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PETITIONER: REGIONAL DIRECTOR, EMPLOYEE’S STATE INSURANCE CORPORATION

       Vs.

RESPONDENT: HIGH  LAND COFFEE WORKS OF P.F.X. SALDANHA AND  SONS  ANDANR

DATE OF JUDGMENT26/07/1991

BENCH: SHETTY, K.J. (J) BENCH: SHETTY, K.J. (J) RAMASWAMI, V. (J) II YOGESHWAR DAYAL (J)

CITATION:  1992 AIR  129            1991 SCR  (3) 307  1991 SCC  (3) 617        JT 1991 (3)   325  1991 SCALE  (2)221

ACT:      Employees State Insurance Act, 1948---Sections 1(4) and 2(12)Seasonal   factory’  exemption  from   Statute--Whether arises.

HEADNOTE:      The Regional Director, State Employees Corporation  the appellant  in  the  instant case claimed  for  covering  the factories of the respondents M/s. High Land Coffee Works  of P.F.X. Sakdanha & Sons under the provisions of the Employees State Insurance Act 1948.     Section 1(4) of the Act excludes "seasonal factory" from the scope of the Act. The seasonal factory is defined  under section 2(12)of the Act.     The factories of the respondents were excluded from  the operation of the Act since they were declared to be seasonal factories  within the meaning of the definition  of  section 2(12) of the Act.     By  amending Act 44 of 1966 which came into  force  from 28th January, 1966,the definition of ’seasonal factory’  has been  amended and accordingly the seasonal factory  means  a factory  which  exclusively engaged in one or  more  of  the manufacturing  processes  detailed  in  the  definition  and includes a factory which is engaged for a period not exceed- ing  seven months in a year. The  expressions  manufacturing process & power shall have the meaning respectively assigned to them in the Factories Act 1948.     So  after the amendment the Corporation called upon  the respondents  to pay the contributions payable under the  Act and threatened to take coercive steps to recover the arrears under the Revenue Recovery Act and prosecute them.     The respondents challenged the demand made by the appel- lants in the Employees Insurance Court contending that  even the amending 308 Act  44 of 1966 has not altered the definition  of  seasonal factory,  would still excludes such factory from the  opera- tion of the Act. The Employees Insurance Court accepted  the plea  of the respondents and even the Karnataka  High  Court agreed  to the view of aforesaid Court. So  the  Corporation

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appealed to this Court.     The sole question before the Court for consideration  is whether the respondents’ factories in view of the  amendment to the definition of seasonal factory have lost the  benefit of exclusion from the Act. Dismissing  the appeals and the special leave  petition  the Court,     HELD:  That in the instant case the High Court  observa- tion that the purpose of the definition by the amending  act was to enlarge and not to restrict the Statutory concept  of seasonal  factory so the position of the respondents  estab- lishments as seasonal factories remain unaltered. This  view seems  to  be justified because the objects reasons  of  the Bill of the amending Act clearly indicates that the proposed amendment  was to ’bring within the scope of the  definition of  seasonal factory’ a factory which works for a period  of not  exceeding seven months in a year a) in any  process  of blending,  packing or repacking of tea or coffee b) in  such other manufacturing processes as the Central Government may, by  notification  in  the official  Gazettee  specify.  Thus amendment  is  clearly in favour of widening the  definition of  seasonal  factory’  because the word  ’include’  in  the Statutory definition is generally used to enlarge the  mean- ing of the preceeding words. This is well accepted statutory construction  that  in interpretation clauses  in  order  to enlarge  the  words or phrases occuring in the body  of  the statute the word include is very generally used. [310F-311C] Stroud’s Dictionary, 5th Edn. Vol. 3 page 1263.      C.I.T.  Andhra Pradesh v. M/s. Taj Mahal Hotel,  Secun- derabad, 971 ] 3 SCC 550 and State of Bombay v. The Hospital Mazdoor Sabha Ors., [1960] 2 SCR p. 666 at 875, referred to.

JUDGMENT:      CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos.  1837- 1841 of 1977.     From  the  Judgment and Order dated  28.10.1976  of  the Karnataka  High Court in Misc. First Appeal Nos. 557 to  561 of 1975.     Dr.  Anand  Prakash, Ms. Kitty Kumaramangalam  and  C.V. Subba Rao for the Appellant. 309     G.B. Pai, Dr. Shankar Ghosh, D.N. Mishra and Ms. Mridula Ray for the Respondents.     The Judgment of the Court was delivered by     K. JAGANNATHA SHETTY, J. These appeals by special  leave are  directed  against the judgment of  the  Karnataka  High Court  rejecting the claim of the appellant-Corporation  for covering the factories the respondents under the  provisions of the Employees’ State Insurance Act, 1948 (the Act).     Section 1(4) excluses "seasonal factory" from the  scope of the Act. The "seasonal factory" is defined under  Section 2(12) of the Act which is extracted hereunder:               "Seasonal  factory  means a factory  which  is               exclusively  engaged  in one or  more  of  the               following  manufacturing  processes,   namely,               cotton,  ginning,  cotton  or  jute  pressing.               decortication  of groundnuts, the  manufacture               of coffee, indigo, lac, rubber, sugar (includ-               ing  gur) or tea or any manufacturing  process               which  is incidental to or connected with  any               of the aforesaid processes."     The factories of the respondents were excluded from  the operation  of  the Act since they were declared  to  be  the

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seasonal  factories within the meaning of the  above  stated definition. There is no dispute on this aspect.     By  Amending Act 44 of 1966 which came into  force  with effect  from 28th January 1968, the definition of  "seasonal factory" has been amended. The definition as amended reads:               "Seasonal  factory  means a factory  which  is               exclusively  engaged  in one or  more  of  the               following  manufacturing  processes,   namely,               cotton  ginning,  cotton  or  jute   pressing.               decortication  of groundnuts. the  manufacture               of coffee, indigo, lac, rubber, sugar (includ-               ing  gur) or tea or any manufacturing  process               which  is incidental to or connected with  any               of  the  aforesaid processes  and  includes  a               factory  which  is engaged for  a  period  not               exceeding seven months in a year--               (a)  in  any process of blending,  packing  or               re-packing of tea or coffee; or               310               (b) in such other manufacturing process as the               Central Government may, by notification in the               Official Gazette, specify;               The   expressions   "manufacturing    process"               and "power" shall have the meaning respective-               ly  assigned  to them in  the  Factories  Act,               1948".       After the said amendment, the Employees’ State  Insur- ance  Corporation  called upon the respondents  to  pay  the contributions  payable under the Act and threatened to  take coercive  steps  to recover the arrears  under  the  Revenue Recovery Act and prosecute them. Challenging the validity of the  demand made, the respondents approached the  Employees’ Insurance Court, inter alia contending that the amendment to the definition of the expression "seasonal factory"  brought out  by  the  Amending Act 44 of 1966 has  not  altered  the position  of the seasonal factory as obtained prior  to  the amendment  and Section 1(4) of the Act would still  continue to  exclude such factory from the operation of the Act.  The Employees’  Insurance Court accepted the respondent’s  plea. The Karnataka High Court has also agreed with the view taken by  the Employees’ Insurance Court. The Corporation has  now appealed to this Court.     The  sole  question  for consideration  is  whether  the respondents’  factories  in  view of the  amendment  to  the definition  of ’seasonal factory’ have lost the  benefit  of exclusion  from the Act. The High Court on this  aspect  has observed  that the purpose of the amendment was  to  enlarge and  not  to  restrict the statutory  concept  of  ’seasonal factory’  and the position of respondents establishments  as seasonal  factories  under and for the purpose  of  the  Act remained unaltered even after the amendment.     The view ,taken by the High Court seems to be justified. The statement of Objects and Reasons of the Bill which later became the Act 44 of 1966 indicates that the proposed amend- ment  was  to bring within the scope of  the  definition  of ’seasonal  factory’, a factory which works for a  period  of not exceeding seven months in a year- (a) in any process  of blending,  packing or repacking of tea or coffee; or (b)  in such other manufacturing process as the Cenrtral  Government may,  by notification in the Official Gazette, specify.  The amendment  therefore, was clearly in favour of the  widening the  definition of ’seasonal factory’. The amendment  is  in the nature of expansion of the original definition as it  is clear from the use of the words ’include a factory’. 311

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The  amendment does not restrict the original definition  of "seasonal factory" but makes addition thereto by  inclusion. The word "include" in the statutory definition is  generally used to enlarge the meaning of the preceding words and it is by  way  of extension, and not with  restriction,  The  word ’include’  is very generally used in interpretation  clauses in  order to enlarge the meaning of words or phrases  occur- ring  in  the body of the statute; and when it is  so  used, these  words or phrases must be construed as  comprehending, not  only  such things as they signify  according  to  their natural  import but also those things which the  interpreta- tion  clause  declares that they shall  include.  (See:  (i) Stroud’s  Judicial Dictionary, 5th ed. Vol. 3, p.  1263  and (ii)  C.I.T. Andhra Pradesh v. M/s Taj Mahal  Hotel,  Secun- derabad,  [1971]  3  SCC 550 (iii) State of  Bombay  v.  The Hospital Mazdoor Sabha & Ors., [1960] 2 SCR 866 at 875.     In  view of these well accepted statutory  construction, the  decision of the High Court does not call for  interfer- ence.     In the result the appeals and the special leave petition fail and are dismissed with costs. S.B.                    Appeals and petition                                      dismissed. 312