Rajamannar, C.J.

The decision of this appeal turns on the application of the definition of "employee" in the Employees' State Insurance Act, 1948, to seven persons employed in the office of the managing agents of the Lotus Mills, Ltd., Coimbatore. Lotus Agency (Private), Ltd., are the managing agents. The learned District Judge of Coimbatore decided that they were not "employees."

"Employee" is defined in S.2(9) of the aforesaid Act thus

"'employee, ' means any person employed for wages in or in connexion with the work of a factory or establishment to which this Act applies and -

(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to, or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; ............" *

For the purpose of this appeal Sub-cls. (ii) and (iii) are not material. "Factory" is thus defined :

"'Factory, ' means any premises including the precincts thereof whereon twenty or more persons are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on w