The main legal point established in the judgment is that a petrol pump, involving a manufacturing process as defined under the Factories Act, satisfies the definition of a 'factory' under the Employees' State Insurance Act, 1948, and is liable for coverage and contribution.

Ramachandra Menon, J.

Challenge is against the order passed by the Employees Insurance Court, Kollam; whereby the application filed by the appellant, against the proceedings of the respondent Corporation intending to extend coverage to the establishment of the appellant, was dismissed, repelling the contentions raised that it was not a factory under Section 2 (12) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the 'Act') and that at no point of time in the preceding 12 months had the appellant engaged ten or more employees to have extended the coverage.

2. The appellant is a dealer of petroleum products marketed by the Bharath Petroleum Corporation Limited. Admittedly, the petrol pump run by the appellant is having three outlets for filling petrol/diesel in the vehicles, which is a commercial establishment within the meaning of the Kerala Shops and Establishment Act, 1960.

3. The Area Inspector of the respondent Corporation conducted an inspection in the appellant's establishment on 03.02.2000 and reported, after verification of the attendance and the registers, that 11 persons were engaged for wages in the petrol pump and recommended for extension of coverage under Section 2(12) of the Act w.e.f. 01.01.1999. Pursuant to this, Form - C 11 was forwarded by the Corporation on 04.04.2000. But since there was no response from the part of the appellant, the Corporation proceeded with steps under Section 45A of the Act and Form C-18 notice was issued on 04.02.2003, proposing the assessment of contribution as Rs.1,15,026/- in respect of 11 employees, for the period from January 1999 to September 2002, affording an opportunity of hearing scheduled on 05.03.2003. Considering the request made by the appellant, the date of hearing was adjourned to 10.04.2003, granting 30 days' time, as sought for, for production of records. But since nothing turned out in the positive, and there was total inaction/lapse on the part of the appellant, a show-cause notice dated 26.06.2003 was issued to the appellant, proposing prosecution proceedings for the non-payment of contribution and non-submission of returns for the relevant period, under Section 85 of the Act. This made the appellant to approach the Employees Insurance Court, Kollam, by filing an application under Section 75 of the Act, challenging the proceedings on different grounds, which included the plea of limitation as well.

4. In the course of further proceedings, evidence was let in from the part of the appellant by examining AW1 and AW2, besides marking Exts. A1 to A3. Evidence adduced from the part of the respondent consists of the oral testimony of RW1 and documents produced as Exts. B1, B2, B2(a), B2 (b) and B3 to B7. The points for consideration as dealt with by the Court below in paragraph 5 of the order under challenge were:

"1. Whether the applicant's establishment is a factory under section 2 (12) of the Act to attract coverage under the provisions of the Acts and liable to pay contribution in respect of the employees engaged in the establishment ?

2. Whether the claim and demand made by the Corporation is barred by limitation or not under the proviso to Section 77 (1) (b) of the E.S.I. Act ?.

3. Whether the suit is barred by limitation or not ? (The learned counsel for the applicant and the Corporation, however, did not press the point at the time of argument)."

As observed by the Tribunal in the very same paragraph, the question of limitation was not pressed by the learned counsel and hence the only question considered was whether the applicant's establishment would come under Section 2 (12) of the Act, to attract coverage under the ESI Act and whether it was liable to pay contribution for the employees engaged in the said establishment. After referring to the relevant provisions of law, it was held that there was manufacturing process in the establishment of the appellant, in so far as petrol/diesel was pumped from the tank kept in the premises, to the