The court emphasized the beneficial nature of the ESI Act and the purpose of providing insurance coverage to employees. It interpreted the provisions of the Act and referred to relevant case law to support its decision.

( 1 ) PETITIONER has sought for issuance of writ of certiorari for quashing Item No. 1 of notification produced by him as Annexure-C and also the demand made by the Employees' State Insurance (ESI) Corporation demanding him to contribute a sum of Rs. 32,109. 80 vide Annexure-D in this petition under Article 226 of the Constitution of India. Though the petitioner has also sought for quashing Section 1 (5) of the ESI Act (hereinafter referred to as the 'act' for brevity), 1948 as unconstitutional, in the writ petition since the same was not argued during hearing of the petition, the same is not dealt in this order.

( 2 ) THE case of the petitioner is that as a dealer of Indian Oil Corporation has established a petrol bunk along with it is running a Service Station in his own individual right employing about 7 to 8 persons in the latter businesses at Hassan. The Regional Director, ESI Corporation, on the basis that the petitioner had employed 11 persons during December 1982 and since the petitioner is running his Petrol Bunk and Service Station with the aid of power, called upon him to contribute as per the provisions of ESI Act for the period 1-12-1982 to 31-3-1986 by an order dated 1-12-1986 vide Annexure-A. Petitioner challenged the same by means of an application under Section 75 of the ESI Act before the ESI Court, which has been dismissed, which order also he has challenged by means of an appeal before this Court.

( 3 ) SINCE the basis of demand is the notification issued by the State Government dated 1-12-1985 vide Annexure-A in exercise of its powers under Section 1 (5) of the Act, petitioner has challenged the said notification as stated above.

( 4 ) RESPONDENTS 3 and 4. e. , the ESI Corporation and its Director have filed the statement of objections defending the power of State to issue the notification.

( 5 ) SRI Veerabhadrappa, learned Counsel appearing for the petitioners submitted that Item No. 1 to the impugned notification in effect amends the definition of the Factory as defined under section 2 (12) of the ESI Act as unamended which is beyond the power of the rule making body. Elaborating the contention he submitted, the legislature itself has made a distinction between a factory and an Establishment, is clear by a reading of Section 38. A Factory is denned under section 2 (12) of the Act (prior to amendment) whereunder manufacturing process is carried on with the aid of power and employing 20 or more persons. According to him the petitioners unit is a manufacturing process, carried on with the aid of power, hence is a "factory". The impugned notification takes within its net, the petitioner's unit where admittedly the employees' are less than 20 persons. Thus the notification redefines a Factory as a Manufacturing Unit run on power with less than 20 employees' also which is ultra vires of the power under Section 1 (5) of the Act. In support of his arguments, learned Counsel took me through the definition of the Factory Section 2 (12) and Section 38 of the ESI Act. The argument on a closer scrutiny of the provisions of the Act and the notification deserves to be rejected.

( 6 ) AS the preamble of the Act suggests the Act is a beneficial piece of legislation mainly meant for the benefit of the employees' to provide an insurance coverage when in distress during sickness, maternity, employment injury etc. The Act is made to apply by Section 1 (4) to all factories by operation of law which reads: "section 1 (4 ). It shall apply in the first instance, to all factories (including factories belonging to the Government other than seasonal factories): (Provided that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the Government whose employees' are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act)".

( 7 ) A "factory" as it stood prior to amendment which definition is the one relied on to by

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