The State Government's power to grant exemptions under Sections 87 and 88 of the Employees' State Insurance Act, 1948, does not extend to the special contribution under Chapter V-A, which is exclusively reserved for the Central Government under Section 73-F.

( 1 ) THREE questions of importance, touching the Employees' State Insurance Act, 1948, and the inter-relation of some of its sections and its three Chapters IV, V and V-A and their relative mutual impact on one another, arise for consideration in this appeal and they embrace, in particular, determination of the meaning and scope of the two terms "employee' and 'factory' and the effect thereof and of the exemption, granted by the State Government under Sections 87 and 88 of the Act, on the employer's liability for special contribution under the aforesaid Chapter V-A. For proper appreciation of the questions raised and facilitating due determination of the same, it is necessary to state the facts which led up to the present proceeding. Those facts lie within a short compass and they stand as follows: the appellant, the Calcutta Electric Supply Corporation Ltd. , is a business concern, carrying on the business of generating and supplying electrical energy for use, inter alia, in Calcutta and its suburbs and, for that purpose, it has three power houses or Generating Stations and 23 sub-stations in Calcutta and Howrah and certain ancillary establishments. The above three Power Houses or Generating Stations are the Southern Generating Station, the old Cossipore Generating Station and the new Cossipore Generating Station, employing respectively 713, 391 and 399 men on their separate rolls. The 23 sub-stations which draw high voltage electrical energy from the connected Power Houses or Generating Stations and distribute such energy to individual customers after transforming and converting it to low and medium voltage, are each situate at a distance of more than one mile from the corresponding Power House or Generating Station and each of these sub-stations, apart from its connection with the corresponding main Power House or Generating Station as aforesaid (which is of paramount importance in the present case), may be said to form and constitute a distinct and separate installation in its own premises employing, on its own individual roll, less than 20 persons.

( 2 ) THE Employees' State Insurance Act, Act XXXIV of 1948, which applies, inter alia, to 'factories' (vide Section 1 (4)), became law on April 19, 1948, and, in accordance with its own provisions, different parts of the statute were brought into force in different areas on different dates (vide Section 1 (3) ). The original Act had no Ch. V-A and this new Chapter, with its new group of sections, Sections - 73-A to, 73-1, was enacted and introduced in the year 1951 by Act LIII (Section 20) of that year, and, under the said new Section 73-A, the appellant Company was made liable to pay the special contribution in terms thereof with effect from February 25, 1952.

( 3 ) IN the year 1955, Or more precisely, on the 31st of August, of that year, the State Government, acting as the appropriate Government (vide Section 2 (1)) for the purpose, issued a notification under Section 88 of the Act, exempting the appellant's employees from the operation of the above Act "except Chapter V-A thereof, subject to the condition that such exemption shall cease to be in force after a period of one year or after Chapters IV and V of the said Act are brought into force in the area, where the Mulajore Generating Station, Shyamnagar, of the Calcutta Electric Supply Corporation. Ltd. , is situate, whichever is earlier," and, in the wake of the said notification, the appellant Company objected to the levy of the special contribution and, eventually, filed the present application before the appropriate special tribunal under the Act, namely, the Employees' Insurance Court, Calcutta (vide Section 74) praying for a declaration that it (the appellant) was not liable to pay any special contribution at all or, at any rate, in respect of the employees at the sub-stations and the ancillary establishments, referred to above, and for an order staying realisation of the amounts (Rs. 12,597/-