Regional Director, E.S.I. Corporation vs P. Manickam, Proprietor, Thirumurugan Engineering Works

P.K. Misra, J.—Heard the learned counsel appearing for the appellant. In spite of notice, the respondent has not appeared.

The present appeal is directed against the order dated March 24, 1994 passed by the Principal District Judge, Tiruchirapalli, allowing the

petition filed u/s 75-A of the Employees'' State Insurance Act, 1948, (hereinafter referred to as ''the Act''). The aforesaid proceedings was initiated

by the present respondent. There is no dispute that the present respondent is the proprietor of Thirumurugan Engineering Works, which was an

ancillary industry doing work for BHEL. In January 1987, the present appellant has passed an order to the effect that the present respondent was

liable to pay a sum of Rs. 10,571.50 as Employees'' State Insurance Contribution. The aforesaid order was challenged by filing the application u/s

75-A of the Act.

The main contention was to the effect that the persons working in the factory being less than 20, the Act was not applicable. It was also

contended that the Corporation had wrongly considered the casual employees who were working under the Contractor to come to 5 a conclusion

that more than 20 persons were employed.

The trial Court relying upon a decision of the Supreme Court in C.E.S.C. Limited and Others Vs. Subhash Chandra Bose and Others, came to

the conclusion that the workmen who were employed by the contractor should not have been considered as part of the employees of the present

respondent.

The learned counsel appearing for the appellant has contended that in view of the definition of the word ""Employee"", as defined u/s 2(9) of the

Act, there is no escape from the conclusion that the employees under the Contractor, who were working within the premises of the factory, were

also to be considered as employees of the present respondent. The relevant portion of Section 2(9) is as follows:

2(9) ''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) xxxxx

(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 are so lent or

let on hire has entered into a contract of service.

In the present case, there is no dispute that the persons who were employed under the so called contractor, were employed in connection with

the work of the factory. There is no dispute that they have been carrying out the work within the premises of the factory. In such circumstances of

the matter, there is no escape from the conclusion that such employees under the contractor are also to be considered as employees-of the present

respondent, as such persons who have been employed within the premises of the factory are belonging to the present respondent.

The trial Court has placed reliance on the decision of the Supreme Court in Calcutta Electric Supply Corpn. Ltd. case (supra) which was not

concerned with the similar case on hand. There, the question was whether there was supervision over the employees who had been engaged by a

contractor, but the present question was not directly raised in the said decision nor it was decided. The decision in Regional Director, Employees''

State Insurance Corpn., Madras Vs. South India Flour Mills (P) Ltd., applies directly to the facts of the present case. The trial Court has

erroneously appreciated the decision of the Supreme Court in South India Flour Mills (P.) Ltd. ''s case (supra) which ran counter to the

subsequent decision of the Supreme Court. As a matter of fact both the decisions were on different aspects and were not relevant to the facts of

the case. It was erroneous on the part of the trial Court later impliedly overruling the decision of the Supreme Court in South India Flour Mills (P.)

Ltd. ''s case (supra). Since the only ground on which the trial Court has held that the employees were less than 20 numbers is not sustainable, the

order passed by the trial Court is set aside and the order dated January 8, 1987 passed by the present appellant is restored. Since there is no

appearance, there will be no order as to costs. 212