East Asiatic Co. (India) Pvt. Ltd. vs Regional Director, Employees' State Insurance Corporation

Venkatadri, J.—This appeal is against the order passed by the Additional Commissioner for Workmen''s Compensation, Madras, in E. S. I. No. 2 of 1957. The appellant herein, the East Asiatic Co. (India) Private Ltd., Madras, filed a petition u/s 73-B of the Employees'' State Insurance Act for a declaration that they were not liable to the Employees'' State Insurance Corporation for the employer''s special contribution in respect of their tannery at Vaniyambadi. They prayed that the sum of Rs. 2726 paid by them by way of employer''s contribution for the quarter ended 31st March 1.953 to 30th June 1955 be ordered to be refunded to them by the respondent, that the order of the Regional Director calling upon the appellant herein to pay employer''s special contribution for the quarter ended 30th September 1955 upto the date of filing the petition before the Additional Commissioner for Workmen''s Compensation should, be set aside and that the order of the Regional Director (respondent herein) calling upon the appellant herein to submit returns for all quarters from the quarter ended 31st December 1953 upto the date of filing the petition before the Additional Commissioner for Workmen''s Compensation should also be set aside.

The allegation made in the petition was that the appellant''s tannery at Vaniyambadi was not a factory within the definition of ''factory'' in Section 2(12) of the Employees'' State Insurance Act, 1948. They also contended that power was not used in their tannery in the manufacturing process itself. The respondent herein alleged that the tannery was a factory, that the appellant was liable to pay the contribution, that the claim for refund of the contribution already paid was unsustainable, and that the appellant herein was also bound in law to pay the special contribution up to the date of filing the petition. The controversy between the parties before the Additional Commissioner for Workmen''s Compensation is. whether the tannery in question comes within the mischief of Section 2(12) of the Employees'' State Insurance Act. Evidence has been adduced by N. Kuppanna Rao, Superintendent of the appellant''s tannery at Vaniyambadi. He stated that though there was a well inside the factory premises and an oil engine, the water was not used in the manufacturing process due to technical reasons and that therefore water from the well which was outside the premises of the tannery was taken for manufacturing process.

The Additional Commissioner for Workmen''s Compensation was of the opinion that in view of the admitted fact'' that their was a well inside the tannery of the appellant and an oil engine was used to pump water from that well, it was not necessary for him to go into the contention put forth by the appellant that water for manufacturing process was drawn from the wed which was situated a furlong away from the tannery and the well was separated by a different premises and precincts of another factory and therefore there was no manufacturing process with" the aid of power in any part of the premises of the tannery. He held that the tannery was a factory as defined in Section 2(12) of the Employees'' State Insurance Act. I am not able to agree with the order passed by the Additional Commissioner. He must be satisfied whether the manufacturing process is being carried on with the aid of power in any part of the premises. When once it is proved that the appellant is making use of the water from the well situated outside the factory premises, it cannot be said that they are carrying on manufacturing process with the aid of power in any part of the premises.

A similar question arose in W. P. No. 691 of 1959 (A. B. Mohammed Sulaiman v. Regional Director, Employees State insurance Corporation, Madras). In that petition Veerayswami, J. has observed that the essential requisites, of the definition of "factory" in Section 2(12) are : (1) the premises including their precincts, (2) 20 or more persons, working there, and (3) a manufacturing process carried on in the premises including the precincts with the aid of power. The learned Judge has also observed that the respondent in that case has not been able to show that the pumping of water is done within the precincts of the factory. Therefore he has observed that it cannot be held that because of the pumping of water with the aid of power from the land lying outside the premises and precincts or the tannery, the tannery is a factory within the statutory definition under the Employees'' State Insurance Act. Following the above principles laid down by Veeraswami,. J. I feed that the order passed by the Additional Commissioner for Workmen''s Compensation is not correct. For the he has not given any definite finding whether water is being used from the well situated within the factory premises with the aid of power.

The respondent has raised another point that this appeal is not maintainable, as it was filed u/s 82(2) of the Act. It is true that the petition was filed u/s 73-B because at the time of filing this petition there was no Employees'' Insurance Court having jurisdiction to try the dispute between the employer and the employee But at that time, by a notification, the Government of India authorised the Additional Commissioner for Work men''s Compensation to hear disputes under Ch. V-A of the Employees'' State Insurance Act. The procedures that have to he followed are mentioned in Sections 76 to 79 of the Act. Section 82(2) says that an appeal shall be to the High Court from an order of the Employees'' Insurance Court, if it involves a substantial question of law. I am satisfied that this appeal is maintainable u/s 82(2) as it involves a substantial question of law. Therefore the contention raised by the State that the appeal is not maintainable u/s 82(2) has no substance. I hold that the appeal is maintainable.

The appeal is allowed, but, in the circumstances, no costs.