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SUPREME COURT OF INDIA
HIMA KOHLI, RAJESH BINDAL, JJ.
M/s. J.P. Lights India - Appellant
Versus
The Regional Director E.S.I. Corporation, Bangalore - Respondent
Civil Appeal No. 2527 Of 2012
Decided On : 27-07-2023
| Table of Content |
|---|
| 1. appellant's challenges regarding esi applicability (Para 1 , 2 , 3) |
| 2. substantial questions of law from high court appeal (Para 4) |
| 3. definition of factory and manufacturing process (Para 6 , 9 , 10) |
| 4. legal definitions under esi and factories act (Para 7 , 8) |
| 5. appeal dismissed, no infirmity found (Para 11) |
ORDER :
1. The appellant, a sole proprietorship firm, is aggrieved by the judgment impugned dated 26th August, 2010, passed by the High Court of Karnataka, Bangalore, whereby the appeal1[M.F.A. No. 6876 of 2003] preferred by it against the order dated 29th September, 2003, passed by the Employees State Insurance Court2[For short ‘ESI Court’], Bangalore, has been dismissed.
2. The appellant-firm had approached the ESI Court, by filing applications under Section 75 of the Employees State Insurance Act3[For short ‘ESI Act’], 1948, assailing the notices of recovery and orders passed by the respondent-Corporation, taking a plea that it had never employed more than eleven employees and was not using power and, therefore, the provisions of the ESI Act were not applicable to it.
3. After evidence was led before the ESI Court and issues were framed, the plea of the appellant-firm to the effect that it was not manufacturing any goods with the aid of power and, therefore, was not a factory as contemplated under the ESI Act, was turned down. The second plea with regard to employing ten or more persons at a given point of time in the preceding 12 months, during which manufacturing process was carried out by the aid of power, was also decided against the appellant-firm, upon going through the records and observing that the appellant-firm had engaged more than ten workmen at its unit, which could be gathered from the attendance register for the relevant period. As a result, both the applications filed by the appellant-firm were dismissed.
4. Aggrieved by the said dismissal order, the appellant preferred an appeal before the High Court, wherein the following two substantial questions of law were formulated:
2. Whether the appellant business being carried on with the aid of power as defined under Section 2 (15)(C) would not be applicable or not?”
5. Both the questions of law have been answered against the appellant and in favour of the respondent-Corporation. Aggrieved thereby, the present appeal has been filed by the appellant-firm.
6. It is the contention of Mr. Balaji Srinivasan, learned counsel for the appellant that the appellant-firm does not fall under the definition of “Factory” as defined in Sections 2 (12)& 2(14AA) of the ESI Act read with Section 2 (k) of the FACTORIES ACT , 1948. To test the aforesaid submission, it is considered necessary to examine the relevant provisions of law, which are extracted hereunder:
| “ESI Act 2(12) “factory” means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952), or a railway running shed;] 2(14AA) “manufacturing process” shall have the meaning assigned to it in the FACTORIES ACT , 1948 (63 of 1948);]” “The FACTORIES ACT , 1948 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, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, |
A factory is classified as seasonal under the ESI Act if its predominant activity is seasonal, and it is exempt from ESI applicability if it employs fewer than ten workers.
Point of Law : Supreme Court considered the scope of notification of establishments under section 1(5) of the 'ESI Act'.
The central legal point established in the judgment is the interpretation of the term 'seasonal factory' under Section 2 (19-A) of the ESI Act, particularly in relation to the manufacturing processes....
The applicability of the Employees’ State Insurance Act is contingent on the factory having the requisite number of employees, and Section 1(6) only applies to those already covered, not to new appli....
The applicability of the Employees’ State Insurance Act is contingent upon the establishment being classified as a 'factory' with at least 10 employees, as defined under Section 2(12).
Cold storage facilities are classified as 'factories' under the Employees State Insurance Act, as they involve a manufacturing process, necessitating ESI contributions regardless of the number of emp....
Point of law : Partnership Act - In the enquiry, sufficient opportunity was not given to the respondent to produce documents or to adduce evidence. Hence, the question raised by the appellant regardi....
The interpretation of Section 2(12) of the Employees' State Insurance Act, 1948 in determining the number of employees in a factory.
The Sale Depot of the corporation is not covered under the Employees’ State Insurance Act due to the absence of manufacturing activities and failure to meet employee thresholds.
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