Venkatarama Sastry, J.
1. This appeal has been referred to a Division Bench by our learned brother Madhava Rao, J., as in his opinion an important question as to the interpretation of the word 'employee' in a factory, in view of the amendment of Sub-section (9) of Section 2 of the Employees' State Insurance Act XXXIV of 1948, hereinafter referred to as the Act, arises in this case.
2. The facts necessary for the purpose of this appeal are the following: The respondents before us M/s Krishna Bottlers Private Ltd., represented by its managing director, Lieutenant Col. Sanjeeva Rao, Kavadiguda, Secunderabad, filed an application under Section 75 of the Act making the following averments:
3. The petitioner bottles and sells soft $ called 'Coca Cola' and 'Fanta' in $ State of Andhra Pradesh. Their factory is at Hyderabad where the said drinks are bottled. Its various depots arc at various places. The factory at Hyderabad is engaged in manufacturing process. The petitioner is paying the Employees' State Insurance under the said Act, for the last several years. The petitioner has no factory at Vijayawada and no manufacturing process is carried on there. The sales depot at Vijayawada deals only with the finished goods, i.e., sale and supply of 'Coca Cola' and 'Fanta'. There is one depot manager and a few salesmen engaged at the depot. The persons employed the petitioner's depot are not engaged in any manufacturing process or any work incidental thereto. The petitioner has not, therefore, been collecting the employees' contribution at the sales-depot, nor was it paying its own contribution. The petitioner was granting sick leave with full pay to the employees' as provided under the Andhra Pradesh Shops and Establishments Act, for all these years.
4. The Assistant Regional Director issued 10 them a notice dated 29th May, 1972, calling upon them to pay the arrears of contribution for insurance under in Act from 30th June, 1968. for the employees working at Vijayawada depot under the misconception that the said depot is a factory. As the said depot is not a factory and the employees therein sure not covered by the Act, and the salesmen in that depot are not employees under the Act, the respondents prayed for a declaration that their depot at Vijayawada is not covered by the Act and the salesmen engaged therein are rot persons to be called employees within the meaning of the Act. The total amount demanded from them was Rs. 14,235.46.
5. The appellant herein filed their counter denying the allegations in the petition and urging that the employees in the sales-depot at Vijayawada come within the amended definition in Sub-section (9) of Section 2 of the Act, as per Act XLIV of 1966. According to the amended definition any person employed for wages on any work of or connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment comes within the ambit of the word 'employee'. The employees in the sales depot of the petitioner carry on the work of distribution and sale of the products of the petitioner, which is covered under the Act. Under Section 2(9) of the Act there are no geographical limits within which the employees can be employed. They may work in the factory' or establishment or elsewhere. The appellant herein is entitled to cover all employees whose wages are upto Rs. 500 per month irrespective of the fact wherever the employees may work or reside, provided they are borne on the wage rolls of the factory of their wages are debited to the accounts of the factory. The Insurance Inspector of the appellant herein inspected the accounts of the factory at Hyderabad and submitted a report stating that the respondents herein have got their sales-depot at Vijayawada and the Wages of the sales-depot of the employees are debited to the accounts of the factory. The sales-depot is called M/s. Sri Krishna Bottlers Pvt. Lid., Maruthinagar, Vijayawada-4 and the accounts of the said depot are ultimately included in the petitioner's accounts for purposes of final accounts. The petitioner is also paying contributions in respect of its employees at its another sales-depot at Visakhapatnam. The appellant, therefore, prayed that the application should be dismissed.
6. The Employees' Insurance Court, Hyderabad, took up the case on its file as E.I. Case No. 8 of 1972. The secretary of the petitioner's company gave evidence as P.W. I. According to him there was no factory or manufacturing process at Vijayawada and their Kales-depot has been registered separately under the Shops and Establishments Act. In a prior communication, the E.S.I authorities issued a letter Ext. R1 that the said sales-depot is not covered by the Act. The depot manager is in charge of the establishment at Vijayawada. He employs the staff and the staff is under his disciplinary control. The workers employed in that sales-depot are attending entirely to the sales. The said workers are not liable to be transferred to the factory at Hyderabad. There is no administration of the factory carried on at Vijayawada Separate attendance, wage and other registers are maintained by the sales-depot at Vijayawada for its staff and salary for the employees is paid only by the depot at Vijayawada. Separate accounts are maintained there. The employees at the sales-depot, Vijayawada, are not on the pay-rolls of the factory. The petitioner has been paying the E.S.I. contribution for the employees at Vijayawada from 1971 under protest, in Order to avoid prosecution and harassment. In the cross examination of this witness it wits elicited that the application is not filed by the depot manager at Vijayawada; that the sales-depot at Visakhapatnam is paying E.S.I. contribution; that the petitioner appointed the depot-manager at vijayawada; that the assets and liabilities of the sales-depots run by the company, but it is functioning independently; that the sales-depot is only concerned with the sales of products manufactured in the company and not any other products of any other factory; that the internal administration of the sales-depot is carried on only by the depot manager there He further asserts that the salts-depot at Vijayawada is the company's depot and as such the income and expenditure of that depot are merged in the company's account at the end of the year for the purpose of income tax and sale tax. He no doubt says that all the four sales-depots are registered under the Shops and Establishments Act and in order to avoid harassment the sales-depot at Visakhapatnam is also paying the E.S.I. contribution. The other sales-depots are at Visakhapatnam, Guntur and Rajahmundry.
7. On behalf of the appellant herein, the Inspector of E.S.I. has been examined as R.W. 1. According to him the petitioner paid E.S.I. contribution from 1st May, 1971 to 31st December, 1971, that for the period from 1st April, 1968 no 30th April, 1971 the E.S.I. contribution due from the emp. $ is Rs. 8,468 while the contribution $ from the employees comes to Rs. 5,678.00. According to him all the employees at Vijayawada and Visakhaptnam sales-depots are covered by the Act and the petitioner being the employer, is liable to pay the contribution He also says that the employees at Vijayawada are looking after the administration of sales and distribution of 'Coca Cola' and 'Fanta' which are manufactured by the petitioner in its factory at Hyderabad. The appellant herein is not demanding the contribution on the basis that there is a manufacturing process at the sales-depot at Vijayawada, but the claim is based on the fact that the employees at Vijayawada sales-depot are the petitioner's employees and are liable to be transferred from one place to another. In the cross-examination he says that the employees are not connected with the actual manufacturing process and the sales-depot is only dealing with the administration of sales and distribution. He has not inspected the sales-depot at Vijayawada and its records. The sales-depot at Vijayawada is having separate books of accounts at Vijayawada. He has no personal knowledge whether any employee from Vijayawada sales-depot was transferred to any other place. Even though separate ledgers are maintained at Vijayawada ther are finally reflected in the petitioney's accounts at Hyderabad The Central Government has not issued any notification applying the Act to establishments and as it stands only factories are covered by the Act.
8. Exhibit. P1, which is an inspection letter, was marked for the petitioner while Exts. R1 to R7 were marked for the respondent in the lower Court. On the above evidence the learned Judge of the Employees' Insurance Court, held that the petitioner does not come within the purview of Section 2(9) of that Act, so far as the sales-depot at Vijayawada is concerned. The learned Judge was of the opinion that the employees at Vijayawada sales-depot are not on the pay-rolls of the factory and that the sales-depot is a separate establishment unconnected with the factory. The sales-depot at Vijayawada is registered under the $ and Establishments Act. The employees at the depot cannot be said to have been employed directly by the principal employer on any work of or incidental or preliminary to or connected with the work of the factory, because the moment the soft drinks are manufactured by the factory, the work of the factory is over and it is for the company which is also having a factory, viz., the petitioner, which has to take steps for the distribution or sale of the products so manufactured. According to the learned Judge the sales depot at Vijayawada is a separate entity altogether which has nothing to do with the factory at Hyderabad, and inasmuch as it is a separate establishment and since there is no notification contemplated under Section 1(5) of the said Act, the provisions of the Act are not applicable to that establishment In the result he allowed the petition and directed each party to bear its own costs.
9. In this appeal preferred by the Region, al Director, Employees' Stats Insurance Corporation, Hyderabad 4, Sri I.A. Naidu, learned Counsel appearing for the appellant, has urged before us the following points; (I) The factory and the sales-depot belong to the petitioner and they arc one and the same. There are no two different entities. The company is registered under the Companies Act and it owns the factory as well as the sales-depot. The sales depot is, therefore, a necessary adjunct for the sale of the products of the company. The object of the company is not only to manufacture the soft drinks, but also to sell them. Hence, the sales-depot is a past of the factory owned by the company, (2). After the Amendment Act XLIV of l966, which came into force on 22th January, 1968, all the employees is the sales depot, who are in charge of distribution and sales of the products of the company, come within the meaning of the word 'employee' under Section 2(9) of the Act, (3) The manager of the sales-depot at Vijayawada, in respect of whose employees the E.S.I. contribution demand has been made, has not filed the petition and, therefore, the petition has to be dismissed in I inline, (4) The Employees' Insurance Court has allowed the petition on the grounds not urged by the petitioner, (5) The petitioned sales-depot is not a separate establishment and it is not necessary that there should be a notification under Section 1(5) of the Act. The learned Counsel has taken us through the relevant provisions of the Act and also relied upon several decisions, which I would advert to in due course.
10. Sri K. Srinivasamurthy, learned Counsel appearing for the respondent, before us (petitioner before the E.S.I. court) has, in answer to the above contentions, submitted that the factory and the establishments are different entities and they cannot be equated. According to him only the employees in the factory are covered by the Act. The definition of an 'employee' under Section 2(9) of the Act has to be read along with the definition of 'factory' under Section 2(12) of the Act. The business of she factory ends with the production of the soft drinks while the business of the sales-depot is hale of those finished products. The employees at the sales-depot cannot be deemed to be connected in any way with any administration or work connected with the factory. In order to come under Section 2 the there should be a manufacturing process. At the sales-depot at Vijayawada no manufacturing process goes on. Hence, the employees at Vijayawada cannot be deemed to be the employees in a factory. Section 38 of the Act speaks of employees in a factory and the contribution is payable only in respect of such employees and not employees in employments. The word 'in' used in Section 38 clearly shows that unless they are employed in factories, or is the precincts of a factory, they cannot be deemed to be employees in respect of whom contributions have to be made under Chapter IV. He has also relied upon several decisions to which reference would be presently made. The learned Counsel for the appellant also relied upon the Statement of Objects and Reasons and the preamble to the Act and several other provisions of the Act as well as the Factories Act.
11. It is necessary at the inception to note the few of this admitted facts. M/s. Krishna Bottlers (Pvt.) Ltd. is a company registered under the Companies Act, which owns the factory as well as the sales-depot at Vijayawada. The factory is located at Secunderabad while the sales depot in question is located at Vijayawada. There are employees working in Vijayawada sales-depot and the company appointed the staff at Vijayawada. The company is also paying their salaries. The company's local manager employs them, pays them and he has administrative control over them. The employees at Vijayawada sales-depot are not liable to any transfer. The board of directors of the company has the ultimate control or authority over all tine sales-depots, including the one at Vijayawada. There is no factory at Vijayawada engaged in manufacturing process and preparation of soft drinks. The sales-depot at Vijayawada is registered under the Andhra Pradesh Shops and Establishments Act, 1947. The sales-depot has got is muster-tolls, attendance and pay registers and separate accounts at Vijayawada. The final accounts of this sales depot are merged with the accounts of the company at the end of the year for the purpose of income-tax and sales tax levied on the company.
12. On the above facts and in view of the clear evidence given by P.W. 1 it is clear that the sales-depot at Vijayawada is only an adjunct to the factory attending to the sale and distribution of the finished products of the company. The question now, that arises for our consideration there fore is, whether the employees of the petitioner at the sales-depot at Vijayawada are covered by the Act for the purpose of levy of E.S.I. contributions ?
13. Before we deal with the case law it is better to extract the relevant provisions of the Act, which are germane for the purpose of this appeal, and also to note the objects and the purpose of the Act. The Act is intended to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provision for certain other matters relating to them. It is the result of a scheme envisaged by the Government for Company. State Insurance providing for certain be. $ to the employees in factories and establishments in the event of sickness, maternity and employment injury. A Corporation has been set up by the Act which is controlled by a Central Board. The insurance fund is derived mainly from contributions from employers and the work-men. The employer is liable to pay the contribution in the first instance payable by the employee as well as himself and would be entitled to reimburse himself for the employs; share of the contribution from his wages. The Act covers only employees canting wages upto Rs. 500 per month. The benefits contemplated by the Act are sickness cash benefit, maternity benefit, disablement and dependants benefit, etc. The Act extends to whole of India, but has been made application in the first instance to all factories. It is open to the Government to extend the provisions of this act to any other establishment or class of establishments, industrial and commercial, agricultural or otherwise. The Act has been amended by Amending Act XLIV of 1966. Section 2(9) defines the employee in the following terms:
(9) 'employee' means any person emloyed 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 in cidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let is hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;
and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment; but does not include-
(a) any member of the Indian naval, military or air forces; or
(b) any person so employed whose wages (excluding remuneration for overtime work) exceed live hundred rupees a month;
Provided that an employee whose wage (excluding remuneration for over. time work) exceed five hundred rupees a month at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period.
14. The factory was defined under Section 2(12) of the Act as follows:
'factory' means any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages 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 Mines Act, 1952 (XXXV of 1952), or a railway running shed;.
15. The principal employer is defined under Section 2(17) as follows:
'principal employer' means-
(i) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under the Factories Act, 1948 (LXIII of 1948), the person so named;
(ii) in any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority is so appointed, the head of the department;
(iii) in any other establishment, any person responsible for the supervision and control of the establishment;.
16. The immediate employer under Section 2(13) is defined as follows:
'immediate employer', in relation to employees employed by or through him, means a person who has undertaken the execution, on the premises of a factory, or an establishment to which this Act applies or under the supervision of the principal employer or his agent, of the whole or any part of any work which is ordinarily part of the work of the factory or establishment of the principal employer or is preliminary to the work carried on in, or incidental to the purpose of, any such factory or establishment, and includes a person by whom the services of an employee who has entered into a contract of service with him are temporarily km or let on hire to the principal employer;.
17. Chapter 4 deals with contributions. Sections 38 to 40 are in the following terms:
38. All employees to be insured.-
Subject to the provisions of the Act, all the employees in factories or establishments to which this Act applies shall be insured in the manner provided by this Act.39. Contributions.-(1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer's contribution) and contribution payable by the employee (hereinafter referred to as the employee's contribution) and shall be paid to the Corporation.
(2) The contributions shall be paid at the rates specified in the First Schedule, and in case where the provisions of this Act are made applicable to any employee or class of employees in any factory or establishment or class of factories or establishments in such manner that they are excluded from some of the benefit under this Act, at such rates as the Corporation may be in this behalf.
(3) A week shall be the unit in iv of which all contributions shall payable under this Act.
(4) The contributions payable in respect of each week shall ordinarily fall due on this last day of the week, and where an employee is employed for part of the week, or is employed under two or more employers during the same week, the contributions shall fall due on such days as may be specified in the regulations.
40. Principal employer to pay contributions in the first instance -(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution and the employees contribution.
(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made there-under, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employees; be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:
Provided that no such deduction shall be made from any wages other than sued as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.
(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.
(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.
(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.
18. The Employees' State Insurance Act is the outcome of a policy to provide remedy for the widespread evils arising from the consequences of rational poverty. It is a piece of social security named by Lord Beveridge, namely, want, disease, dirt, ignorance and indigence The Act was originally made applicable to factories. It primarily provides for benefits to the employees in such factories. The Act envisages also the extension of benefits to the employees in other establishments, industrial, commercial, agricultural or otherwise by a notification by the appropr are Government. It provides for benefits to the employees in the event of sickness, maternity, injuries in the course of employment and payments to dependants in certain cases. The benefits conferred by the Act cover a larger area of employees than what the Factories Act and allied legislations intruded. The object of the Factories Act is to secure health, safely, welfare, working hours, leave and other benefits for the workers employed in the factories. The benefits of this Act do not extend to field workers working outside the factory, whereas the object of the Employees' State Insurance Act is to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments working in them or elsewhere and dependence benefits to their dependants.
19. Before we deal with the interpretation of the several provisions under the Act extracted supra, it is better to extract the preamble to the Act and the relevant portions of the Statement of Objects and Reasons. The preamble provides as follows:
An Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto.
The Statement of Objects and Reasons also mentions as follows:
The introduction of a scheme of Health Insurance for Industrial workers has been under the consideration of the Government of India for a long time. The necessity for such a scheme has become more urgent in view of the conditions brought about by war. The scheme envisaged is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories. A scheme of this nature has to be planned on an All. India basis and administered uniformly throughout the country. With this object, the administration of the scheme is proposed to be entrusted to a Corporation constituted by Central legislation.
19a. I am alive to the fact that in the interpretation of statute's the preamble, though a key to open the rind of the Legislature, cannot be used to control or qualify the precise and unambiguous language of the enactment. As laid down by their Lordships of the Supreme Court in Y. A. Mamarde v. Authority under Minimum Wages Act 1972 2 L.L.J. 136, it is only in case of doubt or ambiguity that recourse may be had to the preamble to ascertain the reason for the enactment in order to discover the true legislative intendment. It was also similarly laid down in Workmen of the Firestane Tyre & Rubber Co. v. Management 1983 2 L.L.J. 278, where it was held that the preamble gives an indication as to what the Legislature wents to achieve.
20. Dealing with a welfare legislation, Vaidialingam, J., speaking on behalf of the Court, observed at page 334 as follows:.We are aware that the Act is a beneficial piece of legislation enacted in the interest of employees. It is well-settled that in construing the provision of a welfare legislation, Courts should adopt, what is described as a beneficient rule of construction. If two constructions are reasonably possible to be placed on the section, it follows that the construction which furthers the policy and the object of the Act and is more beneficial to the employees, has to be preferred. Another principle to be borne in mind is that the Act in question which intends to improve and safeguard the service conditions of an employee, demands an interpretation liberal enough to achieve the legislative purpose; But we should not also lose sight of another canon of interpretation that a statute or for the matter of that even a particular section, has to be interpreted according to its plain words and without doing violence to the language used by the Legislature.
21. The scope of Statement of Objects and Reasons and the preamble has also been considered by the Supreme Court in A.C. Sharma v. Delhi Administration : 1973CriLJ902 . Dua, J., speaking for the Bench, observes at page 917 as follows:
Statement of Objects and Reasons for introducing a Bill in the Legislature is not admissible as an aid to the construction of the statute as enacted; far less can it control the meaning of the actual words used in the Act. It can only be referred to for the limited purpose of ascertaining the circumstances which actuated the sponsor of the Bill to introduce it and the purpose for doing so. The preamble of a statute which is often described as a key to the understanding of it may legitimately be consulted to solve an ambiguity or to ascertain and fix the meaning of words in their context which otherwise bear more meanings then one. It may afford useful assistance as to what the statute intends to reach, but if the enactment is dear and unambiguous in itself then no preamble can vary its meaning. While construing a statute one has also to bear in mind the presumption that the Legislature does not intend to make any substantial alteration in the existing law beyond what it expressly declares or beyond the immediate scope and object of the statute.
Bearing the above principles in mind I would now consider the scope of the provisions of the Act.
22. A factory is denned as any premises including the precincts thereof, wherein 20 or more persons are employed and in any part of which the manufacturing process is being carried on with the aid of power. There is no separate definition of the manufacturing process in this Act. But the expression 'manufacturing process' has the same meaning as is assigned to it in the Factories Act, LXIII of 1948. Section 2(x) of the Factories Act defines 'manufacturing proces' us follows:
'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, or
(v) constructing, reconstructing, repairing refitting, finishing or breaking up ships or vessels;
23. A worker in a factory is defined by Section 2(1) of follows:
'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, on the subject of the manufacturing process;.
24. Taking the definition of the 'factory' in both the Acts, and the 'worker' in juxta position to an 'employee' in the Act various decisions have been rendered on the subject. We may in the first instance refer to a Bench decision of their Lordships Rujagopalan and Ramachandra Iyer, JJ., in Employees State Insurance Corporation v. S.M. Sriramulu Naidu : (1960)IILLJ699Mad . It was held in that case shat it is not necessary that 20 or more persons should be employed in the manufacturing process itself in order to make it a factory, nor is it necessary that the entire premises should be occupied by manufacturing process, and where within the same premises or compound a printer of departments ere situated and the departments are engaged in the work in connection with, or incidental to, a manufacturing process of the factory, then prima facie ail form part of the factory. In such a case it can be considered that all the various departments were integrally connected with the manufacturing process. As regards the word 'employee' used under the Act, it is wider than the term 'worker' employed in the Factories Act. A purely clerical establishment under the Factories Act may not make the persons therein as workers within the meaning of that Act. It was, therefore, held that the Act is intended to cover a wider class of employees thin those contemplated by the Factories Act. Their Lordships have disagreed with the view held in In re: K.V.V. Sarma (1952) 4 F.J.R. 329, and reversed the decision of Baxter Ahmed Sayeed, J., in S.M. Srinomulu Naidu v. Employees' State Insurance Corporation (1958) 15 F.J.R. 209. This decision in Employees' State Insurance Carporation v. S.M. Sriromulu Naidu (1959) (Supra) was followed in Employees' State Insurance Corporation v. Ganapathia Pillai (1960) 9 F.J.R. 279, where Rajamannar, C.J. and Veeraswami, J., after considering that decision in Employees' State Insurance Corporation v. S.M. Sriromnlu Noidu, (Supra) held as follows:
While we recognise that there is a difference between the definition of 'worker' in the Factories Act and the definition of 'employee' in the 'Employees' State insurance Act, what we have to decide in each case is whither a particular person is one who will full within the definition in the Employees' State Insurance, Act.
On the fact of that case their Lordships held that one of the workers who was keeping only a ledger for the managing agent and net for the factory, was not an employee within the meaning of the Act. To arrive at that conclusion their Lordships followed the unreported decision of Gajendragadkar and Chainari, JJ., which was subsequently reported in Employees' State Insurance Corporation v. Chittur Harikar her Raman 1957 L.L.J. 267 : (1956) 2 F.J.R. 462.
25. In Thiagarajan v. Employees' State Insurance Corporation (1963) 24 F.J.R. 400, the decision in Employees' State Insurance Corporation v. S.M. Sriramulu Naidu, (supra) was again referred to with approval by Ramachandra Iyer, C.J., and Venkataraman, J., wherein they held that the expression 'worker' incidental to or primary to the work of the factory would take is the gardeners, building workers, office attendants, watchmen, etc, of a textile mill, even though they have nothing to do with the actual manufacturing process of the factory, since their work would be conducive to the health of its manual workers and would enhance their efficiency and health.
26. Chandra Reddy, C.J., and Narasimham, J., have also approved the above view in Sirsilk Ltd. v. Employees' State Insurance Corporation (1963) 26 F.J.R. 266 . After approving the aforesaid decision their Lordships held as follows:.What was laid down there was that the expression 'employee' in the Act was of wider import than the wed 'worker' occurring in the Factories Act and that, having regard to the nature of the benefits secured to the insured employee under the State Insurance Act, the term 'factory' should have a different and wider interpretation than that of the same word in the Factories Act, which was intended to safeguard against the risks attendant in a factory to workers connected at least in a way with the manufacturing process. We are in entire agreement with the interpretation placed by the learned Judges on the term 'employee' in the Act. The word 'employed' has a larger denotation than the expression 'worker' in the Factories Act, and there is no scope for limiting the meaning of the word 'employee' to a 'worker*' as defined in the Factories Act. This being beneficial legislation, should receive a liberal construction. To read it in a restricted sense as applying only to persons engaged in the manufacturing process would be to defeat the very purpose of this enactment and will be opposed to the well - recognised canons of construction.
Their I ordships have, in the course of the judgment, referred to various decisions both English and Indian, wherein it was held that the workers in a canteen at ached 10 the factories the also employees of the factory, for instance see Luitman v. Imperial Chemical Industries Ltd. [1955] 3 All ER 481 : [1956] 1 W.L.R. 980 and State of Punjab v. British India Corporation Ltd. : [1964]2SCR114 , wherein their Lordships held that the building used for housing the canteen or other allied purposes must be held used for the purpose of the factory within the meaning of Punjab Urban Immovable Property Tax Act, 1960. I may in this connection also refer to the decision in London Co-operative Society Ltd. v. Southern Essex Assessment Committee LR [1942] 1 KB 53 where such canteen workers are held to be employees of the factory. Similarly, the Jaundry attached to a public institution was held to be a part of it in Royal Masoric Institution for Boys (Trustees) v. Parkes LR (1912) 3 KB 212. Their Lordships also have distinguished the decision in Employees' State Insurance Corporations. V. C.H. Raman (Supra), on the ground that the administrative office concerned in that case was concerned with the sale of the products of the factory and the business of the factory ended with the production of those goods. In view of the clear pronouncement in the above rate, by a Division Bench of this Court, with which I am is complete agreement, it is not necessary that the employee should work in the actual manufacturing process. It is enough if he is employed in any work of or incidental or preliminary to or connected with the work of the factory, to bring him within the purview of this Act.
27. Their Lordships of the Supreme Court in Nagpur Electric Light and Power Co. Ltd. v. Employees' State Insurance Corporation 1967 2 L.L.J. 40, interpreting the provisions of Section 2(9)(i) of the Act, referring to the assistant engineers, supervisors, electricians, overseers, overseers, connected with the erection, and maintenance of electricity supply lines connected with the transmission of power, the cable jointer, mistries, linemen, coolies and wireman employed for the inspection of supply lines, digging of pits, erection of poles for laying distribution mains and service lines, the masons attending to the masonary work of the buildings, the attendants in charge of the sub stations, who look after the transformation and transmission of power, the motor drivers and cleaners employed for carrying materials and tower ladders in trucks for maintenance of the supply lines, the clerks, draughtsman main office peons helping the assistant engineers, the storekeepers and clerks issuing stores to all the departments and keeping accounts relating to the stock, the deputy meter superintendent, the meter mechanics and meter testers, attending to the testing, calibration and repairs of the meters, as follows:
All these employees, clerical 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 Section 2(9)(i) if he is employed in connection with work of the factory.
Their Lordships have also distinguished the decision Employees' State Insurance Corporation v. C.H. Raman, (supra) on the ground that the work of the factory ended with the production of finished articles and the work of selling the products was not connected with the work of the factory. Ultimately, Bachawat, J., speaking for the Court, observed at the end as follows:
The company maintains one establishment for its factory. The factory does the work of transforming and transmating 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. (Italics is mine).
28. In view of the above clear pronoun cements, it has to be held that all the staff employed by the factory in its work where actual manufacturing process is carried on or in connection with any other work of the factory, including sale of its products, should be deemed to be. workers connected with the factory and, therefore, all persons employed in such work should be held to be employees. Reference may also be made to a recent decision of our High Court in G. Subba Rao v. Andhra Pradesh Road Transport Corporation (1972) 42 FJR 135 wherein Gopal Rao Ekbote, J. (as his Lordship then was) and Lakshmaiah, J. held that the workers and the administrative stuff employed for any work of, incidental or preliminary to or connected with the work of the factory, that is to say, the premises in eluding the precincts, where persons are working for assembling or on transport buses, whether such work is done by the employee in the factory or elsewhere are persons to whom the provisions of Employees' State Insurance Act can be applied. Their Lordships made exception only in the case of employees, who are working on the side of plying the buses.
29. A single Judge of the Madras High Court, Maharajan, J., in Mahalakshmi Oil Mills v. Employeees' State Insurance Corporation, Madras (1970) 38 FJR 185, held that the work of the factory is equated within manufacturing process. But, this view was held to hi not sound by Veeraswami, C.J., and Raghavan, J., in Employees' State Insurance Corporation v. Prabhulal Brother (1972) 43 FJR 97, wherein their Lordships reversed the decision of Venkatadri, J., in Prabhulal Brothers case (1965) 23 FJR 14. In the latter case the learned Judge Venkatadri, J., held that a sales clerk is not an employee, but the Division Bench reversed the said decision, after holding that the work of the factory cannot be equated to the work of manufacturing process and following the Supreme Court decision in Nagpur Electric Light and Power Co. Lid. v. Employees' State Insurance Corporation (supra) their Lordships observed as follows:.In this case, the factory, as we mentioned, was engaged in the manufacture of umbrellas. It is inconceivable that the work of the factory did not include sale of such umbrellas. If it were otherwise, it would be unrealistic, having regard to the concept of factory. A factory is associated with a commercial activity and that activity will have as its ultimate aim the marketing of its products. Sales clerk, therefore, would clearly fall within the definition of the term 'employee' in the Act.
30. In the present case it is admitted that one of the objects of the company is to establish a factory for the production of soft drinks like 'Coca Cola' and 'Fanta' and also to sell them. It has also been established on evidence in this case that the sales depots of the company are part of the company's activities in the same way as the factory. It has, therefore, in my opinion, to be held that all employees engaged by the company in all its sales-depots are also employees is the factory within the meaning of the word 'employee' even under the Act prior to the amendment in 1966, even though they are working outside the precincts of the factory. It may be noted that in order to be un employee under Section 2(9)(i) of the Act, the work need not be done by the employee in the factory alone. It can be done not also outside but also elsewhere, so long as the sales-depots are doing part of the work of the factory and are owned by the company. Hence, it has to be held that the work carried on by the employees in the sales-depots is the work of the factory or the work in connection with the factory so as to bring the employees therein within the ambit of this Act.
31. I have next to deal with the two decisions relied upon by Sri K. Srinivasamurthy, mainly in support of his arguments. They are, one is by Gajendragadkar, J., (as his Lordship then was) and Chainani, J., in Employees' State Insurance Corporation v. Chittur Harihar Iyer Raman, (supra) and the other is that of Madras High Court in Mettur Beardsell Limited v. Employees' State Insurance Corporation, Madras 1974 1 L.L.J. 397 : (1973) 44 FJR 76, rendered by Ramaprasada Rao, j. The second one was also a decision rendered after the amendment of Section 2 (9)(i) of the Act (XLIV)of 1966. That was a case relating to Mettur Beardsell Limited, which had its factory at Madhavaram, within the limits of Madras City, with and independent administrative office at 52/53, Jehangir Street, Madras-1. The company contended that their 67 workers are exclusively working at the factory and there are few others numbering about 30 working in the administrative office of the company at the address give above. According to the case of the company, even though the definition of an 'employee' has been amended in 1966, the Employees' State Insurance Corporation, Madras, had not the requisite jurisdiction in law to call upon the company to register the members of the staff of the administrative office as employees and then claim contribution for the reason that no notification was issued by the appropriate Government under Section 1(5) of the said Act, and the learned Judge thought that if the provisions of the Act are extended to any institution, other than a factory, which is popularly known in trade and commerce as an establishment, then the procedure prescribed in Section 1(5) is absolutely necessary to be adhered to. In the words of the learned Judge, the appropriate statutory functionary would lack jurisdiction, if it extends the provisions of the Act to any establishment or class of establishments. Discussing the effect of the amendment brought in by Act XLIV of 1966, the learned Judge dissents from the view held in Hindustan Lever Ltd. v. Employees' State Insurance Corporation, New Delhi 1973 1 L.L.J. 259 : (1972) 42 F.J.R. 263, where it was held that the new amendment is purely declaratory of the existing situation. The learned Judge observes is it here was no ambiguity in the quondam definition of 'employee' and by reason of adding the additional paragraph in 1966, there has been an expansion of the definition and not a clarification of it as suggested and as assumed by the learned Judge, who disposed of the case in Hindustan Lever Ltd. v. Employees' State Insurance Corporation (supra).
32. I am unable to agree with the reasoning of the learned Judge. If the amendment brought in by the Act, XLIV of 1966 was intended to enlarge of extend the definition end to bring within is ambit persons, who are mentioned in the amended definition to become employees under the Act, to insist upon a notification in regard to such an establishment would amount to begging the question since an employee who is connected with the work of the factory or doing work in connection with the factory or is engaged in the distribution or sale of the products of the factory has to be regarded as an employee under the amended definition. The Court cannot fail to apply that definition to an employee merely on the ground that there has been no separate notification under Section 1(5) of the making the Act application such establishments dealing with the work of the factory or anything done in connection with the work, of the factory or to persons engaged in the distribution or sale of the products the factory. It has to be noted the word 'establishment' has not been defined in the Act. The establishment in question in the case tinder consideration of the learned Judge was an establishment attached to the factory itself. It was the work connected with the factory and not in any way unconnected with it. I am, therefore, unable to agree, with respect, with the reasoning given by the learned Judge, that without the Act being extended by notification to establishments of that type, the persons working therein cannot be deemed to be employees, as it is neither sound in principle nor is it in tune with the amended provision nor is it supported by any authority. I am, therefore, of the opinion the view held by Madras High Court in Mettur Beardsell Ltd. v. Employees' State Insurance Corporation, Madras, (supra) is not correct and that the view held by the Delhi High Court in Hindustan Lever Ltd. v. Employees' State Insurance Corporation, (supra) lays down the correct law.
33. In the case first cited by Sri K. Srinivasamurthy Employees' State Insuiance Corporation v. chittur Harihar Iyer Raman (supra) it was held that the work of the factory en led with the production and it was not concerned with the sale of its products. This decision has, therefore, been distinguished in other cases by the Supreme Court also on that ground.
34. I may also in this connection observe that the view, which I fun holding here, has been held by Punjab High Court in Chanan Singh & Sons v. Employees' State Insurance Corporation, Amritsar (supra).
35. The Delhi High Court also has taken a similar view in Hindustan Lever Ltd. v. Employees' State Insurance Corporation (supra). That case dealt with employees in the office at Delhi of Hindustan Lever Ltd., which has its factories at several other places like Bombay, Calcutta, Shamnagar, Ghaziabad, Etah and Trichinapally. It was held by the learned Judge that all the persons working at Delhi office are also employees within the meaning of the Act.
36. I may also in this connection refer to the decision in Hoyle v. Oram 142 Eng. Rep. 1090. It related to a firm of calico printers. The business of the firm was carried on at two places, seven miles apart. It was held that both the premises were part of the same establishment, The principle to be deduced from this decision is that the distance is not the criterion that matters, but that the business should be one in relation to or in connection with the business of the concern.
37. The learned Counsel also referred to an unreported decision of our learned brothers Obul Reddi and Madhava Rao, JJ. in C.M.A. No. 187 of 1971. On a perusal of that decision I find that their Lordships have not laid down a rule contrary to the above. Their Lordships have observed that a factory cannot be equated to an establishment. As there was no evidence on record that tie employees of zonal sales office are persons employed in a work connected with the administration of the factory, their Lordships remitted the matter to the Court below for disposal. I do not, therefore, think that that decision is of any assistance to the respondent.
38. I now come to the scope of the amendment in Section 2(9) introduced by Act XLIV of 1966. It has to be seen from the Statement of Objects and Reasons for this amendment, that since the existing definition of the term 'employee' did not cover administrative staff engaged in sale and distribution and other allied functions, the definition was amended to cover such employees. The definition begins with the word 'includes'. It has been held by their Lordship is of the Supreme Court, that the meaning of the word 'includes' has to be understood in the following manner:
The word 'includes' in often used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things at they signify, according to their nature and import but also those things which the interpretation clause declares that they shall include. The word 'include' is also susceptible of other constructions, which it is unnecessary to go into, (vide Taj Mahal Hotel's case : [1971]82ITR44(SC) .
39. Similar view has been held by their Lordships Jaganmohan Reddy, C.J. and Venkatesam, J., in Taj Mahal Hotel v. Income-tax Commissioner : [1967]66ITR303(AP) .
40. It is, therefore, clear that this new definition enlarges the scope of the word 'employee' in a factory. According to this definition any employee working for wages in connection with the administration of a factory or any part, department or branch thereof or with the purchase of raw materials for or the distribution or sale of the products of the factory would also be covered by this Act. There is no dispute that the employees in the sales depots in this case are employed for the distribution or/and sale of the products of the factory. This amended definition, therefore, in my opinion, puts the matter beyond any shadow of doubt and brings the employees in these sales-depots within the purview of the new definition.
41. It is no doubt true that there is no definition of an establishment in this Act. The word establishment is only defined by Section 2(10) of the Shops and Establishments Act. But I have already held that the sales depots in this case arc doing 1h; work of the factory or the work in connection with the factory, and they are not separate establishments and, in any event, since the employees working in the sales-depots are attending to the distribution and sale of the products of the factory, they must be deemed to be employees of the factory. It is not, therefore, necessary that there should be a separate notification under Section 1(5) of the Act extending the provisions of this Act to the establishments outside the factory as in this case.
42. Sri K. Srinivasamurthy, next relied upon the language of Section 38 of the Act, which says that it applies to all employees in factories His argument is that an employee in order to be entitled to the benefits of the Act should be an employee working actually in the factory For the reasons already given, I cannot agree with this interpretation. The word 'in' used in the said section is more descriptive of the persons employed in the factory. It is not, therefore, necessary for me to consider the decisions cited by him with regard to the interpretation of the word 'in' used in statutes of this nature. I cannot, therefore, agree with the learned Counsel that Section 2(9) read with Section 2(12) of the Act is applicable only to the actual workers in the factory and that the sales-depots in this case are separate establishments unconnected with the factory.
43. Mr. Srinivasamurthy next placed reliance upon some decisions under the Factories Act, for instance Ramhlashan v. Bombay Gas Co. (1960) 19 F.J.R. 385. I have already held that the word 'employee' under this Act is wider than the word 'worker' used under the Factories Act and, therefore, this decision is of no assistance. The learned Counsel also relied upon the decision of the Supreme Court in State of Uttar Pradesh v. M.P. Singh : 1960CriLJ750 and Employers' State Insurance Corporation v. Chittur Harihar Iyer Raman (supra). For the reasons already given these decisions also are of no assistance.
44. He next relied upon the decision in Prabhulal Hrothers v. Employees' State Insurance Corporation (supra). But this decision has been reversed in Employees' State Insurance Corporation v. Prabhulal Brothers (supra). The decision in Mahalakshmi Oli Mills v. Employees' State Insurance Corporation, Madras (1970) 38 F.J.R. 185, relied upon by him has been dissented from in Employee's State Insurance Corporation v. Prabhulal Brothers, (supra).
45. He next relied upon the decision in Safdarjung Hospital, New Delhi v. K.S. Sethi : (1970)IILLJ266SC , wherein their Lordships of the Supreme Court held that a hospital is not an industry. I do not see how the said decision has any relevance in this case. I, therefore, reject all his contentions above referred to.
46. For the above reasons, I hold that the employees in the sales-depot at Vijayawada, are employees covered by the Act, even as unamended and definitely so by the Act as amended in 1966 and hence the prayer of the petitioner before the lower Court in his Petition No. 8 of 1972, cannot be granted. It cannot be held that the salesman in the sale-depots of the petitioner do not come within the expression 'employee' under the Act and are, therefore, not covered by this Act. For these reasons I set aside the decision of the lower Court and allow this appeal with costs.
Kondaiah, J.
I have had the advantage of perusing the judgment prepared by my learned brother, Venkatrama Sastry, J. I am in entire agreement with his ultimate conclusion to allow the appeal But, however, with great respect to him, I am unable to persuade myself to agree with the view expressed by him fat Section 2(9)(i) of the Employees' State Insurance Act, 1948 thereinafter called 'the Act', itself would apply to the case on hand. I prefer to rest my decision on the ground that it is the inclusive part of the definition of 'employee' in Section 2(9) of the Act which has been added by the Amending Act XLIV of 1966 and came into force on 28th January, 1968, that would apply to the employees working in the sales branch depot of the respondent company at Vijayawada and give my own reasons therefor.
47. The material facts which are not in dispute and which lie in a short compass may briefly be stated: The respondent, M/s. Krishna Bottlers (Pvt.) Ltd., a company registered under the Companies Act and having its head office and a factory for manufacturing soft drinks such as Coca Cola, Fanta and Soda, at Tank Bund, Secunderabad, has got a sates depot at Vijayawada which is registered separately under the Andhra Pradesh Shops and Establishments Act, 1947. At Vijayawada there is a depot manager who is up pointed by the respondent-company The depot manager employs the staff in that sales depot. Those employees are under the disciplinary control of the depot manager. They are not liable to be transferred to the respondents' factory at Secunderabad. Separate attendance register, muster roll, wage register and accounts are maintained by the sales depot at Vijayawada for its staff and their salaries are paid by the depot manager. However, the income and expenditure of the sales depot at Vijayawada are merged in the company's accounts at the end of the year for purposes of income-tax and sales tax.
48. For the years 1968-69, 1969-70 and 1970-71, the appellant demanded the payment of Rs 14,235.46 towards arrears of contribution for insurance payable under the Act by the respondent-company in respect of its employees at Vijayawada sales depot. Resisting the claim of the appellant, the respondent-company filed an application before the Employees' Insurance Court at Hyderabad under Section 75 of the Act for declaration that the employees working in its Vijayawada sales-depot are not covered by the Act as they are not employees within he meaning of Section 2(9) of the Act. As the Employees' Insurance court upheld the Claim of the company, the present appeal has been preferred by the appellant.
49. The short question that falls for decision is whether, on the facts and in the circumstances, the persons working in the respondent-company's sales depot at Vijayawada arc 'employees' within the meaning of Section 2(9) of the Act.
50. The answer to the question depends upon the scope and ambit of the definition of th 'employee' under Section 2(9) of the Act and us application to the workers in question. The relevant and material portion of the definition With which we are concerned, reads thus:
'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 en 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
* * *and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment;....
Section 2(9) is separate and distinct from the inclusive part of the definition. In order to being any person within the scope of the definition of 'employee' under Section 2(9)(i) of the Act, he must have been directly employed by the principal employer for wages in or on any work of, or incidental or preliminary to or connected win the work of, a factory, whether such work is done by the employee in the factory or elsewhere. Unless a person is employed for wages in or in connection with the work of, or incidental or preliminary to the work of, a factory, he cannot be termed to be an employee within the meaning of Section 2(9)(i). The very use of the word 'elsewhere' in the end of Section 2(9)(i) makes it abundantly clear that the work contemplated in that clause is not confined either to the work done within the premises of the factory or to the manufacturing process. The use of the words 'in', 'in connection with' and 'incidental or preliminary to' leaves no doubt in my mind that the persons, in order to bring themselves within the scope of the definition of employees under Section 2(9)(i) of the Act, must have been employed for wages invariably on some work connected directly with the factory. The persons employed by a company owning a factory, for purposes unconnected with the work of the factory in any manner cannot be termed to be employees within the meaning of Section 2(9)(i). The real and crucial test for the applicability or otherwise of this part of the definition is the nexus or connection in some manner or other that exists between the work for which they are employed and the work of the factory. Where the work of the person employed has some connection or other with the work of the factory, irrespective of the fact whether he works inside or outside the factory or in any other far off place, be comes under the purview of this part of the definition. It is she pertinent to notice that the Legislature did not categorise the classes or types of employees. The Act being a social and welfare legislation intended to improve the lot of the employees, it is not only desirable but appropriate and proper to liberally construe the words 'any person employed' so as to take in all classes or categories of employees who satisfy the ingredients of the definitions. Such liberal interpretation would be in consonance or in accord with the object and purpose of the Act. The persons employed may be persons engaged in different types of work in the very manufacturing process of the factory. They may be also ministerial staff such as clerks, typists, accountants, section heads, etc., who are nor engaged in manual labour. Where the duties of the administrative staff are connected in some manner or other with the work of the factory, they shall be termed to be employees engaged in the work of the factory.
51. The pertinent question with which we are concerned is whether the persons employed in the sales branch of a company situated at a different plece for the purpose of selling its manufactured products can be said to be persons employed in or in connection with the work of or incident or preliminary to the work of, the factory. The process of manufacture would commence with the collection of raw materials and end the moment the manufactured soft drinks such as Coca Cola, Fanta and Soda are brought out of the factory for the purpose of sale. In my considered opinion, the distribution or sale of the manufactured or finished products of the factory can, under no circumstances be termed to be a work of, or incidental or prellminaty to the work of, the factory. Nor can such persons employed in the distribution or sale of the manufactured products or goods be termed to be persons employed in or in confection with the word of or incidental, or preliminary to the work of, the factory, as the production or manufacture of finished goods is altogether different and distinct from the distribution and sale of such goods. It admits of no doubt that a manufacturer who owns a factory may sell his finished products either himself directly or through branch offices or his agents or third party strangers. The sales branch offices, in such circumstances, must be held to be unconnected with the manufacturing process or any other work of the factory. Hence, they cannot be termed to be necessary or manufacture of the finished products.
52. The submission of Mr. I.A. Naidu, learned Counsel for the appellant, that the respondent-company is not only interested in, but actually has intended to have the distribution and sale of soft drinks manufactured in its factory at Secunderabad, through its sales- depots at Vijayawada, Visakhapatnam and other places, and, therefore, such distribution or sale or the soft drinks must be held to be the work of the factory, cannot be acceded to. The respondent-company is, no doubt, the owner of the factory where the manufactured goods are produced as well as the sales-depots at Vijayawada, Visakhapatnam and other places. One of the objects and purposes of the company may be to have the distribution and sale of its soft drinks through its sales-depots established in different places in or out side the State, But it is not the purpose or object of the company that owns the factory as well as the sales-depots in different places that is material for the purpose of deciding the point at issue. As pointed out earlier, it must be seen whether the persons working in the sales-depots are employed in or in connection with the work of the factory or on any work of or incidental or preliminary to the work of, the factory. The distinction between the work of the factory and the work of the respondent company must always be borne in mind. The persons employed in the sales-depots belonging to the company at different places might have been employed for the work of the company or for any work concerning the company, but, at the same time, their employment may or may not be in or in connection with the work of the factory. Where the persons are employed in or in connection with the work of the factory, then only they will become employees within the meaning of Section 2(9)(i) but not otherwise. Hence, I do rot find any substance in the submission of the appellant.
53. For the reasons stated, I am of the firm view that the workers in question are not employed in or in connection with the work of. or incidental or preliminary to the work of, the factory of the respondent-company at Secunderabad.
54. This view of mine gains support from the decisions of the Bombay High Court in Employees' State Insurance Corporation v. C.H. Raman (1957) 2 F.J.R. 462 and Ramlanshan v. Bombay Gas Co. (1960) 19 F.J.R. 385 and a decision of the Madras High Court in Employees' State Insurance Corporation v. Ganapathia Pillai (1960) 19 F.J.R. 279, which I shall presently refer to.
55. In the case of C.H. Raman's case (1957) 11 F.J.R. 462, the learned Judge, Gajendragadkar, J. (as ho then was), who spoke for the Court, while holding that the respondent therein who was employed in the administrative office of M/s J.K. Chemicals Ltd., as a general assistant and entrusted with clerical and typing work, was not an 'employee' within the meaning of Section 2(9)(i) of the Act, observed thus (at p. 465):.it is not shown that the work of the factory was to sell the products of the factory. The work of the factory in the present case began with the collection of raw materials and ended with the production of finished articles. If that be so, it would be difficult to accede to the argument that the work of selling the products of the factory was connected with the work of the factory. The work of selling cannot be said to be incidental or preliminary to the work of the factory. It is obviously not preliminary; and it cannot be incidental in that tense.... A person engaged on the management side would not have been a worker within the meaning of the Indian Factories Act. A person engaged on the management side may be an employee provided the management is carried on in an office arid the management, on the facts, can be said to be connected with the work of the factory itself. Even so, we do not think that the work which the respondent admittedly does in discharging his duties can be said to be either incidental, preliminary to or connected with the work of the factory.
Applying the aforesaid observations of the Bombay High Court in C.H. Raman's case (1957) 2 F.J.R. 462 and having regard to the definition of 'employee' in Section 2(9)(i) of the Act, it was held, by a Division Bench of the Madras High Court consisting of Rajamannar C.J., and Veeraswami, J. (as he then was), in Employees' State Insurance Corporation v. Ganapanthia Pillai (1960) 19 F.J.R. 279, that a secretary, clerk and typist in managing agent's office of a mill are not persons employed in some manner or other on any work connected with the work of the factory, i.e., manufacturing process. But, however, one T.N. Kanthanathan who disburses not only the pay of the officers and staff but also the wages of the workers in the mill, was held to be liable for insurance contribution.
56. The submission of Mr. I.A. Naidu, that the decision in C.H. Raman's case (1957) 11 FJR 462 and Ganapathia Pillai's case [1960] 19 FJR 279, are no longer good law in view of the decision of the Supreme Court in Nagpur Electric Light and Power Co. Ltd. v. Employees' State Insurance Corporation (supra) cannot be acceded to. The decision in C.H. Raman's case, is still good law as the same has been distinguished but not overruled by the Supreme Court in the case of the Nagpur Electric Light and Power Co. Ltd. (supra). Therein it was found on a consideration of the facts that all the workers of the disputed categories were persons employed for wages in or in connection with the work of the factory and were directly employed by the company on the work of or incidental to or connected with the work of, the factory, though some of them were working in the factory and others elsewhere. Hence, the assistant engineers, supervisors, electricians and overseers who were engaged in the erection and maintenance of the electricity supply lines connected with transmission of power, the cable jointer, mistries, linemen, coolies and wiremen who were employed for inspection of the supply lines, digging pits, erecting poles for paying distribution mains and service lines, the masons and attendants in charge of sub-stations and the clerks, accountants, telephone operators, typists, motor car staff and menial staff required to do miscellaneous work including the cleaning of the office compound were held to be 'employees' within the meaning of Section 2(9)(i) or the Act as they wore employed 'in connection with the work of the factory, that is to say, in connection with the work of transforming and transmitting electrical power.' The ground on which the aforesaid categories of workers were held to be employees within the meaning of Section 2(9)(i) was that the duties of the administrative staff were directly connected with the work of the factory The learned Judge, Bachawat, J., who spoke for the Court, observed that the clerks who are not engaged in manual labour art employees if they are employed in connection with the work of the factory. In that connection it was observed that:
a person doing non manual work can bean employee within the meaning of Section 2(9)(i) if he is employed in connection with the work of the factory. The duties of the administrative staff are directly connected with the work of the factory. The case of the Employees' State Insurance Corporation, Bombay v. Raman (supra) is distinguishable.
This decision is an authority for the proposition that any employee, clerical or otherwise, engaged in the administrative work which is non-manual, irrespective of the work bang done in or outside the factory, would be an employee within the meaning of Section 2(9)(i) if he is employed in connection with the work of, or incidental to or preliminary to the work of, the factory. Any other person or worker who is employed in any separate establishment unconnected with the work of the factory cannot be termed to be an 'employee' within the meaning of Section 2(9)(i) of the Act. For the same reason, the decision of the Madras High Court in Ganapath a Pillai's case (19 $ ) 19 F.J.R. 279, is still good law. I may add that in Mahalakshmi Oil Mills v. Employees' State Insurance Corporation (19 $ 0) 38 F.J.R. 185, a person who is exclusively employed as a salesman attending to the shipment of finished goods and who has nothing to do with the factory work as such, was held by the learned Judge, Maharejan. J., to be not an 'employee' within the meaning of Section 2(9) as the words 'incidental or preliminary to' in the definition have to be understood with the words 'with the work of the factory'. The coolies employed by a gas manufacturing works for laying pipes out* side the factory for transporting gas to consumers were held by a Division Bench of the Bombay High Court in Ramalanshan v. Bombay Gas Co. (1960) 19 F.J.R. 385 : A.I.R. 19 $ Bom. 184 , to be not workers employed in connection with the manufacturing process of gas. Therein Chainani, C.J., who spoke for the Court, observed thus:
Distribution or transport of an article after it is manufactured is not a manufacturing process Such work cannot also be said to be incidental to or connecter with a manufacturing process Consequently, employment in such work will not bring the employee within the definition of 'worker'.... He is not employed in connection with gas while it is still in the stage of production.
57. I shall now turn to the decisions cited by the appellant's counsel in support of his plea. In Employees' State Insurance Corporation v. Prabhulal Brothers (supra) the clerical staff working in the sales section within the premises of me factory producing or manufacturing umbrellas are held by a Division Bench of the Madras High Court, to be 'employees' within the meaning of the Section 2(9)(i) of the Act. It is pertinent to notice that sales clerks therein were found to be working in the premises of the factory along with the other employees working in other sections. Hence, on the facts and in the circumstances of that case, that decision can be justified. However, with great respect to the learned Judges, I am unable to persuade myself to agree with the reasoning for the view expressed by them that:
It is inconceivable that the work of the factory did not include sole of such umbrellas. If it were otherwise, it would be unrealistic, having regard to toe concept of factory. A factory is associated with a commercial activity aim that activity will have as its ultimate aim the marketing of its products. Sales clerk, therefore, would clearly fall within the definition of the term 'employee' in the Act.
As pointed out earlier, the owner of the factory may have the intendment or object of selling the products manufactured in his factory. But a factory by itself may not have such purpose or object. Hence, this decision does not run contrary to the view expressed by me.
58. In Chanan Singh & Sons v. Employees' State Insurance Corporation (1962) 24 FJR 371, the Punjab High Court held on the facts of that case, that the members of the line staff of an electric supply company were employees within the meaning of Section 2(9)(i) of the Act, as they were employed by the principal employer and their work was incidental to and connected with the work of the factory. In Culcutta Electric Supply Corporation v. Employees' State Insurance Corporation : (1961)IILLJ30Cal , the electric supply company had three power homes or generating stations which were found on facts to be factories. Hence, the workers therein were held to be employees within the meaning of section 2(9)(i) of the Act. A Division Bench of the Madras High Court, in Regional Director, Employees' State Insurance Corporation v. Sriramulu Naidu (1959) 19 FJR 238 : AIR 1960 Mad. 248, held that the Pakshiraja Studios was a factory and the provisions of the Act would apply lo it on the ground that 'it is only as a result of the co-ordinated efforts of all the departments that the raw films' could be converted into finished cine films and that 'all the departments should be taken as a unit for the purpose of ascertaining whether the premises of the studios will be a factory under the Act'. Therein the question whether a person was or was not an employee within the meaning of Section 2(9)(i) did not arise. In another decision of the Madras High Court of Thiagarajan v. Employees' State Insurance Corporation (1963) 24 FJR 400, the gardeners, building workers, office attender, watchman, etc., of a textile call were held to be employees within the meaning of Section 2(9)(i) of the Act as the maintenance of the garden would be conducive to the health of its manual workers and would also enhance their efficiency and health. Though the aforesaid persons had nothing to do with the actual working of the factory they were, nonetheless, found to have been employed for working in the garden, maintained by the factory for purposes of keeping the factory a healthy surroundings and hence, it could not be said that they were employed on a work unconnected with the factory. A Division Bench of this Court, in Sirsilk Ltd. v. Employees' State Insurance Corporation (1963) 26 FJR 265, held that the running of a canteen in a factory is essential for enhancing the efficiency of the workmen employed in the factory as it feeds end entertains persons engaged in the process of manufacturing and the workers employed in such a canteen are employees within the meaning of Section 2(9) of the Act. The aforesaid five cases do not advance the plea of the appellant that Section 2(9)(i) of the Act would apply, as they are distinguishable from the facts of this case.
59. The next decision on which strong reliance has been placed by the appellant's counsel in support of his plea that the definition of 'employee' under Section 2(9)(i) of the Act would apply, is that of a Division Bench of this Court in G. Subba Rao v. A.P. State Road Transport Corporation (1972) 42 FJR 135. The question that fell for decision therein was whether the workmen working in the premises of the factory where buses are built or repaired and the ministerial staff working in the premises or outside the premises of the factory as well as those working in several offices for the purpose of running the State bus service, such as drivers, cleaners, conductors and ministerial staff connected therewith, are employees within the meaning of Section 2(9) (i) of the Act. The learned Judge, Gopal Rao Ekbote, J. (as he then was), who spoke for the Court, held that 'the workers and the administrative staff employed for any work of, or incidental or preliminary to or connected with the work of the factory, that is to say, premises including the precincts where persona are working for assembling, repairing, body building, ete., of the transport buses, whether such work is done by the employee in the factory or elsewhere art the persons to whom the provisions of the Employees' State Insurance Act can be applied' and 'they cannot apply to employees who are working on the side of plying the buses'. This decision does not render any assistance to the appellant's plea, but, on the other hand, it fortifies my view that the employees employed by the respondent-company for the purpose of selling its soft drinks are not employees within the meaning of Section 2(9)(i) of the Act, as they are not employed for any work of, or incidental or preliminary to or connected with the work of, the factory where the soft drinks are manufactured
60. I may add that the field workers employed in guiding, supervising and controlling the growth and supply of sugarcane to be used in the sugar factory were held by the Supreme Court in State of U.P. v. M.P. Singh : 1960CriLJ750 , to be not employees either in the premises or precincts of the factory and, therefore, the provisions of the Factories Act, 1948, were stated to be inapplicable.
61. There is yet another valid ground to hold that the workers in question are not employees within the meaning of Section 2(9)(i) of the Act. The persons working in the sales depot at Vijayawada have not been directly employed by the respondent-company, the principal employer, as required by Section 2(9)(i). Admittedly they have been employed by the manager of the Vijayawada sales depot, who, in his turn, has been appointed directly by the principal employer. Separate attendance register, muster roll, wage register and some of the accounts are maintained in the sales depot at Vijayawada which is registered separately under the Andhra Pradesh Shops and Establishments Act, 1947. Hence, they cannot be termed to be persons employed directly by the principal employer and under its disciplinary control.
62. For all the reasons stated, I have no hesitation to hold that the persons employed by the respondent-company in the Vijayawada sales depot through its depot manager at Vijayawada are not 'employees' within the meaning of Section 2(9)(i) of the Act.
63. The contention of Mr. I.A. Naidu, that the respondent-company is estopped from contending that it is not liable to pay contribution towards insurance in respect of its employees in the sales depot at Vijayawada, as such contribution is being paid in respect of the workers in the ales depot at Visakhapatnam and other places, cannot be acceded to. The conduct of the respondent either in paying the contribution in respect of its employees in the sales depots at Visakhapatnam and other places, or paying the same on protest in respect of the employees in the Vijayawada sales depot for any earlier years cannot, in any way, disentitle or debar the respondent-company from taking the present stand that the provisions of the Act do not apply to the case on hand, if the same is sustainable in law. It admits of no doubt that there is no question of estoppel against a statute, nor can an admission of a party bar him from raising the contention that the statutory definition of 'employee' is not in fact applicable to the case. The appellant can, therefore, succeed only if it is established that the persons in dispute are employees within the meaning of Section 2(9)(i) in so far as this aspect is concerned, but it cannot base its claim on the sole ground of estoppel, or admission or conduct of the respondent-company.
64. This brings me to examine whether or not the inclusive part of the definition of 'employee' in Section 2(9) would apply. The appellant contends that the inclusive part of the definition is clarificatory or explanatory to the existing definition of 'employee' whereas the respondent pleads that this part of the definition forms part of the earlier part of the definition of 'employee' and, therefore, it must be read in conjunction with the earlier part so as to connect the persons specified therein with persons employed in or in connection with the work or the factory. In order to appreciate the respective stands taken by the contending parties, it is not only appropriate but necessary to refer to the impact and effect of the amendment. The language of the inclusive part of the definition is clear and unambiguous. The legislative intendment, and object of the amendment by the addition of this inclusive part of the definition must be gathered from its very provisions. On a plain reading of the inclusive part of the definition, it is abundantly clear that that purpose and object of the addition was to cover such of the persons employed for wages on any work connected with the administration of the facto y and those engaged in the purchase of raw materials for, or the distribution or sale of the products of, the factory who were not covered by the existing definition of the term 'employee'. It may also be noticed that the statement, of objects and reasons for the Amending Act XLTV of 1966. indicates that the amendment of the definition of 'employee' is to 'cover the administrative staff engaged in sale, distribution and other allied functions' who are not covered by the then existing definition : vide A.P. Gazette dated 14th October. 1965, Part III-A, Central Bills, pages 198 and 199. The amended part of the definition of the term 'employee', as noticed earlier, is an inclusive one The impact and effect of the use of the expression 'includes' in a definition clause in a statute has been well-settled. As stated by Lord Watson in Dilworth v. Commissioner of Stamps LR [1899] AC 99 , 'include' is very generally used in interpretation clauses in order to enlarge the meaning of the words or phrases occurring in the body of the 'statute'. To the same effect is the decision of the Supreme Court in Income-tax Commissioner v. Taj Mahal Hotel : [1971]82ITR44(SC) . The learned Judge, Grover J., spoke for the Court, ruled thus:
The word 'includes' is often used in interpretation clauses in order to enlarge the meaning of the winds or phrases occurring in the body of the 'statue'. When it is so used, these word and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include.
I may usefully refer to the following observations of a Division Bench of this Court consisting of Jaganmohan Reddy, C.J., (as he then was) and Venkatesam, J., in Taj Mahal Hotel v. Income-tax Commissioner : [1967]66ITR303(AP) , which has been affirmed by the Supreme Court in Income-tax Commissioner v. Taj Mahal Hotel (1972) 82 ITR 41 : : [1971]82ITR44(SC) :
When it is mentioned that a particular definition 'includes' certain things, it should be taken that the Legislature intended to settle a difference of opinion on the point or wanted to bring in other matters that would not properly come within the ordinary connotation of the word or expression or phrase in question (vide Madras Central Urban Bank Ltd. v. Corporation of Madras 62 MLJ 120 : A.I.R. 1932 Mad 474). The Legislature uses the word 'means' where it wants to exhaust the significance of the term 'defined' and the word 'includes' where it intends that while the term defined should retain its ordinary meaning its scope should be widened by specific enumeration of certain matters which its ordinary meaning may or may not comprise so as to make the definition enumerative but not exhaustive: vide Province of Bengal v. Hingal Kumari A.I.R. 1946 Cal. 217.
On the application of the rules of interpretation referred to above with regard to the scope and ambit of the inclusive definition, I am of the firm view that the sovereign Parliament, by adding the inclusive part in the definition of 'employee' intended to settle any difference of opinion on the point relating to the persons employed for wages on any work connected with administration of the factory and also wanted to bring within the connotation as the expression 'employee' defined under Section 2(9) the persons who are engaged in the purchase of raw materials and the distribution or sale of the products of the factory. In fact, the decisions of two Division Benches of the Bombay High Court in Employees' State Insurance Corporation v. C.H. Ramon (supra) and Romlanshan v. Bombay Gus Co. (1960) 19 FJR 385, and the decision of the Madras High Court in Employees' Stale Insurance Corporation v. Ganapathia Pillai : (1961)ILLJ593Mad , and that of the Supreme court in State of U.P. v. M.P. Singh : 1960CriLJ750 , referred to above indicate that persons employed in any administrative work or sale or distribution of finished products of a factory would not fall within the purview of the definition of 'employee' in Section 2(9)(i) as they are not employed in or in connection with any work of the factory. The inclusive part of the definition Would certainly put an end to any such controversy and settle the point beyond any doubt in future.
65. The Act being a social and welfare legislation intended to improve the lot of the employees, the inclusive part of the definition of the term 'employee' must be liberally construed so as to benefit the other categories or persons specified therein. The Courts must, therefore, adopt the beneficial rule of construction which would be not only consistent with but furthering the policy and object of the amendment and more beneficial to the employees. Any other interpretation which is in conflict with the object and purpose of such amendment is not only not permissible on the plain language of the amended definition but would lead to anomalies resulting in grave injustice to the classes of Employees enumerated therein. If really the inclusive part of the definition of the term 'Employee' was intended to be I only an explanation or clarification of the orginal definition as observed by Dalip K. Kapur, J., in Hindustan Lever Lid. v. Employees' State Insurance Corporation 1973 1 L.L.J. 259 : (1972) 42 F.J.R. 263, on which strong reliance has been placed by Mr. I.A. Naidu, the wording of the same would have been altogether different. It must be presumed that the sovereign Parliament, in its wisdom, thought fit to provide the inclusive part in the definition which expanded the original definition of 'employee' with a specific purpose. If really it was an explanation or clarification of the original definition, nothing prevented the Parliament from inserting an explanation to the definition instead of adding the inclusive part. It is not the province of the Courts either to add any words to, or omit to read any expression in, the definition of 'employee' under Section 2(9). This liberal construction of the inclusive definition of the term 'employee' would be consistent with the object and intendment of the Act, i.e., to secure sickness, maternity, disablement and medical benefits to employees of factories and establishments and dependants' benefits to their dependants. It is also pertinent to notice that the definition of the term 'employee' in the Act is wider than that of the term 'worker' in the Factories Act. On a plain reading of the inclusive part of the definition, I am inclined to hold that it is an additional and independent provision which takes in within the fold all Persons employed for wages for any work connected with the administration of the factory or sale of the products of, the factory. It is pertinent to notice that the inclusive Part of the definition is complete in itself and it does not form part of the earlier Part of the definition. It enumerates separate and distinct sets or classes of persons to whom this benefical piece of legislation is sought, to be extended. The same view has been expressed by Ramaprasada Rao,J. in Mettur Beardsell Limited v. Employees' State Insurance Corporation, Madras 1974 1 L.L.J. 39 : (1973) 44 FJR 76 . According to the learned Judge:
there was no ambiguity in the quondam definition of 'employee' and by reason of adding the additional paragraph in 1966, there has been an expansion of the definition and not a clarification of it as suggested and as assumed by the learned Judge who disposed of the case in Hindustan Lever Ltd. v. Employees' State Insurance Corporation, New Delhi, (Supra).
Hence. I respectfully disagree with the view taken by Dalip K. Kapur, J., in the case of Hindustan Liver Ltd., (supra) with regard to the scope and effect of the inclusive part of the definition. In other respects, it actually supports the view taken by me. That apart, that was a case where the amended definition of the 'employee' was held to be applicable. Therein the learned Judge was of the view that the Court was not competent, on that facts on record, to determine whether any of the employees of the company are covered by the Act and the question must first be worked out by the Corporation by finding out which of the employees ate covered and then the matter has to be adjudicated upon by the Court appointed under the Act. Hence, It does not assist the appellant in any manner.
66. Relying upon the use or the words 'all employees in factories' in Section 38 and 'in or in connection with the work of a factory' in Section 2(9) of the Act, it was pressed upon us by Mr. Srinivasa Murthy, learned Counsel for the respondent, that the object of the amendment of the definition of 'employee' is to include only the persons who carry on the work specified therein or within the precincts of the factory but not to include persons working outside the factory in a separate establishment. Section 38 requires all employees in factories to be insured in the manner provided by the Act. It must be borne in mind that the material part of Section 38 is subject to the provisions of the Act. The expression 'employees in' occurring before the term 'factories' should not be construed to take is only such persons who carry on work within the premises of the factory. It admits of no doubt that the definition of 'factory' in Section 2(12) takes in 'any premises including the precincts thereof wherein twenty or more per. sons are working'. Hence, the expression 'employee' used in Section 38 must be construed as defind under Section 2(9) of the Act. The provisions of Section 38 must be read harmoniously with the other provisions of the Act. It muse be borne in mind that this section is not the charging section. But the liability of the employer to pay contribution in respect of his employees arises or is created under Sections 39 and 40. Section 39 enjoins the employer to pay contribution payable by him as well as the employees to the Corporation as per the provisions of the Act; whereas Section 40(1) makes it obligatary on the part of the principal employer to pay contribution in respect of every employee, whether directly employed by him or by or through an immediate employer. In fact, it is the respondent company that is now sought to be proceeded against for the recovery of the arrears of contribution payable under Section 40 in respect of its employees working in the sales branch depot at Vijayawada. The further submission of Mr. Srinivasamurthy that the mere amendment of the definition of 'employee' under Section 2(9) without suitably amending the expression 'in factories' occurring in Section 38 of the Act, does not create any advantages or rights to the employees, cannot be acceded to. As already stated, Section 38 is not material for the determination of the question now before us. It only provides for insurance in respect of the employees 'in factories'. The liability is fastened to the employer only under Sections 39 and 40. Hence, I do not find any substance in this submission of the respondent.
67. The plea of Mr. Srinivasamurthy that the person in question have not been directly employed by the respondent-company and they belong to a separate and independent establishment registered under the A.P. Shops and Establishments Act, 1947 and, therefore, they cannot be termed to be the employees of respondent company in respect of whom insurance contribution had to be paid, merits rejection. The inclusive part of the definition does not require persons to be employed by the principal employer directly. It is sufficient if the persons are employed for wages on any work connected with the purchase of raw materials, for, or the distribution or sale of the products of the factory or with its administration. There is no mention of the authority that should appoint or employ the persons. The requirements of Section 2(9)(i) that the persons must have been employed directly by the principal employer is not necessary to attract the inclusive part of the definition. This part of the definition, as pointed out earlier, is not in any was dependent upon the categories of persons specified in Clauses (i), (ii) and (iii) of Section 2(9). True, as contended by Mr. Srinivasamurthy, the Act is not made applicable to establishments as no notification as contemplated by Section 1(5) has been made by the appropriate Government. The persons in question are sought to be held as employees within the definition of Section 2(9) not because they belong to an independent establishment indicated therein, but because they are persons employed for wages by the respondent-company, the principal employer, through its depot manager at Vijayawada on the work connected with the distribution or sale of the soft drinks produced at its factory at Secunderabad. The aforesaid requirements would make the persons in question squarely fall within the inclusive part of the definition of 'employee', irrespective of the fact that the Vijayawada sales branch depot of the respondent-company has been registered under the A.P. Shops and Establishments Act, 1947 and separate attendance register, muster roll, wage register and a set of accounts are maintained therein. I am unable to persuade myself to agree with the view taken by the learned Judge, Ramaprasada Rao, J., in Mettur Beardsell Limited v. Employees' State Insurance Corporation, Madras 1974 1 L.L.J. 39 : (1973) 44 F.J.R. 76, on which strong reliance has been placed by Mr. Srinivasamurthy, that the Act is not applicable to the personnel working administratively, in the absence of the prescribed statutory notification under Section 1(5). The unreported decision of a Division Bench of this Court in C.M.A. No. 187 of 1971 dated 8th August, 1972, on which strong reliance has been placed by Mr. Srinivasamurthy, does not advance his plea. Therein it was held that a 'factory' cannot be equated to an 'establishment'. That apart, the matter has been remitted to the fudge, Employees' Insurance Court, for disposal according to law, setting aside the order of the Tribunal on the ground that the material on record is not sufficient to decide whether or not the employees of the zonal sales office of the company therein are persons employed on a work connected with the administration of the factory.
68. For all the reasons stated, I am of the firm view that the persona working in the respondent-company's sales depot at Vijayawada are 'employees' within the meaning of inclusive part of the definition of 'employee' under Section 2(9) of the Act.
69. In the result, the appeal is allowed with costs, setting aside the order of the Employees' Insurance Court.