B. N. KRISHNAN, J.

( 1 ) THE appellant was the applicant before the Employees State insurance Court, Bangalore in E. S. I. No. 12 of 1983 and being aggrieved by the order passed by the said court holding that it was liable to be covered under the Employees State Insurance act (for short 'the E. S. I. Act' or 'the Act') or with effect from 27-1-1980, has preferred this appeal.

( 2 ) THE appellant filed an application before the E. S. I, courtunder Section 75 of the E. S. I. Act and pleaded as hereunder. It is a club set up and run by its members for the purpose of recreation and it does not make any profit and it is run on the contribution from the members from time to time and for the benefit of its members. It is having a canteen and caters foodstuffs in the course of its activities and it is neither a factory nor an establishment liable to be covered under the E. S. I. Act. The E. S. I. Inspector inspected the club and sent a letter dated 25-1-1981 together with a draft order claiming a sum of Rs. 60,233. 25p. as contribution for the periods mentioned in the said order. The applicant-club is neither a factory nor an establishment liable to be covered under the provisions of the e. S. I. Act and therefore it is not liable to pay any amount by way of contribution and therefore it has sought for a declaration that it is not liable to be covered under the E. S. I. Act and also to set aside the order demanding contribution.

( 3 ) THE E. S. I, court raised the following issues:1. Whether the applicant-club proves that it cannot be covered under the E. S. I. Act for the reasons stated in paragraphs 2 and 5 of the application? 2. Whether the impugned orders are opposed to the principles of natural justice and not in accordance with law? 3. Whether the applicant is entitled to the relief claimed? after trial, the E. S. I, court answered issue No. 1 in the negative and held that the order required modification and therefore the actuals should be calculated after affording opportunity to the applicant to place the required material. It is being aggrieved by this order of the E. S. I, court that the applicant before it, has preferred this appeal.

( 4 ) LEARNED advocate for the appellant contended that thoughin the kitchen attached to the catering section of the appellant-club more than 20 persons are employed and preparation of foodstuffs is made with the aid of various electrical appliances, it does not fall within the purview of factory as defined by Section 2 (12) of the E. S. I. Act and therefore the order of the E. S. I, court is vitiated. It was further urged that even if the catering section of the club could be held to be a factory within the meaning of the E. S. I. Act, only that section of the club and the employees of the said section could be covered and the other sections of the club which have nothing to do with the catering section cannot come within the purview of the said definition and the persons working in those sections cannot be covered under the provisions of the E. S. I. Act. These contentions have been vehemently disputed by the learned advocate for the respondent.

( 5 ) SO, the short points that arise for consideration in thisappeal are:1. Whether the catering section of the applicant club comes within the meaning of factory as defined in E. S. I. Act? 2. Whether only the catering section and the employees of the said section are liable to be covered and whether all the employees of the other sections are not liable to be covered under the provisions of the E. S. I. Act?

( 6 ) POINT No. 1the word 'factory' has been defined in Section 2 (12) of the Act as hereunder:"factory means any premises including the precincts thereof wherein twenty or more 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 does not include a mine subject to operation of the

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