LexEMPLOYEES STATE INSURANCE CORPORATION versus M/S. M.M. SURI AND ASSOCIATES (P.) LTD.
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EMPLOYEES STATE INSURANCE CORPORATION A V. M/S. M.M. SURI AND ASSOCIATES (P.) LTD. OCTOBER 28, 1998 [S. SAGHIR AHMAD AND D.P. WADHWA, JJ.] Employees' State Insurance Act, 1948: SS. 1 (5), 2(9), 2(12) and 2(22)-Delhi Administration-Notification dated 30.9.1988-Extending the Act to 'Shops'-Held, Act would apply to an establishment only when number of its employees answering the description of 'employee' as contained ins. 2(9) is twenty or more. Wards and Phrases: Words 'r!mployee', 'factory' and 'wages' occurring in ss.2(9), 2(12) and 2(22) of Employees' State Insurance Act, 1948-Meaning of A notification dated 30.9.1988 was issued by the Delhi Administration extending the provisions of s.1(5) of the Employees' State Insurance Act, 1948 to 'shops' situated within the Union Territory of Delhi, if twenty or more persons were employed therein. Jn a writ petition challenging the notification, the High Court held that the word "employees" was applicable to those who were not officers and, since in the establishment of the respondent there were five officers and the balance of the workers numbered less than twenty, the notification was not applicable to the respondent's establishment Aggrieved, the Employees' State Insurance Corporation filed the present appeal. It was contended for the appellant Corporation that in view of the definition of'factory' as given in s.2(9) and the words used in s.2(12) of the Act, namely, "persons are employed for wages" the stress was on the word persons and, therefore, for the Act to be applicable the only criteria would be to see if the establishment engaged twenty or more persons in its employment. It was also contended that the Act being a welfare legislation, if majority of the persons employed were 'employees' even though their number is less than twenty they should not be deprived of the benefit under the Act. Dismissing the appeal, this Court 451 B 452 SUPREME COURT REPORTS [1998) SUPP. 2 S.C.R. A HELD: 1.1. The Employees' State Insurance Act, 1948 would apply to an establishment only when number of employees is twenty or more and all those employees answer the description of'employee' contained in s.2(9) of the Act. It is important to note that till the Act was amended by the amending Act 44of1966, the definition of'factory', as provided in s.2(12) of the Act, meant any premises "wherein twenty or more persons are B working". This definition of"factory" was changed and at the relevant time it was substituted by the words "employed for wages". When the word 'wages' is specifically introduced in the section it can only mean to have reference to what "wages" mean in s.2(22) of the Act. It cannot be given any other meaning. [457-A-C) c Regional Director Employees State Insurance Corporation, Trichur v. Ramanuja Match Industries, (1985) l SCC 218 and Employees' State Insurance Corporation v. Apex Engineering Pvt. Ltd., (1998) l SCC 86, relied on. 1.2. There is no dispute that as per the Notification dated 30.9.1988 D issued by the Delhi Administration, the number of employees falling within the definition of s.2(9) of the Act, employed in the establishment of the respondent are less than twenty. The High Court has, therefore, rightly held that the notification extending the Act to the shops is not applicable to the establishment of the respondent. (459-G-H; 460-A) E F G CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5640 of 1997. From the Judgment and Order dated 23.4.97 of the Delhi High Court in L. P. A. No. 74 of 1997. V .J. Francis for the Appellant. Dushyant Dave, Tarun Sharma and Arun K. Sinha for the Respondents. The Judgment of the Court was delivered by D.P. WAD HWA, J. Dissatisfied with the judgment of Delhi High Court holding that the notification dated September 30, 1988 issued under sub- section (5) of Section I of the 'Employees' State Insurance Act, 1948 (for short, the 'Act') was inapplicable to the establishment of the respondent, H Employees, State Insurance Corporation (ESIC) has filed the present appeal [ ,, E.S.l. CORPN. v. M.M. SURI AND ASSO. (P.) LTD. [D.P. WADHWA, J.] 453 after obtaining leave from this Court. A Under sub-section (5) of Section 1 of the Act, notification was issued, after complying with necessary formalities, extending the provision of the Act to 'shops'. It is not disputed that respondent is a shop and that the notification would be applicable to it if other condition
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