Case: Hyderabad Asbestos Cement Products Ltd Vs. The Employees Insurance Court &amp; Anr

2. Civil Appeal No. 652 of 1976 is filed by the Hyderabad Asbestos Cement Products Ltd. by certificate granted by the High Court of Andhra Pradesh by an order dated 2nd April, 1976. The appellant-company is a factory situated at Sanatnagar where asbestos sheets are manufactured. The company has Zonal Sales Offices in various States and in the State of Andhra Pradesh they have such Zonal Offices at Vijayawada and Vishakhapatnam. We are concerned with the Vijayawada Zonal Office. There are employees in the S. Zonal Office who do the work of canvassing for the sale of products manufactured in the factory located at Sanatnagar. It is contended that the Zonal Offices are establishments and are not factories and as such do not fall within the scope of the Employees State Insurance Act, 1948. The High Court negatived the contention of the appellant3. Civil Appeal No. 900 of 1977 is by a certificate granted by the Andhra Pradesh High Court to the appellants, M/s. Foods, Fats & Fertilisers Ltd., Tadepalligudem, West Godavari District. The appellant is having a factory at Tadepalligudem in West Godavari district where rice bran oil, alvitone and cattle food, etc., are being manufactured. The appellant is also having an administrative and export office at No. 115-B. N.S.C. Bose Road, from where rice bran, textile yarn, etc., are exported to foreign countries. The administrative work is also carried on in the Madras office in relation to the business of the company. It was contended that the employees of the company at the Madras office are not employees under the Employees State Insurance Act, 1948. The High Court of Andhra Pradesh following its decision in W.P. No. 2907 of 1974 against which Civil Appeal No. 652 of 1976 is preferred; dismissed the petition and granted a certificate4. Civil Appeal No. 1314 of 1977 is an appeal by M/s. Union Carbide (India) Ltd. against the decision of a Bench of the Calcutta High Court in Matter No. 631 of 1973 by special leave granted by this Court. The appellant is a public limited company carrying on its business in the manufacture and sales of diverse consumer products such as finish batteries, flashlights, arc-carbons, chemicals and plastics and also in pesticide and processing and export of shrimp. For carrying on the business of the company, the company operates factories all over India. Eight of the manufacturing units have been placed under the Calcutta General, Office which is situate at 1-Middleton Street, Calcutta. According to the appellant, the Calcutta General Office of the company is concerned with managing the affairs of the company in general and with lying down the broad policies in respect of the business of the eight factories and falls within the meaning of West Bengal Shops & Establishments Act. The High Court rejected the plea of the appellant holding that the employees in question fall under the Employees State Insurance Act5. Apart from the three appellants several companies Voltas Ltd., Hindustan Lever Ltd., Rallis India Ltd., Merck Shai and Dohme of India Ltd., and Indian Chemical Industries were all permitted to appear as interveners.

Court's reasoning:
The law, therefore, is clear that any employee who is connected with the works of the factory would be an employee under S. 2(9) whether the work within the factory or outside its premises11. The amendment to S. 2(9) introducing the inclusive definition referred to above was enacted by Act 44 of 1966 which came into force on 28-1-1968. It may be noted that the decisions of the Bombay and the Madras High Courts referred to above (supra), were rendered before the amendment was introduces and it appears the amendment was introduced for the purpose of covering cases which were held to be outside the scope of S. 2(9) by the two decisions. The amended section includes any person employed for wages on any work connected with the administration of the factory or any part, department or branch thereof or with the purchase of raw materials or for the distribution or sale of products of the factory. It will be seen that the work connected with the administration of the factory, the purchase of raw materials and the distribution or sale of products are brought within the scope of the definition. After the amendment, therefore, the plea that employment in connection with the administration of the factory or with the purchase of raw materials or distribution or sale of products cannot be contended to be as not falling within the definitionThe word factory is confined to the premises including the precincts thereof where the manufacturing process is carried onWe are unable to accept the contention for on a reading of the relevant section it is clear that the word "employee" would include not only persons employed in the factory but also persons connected with the work of the factory. The employee may be working within the factory or outside the factory and may be employed for administrative purposes or for purchase of raw materials or for sale of the finished goods all such employees are included within the definition of "employee". A recent decision of the Bench of the Madras High Court in W.Ps. 144-149 and 331 of 1971 dated 14th October, 1976 has also taken a similar viewWe are unable to accept the contention for on a reading of the relevant section it is clear that the word "employee" would include not only persons employed in the factory but also persons connected with the work of the factory. The employee may be working within the factory or outside the factory and may be employed for administrative purposes or for purchase of raw materials or for sale of the finished goods all such employees are included within the definition of "employee". A recent decision of the Bench of the Madras High Court in W.Ps.9 and 331 of 1971 dated 14th October, 1976 has also taken a similar