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The Birla Cotton Spinning and Weaving Mills Ltd., Birla Mills Ltd. Vs. the Employees State Insurance Corporation - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Case NumberF.A.F.O. No. 57-D of 1958, from order of Judge Employees Insurance, Delhi, D/- 10-1-1958
Judge
Reported inAIR1970Delhi167; 1970LabIC1108
ActsEmplopyees' State Insurance Act, 1948 - Sections 2(9); Code of Civil Procedure (CPC), 1908
AppellantThe Birla Cotton Spinning and Weaving Mills Ltd., Birla Mills Ltd.
RespondentThe Employees State Insurance Corporation
Appellant Advocate Dalip K. Kapur, Adv
Respondent Advocate Dipak Choudhary and P.D. Sharma, Advs.
Cases ReferredCentral Rly. Workshop v. Vishwanath
Excerpt:
.....the most important considerations in matters relating to custody of a minor child. - as the main factory building dominates the are inside the compound, it appears to us that the premises of the factory could well mean the whole complex of the buildings inside the compund-wall of the premises of the company, in a part of which the actual manufacturing process is carried on. while we are inclined to hold that the whole are inside the compund-wall of the premises of the company amounts to the premises and the precincts of the factory, we think that we would not like to give a final decision on this aspect of the question inasmuch as this appeal is capable of being decided finally by considering the second aspect of the question. it is precisely on these special factors that this decision..........premises of the company are enclosed by a compound wall, inside this compound, there is the main factory building shown inside the red border. separated from the main factory building by open spaces or roads are other buildings such as godowns, officers, etc. the company applied to the employee insurance court under section 75(1)(a) of the employees state insurance act, 1948 (hereinafter called the act) for the determination of the question, whether the employees enumerated in the statement at the end of the record of this appeal are covered by the definition of an 'employee' in section 2(9) of the act. the company had pleaded that these persons were not working in the factory nor were they doing work connected with the work of the factory and, thereforee, they were not 'employees'.....
Judgment:

V.S. Deshpande, J.

1. Birla Cotton Spinning and Weaving Mills, Limited (hereinafter called the Company) is engaged in the manufacture of cotton textiles. As shown by the plan filed in the Court below, the premises of the Company are enclosed by a compound wall, Inside this compound, there is the main factory building shown inside the red border. Separated from the main factory building by open spaces or roads are other buildings such as godowns, officers, etc. The Company applied to the Employee Insurance Court under Section 75(1)(a) of the Employees State Insurance Act, 1948 (hereinafter called the Act) for the determination of the question, whether the employees enumerated in the statement at the end of the record of this appeal are covered by the definition of an 'employee' in Section 2(9) of the Act. The Company had pleaded that these persons were not working in the factory nor were they doing work connected with the work of the factory and, thereforee, they were not 'employees' under the Act. The claim of the Company was resisted by the Employees' State Insurance Corporation and by certain employees. The Employees' Insurance Court held that these persons were employees under the Act. Hence this appeal.

2. The sole question for decision, thereforee, is whether these persons are 'employees' under the Act.

3. None of these employees is working in the main factory building. They are working either in the administrative office or on other work of the company ooutside the main factory building and sometimes outside the premises of the Company enclosed by the compound wall. The Unit of production is the Birla Cotton Spinning and Weaving Mills. It has two main divisions. The vast majority of its employees numbering about 5000 are working inside the factory where the manufacturing process is carried on. The minority of the workers with whom we are concerned numbering about 178 are working outside the factory, but in close connection with the work carried on in the factory. Most of these 178 persons are working in administrative offices of the Company the work of which together with the manufacturing process constitutes the work of production in which the Company is engaged. The office work consists of keeping accounts, preparing bills, maintaining record of attendance, correspondence etc., while the outdoor work consists of the watch and ward department, taking delivery of goods from the Railway station and dispatching goods to the Railway Station, sweepers, drivers, clearners and peons. The manufacturing process carried on in the factory cannot in itself result in the production of goods without the help of these 178 persons. The factory workers and the outsiders together produce the goods.

4. The relevant portion of the definition of the word 'employees' which governs the present case is contained in Section 2(9) of the Act, as it stood before it was amended by Act No. 44 of 1966. It is necessary to read the said definition carefully. It is as follows:

' 'employee' means any person employed for wages in orin connection 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, 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.'

The above definition covers the following two types of persons, namely:-

(a) Those working in the factory; and

(b) Those working elsewhere but employed for wages in connection with the work of a factory or on any work or of incidental or preliminary to or connected with the work of the factory.

5. The first aspect of the question for decision, thereforee, is whether any of the persons described in the attached statement are working in the factory. The definition of the word 'factory' for the purpose of the Act is to be found in Section 2(12) thereof and is as follows:

' 'factory' means any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Mines Act, 1952, or a railway running shed.'

6. As we have stated above, none of these persons is working in the main factory building. The definition of 'factory' however means any premises including the precincts thereof. The same expression has been used to define a 'factory' in Section 2(m) of the Factories Act which was also enacted in the same year, namely, 1948, in which this Act was enacted. In construing the word 'premises' as used in Section 2(m) of the Factories Act, 1948, the Supreme Court observed in Ardeshir H. Bhiwandiwala v. State of Bombay : (1961)IILLJ77SC in paragraph (5) that 'the word 'premises' has now come to refer to either land or buildings or to both, depending on the context'. In paragraph (6), their Lordships further observed that:

'The expression 'premises including precincts' does not necessarily mean that the premises must always have precincts. Even buildings need not have any precincts. The word 'including' is not a term restricting the meaning of the word 'premises' but is a term which enlarges the scope of the word 'premises'.'

In our view, the precincts would be the adjuncts of the premises. The premises could themselves be either the main factory building alone or the whole complex of buildings inside the compound-wall of the premises of the Company. As the main factory building dominates the are inside the compound, it appears to us that the premises of the factory could well mean the whole complex of the buildings inside the compund-wall of the premises of the Company, in a part of which the actual manufacturing process is carried on. Whether the main factory building alone is to be regarded as the premises of the factory or all the buildings inside the compund are to be so regarded depends on the sense of proportion in which the main factory building stand to the other buildings inside the compound. As the factory building is by far the biggest and the most important building, it is arguable that the other buildings are attached parts of the factory. On this view, the persons described in the statement would be working in the factory.

7. Even if the whole area inside the compund-wall is not regarded as the factory, the area outside the main factory building is capable of being regarded as the precincts of the factory. For the open spaces and the buildings around the main factory building but inside the compound-wall are subservient to the main factory building. They have no other purposes except to serve the need of the factory. Here again, the precincts are not independent buildings in themselves as they cannot exist independently but only as serving the needs of the factory. They are, thereforee, inevitably attached to the factory and may justly be said to form the precincts of the factory. In State of U.P. v. M. P. Singh : 1960CriLJ750 , the fields in which sugar plants were grown for being consumed by the sugar factory could not be regarded as being within the precincts of the factory or in the premises of the factory. Presumably, the field could not be in the same compund in which the factory was situated and the area of the fields must have been too large to be regarded as being within the precincts or the premises of the factory. On the other hand, in the present case, the area around the main factory building but inside the compund-wall is not so large that it could notbe said to fall within the premises or the precincts of the factory. This is why in Employees' State Insurance Corporation v. Siriramulu Naidu : (1960)IILLJ699Mad , it ws held that a number of departments situated in separate buildings but engaged in work connected with the manufacture within the same compund as the main factory building was situated constituted a factory. While we are inclined to hold that the whole are inside the compund-wall of the premises of the Company amounts to the premises and the precincts of the factory, we think that we would not like to give a final decision on this aspect of the question inasmuch as this appeal is capable of being decided finally by considering the second aspect of the question.

8. The second aspect is whether the persons enumerated in the attached statement are employed for wages 'in connection with the work of the factory or on any work of or incidental or preliminary to or connected with the work of the factory'.

9. As to what work can be said tobe connected with the work of the factory is mainly a question of degree. There may be various degrees as to the closeness or the directness of the connection between the work of the factory and the work done elsewhere in connection with the work of the factory. It is possible to take either a strict or a liberal view of such connection. On a survey of the case-law dealing with this aspect of the question, it appears to us that the trend of the judicial opinion has definitely been to abandon the former strict view and to accpet a more liberal view in view of the fact that the Act is a piece of welfare legislation which should be liberally construed. In the Employees' State Insurance Corporation v. Raman (1957) 1 Lab Lj 267 , the Chemicals were actually manufactured by the Eastern Chemicals Company. The sales of the products manufactured by them were, however, looked after by the J. K. Chemicals, Ltd. It was not the case of the Employees' State Insurance Corporation that the Eastern Chemicals Company, as one company, ran two departments in one of which Chemicals were manufactured and in the other, they were sold. On the contrary, the work of the factory proper was confined only to the manufacture while the work of the sales was done by another company. Their Lordships observed that:

'If we were dealing with the case of factory which, as one unit, runs two departments, ....... perhaps different considerations may have come into play'.

On the special facts of the case, thereforee, the decision was that the employees doing the work of sales in the J.K. Chemicals Ltd., were not the employees of the factory of the Eastern Chemicals Company. It is precisely on these special factors that this decision was distinguished later by the Supreme Court in Nagpur Electric Light and Power Co., Ltd., v. Employees' State Insurance Corporation. Air 1947 Sc 1364 which will be referred to later.

10. In the Employees' State Insurance Corporation v. Ganpathia Pillai : (1961)ILLJ593Mad the persons employed in the Managing Agents office were not doing any work connexted with the work of the factory which was regarded as the actual manufacturing process. Apparently the connection insisted upon was a direct or immediate connection which was found to be wanting. It will be seen that this strict view has not found favor with subsequent decisions.

11. In : 1960CriLJ750 referred to above, while the field workers employed in the sugar-cane fields could not be said to be employed in the precincts or the premises of the factory, they had been held by the High Court to be employed 'in work connected with the subject of the manufacturing process'. This finding of the High Court was not varied by the Supreme Court in paragrapn (6) of the decision. This shos that trend of the liberal view of the word 'connection'. In K. Thiagarajan Chettiar v. Employees' State Insurance Corporation : (1963)IILLJ207Mad even the gardners, building workers, officer attender, watchman etc., of a textile mill were held to be 'employees' on a liberal view of the expression 'work connected with the work of the factory'. In Chanan Singh v. Employees' State Insurance Corporation a person working as Accountant and doing work connected with the sale and distribution of the products of the factory was also held to be an 'employee' as his work was connected with the work of the factory. In Sirsilk Ltd., v. Employees' State Insurance Corporation : AIR1964AP291 workmen in the canteen attached to the factory were held to be employees inasmuch as their work was also connected with the work of the factory since they fed and entertained persons actually engaged in the manufacturing process.

12. This process of liberalising the concept of 'work connected with the work of the factory' reached its final Phase in : (1967)IILLJ40SC in which the work of the following persons was held tobe 'in connection with the work of the factory or incidental or preliminary to or connected with the work of the factory', namely, engineers, supervisors, electricians, and overseers engaged in the erection and maintenance of the electricity supply lines, cable joiners, mistress, linemen, coolies and wiremen employed for inspection of the supply lines, digging pits, ereting poles for lying distribution mains etc., masons, motor drivers and cleaners, clerks, draughtsmen and main office peons, store-keepers, meter superintendents, meter mechanics, accountants and even the telephone operators. It is to be noted that this decision is not based on an extended definition of the word 'factory'. In paragraph (8) of the report, their Lordshisp stated that they did not accept the proposition that wherever the manufacturing process was carried on, there was the factory. On the contrary, their Lordships approved of the proposition that 'a factory must occupy a fixed site' in 17 Halsbury's Laws of England p. 15, This shows that the decision cannot be explained as being due to the special nature of the electric supply work the work of the electric supply is spread over a large area and is not confined to a factory building. The basis of the decision is that the work of persons working outside the factory building over a large area was connected with the work of the factory and, thereforee, all these persons were 'employees' under the Act.

13. In the latest decision of the supreme Court in the Works Manager, Central Rly. Workshop v. Vishwanath, (Civil Appeal No. 1644 of 1966, D/- 9-10-1969) = (reported in : (1970)ILLJ351SC ) their Lordships were considering the definition of 'worker' in Section 2(1) of the Factories Act, 1948 which is more restricted than the definition of 'employee' under the Act. The expression with which their Lordships were concerned was 'work incidental to or connected with the manufacturing process or the subject of the manufacturing process'. Their Lordships observed that:

'it is probably true that all legislation is a welfare state is enacted with the object of promoting general welfare; but certain types of enactments are more responsive to some urgent social demands and also have more immediate and visible impact on social vices by operating more directly to achieve social reforms. The enactments with which we are concerned, in our view, belong to this category and, thereforee, demand an interpretation liberal enough to achieve the legislative purpose, without doing violence to the language.'

Therefore, the time-keepers who prepare the pay sheets of the workship staff, maintain leave account, dispose of settlement cases and maintain records for statistical purposes were held to be 'workers'. The observations of their Lordships are applicable to the construction of the word 'employee' in the Act which is also an enactment more responsive to an urgent social demand and in the same category as the Factories Act.

14. A look at the duties of the persons listed in the statement would show that all of them are intimately concerned with the work of the factory. They are all employed by the same Company which is running the factory. They are, thereforee, diferent departments of the same Company, the object of which is to manufacture textiles. The manufacturing process cannot be carried on without the help of these ofice workers. It would be too artificial a view of a work in a factory to say that only the actual manufacturing staff should be regarded as doing the work of a factory. For, the manufacturing staff wouldbe unable to function unless the other connected work is done by other persons. The work done in the office of the factory must, thereforee, be said to be connected with the work of the factory and thereforee, the office workers must also be said to be 'employees' under the Act. It is trust that the preamble of the Act says that the Act was to provide for certain benefits to employees in case of sickness, maternity and employment injury. It may also be that the risk of employment injury may be grater to a worker actually carrying on the manufacturing process as compared to the office worker. But sickness and maternity are common to both the manufacturing workers and office workers. The Act deals comprehensively with all these risks. This is why the definition of an 'employee' under the Act covers not only the manufacturing workers but also persons doing work connected with the manufacturing work. On this view, the office workers are 'employees' under the act. We find so. Incidentally, it may be stated that the amendment of the definition of 'employee' in Section 2(9) of the Act by Act No. 44 of 1966 confirms the liberal view of the 'connection' between the manufacturing process carried on in the factory and the work done in the office of the factory. The liberal construction adopted by us in this decision is, thereforee, shown to have been in accordance with the intent of the legislature.

15. The appeal is, thereforee, dismissed but without any order as to costs.

16. Appeal dismissed.


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