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.

JUDGMENT :

PRAVIN S . PATIL, J.

1. Heard.

2. The present appeal is preferred by Maharashtra State Handlooms Corporation Limited, challenging the judgment and order dated 18.01.2010 passed by the Industrial Court, Akola, in ESIC Application No.3/1988, whereby it is held that the unit run by the appellant Corporation at the Akola Sale Depot is covered under the provisions of the Employees’ State Insurance Act, 1948 (hereinafter referred to as “the ESI Act of 1948”), and by determining the amount of contribution payable for the relevant period in respect of the employees working at the Akola Sale Depot was directed to deposit the amount as per order of respondent dated 15.04.1988.

3. Before adverting to the merits of the matter, the certain facts, which are necessary to be recorded in the matter, are as under:

The appellant is a statutory authority, and its affairs are managed by its Board of Directors. The head office of the Corporation is situated at Nagpur, and it controls and supervises the entire functioning of its subordinate units spread throughout the State of Maharashtra. The nature of the units through which the appellant carries out its activities can be appropriately categorized as follows:

i) Production Centres;

ii) Sale Depots;

iii) Weaving Sheds, Dye Houses, Design Centres, Processing Units, and Printing Units.

4. According to the appellant, in the production centres, the clothes are weaved by the handloom weavers in their respective houses/cottages on their looms. The centre does not have any production or manufacturing activities carried out in the premises. Only clerical cadre work, as per the instruction and posting by the head office, the work is done in the production centre.

5. In Sale Depots, it is pointed out that these depots were established so as to make it convenient and facilitate the weavers to sell the weaved clothes collected from the handloom weavers. In sale depots, again no production or manufacturing activities are carried out. Sale depots only work as extension points of the head office for the purpose of sale of weaved clothes collected from handloom weavers. Hence, it was never required to the appellant to register the sale depots under the Maharashtra Shops and Establishments Act, 2017.

6. The weaving shed, Dye house design Centre, Processing and Printing Unit, wherein the processing and manufacturing activities were carried out. In the weaving shed, handloom weavers used to assemble in turn, they assigned with hops to weave clothes. In Dye house, the process of dyeing of yarns were being carried out. Then in the design centre, designing of clothes is carried out. These premises were duly registered under the FACTORIES ACT as well as under the Employees’ State Insurance Act depending upon the number of employees working there.

7. In support of this submission, the appellant has also placed on record the list of units under the control of head office, Nagpur on 31.03.1988. In the list shown, there are total 55 units working on 31.03.1988, but except for one at Nagpur, all are closed.

8. The appellant has further relied upon the Maharashtra State Handloom Corporation Limited Recruitment Rules, 1977. From the said Rules, it is pointed out that specific provision is made for the employees for maternity leave under Rule 48 and medical attendance under Rules 52 and 53. As such, by these Rules, the Corporation has taken care to provide all medical facilities of their employees and said Rules considered sickness, maternity and employment injury of the Corporation.

9. In the background of above said factual position, the respondent issued a notice dated 15.07.1986