HYDERABAD ASBESTOS CEMENT PRODUCTS LTD Vs. EMPLOYEES INSURANCE COURT INDUSTRIAL TRIBUNAL RAMKOTL HYDERABAD

JUDGEMENT

(1.) This Full Bench has been constituted to hear the writ peticlon by reason of an order of reference made on the 25th of November, 1974 by the Hon'ble the Chief Justice and Punnayya, J. The order of reference states :

(2.) In the Writ petition the petitioner prayed that the High Court may be pleased to Issue an order, direction or a writ particularly one in the nature of Mandamus directing the 1st respondent, the Employees. Insurance Court, Hyderabad to refer a question of law for the decision of the High Court under Sec. 81 of the Employees State Insurance Act, 1948 (hereinafter referred to as 'the Act') I.e. whether the employees working in Establishments which are not factories with in the meaning of Sec. 2 (12) of the Act can be said to be covered under the Act.

(3.) The facts giving rise to the filing of the Writ petition may now be set out briefly. In Sanatnagar. Hyderabad, there is an Industrial Estate. The petitioner, the Hyderabad Asbestas Cement Products Ltd , has a factory located at Sanatnagar. In the said factory, asbestas sheets, are manufactured. There are a large number of employees in the said factory, They are ail covered by the ESI. Act. The petitioner company has Zonal Sales Offices in several states of the Country. In the State of Andhra Pradesh, they have such Zonal Offices at Vljayawada and Vlsakhapatnam. The factory located at Sanatnagar is registered as a factory under the Factories Act. The several Zonal Offices which according to the petitioners, are establishments were registered under the relevant Shops and Establishments Act in the several States where they are located. These sales offices are not factories within the meaning of the E.S.I. Act, as no manufacturing process or work incidental to it is carried on in the Zonal Sales Offices. While, so he Regional Director, Employees State InsuranceCorparatlon. Hyderabad had by his letter dated 13-3-1970 Informed the petlt!oner with regard to the coverage under the Act of the contract labour engaged by the various contractors for loading and unloading of goods at the factory premises of the company. The letter also informed that with regard to the staff of the zonal sales offices, the provisions of the Act arc applicable with effect from 28-1-1968. The letter required that those employe's should all be covered under the Act. The petitioner company filed Application No 6 of 1970 before the 1st respondent, the Employees Insurance Court under Sec. 75 of the Act. That application was dismissed by the E.S.I. Court. The petitioner-company had preferred C M.A.No, 187 of 1971 to this Court The appeal was heard by Obul Reddy, J (as he then was) and Madhava Rao, j By their judgment dated the 8th of Aug. 1972, the Bench had allowed the appeal and the matter was remitted to the E. I Court for a disposal in the light of the observations contained in the judgment. In the course of the judgment it was observed by the Bench that there was a distinction between a 'factory' and an 'Establishment' and that initially the Act applied only to factories. The Act would cover 'establishment' only In case a notification was issued by the Central Govt. under sec. 1 (5) of the Act. in the absence of such a notification establishments are not covered by the Act. It was opined by the Bench that as the distinction between a 'factory' and an 'establishment' was not maintained by the E.I. Court while dealing with the case the case was reminded. While the matter was pending before the E. I. Court after remand, a Division Bench of this Court in C M.A. No. 45 of 1973 (E.S.I. Corparation v. Sri Krishna Bottlers (p) Ltd (1974) II An.W.R. 59) had to consider a similar question. In that case, Sri Krishna Bottlers (P) Ltd., had a factory at Hyderabad for manufacturing soft drinks under the name of 'Fanta' and 'Coca Cola'. The company had a Sales Office at Vijaywada for selling the soft drinks manufactured by the factory at Hyderabad. The E.S.I. Corporation demanded the company for payment of Insurance contribution in respect of the employees of the Sales Office at Vljayawada. This was challenged by Sri Krishna Bottlers (p) Ltd., before the E I. Court. The E. I. Court purporting to follow the judgment of the Division Bench In C.M.A.No. 187 of 1971 held that the employees of the Sales Office at Vijayawada could not be deemed to be covered by the Act, The E. S. I. Corporation preferred the appeal to this court. The learned judges Constituting the Division Bench delivered seperate Judgments allowing the appeal. The difference between the two learned judges was on the question whether the employees at the Vijayawada Sales Office came within the definition of an 'Employee under S. 2 (9) (I) of the Act as it stood orglnally or whether they came under the amended and inclusive definition added to the original definition of an 'employee' by Act 44 of 1966. While both the learned judges concurred in the view that the employees of the Sales Office at Vljayawada were covered by the amended definition of S. 2 (9) of the Act, they differed on the question whether the una- mended definition covered the employees of the Sales Office at Vijayawada.jVenkatrama Sastry, J , expressed the view that even without the amendment, the employees were covered by S. 2 (9) (I) of the Act, while Kondaiah, j. held that they were not so covered.