Back
IN THE HIGH COURT OF BOMBAY
Dhanuka D.R., J.
Ritz Hotel (Vegetarian), Pune.... Appellant.
Versus
Joint Regional Director .... Respondent.
First Appeal No. 822 of 1980, decided on 16-8-1994.
Advocates appeared :
A.P. Vaze, for appellant.
R.M. Jayakar i/b M.V. Jayakar Co., for respondent.
EMPLOYEES' STATE INSURANCE ACT, 1948 - SECTION 2(K) - SECTION 1(5) - NOTIFICATION DATED 19TH NOVEMBER, 1976 - INTERPRETATION OF THE DEFINITION OF MANUFACTURING PROCESS - APPLICATION OF THE ACT TO HOTELS AND RESTAURANTS - STORAGE OF MILK AND CURD IN A REFRIGERATOR - WHETHER AMOUNTS TO MANUFACTURING PROCESS.
Fact of the Case:
The appellant, Ritz Hotel of Pune, challenged the order of the Employees' State Insurance Court, Pune, which held that the hotel was covered under the Employees' State Insurance Act, 1948. The hotel employed 14 to 17 employees and stored milk and curd in a refrigerator for preparing tea, buttermilk, and kadi for customers. The issue was whether the hotel's activities constituted a manufacturing process under the Act.
Finding of the Court:
The court held that the hotel's activities did not constitute a manufacturing process under the Act. The court interpreted the definition of 'manufacturing process' in section 2(k) of the Factories Act, 1948, which was incorporated into the Employees' State Insurance Act, 1948. The court held that the storage of milk and curd in a refrigerator did not amount to preserving or storing articles in cold storage within the meaning of section 2(k)(vi) of the Factories Act. The court also held that the preparation of food in the hotel's kitchen did not constitute a manufacturing process with the aid of power under section 2(k)(i) of the Factories Act.
Issues: 1. Whether the hotel's activities constituted a manufacturing process under the Employees' State Insurance Act, 1948? 2. Whether the storage of milk and curd in a refrigerator amounted to preserving or storing articles in cold storage within the meaning of section 2(k)(vi) of the Factories Act, 1948? 3. Whether the preparation of food in the hotel's kitchen constituted a manufacturing process with the aid of power under section 2(k)(i) of the Factories Act, 1948?
Ratio Decidendi: 1. The definition of 'manufacturing process' in section 2(k) of the Factories Act, 1948, which was incorporated into the Employees' State Insurance Act, 1948, must be interpreted in a business sense, having regard to the meaning of the words in common parlance and the usage of the trade. 2. The storage of milk and curd in a refrigerator did not amount to preserving or storing articles in cold storage within the meaning of section 2(k)(vi) of the Factories Act, 1948, as it was not a business of preserving or storing articles in cold storage. 3. The preparation of food in the hotel's kitchen did not constitute a manufacturing process with the aid of power under section 2(k)(i) of the Factories Act, 1948, as the kitchen was not operated with the aid of power.
Final Decision: The appeal was allowed, the findings of the trial court were set aside, and the order under appeal was set aside. Application (ESI/LCP) No. 3 of 1980 was allowed.
2. Sometime in the year 1961, Ritz Hotel (Vegetarian) was registered under the Bombay Shops and Establishment Act, 1948. At the material time the said hotel employed about 14 to 17 employees. The appellant stores and preserves milk curds in a refrigerator kept in its hotel. The said refrigerator is operated by power with 3 horse power capacity. The milk which is stored in the freeze is used for preparing tea for the customers. The curd which is kept in the freeze is used for preparing buttermilk to be served to the customers or for preparation of kadi (a liquid preparation). No power is used in the kitchen or for any other activity of the hotel. The said refrigerator appears to be like a domestic refrigerator.
3. On 19th November, 1976, the Government of Maharashtra issued a Notification No. ESI/1875/800/PH 15, in exercise of the powers conferred on it under sub-section (5) of section 1 of the Employees' State Insurance Act, 1948 extended the operation of the said Act to the various classes of establishments mentioned in the Clause (1) of the Scheduled appended to the said notification situate in the areas specified in column 2 of that schedule Clause 1 and Clause 3 of the said schedule read as under :
Description of establishment Areas in which the establishments are situated
1. Any premises including the Pune: (1) The limits of the Pune
precincts thereof whereon ten Municipal Corporation.
or more persons but in any case (2) The limits of Pune Cantonment
less than twenty persons, Board.
are employed or were employed (3) The Limits of Kirkee Cantonment
for wages or any day of the pre- Board.
cedings twelve months, and in (4) Extended limit of Pune Munici-
any part of which a manufactu- pal Corporation comprising the
ring process is being carried on revenue villages of-
with the aid of power or is ordin- (a) Dhanori,
arliy so carried on; but excludi- (b) Lohgaon,
ng a mine subject to the operat- (c) Vadgaon,
ion of the Mines Act, 1952 (35 of (d) Sheri,
1952), or a railway running shed (e)Hadapsar,
or an establishment which is ex- (f) Kondhawa Khurd,
clusively engaged in any of the (g) Dhankwadi,
manufacturing process specified (h) Hingane Budruk,
in Clause (12) of section 2 of the (i) Kothrud,
Employees' State Insurance Act, (j) Dapodi,
1948 (34 of 1948). (k) Pashan, (l) Kalas, (m)Katraj (5) The revenu villages of Chinchwad, Pimpri, Waghori, Loni- Kalbhar and Bhosari,
Nagpur: Limits of the Corpn. of City of Nagpur.
- do -
3. The following establishments
whereon twenty or more persons
are employed, or were employed
for wages on any day of the prec-
edings twelve months, namely:-
(i) Hotels;
(ii) Restaurants;
(iii) Shops;
(iv) Road Motor Transport Esta-
blishments;
(v) Cinemas including Preview
theatres; and
(vi) Newspaper Establishments
as defined in section 2(d) of the
Working Journalists (Conditio-
ns of Service) and Miscelleneo-
us Provisions Act.
4. Even though the establishments of the appellant is liable to be considered as a hotel, the said establishment is not covered by category 3 inasmuch as 20 or more person were not employed for wages in the said hotel at the material time.
5. The trial Court has held that the establishment of the appellant was covered by and under the provisions of the said Act inasmuch as the appellant employed more than 20 employees on wages at the relevant time and the appellant preserved or stored milk or curd in a 'cold storage'. The trial Court has held that storing of milk or curd in the refrigerator amounts to storing of articles in cold storage. The trial Cou
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
