REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE CORPN MADRAS EMPLOYEES STATF INSURANCE CORPN EMPLOYEES STATE INSURANCE CORPN Vs. SOUTH INDIA FLOUR MILLS P LTD

JUDGEMENT

(1.) Civil Appeal No. 801 of 1976 and Civil Appeal No. 819 (NL) of 1976 have been preferred by Special Leave by the Employees' State Insurance Corporation, hereinafter referred to as 'ESI Corporation'. The ESI Corporation has also filed Special Leave Petitions Nos. 1143-1145(NL) of 1978. These appeals and the Special Leave Petitions raise a common question of law and, as such, they have been heard together. Indeed, by an order of this Court the Special Leave Petitions were directed to be heard along with Civil Appeal No. 801 of 1976. Before we indicate the question of law we may state a few facts.

(2.) In Civil Appeal No. 801 of 1976, the respondent company, South India Flour Mills (P) Ltd., is engaged in milling wheat into wheat products in its flour mill. It is not disputed that the mill of the respondent company is a factory within the meaning of the Factories Act, 1948. In or about the middle of 1964, the respondent company commenced the construction of another building in the compound of the existing factory for the expansion of the factory and engaged workmen for such construction on daily wage basis. The ESI Corporation called upon the respondent company to make contribution in respect of the workmen employed for the construction work of the factory building as required by the Employees' State Insurance Act, 1948, hereinafter referred to as 'the Act'. The respondent company moved the Madras High Court under Art. 226 of the Constitution against the said demand. A learned single Judge of the High Court took the view that the persons employed in the construction of a new unit of the factory Were not employees within the meaning of the definition of the term 'employee' under S. 2(9) of the Act. In that view of the matter, the learned Judge allowed the writ petition of the respondent company. On appeal by the ESI Corporation to a Division Bench of the High Court, the Division Bench simply referred to and relied upon an earlier decision of that Court in Employees' State Insurance Corporation v. Gnanambikai Mills Ltd., (1974) 2 Lab LJ 530 (Mad). In that case, it has been held that though casual employees come within the definition of the term 'employee' under S. 2(9) of the Act yet, as they may not be entitled to sickness benefit in case their employment is less than the benefit period or contribution period, it does not appear to be the intention of the Act that casual employees should be brought within its purview. Accordingly, it has been held that construction workers being casual employees do not come within the purview of the Act. The appeal preferred by the ESI Corporation was dismissed.

(3.) In Civil Appeal No. 819 (NL) of 1976, the respondent company, Shri Sakhti Textiles Pvt. Ltd., was granted an additional spindleage. Accordingly the respondent company expanded its mill, that is the factory, by putting up of new buildings and, for that purpose, the company had to employ a large number of workers. The ESI Corporation demanded from the respondent company contributions in respect of the said workers for the period from July 1, 1963 to September 30, 1967. The respondent company instituted proceedings under S. 75 of the Act in the Employees' State Insurance Court, Coimbatore, inter alia, praying for a declaration that the workers employed for the construction work of the factory buildings were not employees within the meaning of S. 2(9) of the Act. The Employees' State Insurance Court held that the workers engaged by the respondent company for putting up of additional constructions for the factory were not employees within the definition of the term 'employee' under the Act. On appeal by the ESI Corporation against the order of the Employees' State Insurance Court, a Division Bench of the Madras High Court took the view that employment of workers for putting up of additional buildings for the purpose of commencing manufacturing process would not be employment incidental or preliminary to or connected with the work of the factory and, accordingly, the workers employed for the purpose of construction of additional buildings were not employees within the meaning of S. 2(9) of the Act. In that view of the matter, the Division Bench dismissed the appeal.