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Judgment
Deepak Gupta, J.—By this judgment five appeals, being FAO Nos. 7, 8, 9, 10 and 11 of 1996, are being disposed of since similar questions arise for determination in all these appeals.
All these cases arise out of the proceedings under the Employees State Insurance Act, 1948 (hereafter referred to as ''the Act''). The Appellant Mohan Meakin is admittedly an industrial establishment. It has a brewery at Solan. Two questions which are common to all the five appeals are whether the amount paid by the Appellant to the contractors, who have been given the job of washing of empty bottles and packing the same, is to be considered as wages and ESI contribution paid on it; and whether the Appellant is liable to pay the ESI contribution on the wages paid to the casual employees?
In FAO Nos. 7, 9 and 11 of 1996, a question has been raised as to whether the amount paid as stipend to apprentices is to be considered as wages paid to employees and whether ESI contribution is to be paid on this amount?
In FAO Nos. 8 and 9 of 1996, the question which has been raised is whether the amount paid to the employees on account of efficiency award is to be considered as part of the wages or not for calculating the ESI contribution?
Lastly, in FAO No. 9 of 1996, the question has been raised, whether the employer is liable to pay ESI contribution on the salary paid to the staff of the Mohan Middle School?
In all these cases, the authorities under the Act had called upon the Appellant to furnish certain documents and, not being satisfied, had directed the employer to make contribution with regard to the payment made to the contractors, payment made to casual workers, payment made to the apprentices, payments made on account of efficiency award and the salary paid to the staff of the Mohan Middle School.
These orders related to different years. These notices were challenged by the Appellant before the ESI Court, Himachal Pradesh. The Court has granted some benefit to the Appellant but has rejected the remaining portion of their claims. The ESI Court has held that the Appellant is liable to pay contribution on the entire amount paid to the contractors. It has also held the Appellant liable to pay contribution under the ESI Act on the amount paid to the casual workers. With regard to the apprentices, the ESI Court has held that the Appellant is not liable to pay the ESI contribution on the amounts paid to the apprentice. However, it has held that the amount shown by the Appellants as having been paid to the apprentices has actually not been paid and accordingly has given only partial relief to the establishment. With regard to the contribution on account of efficiency award, the claim of the Appellant has been rejected. The Appellant was also directed to pay the contribution with regard to the salaries paid to the employees of the Mohan Middle School.
I have heard Mr. K.D. Sood, learned Counsel for the Appellant; and Mr. S.R. Sharma, learned Counsel for the Respondents.
Mr. K.D. Sood has urged that the approach of the ESI Court was totally flawed. He has raised the following questions:
(i) Whether payments made to a job-work contractor falls within the ambit of Section 2(9) of the ESI Act and wages within the ambit of Section 2(22) of the Act and the employer is liable to pay ESI contribution under the Act?
(ii) Whether the employer is liable to pay ESI contribution on wages paid to casual workers?
(iii) Whether the employer is liable to pay ESI contribution on the amount of stipend paid to the apprentices?
(iv) Whether the employer is liable to pay ESI contribution on the amount paid as efficiency award to its employees?
(v) Whether the Appellant is liable to pay ESI contribution on the amount paid as salary to the staff of Mohan Middle School, which is managed by a separate Managing Committee and has no connection with the Appellant?
Before dealing with these questions, it would be apposite to refer to some provisions of the Act as it stood prior to 1984 since all the cases relate to the period prior to 1984.
Section 2(9) of the Act defines "employee" as follows:
2(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and-
(i) who is directly employed by the principal employer on any work of, or incidential 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 employees by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or