Order:-This appeal arises out of an order passed by the Employees State Insurance Court rejecting an application filed by the appellant herein under section 75 of the Employees State Insurance Act (hereinafter called the Art) for a declaration that its factory was not covered by the provisions of the said Act at any point of time and, therefore, it is not liable to pay any contribution at all. The appellant owns a handloom weaving and dyeing factory known as Kamarajan Textiles producing handloom cloth. In the premises where the handloom cloth is manufactured there are various sections, such as; reeling, winding, dyeing and weaving sections. In the reeling and winding sections, power has admittedly been used; but in the dyeing and weaving sections power had not been used. In the reeling and winding sections, where power was used the number of persons employed were less than 20. But in the weaving and dyeing sections, where power is not used, more than 20 persons had been employed by the appellant. According to the appellant its factory cannot be taken to come under the definition of “factory” as defined in the said Act and, therefore, he is not liable to pay any contribution under the provisions of the said Act in respect of persons employed in its factory. However the respondent had assessed the special contribution payable by the appellant from 31st March, 1967 to 30th June,. 1971 at Rs. 13,935 and to realise the said sum it invoked the provisions of the Revenue Recovery Act. At that stage the appellant has filed an application under section 75 of the Act before the Employees State Insurance Court seeking a declaration as set out above.

2. The appellant’s case is that the reeling and winding sections, which used power, employed less than 20 persons and, therefore, they cannot come under the definition of “factory” as defined in the Act and that the dyeing and weaving sections where more than 20 persons are employed, power has not been used and, therefore, those sections cannot also come under the definition of “factory”.

3. It is also its case that the persons employed in the weaving section cannot come under the definition of “employee” ‘under the Act, as they are paid only on piece rate basis, that it has no control over the workers working in the weaving section and that therefore, the persons working in the weaving section cannot be taken to be his employees.

4. The case of the respondent is that the appellant’s factory is a factory as defined under Section 2 (12) of the Act, that it is not a seasonal factory as claimed by the appellant and that admittedly power having been used in reeling and winding the yarn which is used in the manufacture of the handloom cloth in the weaving section, the entire premises should be taken to be a factory. The respondent also denied the contention of the appellant that it has no control over the workers working in the weaving section and stated that the manufacture of the handloom goods is done only under the supervision of the appellant and that, therefore, the persons working in the weaving section will squarely fall within the definition of "employees" in section 2 (9) of the Act.

5. The Court below has found on evidence that towels alone are being manufactured in the factory of the appellant, that about 100 persons used to work in the factory, that 50 of them are engaged in the looms and are paid on piece rate basis and the other 50 in reeling and winding the thread, that reeling and winding work alone was being done with the aid of electric power and that the persons, whose services are engaged in weaving section are expected to do the work according to the specifications given by the appellant as to the measurement and colour of the towels. On the facts found by the lower Court the question is whether its conclusion that the persons working in the appellant’s factory are persons covered by the provisions of the Act and, therefore, the appellant is bound to make special contribution unde

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