thus, no benefit can be derived by the consent terms which related to the earlier period when notification dated 18.9.1978 had not been issued. Notification has statutory force and agreement cannot supersede it. It is also clear that several departments of race club were covered under the notification issued in 1968. Thus, the submission raised on the basis of consent terms is hereby rejected. 14. Coming to the appeal preferred by the ESI Corporation raising question that the payment should have been ordered with effect from 1978-79 onwards instead of 1987 as in view of notification dated 18.9.1978, there was no room to doubt that departments in question of the Turf Club were also covered under ESI Act. In our opinion, the notification of 1978 is clear and has to be given full effect, for earlier period also the consent terms indicated that various other departments of Turf Club were covered under the notification of 1968. Reliance on the decision of this Court in Hyderabad Race Club case (supra) so as to waive the contribution from 1975 to 1986, is not available as in the instant case there was no doubt as to applicability of ESI Act in view of the specific notification issued in 1978. The provisions of ESI Act were applied to various departments of Turf Club w.e.f. 1968. The decision in Hyderabad Race Club case (supra) turned on its own different factual matrix. In this case, it was clear from 1968 itself that Turf Club was covered under ESI Act as is apparent from consent terms. The notification dated 18.9.1978 included other left out departments of race club. The provisions of ESI Act were complied with by Turf Club w.e.f. 1968. The High Court on the facts of the case has erred in quashing the demand for the contribution with effect from 1978 till 1987.15. In our opinion, the Turf Club is liable to make the contribution as per notification dated 18.9.1978 along with interest at such rate as provided in the Act and the Rules till the date of actual payment. Let the amount be contributed within a period of three months from today. Consequently, the

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]. In our opinion, the notification of 1978 is clear and has to be given full effect, for earlier period also the consent terms indicated that various other departments of Turf Club were covered under the notification of 1968. Reliance on the decision of this Court in Hyderabad Race Club case (supra) so as to waive the contribution from 1975 to 1986, is not available as in the instant case there was no doubt as to applicability of ESI Act in view of the specific notification issued in 1978. The provisions of ESI Act were applied to various departments of Turf Club w.e.f. 1968. The decision in Hyderabad Race Club case (supra) turned on its own different factual matrix. In this case, it was clear from 1968 itself that Turf Club was covered under ESI Act as is apparent from consent terms. The notification dated 18.9.1978 included other left out departments of race club. The provisions of ESI Act were complied with by Turf Club w.e.f. 1968. The High Court on the facts of the case has erred in quashing the demand for the contribution with effect from 1978 till 1987.15. In our opinion, the Turf Club is liable to make the contribution as per notification dated 18.9.1978 along with interest at such rate as provided in the Act and the Rules till the date of actual payment. Let the amount be contributed within a period of three months from today.