Shiva Trading Co. vs Secretary to Government of India and Others

G.R. Majithia and S.K. Jain, JJ.—The petitioners, who arc engaged in the business of Rice Shelling, have challenged the validity of letter No. S-38014(17)/90-SSI, dated August 26, 1991, issued by the Under Secretary to Government of India, conveying the Government''s decision regarding grant of exemption u/s 88 of the Employees'' State Insurance Act, 1948 (for short, the Act) to the employees of the factories/establishments engaged in seasonal processes, viz,, re-drying unmanufactured leaf tobacco, salt manufacture, wool pressing either with or without cotton pressing and ginning, ice manufacture, for a further period of three years form July 1, 1989 to June 30, 1992, and letter No. Pb.l2/19485/C-733/93/113, dated July 6, 1993, issued by the Deputy Regional Director, Employees'' State Insurance Corporation, Chandigarh to M/s. Sansari Pal Joginder Paul Rice & General Mills, Jalandhar, to deposit the contributions as are required to be paid in terms of Regulations 29, 3! and 33 of the Employees'' State Insurance (General) Regulations, 3950. in this petition under Articles 226/227 of the Constitution of India.

Learned counsel for the petitioners says that after making enquiries from the concerned quarters he had come to know that no notification either by the Central Government or by the State Government had been issued applying the provisions of the Act to Rice Shelters/Factories. Without applying the provisions of the Act, notice has been issued by the Employees'' State Insurance Corporation, Chandigarh (for short, the Corporation) to the petitioners to get their factories/ establishments registered under the Act and deposit arrears towards contribution as mentioned in the notice. It is further stated that the Punjab Government had been issuing notifications exempting the Rice Shelters from the purview of the Act and under the last notification exemption u/s 88 of the Act had been granted from 1 July 1, 1988 to June 30, 1989.

Written statement by way of affidavit has been filed on behalf of respondents No. 2 and 3 by Sh. S.S.Abrol, Regional Director of the Corporation. It is stated there that the Punjab'' Government issued notification u/s 1(5) of the Act extending the provisions of the Act to the factories working with power and having 10 or more employees with effect from March 30, 1975. Rice Shellers, who were covered under the Act were granted exemption from the operation of the Act. On the expiry of the period of exemption they became liable to comply with the provisions of the Act and to make contributions. The definition of ''seasonal factory'' as given under the Electricity (Supply) Act, 1948 (for short, the Electricity Act) is entirely different from that u/s 2(19A) of the Employees'' State Insurance Act. Under the Electricity Act, every factory working for not more than 8-1/2 months in a year is a seasonal factory, whereas under the Employees'' State Insurance Act they are not seasonal factories unless they are working for a period exceeding 7 months in a year and at the same time are engaged in manufacturing processes; mentioned in Section 2(19A) of the Act.

Learned counsel for the petitioners made the following submissions :-

(i) Petitioners'' rice shellers are not factories within the meaning of Section 2(12) of the Act and that the Punjab State Electricity Board has issued notification declaring Rice Shellers/ Huller Mills as seasonal industries and the same criteria ought to have been adopted for the purposes of the Act; and

(ii) The State Government has not issued any notification applying the provisions of the Act to the Rice Shellers,

The question whether the petitioners are factories as defined u/s 2(12) of the Act is a question of fact which has to be raised before the appropriate forum as provided u/s 75 of the Act. We cannot adjudicate the disputed question of fact, which can be determined after recording evidence in exercise of our extraordinary jurisdiction.

''Seasonal factory'' is defined u/s 2(19A) of the Act and the same reads thus :-"Seasonal factory" means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortication of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year --

(a) in any process of blending, packing or repacking of tea or coffee; or

(b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify."

A bare reading of this provision indicates that only those factories are seasonal factories which are exclusively engaged in one or more manufacturing processes, namely cotton ginning, cotton or jute pressing, decortication of groundnuts, manufacture of coffee, indigo, lac, rubber, sugar (including Gur) or tea or any manufacturing process which is incidental to or connected with any of these processes. The petitioners'' factories are not engaged in any of the manufacturing processes mentioned in Section 2(19A) of the Act and, as such, these do not fall within the definition of ''seasonal factory''. Notification was issued by the State Government extending the provisions of the Act to the factories working with power and having more than ten employees on their establishments. In the light of this notification, the petitioners cannot say that the Act has not been made applicable to them. After the Act was made applicable, exemption was granted to the Rice Shellers/Rice Millers from the purview of the Act. After the expiry of the period of exemption, the Act automatically became applicable to the Rice Shelters/Rice Millers.

In fairness to the learned counsel for the petitioner, his last submission may also be noted. He submitted that this writ petition should also be disposed of along with other writ petitions which were admitted to hearing and are fixed for final hearing before the learned single Judge. Identical matters came up for hearing in this Court before a Bench comprising of S.S. sODHI and V.K. bALL JJ. Civil Writ Petition No. 3942 of 1993, which is the verbatim copy of the present writ petition, came up for hearing before the Bench on May 13, 1993 and the following order was passed :

"The challenge here is to the order Annexure P/l on the ground that no notification has been issued under the Employees'' State Insurance Act and that the petitioner comes under the definition of "Seasonal factory", as provided u/s 2(19A). Neither of these grounds can be sustained in view of the fact that the notification had, in fact, been issued, as per the return filed, as far back as in 1975. What is more, Section 2(19A) does not cover the case of the petitioner as it is not a factory engaged in any process of blending, packing or repacking of tea or coffee. Dismissed."

In C.W.P. No. 3679 of 1993, where Mr. G.S. Dhillon, Advocate was the counsel for the petitioners and where identical relief was claimed, the same Bench passed the fo! lowing order on May 14, 1993:

"Dismissed for the reasons stated in our order in C.W.P. No. 3942 of 1993. We further add I that it would be open to the petitioner to seek his alternative remedy under the Act."

Similar writ Petition, viz., C.W.P. Nos.7433 and 4661 of 1993, came up for hearing before that Bench and the same were dismissed on July 15, 1993 and May 13, 1993 respectively. It would have been better if the Registry had enlisted all the identical writ petitions in which same relief was claimed before the same Bench to avoid conflicting orders.

For the reasons stated above, there is no merit in this writ petition. The same is dismissed with costs quantified at Rs. 5,000/- (Rupees five thousand).