HYDERABAD ASBESTOS CEMENT PRODUCTS LTD. versus THE EMPLOYEES INSURANCE COURT & ANR.

Citation: [1978] 2 S.C.R. 345 · Decided: 02-12-1977 · Supreme Court of India · Bench: V.R. KRISHNA IYER · Disposal: Dismissed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

) 
~I 
345 
HY.DERABAD ASBESTOS CEMENT PRODUCTS LTD. 
A 
11:-
v. 
THE EMPLOYEES INSURANCE COURT & ANR. 
December 2, 1977 
[V. R. KRISHNA IYER AND P. S. KAILASAM, JJ.] 
Employees State Insurance Act 1948-Sec. 2(9) & 2(11), 38-Whether 
employees not working in the factory but employed in connection with the work 
of the factory are covered by the act. 
B 
The appellant Company has a tactory situated at Sanatnagar where asbestos 
sheets are manufactured. The Company has zonal sales offices 
in 
various 
cities. In the State of Andhra Pradesh they have such zonal offices at Vijaya~ 
C 
wad.a and Vizagapatnam. There are employed in the zonal office at Vijayawada 
who do the work of canvassing for the sale of products manufactured in the 
factory located at Sanatnagar. The appellant contended that the zonal offices 
are establishmentS and are not factories and, as such, do not fall within the 
scope of the Employees State Insurance Act, 1948. The High Court negatived 
the contention of the appellant. 
. 
The appellant in an appeal by certificate granted by the High Court conten-
4ed that the Act makes a distinction between· a factory and an establishment and 
D 
that the zonal offices and branch offices are in the nature of establishments 
and cannot be brought within the purview of factories. In order to bring an 
employee within the scope of the Act it was submitted he should not only be 
an employee within the meaning of section 2(9) of the Act but also he should 
be an employee of the factory as defined in section 2(12) of the Act. The 
scheme of the Act and particularly section 38, which is the charging it was sub-
mitted section would indicate that the Act was intended to cover only employees 
in factories and employees who are connected with the work of the factory. 
E 
The respondents supported the judgment of the High Court. 
Dismissing the appeal held : 
1. The object of the -enactment is to provide for certain benefits to employees 
in case of sickness, maternity and employment injury and to make provision for 
certain other matters in relation thereto. Section 2(9) defines employee to 
mean any person employed for wages in or in connection with the work of a 
factory or establishment to which the Act applies and 
includes any person 
F 
employed for \Vages on any work and includes 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. The 
latter part of the definition was added by the Amending Act 44 of 1966. 
[348 B, F, G, 349 Cl 
Nagpur Electric Light & Power Co. Ltd. v. Regional Director Eniployees 
State Insurance Corporation Etc. [1967] 3 SCR P. 92 E1nployeei State Insurance 
G 
Corporation with its Regional Office at Coimbatore v. Ganpathia Pillai and Ors. 
A.J.R. 1961 Mad. 176, referred to. 
2. The amendment was made for the purpose of covering cases which were 
held to be outside the scope of section 2(9) by the decisions of Bombay and 
Madras High Courts. The amended section includes any person employed for 
wages on •any work connected with the adininistration of the factory or any 
part department or branch thereof or with the purchase of raw materials or 'for 
the distribution or sale of products of the factory. It is clear that the work 
H 
connected with the administration of the factory, the purchase of raw materials 
and the distribution of sale of products are brought within the scope of the 
definition. 
[353 H, 354 A-BJ 
!/' 
A 
B 
c 
D 
E 
F 
346 
SUPREME COURT REPORTS 
[1978] 2 S.C.R. 
3. The court negatived the contention that only employees who are employed 
in the factory are required to be insured and not employees employed in con-
nection with the work of the factory. The court held that employees employed 
for administrative purposes or for purchase of raw materials, or for sale of ·the 
finished goods if employed in connection with the work of the factory are inclu-
ded within the definition of en1ployees. 
[352 A-D] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 652 of 1976. 
From the Judgment and Order dated 5-12-1975 of the Andhra 
Pradesh High Court in Writ Petition No. 2907 /74 and 
Civil Appeal No. 1314 of 1977 
Appeal by Special Leave from the Judgment and Order dated 
9-11-1976 of the Calcutta High Court in Matter No. 631 of 1973 and 
Civil Appeal No. 900 of 1977 
From the Judgment and Order dated 21-6-1976 of the Andhra 
Pradesh High Court 

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