1. These two appeals arise out of a common order passed by the First Assistant Judge, City Civil Court, in an application filed by the Employees State Insurance Corporation for the recovery of a sum of Rs. 2,402 being the employee's contribution for the period 1-7-1958 to 28-7-1962 and an application filed by the appellant for declaration that he is not liable to pay the special contribution to the Corporation
(2) The appellant is a firm carrying on business in the manufacture of iron safes. It is common ground that the manufacture of the iron safes is being carried on in Kondithope, while the painting work is being done in another place in Govindappa Naicken Street. The appellant contended that the workmen employed in the painting work should not be taken into consideration, when deciding the question whether the place of the manufacture of the iron safe was a factory or not. On the other hand, the Corporation contended that both the manufacturing place situated in Kondithope as well as the painting work done in Govindappa Naicken Street would form an integral part of the same business, that if the employees of both the places were taken together they would be more than 20 and that therefore it would come within the definition of a 'factory' in S. 2(12) of the Employees State Insurance Act. The court below came to the conclusion that, though the premises where the manufacture of iron safes was carried on was situated far away from the place where painting was done, still the place of manufacture could be called a factory, as the painting would form part of the process of manufacture, and that the place of manufacture would be a factory within the definition of the term in the Act.
(3) S. 2(12) of the Act defines 'factory' as any premises including the precincts thereof whereon 20 or more persons are working and in any part of which a manufacturing process is being carried on with the aid of power.
(4) In these appeals filed by the firm, the same arguments have been reiterated. It was contended that the court below committed an error, in linking both the places together so as to bring them within the mischief of the definition. The only question, therefore for consideration is whether it is just and proper to include the workmen engaged in the painting of iron safes as workmen engaged in the painting of iron safes as workmen engaged in the process of manufacture of iron safes which is done in Kondithope. Learned counsel would contend that the definition of factory would mean any premises including the precincts thereof. Elaborating his contention, he would say that, if the painting shop was also situated within the place of manufacture of the iron safes, then certainly the firm in question would mean a factory. According to him, the distance between the two places must be the clinching factor, to decide whether it is a factory or not.
(5) In S. I. Corporation v. Sriramulu Naidu, : (1960)IILLJ699Mad . Employees State Insurance Corporation demand contribution from the proprietor of the Pakshiraja Studios, Coimbatore. In the Studios, Coimbatore. In the Studios, there were a number of department called (1) Electrical (2) Camera (3) Sound (4) Setting (5) Moulding (6) Carpentry, (7) Laboratory (8) Editing and so on, Electric power was utilised in connection with some of these items of the work in the Studio. The Corporation contended that the Studio was a factory within the meaning of the Act. But the proprietor of the Studio contested the claim pleading that he was under no liability to contribute, as no one of the departments would come within the scope of the term 'factory' under the Act, as different departments were located in different buildings though within the same compound and that he engaged less than 20 workers in each department. But the learned Judges, constituting the Division Bench of this Court, repelled that contention and observed:
'So long as the efforts of all the departments are co-ordinated to achieve the main object of the factory, that is, the manufacture, the decision whether a particular place is a factory or not would depend largely on the question, whether those activities are carried on within the premises of the factory. The premises need not be a single building; a number of buildings within a single compound might constitute a factory'.
But learned counsel for the appellant before me contended that that case be easy distinguished, in that there all the departments were housed in the same compound, whereas in the instant case under no stretch of imagination could the place where the painting work are done by said to be situate within the precincts of the 'factory' where the manufacture of the safes was being carried on. According to, learned counsel, it was the distance that should be taken into consideration and not the work done in connection with the manufacture of the iron safes.
(6) In one of the earliest of cases on the subject, Coles v. Dickinson, (1864) 10 LT 616, the respondents were owners of a mill at Manchester and another in Hortfordshire, the mill at the former place was used for sorting, cleaning and breaking up of cotton, while the mill at the latter place converted the stuff into paper. Relying on the principle laid down in Hoyle v. Oram, (1862) 12 CB 124, that the distance between the two mills was entirely immaterial, it was held that the two mills were parts of one factory. In Action Corporation v. West Middlesex Assessment Committee, 1949 1 All ER 409, an aeroplane manufacturing company used certain premises for the testing of propellers, the component parts of which were manufactured elsewhere. It was held that the testing was part of the process of manufacture or incidental thereto. It was observed at page 411;
'It seems to me that if a manufacture has to make an article to answer a certain specification, it is essential that he should, in the course of his manufacture, take steps to see that the particular parts of the article and the article itself when finished answer that specification, and to ensure that if, they do not, they do not go out from the factory.
In the instant case, I am of the view that the painting work is part of the manufacture or incidental thereto. Unless the manufactured iron safes are painted, they would not become finished products.
(7). In Vishwamitra Karyalaya Press v. Authority etc., Act, : AIR1955All702 , a case arising under the Payment of Wages Act, the printing of the newspaper was done at one place, whereas the composition or preparation of the block was done at another place. It was observed that everything that was necessary before or after to complete the process would be included within the definition of the words 'manufacturing process'. It was therefore held that the premises where composing was being carried on was a factory within the meaning of the definition. It was further held that where a newspaper was printed on one premises and composing was being carried on in another premises, the latter premises also came within the definition of the expression 'Industrial Establishment' as defined in Payment of Wages Act.
(8) Learned counsel for the appellant drew my attention to the decision in Metro Motors Private Ltd. v. Regional Provided Fund Commissioner, . In that case, an employer had a shop where motor cars even sold and attached thereof was service station where repairs and servicing were done to automobiles. Almost half a mile away from these premises, there was a workshop owned by the employer, where bodies for trucks and buses were made. A question arose whether the premises would constitute a factory so as to make the employer liable under the Employees Provident Funds Act. It was held that the main shop, in which motor cars were sold, was not part of the premises. The learned Judges observed that the shop and the service station half a mile away from the workshop could not be deemed to be in the precincts of the premises in which the manufacturing of the bodies for buses went on, when there was no connection between the two premises except that of ownership. I entirely agree. But in that case there was no connection between the body building undertaken in the workshop and the sale of cars in the main shop, whereas in the instant case there is a connecting link in that the iron safes would not become finished products without painting being done.
(9) In (1862) 12 CB 124: 142 ER 1090 the appellants carried on the business of calico-printers at two places separated by a distance of 7 miles. The processes of bleaching, dyeing and finishing were done at one place and the process of printing was done at another. It was held that the same business was carried on in both the places. The case however turned upon the consideration of the question whether both the premises were part of a single establishment. On a review of the case law on the subject. I feel that the conclusion come to by the lower court is correct.
(10) These appeals are accordingly dismissed. But there will be no order as to costs throughout.
(11) Appeals dismissed.