The central legal point established in the judgment is the importance of evidence in determining the applicability of the ESI Act to specific work activities.

D. G. DESHPANDE, J.

( 1 ) HEARD Mr. Mehta for. the appellants and Mr. Gelani for the respondents. This appeal is filed by the Regional Director Employees state Insurance Corporation, Mumbai (hereinafter referred to as "the ESI corporation") against the order of the Employees Insurance Court, Mumbai dated 6th May, 1998 in Application (ESI) No. 138/ 1988. That was an application filed by the present respondents for a declaration that they are not liable to pay contribution as claimed by the Corporation for the period in question and that orders of the opponents/corporation dated 15-9-1987 and 13-9-1988 directing the applicants to deposit an amount of Rs. l,61,000/-and odd and Rs. 9,161 / and odd were illegal and invalid. The contentions of the applicants/respondents were accepted by the Insurance Court and their application was allowed and necessary declaration was given and, therefore, the corporation has filed and preferred this appeal.

( 2 ) THE claim and contention of the applicants/respondents before the Insurance court was that they are a partnership concern. They had a factory at cotton Green, Mumbai, where they fabricated the machinery spare parts and accessories. It was registered under the Factories Act, 1948 and was covered under the ESI Act. But apart from this, the respondents were independently undertaking the work of servicing and maintenance of ships on various docks or at the stream/anchorage i. e. on the ship itself. This work was not carried out in the factory nor in the premises of the factory. There is no functional integrality between manufacturing activity of the respondents in the factory and this servicing and maintenance job of ships undertaking by them. It was further their contention that the servicing and maintenance work of the ships has to be carried out at the docks or at the mid stream anchorage and the places where such work was carried out were owned by the Bombay Port trust Authorities. This work was carried out through various contractors/ sub contractors specialised in that particular job which the contractors would do either by themselves or by engaging their labour. The applicants/respondents were paying lump sum amount to the contractors at site. Therefore, in this background, the respondents contended that the impugned notices and the orders issued by the Corporation were totally illegal and invalid. The Insurance Court upheld the contention of the respondents and passed the order in favour of the respondents which is the subject-matter of this appeal.

( 3 ) MR. Mehta, appearing for the Corporation, vehemently and strenuously urged that the impugned order passed by the Insurance Court was totally wrong. Because the Insurance Court did not take into consideration the Functional integrality. According to him, the type of the work that was sought to be covered under the provisions of ESI Act, as stated above, was supervised by the respondents and, therefore, the contractors or the labour employed by contractors were directly under the control of the respondents. He drew my attention to the different provisions of the ESI Act and, mainly relied upon the following judgments in support of his contentions. 1992 (3) Bom. C. R. 616 : 1993 (66) F. L. R. 111 (ESI Corporation v. Abu marble Mining Pvt. Ltd.); (1994)1 L. L. J. S. C. 12 (ESI Corporation v. M/s. Harrisons Malayalam put. Ltd.); 42 Factories Journal Reports VI 89 (Rajkamal Transport and Anr. v. ESI corporation); a. I. R. 1987 S. C. 447 (M/s. P. M. Patel and Sons v. Union of India ).

( 4 ) IN the case of M/s, P. M. Patel and Sons the question was about the definition of "employee" and the Supreme Court held that the home worker rolling beedies at his home and delivering them to the manufacturer subject to the right of rejection of the manufacturer was the employee within the meaning of employees Provident Funds and Miscellaneous Provisions Act, 1952. This case appears to have been cited by Mr, Mehta to show as to the extent to whic