REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPORATION OF INDIA, BANGALORE Vs. MANAGER, ASSOCIATED CEMENT CO. LTD.

JUDGEMENT

(1.) The Division Bench consisting of Venkataswami & Rangegowda, JJ. has referred the following question of law for the opinion of the Full Bench;

(2.) This case arises out of proceedings initiated by the Associated Cement Companies Limited, Shahabad Cement Works, Shahabad (hereinafter referred to as the Company) under Sec. 75 of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act before the Employees' Insurance Court, Gulbarga, in E. S. I. Application No. 1/72, praying that the Regional Director, Employees' State Insurance Corporation (hereinafter referred to as the Corporation) should be ordered not to demand the contribution from the Company under the Act in respect of the employees in the hospital maintained by it except one nurse. The undisputed facts are these; The Company is running a factory at Shahabad where cement is being manufactured. The Company has established a hospital exclusively for the benefit of its employees where the employees and the members of their families are given medical treatment free of charge. In that hospital fifteen persons are employed by the Company including a doctor and a nurse. The employees of the hospital are included in the muster roll of the factory and their salaries are paid by the factory. The Company has treated the expenditure incurred in running the hospital, including the salaries paid to the employees working there as expenditure incurred by it in connection with its business. The hospital also serves as an ambulance room which every factory is required to maintain under law. Rule 92 of the Rules framed under the Factories Act, reads as follows:-

(3.) The principal contention urged on behalf of the Company before the Employee's Insurance Court and the Division Bench has been that if certain employees are engaged by the employer not directly connected with the work of the factory or in compliance with any statutory provision, but in a hospital which is established as a charitable institution for the benefit of workmen, they cannot be considered as employees within the meaning of the expression "employee" defined in Sec. 2 (9) of the Act. The relevant part of Sec. 2 (9) reads :-