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PETITIONER: NAGPUR ELECTRIC LIGHT & POWER CO., LTD

       Vs.

RESPONDENT: REGIONAL DIRECTOR EMPLOYEES STATE INSURANCECORPORATION, ETC.

DATE OF JUDGMENT: 02/03/1967

BENCH: BACHAWAT, R.S. BENCH: BACHAWAT, R.S. WANCHOO, K.N. BHARGAVA, VISHISHTHA

CITATION:  1967 AIR 1364            1964 SCR  (3)  92  CITATOR INFO :  RF         1970 SC 488  (8)  RF         1973 SC 365  (17)  D          1974 SC 759  (27,29)  R          1978 SC 356  (9)  R          1984 SC1916  (9)  R          1987 SC1166  (4)  RF         1992 SC 573  (37)

ACT: Employees  State  Insurance Act (34 of 1948), ss.  2(9)  and 2(12)--Factory,  area comprised in-Company transferring  and transmitting   electricity-Workers  doing  non-manual   work whether ’employees’ within the meaning of s. 2(9).

HEADNOTE: The  appellant company carried on the work  of  transforming And  transmitting  electrical  energy.   There  was  dispute between  the  company  and the  respondent  whether  certain employees  of  the  company  like  engineers,   draughtsmen, clerks, accountants etc. mentioned in Appendices III, IV and V of the company’s petition before the Employees’  Insurance Court, were ’Employees’ or not within the meaning of s. 2(9) of  the  Employees  Insurance  Act,  1948.   The   Employees Insurance Court held the said workers to be employees  under s.  2(9) and this finding was confirmed by the Single  Judge as  well  -as  the Division Bench of the  High  Court.   The company appealed to this Court by special leave. HELD : (i) The premises of the company were a factory within the  meaning  of the Employees State Insurance Act  but  the High  Court  was wrong in laying down the  proposition  that every  inch  of the area over which the  transmission  lines were  spread was a factory within the meaning of  s.  2(12). The  company’s  factory  had a fixed site  and  was  located within the compound wall of its premises. [96 E, H] (ii)All the employees of the disputed categories clerks  or otherwise  were employed in connection with the work of  the factory,  that  is to say, in connection with  the  work  of transforming and transmitting electrical power.  Some of the employees  were not engaged in manual labour.  But a  person doing non-manual work can be an employee within the  meaning of s. 2(9) (i) if he is employed in connection with the work

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of the factory.  The duties of the administrative staff  are directly connected within the work of the factory. [99 C, G]    Even  those employees who worked outside the factory  but whose  duties  were connected with the work of  the  factory were employees within the meaning of s. 2(9)(i).  Among such employees  were  to  be included  those  attending  to  sub- stations of the factory. [100 A] Ardeshir  H.  Bhiwaniwala v. The State of Bombay,  [1961]  3 S.C.R.542,  State of Uttar Pradesh v. M. P. Singh, [1960]  2 S.C.R.  605  and  Employees’  State  Insurance  Corporation, Bombay v. Raman, [1957] 1 L.L.J. 267. referred to.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 491 and 492 of 1965. Appeals  by special leave from the order-,  dated  September 17,  1963 of the Bombay High Court Nagpur Bench  in  Letters Patent Appeals Nos. 14 and 15 of 1963, 93 S.   V.  Gupte, Solicitor-General and I. N. Shroff, for  the appellant (in C.A. No. 491 of 1965). A.   G.  Ratnaparkhi, for the appellants (in C.A. No. 492 of 1965). Bishan  Narain,  M.  L. Kapur and I. S.   Sawhney,  for  the respondents  Nos.  1  and 2 (in C.As. Nos. 491  and  492  of 1965). 1.  N.  Shroff,  for respondent No. 1 (in C.A.  No.  492  of 1965). The Judgment of the Court was delivered by Bachawat,  J.  The  question in issue in  these  appeals  is whether  certain  employees of the Nagpur Electric  Light  & Power Co. Ltd.,am employees within the meaning of s. 2(9) of the  Employees State Insurance Act, 1948 (34 of  1948).  The company  and the employees filed two  separate  applications before the Employees’ Insurance Court under s. 75 of the Act for  the determination of the question. Their case  is  that out of the five categories of staff mentioned in  appendices 1  to 5 to the company’s petition, those connected with  the receiving  station  and workshop (appendices 1 and  2)  were employees    within  the  meaning  of  s.  2(9),  but  those connected  with  the engineering, stores and  outdoor  work, meter,consumers     and    allocation    departments     and administration  (appendices  3,  4  and  5)  were  not  such employees. The Regional Director, Employees State  Insurance Corporation contested the applications, but he admitted that the workers of the categories mentioned  in items 5 to 14 of appendix  4  and  items 1, 7 and 8 of appendix  5  were  not employees  within  the meaning of s. 2  (9).  The  Employees Insurance  Court  found  that those  workers  and  also  the workers  mentioned  in item 12 of appendix 5 were  not  such employees.  The correctness of this finding is not in  issue in  these  appeals  and we express no  opinion  on  it.  The categories  of workers mentioned in appendix 111, items  1-4 in  appendix TV and items 2-6 and 9-11 of appendix V are  as follows ’Appendix III Mains Senior : (1) assistant engineers, (2) supervisors, (3) electricians, (4) overseers.           Mains junior : (1) cable jointers, (2) mistries,           (3) sub-mistries, (4) lineman-H.T.O.H. mains, (5)           mains coolies, (6) mains coolies temporary, (7)           wireman temporary, (8) sub-mistries, (9) sub-           station attendants.

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Clerical   staff   :  (1)  clerk   to   asstt.   engineers, (2)draughtsman, (3) mains office peons. Stores department : (1) storekeeper, (2)  asstt.storekeeper, (3) clerks, (4) coolies. 94 Motor   car   staff   :  (1)  motor   drivers,   (2)   motor cleaners. Mason. Appendix IV Meter senior & junior : (1) deputy meter superintendent, (2) senior meter mechanic, (3) junior meter mechanic, (4)  meter testers. Appendix V (2)  accounts (department accountant, chief cashier,  asstt. accountant, account clerks. (3)  Time-keeping department : group head, clerks, (4)  Filing department : group head, clerks. (5)  Typing department : steno-typists, typists. (6)  Telephone operators. (9)  Record-keeper and daftari. (9a) Station clerk. (10) Motor car staff : mechanic, drivers, cleaners. (11) Menial  staff  :  peons,  garden  malies,   chowkidars, sweepers, rejas temporary." The,  Employees  Insurance  Court held  that  the  aforesaid workers were employees within the meaning of S. 2 (9) of the Act.   The  company  and the employees  filed  two  separate appeals  from  this  decision to the High  Court  of  Bombay (Nagpur  Bench)  under  S. 82 of the  Act.   Abhayankar,  J. affirmed  the finding of the Employees Insurance  Court  and dismissed  the  appeals.  Letters Patent  appeals  from  his orders  were  summarily  dismissed by a Bench  of  the  High Court.  The company and the employees have now preferred two separate appeals to this Court by special leave. The  Nagpur Electric Light & Power Co., Ltd., occupies  cer- tain  premises at Kamptee Road, Nagpur where it  carries  on the work of transforming and transmitting electrical energy. ’Me premises are located within a compound wall.  Inside the premises there are several buildings, yards and open spaces. The  receiving  station,  the workshop,  the  meter  testing department, the engineers’ quarters, the general office, and stores are in different buildings inside the premises.   The company  does  not  generate electricity.   It  maintains  a receiving  station  inside the premises  where  it  receives electrical energy in bulk from the generating station of the Maharashtra  Electricity Board at Khapparkheda.  The  energy when  received  is  of 11,000  volts.   From  the  receiving station,  the  energy  is either  carried  through  electric supply  lines to a transformer and is stepped down to  3,300 volts  and is then carried to the sub-stations in  the  city where it is again stepped 95. down to 400 volts by other transformers, or is carried  from the  receiving station to sub-stations where it  is  stepped down  directly  from  11,000 to 400 volts.   From  the  sub- stations, the energy is transmitted by electric supply lines and distributed to consumers.  The first question is whether the company maintains a factory and if so, where its factory is located. The  Employees’  State Insurance Act, 1948  applies  in  the first   instance  to  all  factories  other  than   seasonal factories  [s.1(4)]  and  may  be  extended  to  any   other establishment   or  class  of  establishments,   industrial, commercial,  agricultural or otherwise [s.1(5)]. Sec.  2(12) defines a factory.The relevant part of that section reads :

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             "Sec.2(12)  :  "’factory’ means  any  premises               including the precincts thereof whereon twenty               or more persons are working or were working on               any day of the preceding twelve months, and in               any  part of which a manufacturing process  is               being  carried on with the aid of power or  is               ordinarily so carried on but does not  include               a mine subject to the operation of the  Indian               Mines Act, 1923 or a railway running shed;               The  expressions ’manufacturing  process’  and               ’power’  shall have the meanings  respectively               assigned to them in the Factories Act, 1948." Any  premises including the precincts thereof  (excepting  a mine and a railway running shed) constitute a factory if (1) 20  or more persons are working or were working  thereon  on any  day  of the preceding 12 months, and (2)  in  any  part thereof a manufacturing process is being carried on with the aid  of power.  If these two conditions are  satisfied,  the entire  premises including the precincts thereof  constitute a’  factory, though the manufacturing process is carried  on in only a part of the premises.  The premises constituting a factory may be a building or open land or both, see Ardeshir H.  Bhiwaniwala v. The State of Bombay(1).  Inside the  same compound  wall,  there  may be two  or  more  premises;  the premises used in connection with manufacturing processes may constitute a factory, and the other premises within the same compound wall may be used for the purposes unconnected  with any  manufacturing  process  and may form  no  part  of  the factory.               Sections  2(g)  and (k) of the  Factories  Act               1948, define power and manufacturing  process.               They are in these terms :               2(g).   "’power’ means electrical  energy,  or               any other form of energy which is mechanically               transmitted  and is not generated by human  or               animal agency;"               (1)   (1961) 3 S.C.R. 542.               96               2(k).   ""manufacturing  process’  means   any               process for-               (i)   making,       altering,       repairing,               ornamenting,   finishing,   packing,   oiling,               washing,  cleaning, breaking up,  demolishing,               or otherwise treating or adapting any  article               or  substance  with a view to its  use,  sale,               transport, delivery or disposal, or               (ii)  pumping oil, water/or sewage, or               (iii) generating, transforming or transmitting               power; or               (iv)  composing  types for printing,  printing               by letter press, lithography, photogravure               or other similar process or book binding;               (v)   constructing, reconstructing, repairing,               refitting,  finishing or breaking up ships  or               vessels." In  view  of  s. 2 (k) (iii), the  process  of  transforming electrical  energy  from a high to a low potential  and  the process of transmitting the energy through supply lines  are both  manufacturing  processes.  In a part of  the  premises occupied  by the company, the two processes are  carried  on with  the  aid of power by means of electrical  gadgets  and other  devices.   On the premises more than  twenty  persons were  and are working.  No part of the premises is used  for purposes  unconnected  with the manufacturing  process   The premises  therefore constitute a factory within the  meaning

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of s. 2(12) of the Employees State Insurance Act, 1948.               The High Court said:               "This  manufacturing process is carried on  by               the  Company not only in the  building  called               the workshop or the receiving station but over               the  whole  area  over which  the  process  of               transmission is carried on including the  sub-               stations  where  electricity  is  stored   and               supplied   to   the   consumers   by   further               transmission  lines.   Thus  every  part  over               which  this  process is carried on will  be  a               factory  within the meaning of the  Employees’               State Insurance Act." We  cannot accept this line of reasoning.  It seems to us  a startling proposition that every inch of the wide area  over which the transmission lines are spread is a factory  within the  meaning  of s. 2(12).  "A factory must occupy  a  fixed site",  see  Halsbury’s Laws of England, 3rd  ed.,  Vol.  71 ,art.  15, p. 15.  The company’s factory has a  fixed  site. It is located inside the Kamptee Road 97 and  its  boundaries are fixed by the compound wall  of  the premises The next question is whether the members of the staff of the categories mentioned in appendix 111, items 1-4 of  appendix IV  and  items 2-6 and 9-11 of appendix V to  the  company’s petition  am employees within the meaning of s. 2(9) of  the Employees’  State  Insurance Act.  It is  common  case  that these  workers  are employed on remuneration  which  in  the aggregate  does  not  exceed four hundred  rupees  a  month. Section 2(9) is in these terms               "  employee’  means any  person  employed  for               wages  in or in connection with the work of  a               factory  or  establishment to which  this  Act               applies and               (i)   who   is   directly  employed   by   the               principal   employer  on  any  work   of,   or               incidental or preliminary to or connected with               the  work  of, the factory  or  establishment,               whether  such work is done by the employee  in               the factory or establishment or elsewhere; or               (ii)  who   is  employed  by  or  through   an               immediate  employer  on the  premises  of  the               factory   or   establishment  or   under   the               supervision  of the principal employer or  his               agent on work which is ordinarily part of  the               work of the factory or establishment or  which               is  preliminary to the work carried on  in  or               incidental  to the purpose of the  factory  or               establishment; or               (iii)  whose services are temporarily lent  or               let  on hire to the principal employer by  the               person with whom the person whose services  am               so  lent  or let on hire has  entered  into  a               contract of service;               but does not include-               (a)  any member of the Indian naval,  military               or air forces or;               (b)   any  person employed on  a  remuneration               which  in the aggregate exceeds four  hundreds               rupees a month; " The definition of employee in s. 2(9) may be contrasted with that  of  a worker in s. 2 (1) of the  Factories  Act  1948, which is in these terms 98

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             worker’  means a person employed, directly  or               through any agency, whether for wages or  not,               in  any manufacturing process, or in  cleaning               any part of the machinery or premises used for               a manufacturing process, or in any other  kind               of work incidental to, or connected with,  the               manufacturing  process, or the subject of  the               manufacturing process;" It  is to be seen that the definition of an employee in  the Employees State Insurance Act is wider than that of a worker in the Factories Act.  The object of the Factories Act is to secure  the health, safety, welfare, proper  working  hours, leave and other benefits for workers employed in  factories. The  benefit  of this Act does not extend to  field  workers working outside the factory, see the State, of Uttar Pradesh v.  M.  P.  Singh(1).  The object of  the  Employees’  State Insurance Act is to secure sickness, maternity,  disablement and   medical  benefits  to  employees  of   factories   and establishments and dependents’ benefits to their dependants. The benefit of this Act extends inter alia to the  employees mentioned in s. 2 (9) (i) whether working inside the factory or establishment or elsewhere. The  definition of "employee" in S. 2 (9) deals  with  three classes  of employees.  We are concerned with the  class  of employees  mentioned  in  S. 2 (9) (i).   The  courts  below concurrently found and in our opinion, rightly, that all the workers of the disputed categories are persons employed  for wages in or in connection with work of the company’s factory and  are  directly  employed by the company on  work  of  or incidental  to  or connected with the work of  the  factory. Some  of  them  do the work in the  factory  and  some  work elsewhere, but they are all employees within the meaning  of S.  2  (9) (i).  Take the case of the workers  mentioned  in appendix   111.   The  assistant   engineers,   supervisors, electricians, and overseers are engaged in the erection  and maintenance  of the electricity supply lines connected  with transmission   of  power.   The  cable  jointer,   mistries, linemen, coolies and wiremen are employed for inspection  of the  supply lines, digging pits, erecting poles  for  laying distribution mains and service lines.  The masons attend  to the masonry work of the buildings.  The attendants in-charge of  the  sub-stations  look  after  the  transformation  and transmission  of power.  The motor drivers and cleaners  are employed for carrying materials and tower ladders in  trucks for   maintenance   of  the  supply  lines.    The   clerks, draughtsmen  and  main  office  peons  help  the   assistant engineers.  The store keepers and clerks with The assistance of  coolies  issue stores to all the  departments  and  keep accounts  relating to stock.  The deputy  meter  superinten- dent, meter mechanics and meter testers mentioned in items 1 to  4 of appendix IV attend to the testing  calibration  and repairs of (1)  [1960] 2 S.C.R. 605. 99 the meters.  Let us now take the case of the staff mentioned in items 2 to 6 and 9 to II of appendix V. The clerks in the accounts,  time-keeping and filing departments are  employed to  maintain accounts, attendance registers,  muster  rolls, pay-sheets,   typing,  filing  and   dispatching   documents required  in connection with all the  departments  including the  receiving  station  and the  workshop.   The  telephone operators  attend  to  the  telephone  calls  for  all   the departments.   The  menial  staff is  required  to  do  mis- cellaneous  work  including  the  cleaning  of  the   office compound.  The motor car staff is employed to look after the

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cars  employed  in the administration  section.   All  these employees, clerical or otherwise, are employed in connection with the work of the factory, that is to say, in  connection with  the work of transforming and  transmitting  electrical power.   Some  of  the employees are clerks;  they  are  not engaged  in  manual labour.  But a person  doing  non-manual work  can be an employee within the meaning of s’ 2 (9)  (i) if  he is employed in connection with work of  the  factory. The  duties  of the administrative staff are  directly  con- nected  with  the  work of the factory.   The  case  of  the Employees’  State Insurance Corporation, Bombay v.  Raman(1) is  distinguishable.  In that case a company had  a  factory and an administrative office.  The office was situated in  a building  which  was situated within the  same  compound  in which  the  factory was located.  The  entire  compound  was surrounded by one compound wall.  It was found that the work of  the factory began with the collection of  raw  materials and  ended with the production of finished articles and  the work of selling the products was not connected with the work of the factory.  The administrative office handled sales of. the  products manufactured in the factory as well  as  goods imported  from abroad.  The factory and  the  administrative office  maintained  separate  muster  and  wage  rolls   and separate accounts.  In these circumstances, it was held that the clerks employed in the administrative office, whose work consisted mainly of taking down dictations from the  manager and  other  officers and typing out letters,  were  not  em- ployees  within  the meaning of s. 2(9).  The facts  of  the present case are entirely different.  The company  maintains one  establishment  for its factory.  The factory  does  the work  of  transforming and transmitting  electrical  energy. All  the  workers in question including the clerks  and  the administrative  staff  are engaged in connection  with  this work.    None   of  them  is  employed   in   any   separate establishment unconnected with the work of the factory. Some  of the employees work outside the factory,  but  their duties are connected with the work of the factory.  They are therefore  employees  within the meaning of s.  2  (9)  (i). Some are (2) [1957] 1 L.L.J. 267. 100 employed  in the sub-stations.  It is common case  that  the stations  are not independent factories.   The  sub-stations attendants  attend to work which is directly connected  with the of the factory at the main station.  They are  therefore employees within the meaning of s. 2 (9) (i). In  the  result the appeals are dismissed with  costs.   One hear fee. G.C                                Appeals dismissed. 101