Full Judgment Text
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PETITIONER:
NAGPUR ELECTRIC LIGHT & POWER CO., LTD
Vs.
RESPONDENT:
REGIONAL DIRECTOR EMPLOYEES STATE INSURANCECORPORATION, ETC.
DATE OF JUDGMENT:
02/03/1967
BENCH:
BACHAWAT, R.S.
BENCH:
BACHAWAT, R.S.
WANCHOO, K.N.
BHARGAVA, VISHISHTHA
CITATION:
1967 AIR 1364 1964 SCR (3) 92
CITATOR INFO :
RF 1970 SC 488 (8)
RF 1973 SC 365 (17)
D 1974 SC 759 (27,29)
R 1978 SC 356 (9)
R 1984 SC1916 (9)
R 1987 SC1166 (4)
RF 1992 SC 573 (37)
ACT:
Employees State Insurance Act (34 of 1948), ss. 2(9) and
2(12)--Factory, area comprised in-Company transferring and
transmitting electricity-Workers doing non-manual work
whether ’employees’ within the meaning of s. 2(9).
HEADNOTE:
The appellant company carried on the work of transforming
And transmitting electrical energy. There was dispute
between the company and the respondent whether certain
employees of the company like engineers, draughtsmen,
clerks, accountants etc. mentioned in Appendices III, IV and
V of the company’s petition before the Employees’ Insurance
Court, were ’Employees’ or not within the meaning of s. 2(9)
of the Employees Insurance Act, 1948. The Employees
Insurance Court held the said workers to be employees under
s. 2(9) and this finding was confirmed by the Single Judge
as well -as the Division Bench of the High Court. The
company appealed to this Court by special leave.
HELD : (i) The premises of the company were a factory within
the meaning of the Employees State Insurance Act but the
High Court was wrong in laying down the proposition that
every inch of the area over which the transmission lines
were spread was a factory within the meaning of s. 2(12).
The company’s factory had a fixed site and was located
within the compound wall of its premises. [96 E, H]
(ii)All the employees of the disputed categories clerks or
otherwise were employed in connection with the work of the
factory, that is to say, in connection with the work of
transforming and transmitting electrical power. Some of the
employees were not engaged in manual labour. But a person
doing non-manual work can be an employee within the meaning
of s. 2(9) (i) if he is employed in connection with the work
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of the factory. The duties of the administrative staff are
directly connected within the work of the factory. [99 C, G]
Even those employees who worked outside the factory but
whose duties were connected with the work of the factory
were employees within the meaning of s. 2(9)(i). Among such
employees were to be included those attending to sub-
stations of the factory. [100 A]
Ardeshir H. Bhiwaniwala v. The State of Bombay, [1961] 3
S.C.R.542, State of Uttar Pradesh v. M. P. Singh, [1960] 2
S.C.R. 605 and Employees’ State Insurance Corporation,
Bombay v. Raman, [1957] 1 L.L.J. 267. referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 491 and 492
of 1965.
Appeals by special leave from the order-, dated September
17, 1963 of the Bombay High Court Nagpur Bench in Letters
Patent Appeals Nos. 14 and 15 of 1963,
93
S. V. Gupte, Solicitor-General and I. N. Shroff, for the
appellant (in C.A. No. 491 of 1965).
A. G. Ratnaparkhi, for the appellants (in C.A. No. 492 of
1965).
Bishan Narain, M. L. Kapur and I. S. Sawhney, for the
respondents Nos. 1 and 2 (in C.As. Nos. 491 and 492 of
1965).
1. N. Shroff, for respondent No. 1 (in C.A. No. 492 of
1965).
The Judgment of the Court was delivered by
Bachawat, J. The question in issue in these appeals is
whether certain employees of the Nagpur Electric Light &
Power Co. Ltd.,am employees within the meaning of s. 2(9) of
the Employees State Insurance Act, 1948 (34 of 1948). The
company and the employees filed two separate applications
before the Employees’ Insurance Court under s. 75 of the Act
for the determination of the question. Their case is that
out of the five categories of staff mentioned in appendices
1 to 5 to the company’s petition, those connected with the
receiving station and workshop (appendices 1 and 2) were
employees within the meaning of s. 2(9), but those
connected with the engineering, stores and outdoor work,
meter,consumers and allocation departments and
administration (appendices 3, 4 and 5) were not such
employees. The Regional Director, Employees State Insurance
Corporation contested the applications, but he admitted that
the workers of the categories mentioned in items 5 to 14 of
appendix 4 and items 1, 7 and 8 of appendix 5 were not
employees within the meaning of s. 2 (9). The Employees
Insurance Court found that those workers and also the
workers mentioned in item 12 of appendix 5 were not such
employees. The correctness of this finding is not in issue
in these appeals and we express no opinion on it. The
categories of workers mentioned in appendix 111, items 1-4
in appendix TV and items 2-6 and 9-11 of appendix V are as
follows
’Appendix III
Mains Senior : (1) assistant engineers, (2) supervisors, (3)
electricians, (4) overseers.
Mains junior : (1) cable jointers, (2) mistries,
(3) sub-mistries, (4) lineman-H.T.O.H. mains, (5)
mains coolies, (6) mains coolies temporary, (7)
wireman temporary, (8) sub-mistries, (9) sub-
station attendants.
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Clerical staff : (1) clerk to asstt. engineers,
(2)draughtsman, (3) mains office peons.
Stores department : (1) storekeeper, (2) asstt.storekeeper,
(3) clerks, (4) coolies.
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Motor car staff : (1) motor drivers, (2) motor
cleaners.
Mason.
Appendix IV
Meter senior & junior : (1) deputy meter superintendent, (2)
senior meter mechanic, (3) junior meter mechanic, (4) meter
testers.
Appendix V
(2) accounts (department accountant, chief cashier, asstt.
accountant, account clerks.
(3) Time-keeping department : group head, clerks,
(4) Filing department : group head, clerks.
(5) Typing department : steno-typists, typists.
(6) Telephone operators.
(9) Record-keeper and daftari.
(9a) Station clerk.
(10) Motor car staff : mechanic, drivers, cleaners.
(11) Menial staff : peons, garden malies, chowkidars,
sweepers, rejas temporary."
The, Employees Insurance Court held that the aforesaid
workers were employees within the meaning of S. 2 (9) of the
Act. The company and the employees filed two separate
appeals from this decision to the High Court of Bombay
(Nagpur Bench) under S. 82 of the Act. Abhayankar, J.
affirmed the finding of the Employees Insurance Court and
dismissed the appeals. Letters Patent appeals from his
orders were summarily dismissed by a Bench of the High
Court. The company and the employees have now preferred two
separate appeals to this Court by special leave.
The Nagpur Electric Light & Power Co., Ltd., occupies cer-
tain premises at Kamptee Road, Nagpur where it carries on
the work of transforming and transmitting electrical energy.
’Me premises are located within a compound wall. Inside the
premises there are several buildings, yards and open spaces.
The receiving station, the workshop, the meter testing
department, the engineers’ quarters, the general office, and
stores are in different buildings inside the premises. The
company does not generate electricity. It maintains a
receiving station inside the premises where it receives
electrical energy in bulk from the generating station of the
Maharashtra Electricity Board at Khapparkheda. The energy
when received is of 11,000 volts. From the receiving
station, the energy is either carried through electric
supply lines to a transformer and is stepped down to 3,300
volts and is then carried to the sub-stations in the city
where it is again stepped
95.
down to 400 volts by other transformers, or is carried from
the receiving station to sub-stations where it is stepped
down directly from 11,000 to 400 volts. From the sub-
stations, the energy is transmitted by electric supply lines
and distributed to consumers. The first question is whether
the company maintains a factory and if so, where its factory
is located.
The Employees’ State Insurance Act, 1948 applies in the
first instance to all factories other than seasonal
factories [s.1(4)] and may be extended to any other
establishment or class of establishments, industrial,
commercial, agricultural or otherwise [s.1(5)]. Sec. 2(12)
defines a factory.The relevant part of that section reads :
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"Sec.2(12) : "’factory’ means any premises
including the precincts thereof whereon twenty
or more persons are working or were working on
any day of the preceding twelve 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 but does not include
a mine subject to the operation of the Indian
Mines Act, 1923 or a railway running shed;
The expressions ’manufacturing process’ and
’power’ shall have the meanings respectively
assigned to them in the Factories Act, 1948."
Any premises including the precincts thereof (excepting a
mine and a railway running shed) constitute a factory if (1)
20 or more persons are working or were working thereon on
any day of the preceding 12 months, and (2) in any part
thereof a manufacturing process is being carried on with the
aid of power. If these two conditions are satisfied, the
entire premises including the precincts thereof constitute
a’ factory, though the manufacturing process is carried on
in only a part of the premises. The premises constituting a
factory may be a building or open land or both, see Ardeshir
H. Bhiwaniwala v. The State of Bombay(1). 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 the purposes unconnected with
any manufacturing process and may form no part of the
factory.
Sections 2(g) and (k) of the Factories Act
1948, define power and manufacturing process.
They are in these terms :
2(g). "’power’ means electrical energy, or
any other form of energy which is mechanically
transmitted and is not generated by human or
animal agency;"
(1) (1961) 3 S.C.R. 542.
96
2(k). ""manufacturing process’ means any
process for-
(i) making, altering, repairing,
ornamenting, finishing, packing, oiling,
washing, cleaning, breaking up, demolishing,
or otherwise treating or adapting any article
or substance with a view to its use, sale,
transport, delivery or disposal, or
(ii) pumping oil, water/or sewage, or
(iii) generating, transforming or transmitting
power; or
(iv) composing types for printing, printing
by letter press, lithography, photogravure
or other similar process or book binding;
(v) constructing, reconstructing, repairing,
refitting, finishing or breaking up ships or
vessels."
In view of s. 2 (k) (iii), the process of transforming
electrical energy from a high to a low potential and the
process of transmitting the energy through supply lines are
both manufacturing processes. In a part of the premises
occupied by the company, the two processes are carried on
with the aid of power by means of electrical gadgets and
other devices. On the premises more than twenty persons
were and are working. No part of the premises is used for
purposes unconnected with the manufacturing process The
premises therefore constitute a factory within the meaning
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of s. 2(12) of the Employees State Insurance Act, 1948.
The High Court said:
"This manufacturing process is carried on by
the Company not only in the building called
the workshop or the receiving station but over
the whole area over which the process of
transmission is carried on including the sub-
stations where electricity is stored and
supplied to the consumers by further
transmission lines. Thus every part over
which this process is carried on will be a
factory within the meaning of the Employees’
State Insurance Act."
We cannot accept this line of reasoning. It seems to us a
startling proposition that every inch of the wide area over
which the transmission lines are spread is a factory within
the meaning of s. 2(12). "A factory must occupy a fixed
site", see Halsbury’s Laws of England, 3rd ed., Vol. 71
,art. 15, p. 15. The company’s factory has a fixed site.
It is located inside the Kamptee Road
97
and its boundaries are fixed by the compound wall of the
premises
The next question is whether the members of the staff of the
categories mentioned in appendix 111, items 1-4 of appendix
IV and items 2-6 and 9-11 of appendix V to the company’s
petition am employees within the meaning of s. 2(9) of the
Employees’ State Insurance Act. It is common case that
these workers are employed on remuneration which in the
aggregate does not exceed four hundred rupees a month.
Section 2(9) is in these terms
" employee’ means any person employed for
wages in or in connection with the work of a
factory or establishment to which this Act
applies and
(i) who is directly employed by the
principal employer on any work of, or
incidental or preliminary to or connected with
the work of, the factory or establishment,
whether such work is done by the employee in
the factory or establishment or elsewhere; or
(ii) who is employed by or through an
immediate employer on the premises of the
factory or establishment or under the
supervision of the principal employer or his
agent on work which is ordinarily part of the
work of the factory or establishment or which
is preliminary to the work carried on in or
incidental to the purpose of the factory or
establishment; or
(iii) whose services are temporarily lent or
let on hire to the principal employer by the
person with whom the person whose services am
so lent or let on hire has entered into a
contract of service;
but does not include-
(a) any member of the Indian naval, military
or air forces or;
(b) any person employed on a remuneration
which in the aggregate exceeds four hundreds
rupees a month; "
The definition of employee in s. 2(9) may be contrasted with
that of a worker in s. 2 (1) of the Factories Act 1948,
which is in these terms
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worker’ means a person employed, directly or
through any agency, whether for wages or not,
in any manufacturing process, or in cleaning
any part of the machinery or premises used for
a manufacturing process, or in any other kind
of work incidental to, or connected with, the
manufacturing process, or the subject of the
manufacturing process;"
It is to be seen that the definition of an employee in the
Employees State Insurance Act is wider than that of a worker
in the Factories Act. The object of the Factories Act is to
secure the health, safety, welfare, proper working hours,
leave and other benefits for workers employed in factories.
The benefit of this Act does not extend to field workers
working outside the factory, see the State, of Uttar Pradesh
v. M. P. Singh(1). The object of the Employees’ State
Insurance Act is to secure sickness, maternity, disablement
and medical benefits to employees of factories and
establishments and dependents’ benefits to their dependants.
The benefit of this Act extends inter alia to the employees
mentioned in s. 2 (9) (i) whether working inside the factory
or establishment or elsewhere.
The definition of "employee" in S. 2 (9) deals with three
classes of employees. We are concerned with the class of
employees mentioned in S. 2 (9) (i). The courts below
concurrently found and in our opinion, rightly, that all the
workers of the disputed categories are persons employed for
wages in or in connection with work of the company’s factory
and are directly employed by the company on work of or
incidental to or connected with the work of the factory.
Some of them do the work in the factory and some work
elsewhere, but they are all employees within the meaning of
S. 2 (9) (i). Take the case of the workers mentioned in
appendix 111. The assistant engineers, supervisors,
electricians, and overseers are engaged in the erection and
maintenance of the electricity supply lines connected with
transmission of power. The cable jointer, mistries,
linemen, coolies and wiremen are employed for inspection of
the supply lines, digging pits, erecting poles for laying
distribution mains and service lines. The masons attend to
the masonry work of the buildings. The attendants in-charge
of the sub-stations look after the transformation and
transmission of power. The motor drivers and cleaners are
employed for carrying materials and tower ladders in trucks
for maintenance of the supply lines. The clerks,
draughtsmen and main office peons help the assistant
engineers. The store keepers and clerks with The assistance
of coolies issue stores to all the departments and keep
accounts relating to stock. The deputy meter superinten-
dent, meter mechanics and meter testers mentioned in items 1
to 4 of appendix IV attend to the testing calibration and
repairs of
(1) [1960] 2 S.C.R. 605.
99
the meters. Let us now take the case of the staff mentioned
in items 2 to 6 and 9 to II of appendix V. The clerks in the
accounts, time-keeping and filing departments are employed
to maintain accounts, attendance registers, muster rolls,
pay-sheets, typing, filing and dispatching documents
required in connection with all the departments including
the receiving station and the workshop. The telephone
operators attend to the telephone calls for all the
departments. The menial staff is required to do mis-
cellaneous work including the cleaning of the office
compound. The motor car staff is employed to look after the
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cars employed in the administration section. All these
employees, clerical or otherwise, are employed in connection
with the work of the factory, that is to say, in connection
with the work of transforming and transmitting electrical
power. Some of the employees are clerks; they are not
engaged in manual labour. But a person doing non-manual
work can be an employee within the meaning of s’ 2 (9) (i)
if he is employed in connection with work of the factory.
The duties of the administrative staff are directly con-
nected with the work of the factory. The case of the
Employees’ State Insurance Corporation, Bombay v. Raman(1)
is distinguishable. In that case a company had a factory
and an administrative office. The office was situated in a
building which was situated within the same compound in
which the factory was located. The entire compound was
surrounded by one compound wall. It was found that the work
of the factory began with the collection of raw materials
and ended with the production of finished articles and the
work of selling the products was not connected with the work
of the factory. The administrative office handled sales of.
the products manufactured in the factory as well as goods
imported from abroad. The factory and the administrative
office maintained separate muster and wage rolls and
separate accounts. In these circumstances, it was held that
the clerks employed in the administrative office, whose work
consisted mainly of taking down dictations from the manager
and other officers and typing out letters, were not em-
ployees within the meaning of s. 2(9). The facts of the
present case are entirely different. The company maintains
one establishment for its factory. The factory does the
work of transforming and transmitting electrical energy.
All the workers in question including the clerks and the
administrative staff are engaged in connection with this
work. None of them is employed in any separate
establishment unconnected with the work of the factory.
Some of the employees work outside the factory, but their
duties are connected with the work of the factory. They are
therefore employees within the meaning of s. 2 (9) (i).
Some are
(2) [1957] 1 L.L.J. 267.
100
employed in the sub-stations. It is common case that the
stations are not independent factories. The sub-stations
attendants attend to work which is directly connected with
the of the factory at the main station. They are therefore
employees within the meaning of s. 2 (9) (i).
In the result the appeals are dismissed with costs. One
hear fee.
G.C Appeals dismissed.
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