JUDGMENT P. Subramonian Poti, J. 1. The Regional Director of the Employees State Insurance Corporation is the appellant here. The appeal is against the order of the Employees Insurance Court, Kozhikode on an application under section 75 of the Employees State Insurance Act, 1948. The firm Messrs. Oosmaniya Tile Works, Alwaye moved the Insurance Court for a declaration that the managing partner of the firm is not an employee of the firm in respect of whom contribution was payable to the Employees State Insurance Corporation. Such contribution was demanded by the Corporation merely by reason of the fact that it was seen that the managing partner was being paid a monthly salary of Rs. 250 in addition to his share of profit. The court which was so moved under section 75 of the Act did not accept the case of the Corporation. It held that the managing partner of the firm cannot be said to be an employee on whose account contribution was payable under the Employees State Insurance Act. That view is challenged in this appeal. 2. The court which was so moved under section 75 of the Act did not accept the case of the Corporation. It held that the managing partner of the firm cannot be said to be an employee on whose account contribution was payable under the Employees State Insurance Act. That view is challenged in this appeal. 2. Employee is defined in section 2 (9) of the Employees State Insurance Act, 1948 as follows: "(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 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 incidental to the purpose of the factory or establishment; of (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 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 Force; or (b) any person so employed whose wages (excluding remuneration for overtime work) exceeded five hundred rupees a month : Provided that an employee whose wages (excluding remuneration for overtime 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. To the latter part of the definition an inclusive clause was added by Act 44 of 1966 and that was evidently intended to extend the benefit of the provisions of the Act to the employees working in connection with the administration of the factory or the establishment or working in any department or branch concerned with the purchase of raw materials for or the distribution or sale of the products of the factory or establishment. 3. It is the case of the Corporation that the definition indicates that what is necessary to bring any person within the scope of the term employee is only employment for wages which should necessarily be taken as meaning being engaged for wages. The word engaged in the context in which it appears, should, it is submitted by Sri Sankaran Nair, the learned counsel, be understood as referring to working for wages in the factory and not working in the capacity as one employed by another. In other words the word employed is not to be understood as referring to a relationship of employer and employee but to an activity of employment in connection with the work of the factory or establishment. 4. I have already indicated that the inclusive part of the definition was intended to extend the scope of coverage of the term employee. Therefore it appears to me that the category of persons who are brought within the definition by reason of such inclusive clause would be of the same character as the category of persons enumerated in clauses (1), (2) and (3) of the sub-section. All these clauses refer to employment by the employer whether it be the principal employer or the immediate employer. Definition of a term is necessarily for the purpose of application in the other provisions of the Act. All these clauses refer to employment by the employer whether it be the principal employer or the immediate employer. Definition of a term is necessarily for the purpose of application in the other provisions of the Act. Section 38 is the provision which relates to the obligation for insurance in regard to all employees and that reads : "Subject to the provisions of this Act, all employees in factories, or establishments to which this Act applies, shall be insured in the manner provided by this Act."� Section 39 (1) is also relevant in this context and that reads: "The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer contribution) and contribution payable by the employee (hereinafter referred to as the employee contribution) and shall be paid to the Corporation."� The very fact that the contribution payable by reason of compulsory insurance provided in section 38 is to be both by the employer and the employee indicates that the word employee has necessarily to be read as referring to one who is employed by another. In other words the term employee which has relationship to employment must be understood as one who is working under a contract of service. If so read there is no scope for considering the managing partner of the firm as an employee of the firm for, if a person happens to be an employer, he cannot be an employee also, as these terms are normally understood. Of course the position must necessarily be different if there is a specific provision on this behalf in any statute, as for example, the one with which this court had occasion to consider in the decision reported in Insurance Inspector v. Victory Tile Works 1973 KLT 927 . Though the learned counsel for the Corporation would rely on this decision to find support for his contention, I do not think that it is of any assistance to him for, the question decided there was whether a person could be an employee as well as a principal employer as these terms are defined in the Act. There of course it was conceded that the manager working as such was an employee and he also fell within the definition of the term principal employer which specifically referred to the manager. The position here is different. There of course it was conceded that the manager working as such was an employee and he also fell within the definition of the term principal employer which specifically referred to the manager. The position here is different. The question is not whether a person can be the employee and the employer at the same time but whether a managing partner is an employee. It is in this context that I find that he cannot be for the simple reason that he is not a person employed by anyone else. He is an employer as the other partners are and there cannot be a contract of service between him as the employer on the one hand and as employee on the other. 5. As early as in the decision in Ellis v. Joseph Ellis and Co. 1905 (1) K. B. 324 the question whether a partner of a firm could be said to be an employee of the firm arose for decision in the court of appeal in England. Dealing with this, Collins M. R. said : "The supposition that the deceased man was employed, within the meaning of that term as used in the Act, would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works and receives sums which are called wages, it really does not create the relation of employers and employed, but it is, in truth, a mode of adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners, which is that of co-adventurer and not employee.� 6. In Chintaman Rao and another v. State of Madhya Pradesh 1958 (11) LL.J. 252 the Supreme Court had occasion to consider the scope of the term person employed occurring in the Factories Act. In Chintaman Rao and another v. State of Madhya Pradesh 1958 (11) LL.J. 252 the Supreme Court had occasion to consider the scope of the term person employed occurring in the Factories Act. Section 2(1) of that Act defined a worker as meaning : "2 (1) 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, or the subject of the manufacturing process."� The word "person employed had to be construed by the Supreme Court in the decision adverted to. The court held that the concept of employment involved three ingredients: (i) employer (ii) employee and (iii) the contract of employment. The High Court of Bombay in the decision in State v. Pinto 1960 (1) LLJ. 59 had occasion to deal with a question similar to the one arising in this case. Whether a partner who was receiving salary from the firm was a worker as the term is defined in the Factories Act, 1948 was the question that arose in the case before the High Court of Bombay and referring to the decision of the Supreme Court to which I have just now adverted, the learned Judges of the Bombay High Court said: "The employer is one who employs, i.e., one who engages the services of other persons. The employee is one who works for another for hire. The employment is the concept of service between the employees and the employee whereunder the employee agrees to serve the employer subject to his control and supervision. It follows from the above that the term employed is a relative term and always has relation on the one hand to the employer and on the other to the contract of employment. In the course of the judgment of the Court which was delivered by Mr. Justice Subba Rao, emphasis was laid on the presence of the circumstances, viz., whether the workers are amenable to the control and supervision of the manager or not. Mr. In the course of the judgment of the Court which was delivered by Mr. Justice Subba Rao, emphasis was laid on the presence of the circumstances, viz., whether the workers are amenable to the control and supervision of the manager or not. Mr. Justice Subba Rao pointed out that if it is found that the workers are carrying on the work under the management and supervision of the manager of the factory, then it can be safely concluded that each of them is a worker within the meaning of that term in the Factories Act. The decision, of the Supreme Court is directly on the point and is, therefore binding on us. Although the decision in State v. Allisaheb Kashim was not referred to before the Supreme Court, nor was it considered, still the former must be deemed to have been overruled, by necessary implication, inasmuch as the Nagpur decision, in which a similar view was taken, was expressly overruled. The position, therefore, boils down to this, that the eighteen persons who were found working in the factory on the date of inspection were not workers within the meaning of section 2(1) of the Factories Act, although they were actually carrying on the work on the premises of the factory. They were partners of the concern and as such cannot be considered as the employees, because so far as they were, concerned, there was neither any employer nor any contract of employment. They were doing the work in their capacity as partners.� 7. In the light of the above discussion I hold that a managing partner of a firm cannot be considered to be an employee within the meaning of that term as defined in section 2 (9) of the Employees State Insurance Act merely by reason of the fact that he is receiving a salary or other remuneration. If so the Employees State Insurance Court was right and no interference is called for: The appeal is dismissed but in the circumstances no costs.