Judgment

SABYASACHI MUKHARJI, J. :- Special leave granted.

2. This appeal arises out of the judgment and order of the Division Bench of the Rajasthan High Court dated 2nd September, 1986. The judgment under appeal was rendered in an appeal under S. 82(2) of the Employees State Insurance Act, 1948 (hereinafter called the Act). The respondent, Ram Chander, was the proprietor of M/s. Commercial Tailors, Sojati Gate, Jodhpur. At all material times, he used to run a tailoring shop, where clothes were stitched. The shop employed at the relevant time about 10 or 12 persons as tailors. The number of employees, however, never exceeded 20. The clothes were supplied by the customers and these were stitched according to the different sizes of the customers. Such stitchings were done at the shop of the respondent herein manually by electric iron which was also used in the process of stitching. There were ironing of finished clothes also. The Employees State Insurance Court, Rajasthan came to the conclusion as follows :

"The applicant is a tailoring shop which has employed more than 20 persons on one occasion and less on other days and makes use of power in the shape of electric press which is used for ironing of stitched clothes for customers. The electric iron is also used during the process of stitching in addition to the ironing of finished clothes."

3. The question before the Rajasthan High Court was whether such establishment was covered by the Notification dated 20th September, 1975 and came within the mischief of the Act. The answer to that question would depend on the relevant notification being the Notification dated 20th of September, 1975 issued under S. 1(5) of the Act. The schedule which extends the scheme to different establishments, inter alia, provided by Cl. (1)(b) as follows:

DESCRIPTION OF ESTABLISHMENTS AREAS IN WHICH THE ESTABLISHMENTS ARE SITUATED

1. Any premises including the precincts thereof whereon ten or more persons but in any case less than twenty persons are employed or were employed for wages 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 excluding a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed or an establishment which is exclusively engaged in any of the manufacturing processes specified in Cl.(12) of S.2 of the Employees State Insurance Act, 1948 (34 of 1948)(emphasis supplied) 1. Alwar

2. Ajmer

3. Bikaner

4. Jaipur

5. Jodhpur

6. Kota

7. Udaipur

4. In order to answer the question whether the establishment of the respondent comes within the mischief of the Act, it is necessary, therefore, in view of the facts found as noted before to determine only whether manufacturing process was carried on with the aid of power. It is manifest that there is use of electric power in the process of stitching. This is a finding of fact that the establishment or the shop employed more than 10 but less than 20 persons. It cannot also be disputed that by stitching commercially different goods are brought into existence. These are known differently, stitched shirt is indubitably a different commodity than unstitched cloth. It is so commercially known and treated. If by a process a different entity comes into existence then it can be said that this was manufactured. See in this connection the observations of this Court in Empire Industries Ltd. v. Union of India 1985 Suppl. (1) SCR 292. It was observed therein that manufacture is complete as soon as by the application of one or more processes, the raw material undergoes some change. If a new substance is brought into existence or if a new or different article having a distinctive name, character or use result from particular processes, such process or processes would amount to manufacture. Whether in a particular case manufacture has resulted by a process or not would depend on the facts and circumstances of the part