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Mahalakshmi Oil Mills Vs. Employees' State Insurance Corporation (27.10.1965 - MADHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Judge
Reported in(1966)IILLJ1Mad
AppellantMahalakshmi Oil Mills
RespondentEmployees' State Insurance Corporation
Cases ReferredState Insurance Corporation v. Chittur Harihara Iyer Raman
Excerpt:
- venkatadri, j.1. both these appeals arise under the employees' state insurance act. the appellant herein is the mahalakshmi oil mills, carrying on the business of manufacture of oils in the city of madras. the employees' state insurance corporation, through its regional director, called upon the appellant to contribute employees' share of contribution as required under section 40(1) of the employees' state insurance act at rates provided under section 39 read with sch. i of the act for a period commencing from 6 september 1960 to 28 july 1962, approximately amounting to rs. 1,138. as the appellant has not paid this amount, the employees' state insurance corporation have filed the application, e.i.o.p. no. 44 of 1962, out of which c.m.a. no. 223 of 1963 arises. equally the appellant filed.....
Judgment:

Venkatadri, J.

1. Both these appeals arise under the Employees' State Insurance Act. The appellant herein is the Mahalakshmi Oil Mills, carrying on the business of manufacture of oils in the city of Madras. The Employees' State Insurance Corporation, through its Regional Director, called upon the appellant to contribute employees' share of contribution as required under Section 40(1) of the Employees' State Insurance Act at rates provided under Section 39 read with Sch. I of the Act for a period commencing from 6 September 1960 to 28 July 1962, approximately amounting to Rs. 1,138. As the appellant has not paid this amount, the Employees' State Insurance Corporation have filed the application, E.I.O.P. No. 44 of 1962, out of which C.M.A. No. 223 of 1963 arises. Equally the appellant filed E.I.O.P. No. 2 of 1962, out of which C.M.A. No. 222 of 1963 arises for a declaration that it is not liable to pay the contribution as claimed by the Employees' State Insurance Corporation.

2. When the matter came up before the tribunal, the First Assistant Judge. City Civil Court, evidence was adduced by the appellant that there were twenty persons working in the factory as claimed by the Insurance Coporation, but, on the other hand, there was another organization called Tarakeswari Oil Mills, which is a separate entity and separate unit dealing with the sales of the products of Mahalakshmi Oil Mills. The two concerns are situated in two buildings within the same compound. The appellant contended that only fourteen persons were working in Mahalakshmi Oil Mills and six working in the Tarakeswari Oil Mills. Therefore, be far as Mahalakshmi Oil Mills is concerned, the Employees' State Insurance Corporation has no jurisdiction to ask the appellant to contribute the employees' share as coming within the definition of 'factory' in this Act. On these pleadings, the parties went to trial and evidence was let in to prove that the appellant and Tarakeswari Oil Mills are two different entities and they are not one and the same. When P.W. 1 was in the box, he said that Tarakeswari Oil Mills are also proprietors of Mahalakshmi Oil Mills. Evidence was also adduced regarding separate attendance registers for the workers but, in the, attendance only one name, Mahalakshmi Oil Mills, was given but not the other mill.

3. R.W. 1, the manager of the Employees' State Insurance Corporation, when he visited and inspected the premises, saw twenty persons employed within the compound. On this evidence, the learned City Civil Judge came to the conclusion that, as there are twenty persons in both the mills, the appellant is liable to pay the amount as claimed by the Employees' State Insurance Corporation. It is against this judgment the appellant preferred the abovesaid two appeals.

4. The actual point that has to be considered is whether there are two different entities or one organization. No useful purpose will be served in considering whether there are two different entities, because in the decision in Employees' State Insurance Corporation v. S.M. Sriramulu Naidu 1960 I.L.J. 699, their lordships held that even though there are several departments situated within the same compound of a studio, still it was a factory under the Employees' State insurance Act. Therefore, I come to the conclusion that there is abundant evidence on record to show that though Tarakeswari Oil Mills may be a sales organization, still it is a same unit of Mahalakshmi Oil Mills. But still the important Question that has to be considered in this case is the claim of Mahalakshmi that people working in the Tarakeswari Oil Mills cannot be considered to be employees because they are all connected with the sales organization. If those people are excluded, then certainly Mahalakshmi Oil Mills cannot be called upon to contribute as it has got only fourteej workers. There is some force in the of tention urged by the learned Counsel for the appellant. In Employees' State Insurance Corporation v. Ganapathia Pillai 1961 I.L.J. 593, while considering whether a general supervisor, assistant secretary, supervisor in charge of managing agency of a textile mill, a clerk, a ledger clerk, all employees of a textile managing agency, are employees within the definition of the term in the Employees' State Insurance Act, their lordships held that these people do not come within the definition of a workman under the Employees State Insuranoe Act on the ground that it is a separate entity and they have nothing to do with the manufacture of the textile products and held that the Act is not applicable as far as they are concerned.

5. There is a decision of Gajendragadkar, J., as he then was, Employees' State Insurance Corporation v. Chittur Harihara Iyer Raman 1957 I.L.J. 267 on this point. While considering the definition of an ' employee ' under the Employees' State Insurance Act, the learned Judge observed:

It must be shown that he has been employed on any work, of, or incidental or preliminary to, or connected with the work of the factory.

6. Therefore, the learned Assistant Judge of the City Civil Court has not considered this aspect of the case when there is evidence or sufficient material on record to decide whether the persons working in Tarakeswari Oil Mills are employees within the Employees' State Insurance Act. Therefore, this matter has to go back to the tribunal, whoever he is, dealing with it, to decide whether the persons working in Tarakeswari Oil Mills are employees within the meaning of the term in the Employees' State Insurance Act.

7. The appeals are allowed and the matter is remanded to the tribunal.


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