[111] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-1556-1993 (O&M)

Date of Decision : 08.04.2025 Employees State Insurance Corporation …Appellant versus M/s Birla Oil Mills, Malout ….Respondent Coram : HON’BLE MR. JUSTICE PANKAJ JAIN Present: Mr. H.S. Bhatia, Advocate for the appellant.

***

PANKAJ JAIN, J. (ORAL)

[1] The ESI Corporation is in appeal against the order passed by ESI Court, whereby petition filed by the respondent under Section 75 of the ESI Act, 1948, impugning order passed by the ESI Corporation under Section 45A dated 09.04.1990 was allowed.

[2] Counsel for the appellant does not dispute that the issue already stands decided by this Court in FAO No.1555 of 1993 titled as ‘Employees State Insurance Corporation versus Upper Ganges Sugar & Industries Limited’ vide judgment dated 04.09.2024 against ESI Corporation. While deciding issue against the Corporation, this Court held as under:- “2. Respondent/establishment Challenged the order passed by ESI Corporation whereby the factory owned by the respondent i.e. B.T.M. Oil Mills a unit of M/s Birla Textile Mills Ginning and Pressing Factory, Malout was held to be coveredunder the ESI Act w.e.f. 01.04.1980 and they were required to make payment of Rs.41,932/- as contribution for the period commencing from RAJNEESH SHARMA

01.04.1980 to 30.11.1987 along with interest of Rs.13,541/-. It was claimed by the respondent/establishment that cotton ginning and pressing factory at Malout was established in the year 1947 and the same is being run under the name & style of M/s Birla Textile Mills Ginning and Pressing Factory, Malout. In order to utilize cotton seeds separated during the manufacturing process of cotton ginning and pressing, B.T.M. Oil Mills Unit was installed in the same premises. ESI Corporation illegally covered the factory under the provisions of ESI Act and issued notices from time to time calling upon them to deposit the contribution for the period commencing from 01.04.1980 to September, 1987.

3. Two issues were raised by the respondents:

(i) That the ESI Act is not applicable to the area wherein the factory is situated; and (ii) ESI Act is not applicable to the factory, the same being 'seasonal factory' in terms of Section 2(19-A) of the Act.

4. ESI Court rejected the first objection raised by establishment and held that in view of Notification dated 28.02.1981 published in the Gazette of India Extraordinary Part II read with amending Notification dated 24.08.1981, the area wherein the respondent/factory is situated, is covered.

5. Second objection was upheld and answered in favour of the factory holding it to be a seasonal factory in terms of Section 2(19- A) of the 1948 Act and thus exempted from the application of ESI Act relying upon the ratio of law laid down by Andhra Pradesh High Court in the case of Employees' State Insurance Corporation vs. Jayalakshmi Cotton and Oil Products (P) Ltd. and Ors, A.A.O.

No.198 of 1979 decided on 25.04.1980.

6. I have heard counsel for the parties and have carefully perused the records of the case.

7. Section 1 of the 1948 Act deals with application of the statue.

Section 1(4) reads as under :

“(4) It shall apply, in the first instance, to all factories (including factories belonging to the government) other than seasonal factories:

RAJNEESH SHARMA [PROVIDED that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.]”

8. The ESI Court has held the respondent to be a seasonal factory. “Seasonal factory” is defined under Section 2(19-A) of the

1948 Act. The same reads as under :

[(19A) "seasonal factory" means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubb