Hindustan Lever Ltd. v. Deputy Director, Employees, State Insurance Corporation
2010-11-02
P.JYOTHIMANI
body2010
DigiLaw.ai
JUDGMENT : P. Jyothimani, J. 1. The writ petition is directed against the order of the first Respondent, dated 11 October 2004, by which the first Respondent has applied the provisions of the Employees' State Insurance Act, 1948 (ESI Act) to the Petitioner factory and also for direction to forbear the first Respondent from implementing the provisions of the ESI Act in respect of the Tea Factory situated at No. 3, Cuddalore Main Road, Kirumampakkam, Pondicherry. Subsequently, the Respondents 2 to 4 out of them, the fourth Respondent is the workers' union of the Petitioner-company were impleaded as parties. The Petitioner is a company engaged in the manufacture and sale of various items like, soaps, detergents, cosmetics, toilet preparations, beverages, food products etc., including "3 Roses" "Top star" and "Red Label" tea and it is having its registered office at Mumbai. The tea manufactured by the Petitioner is having the brand name, Brookebond 3 Roses, Top Star, Red Label, Taj Mahal, Tazaa, etc., (a) It is the case of the Petitioner that the Petitioner is having factories throughout India in various places including three factories in southern region manufacturing black tea. In 1997, the Petitioner put up a Tea Factory at Pondicherry, engaged in the manufacture of black tea with effect from 19 November 1997, with about 139 workers employed. The manufacture of tea which is a seasonal agro product consists of various stages like, plucking tea leaves and effecting various processes like, withering, oxidation, drying and grading in the factories situate in the plantation area, in which tea is obtained by unblended original garden tea. (b) The said original garden teas from the plantation of the company are received at the factory at Pondicherry. The Petitioner has set up modern factories at various locations to manufacture blended packet tea. The factories are equipped with sophisticated blend drums and supporting systems. The said process is being done in the Petitioner unit at Pondicherry. (c) While doing so, various other processes of removal of burn-materials and elimination of various other particles like, dust etc., and packaging process are completed for which the Petitioner installed 11 high-tech, packaging machines to continuously pack and seal the blended tea.
The said process is being done in the Petitioner unit at Pondicherry. (c) While doing so, various other processes of removal of burn-materials and elimination of various other particles like, dust etc., and packaging process are completed for which the Petitioner installed 11 high-tech, packaging machines to continuously pack and seal the blended tea. Therefore, the process of manufacturing in the Petitioner factory includes various preparations so as to make it finally a marketable product and according to the Petitioner, the said conduct of the Petitioner unit in blending and packaging of tea amounts to manufacture of tea as held in respect of Petitioner's Brooke Bond Company case by a Division Bench of Karnataka High Court reported in Brooke Bond Lipton India Ltd. v. State of Karnataka 109 STC 265 the SLP filed against which came to be dismissed by the Hon'ble Supreme Court, reported in 111 S.T.C. 2. (d) In the licence obtained for the Petitioner's factory first time on 31 October 1997 it was also disclosed that the factory is involved in the process of blending and packaging tea and therefore, since it constitutes a seasonal factory as per Section 2(19-A) of the ESI Act, the provisions of the said Act are not applicable which are applicable to factories other than seasonal factories. The term 'seasonal factory' has undergone some change as per Section 2(12) of the ESI Act which was subsequently inserted as Section 2(19-A) by way of amendment with effect from 20 October, 1989 and as per the said amendment, since the Petitioner factory is exclusively engaged in the manufacture of tea, it is deemed to be a seasonal factory even though the activities are carried on throughout the year. (e) When the Insurance Inspector of the first Respondent-Corporation visited the factory in 2001, he informed that the ESI Act has to be implemented, and by a representation, dated 11 July, 2001, the Respondent-Corporation was informed that in the judgment of the Supreme Court in The Regional Director, Employees'State Insurance Corporation Vs. M/s. High Land Coffee Works of P.F.X. Saldanha and Sons and another, AIR 1992 SC 129 the Petitioner was a party and therefore, the manufacturing process including blending and packaging should be defined as seasonal one, even if it works throughout the year.
M/s. High Land Coffee Works of P.F.X. Saldanha and Sons and another, AIR 1992 SC 129 the Petitioner was a party and therefore, the manufacturing process including blending and packaging should be defined as seasonal one, even if it works throughout the year. In spite of the same, under the impugned letter, dated 11 October 2004, the first Respondent directed that ESI Act has to be implemented in respect of the Petitioner-factory with effect from 1 January 2004 by holding that the Petitioner-factory is a factory coming within the meaning of Section 2(12) of the ESI Act. 2. The said order of the first Respondent is challenged on various grounds including that the procedure contemplated in the Employees' State Insurance (General) Regulations, 1950, in respect of registration of factories has not been followed and that as per the Division Bench judgment of the Karnataka High Court, as confirmed by the Supreme Court, even after the amendment came into effect from 1989 the Petitioner continued to be a seasonal factory, which fact has not been ignored. 3. In the counter-affidavit of the first Respondent, ESI Corporation, it is stated that inasmuch as the Petitioner unit at Pondicherry is involved in blending and packaging tea, the same cannot be said to be involved in the manufacture of tea since the manufacturing starts from plucking of tea leaves, withering, etc., which are not done by the Petitioner. Inasmuch as in the Petitioner unit at Pondicherry, the petitionor is only carrying on the blending and packaging of tea, as admitted by the Petitioner, it is distinguished from the manufacturing process as done in tea factories. (a) It is also not in dispute that as far as the manufacturing activity of the Petitioner is concerned, that is done (elsewhere and in the Pondicherry factory, the blending as well as packaging alone is done and hence, the same is covered u/s 2(12) of the Act. According to the first Respondent, the scope of seasonal factory came to be enlarged by way of amendment which came into force from 28 January 1968 to include the process of blending, packaging, repacking, etc., But the factory which is carrying on such activities shall not engage itself in the process for a period exceeding seven months in a year to get the benefit of seasonal factory.
(b) Therefore, even by subsequent amendment which came into effect in the year 1989, a separate section was brought out, viz., Section 2(12), 2(19-A) by which the blending, packaging and repacking can be treated as seasonal activities if the same are engaged for a period not exceeding seven months in a year and that was clearly explained by the Supreme Court and if it is more than seven months in a year, it ceases to be a seasonal factory, which automatically attracts the provisions of the ESI Act. Inasmuch as it is admitted by the Petitioner that the activity of blending, packaging and repacking in the factory unit is done for a period exceeding seven months in the year ending on 31 December 2003, and the factory is working for 305 days in the year, it ceases to be a seasonal factory. (c) However, the first Respondent admits that the blending and packaging do form part of manufacturing activities but the stand of the first Respondent is that the process of blending and packaging would not constitute the character of a seasonal factory if such process goes beyond seven months in a year and if such process with other manufacturing activities like, plucking, etc., go throughout the year, the factory shall continue to remain as seasonal factory not attracting the provisions of the ESI Act. It is also stated that under the ESI (General) Regulations, 1950, it is not mandatory for the Corporation to bring any factory under the cover of the Act only on submission of Form-I by the concerned factory. 4. That is also the stand taken by the Respondents 2 and 3 who are individual workers of the Petitioner factory and the fourth Respondent which is the union of workers of the Petitioner factory. 5. It is the contention of the learned senior Counsel for the Petitioner Sri AL Somayaji, that the judgment of the Calcutta High Court in Employees' State Insurance Corporation and Anr. v. Brooke Bond India Ltd. and Ors.
5. It is the contention of the learned senior Counsel for the Petitioner Sri AL Somayaji, that the judgment of the Calcutta High Court in Employees' State Insurance Corporation and Anr. v. Brooke Bond India Ltd. and Ors. 1978 (2) LLN 100 was relating to a case of merger of Lipton India, Ltd., dealing exclusively with tea, with Brooke Bond India, Ltd., dealing with both coffee and tea and then Lipton India, Ltd., became Brooke Bond Lipton India Ltd., and in that judgment, the factory of Lipton India Ltd., Kolkatta where tea was blended and packed, and the factory of Brooke Bond India Limited at Coimbatore where blending and packaging was undertaken, were admittedly treated as seasonal factories even before the amendment came in the year 1966, even though they were carrying on operation for more than seven months and that judgment is binding upon the ESI Corporation which was a party therein. He would also rely upon the judgment of the Karnataka High Court in Regional Director, Employees' State Insurance Corporation, Bangalore v. High Lands Coffee Works, and Ors. 1977 (1)LLN 447 in which parties are the same, which judgment came to be confirmed by the Supreme Court in Regional Director, Employees' State Insurance Corporation v. Highland Coffee Works of P.F.C. Saldanha and Sons and Anr. 1991(63)FLR 423(SC) (vide supra). 6. On the other hand, it is the contention of the learned Counsel for the Respondents including the union of workers, that the Petitioner-company came into existence after the amendment was effected on 20 October 1989 since the manufacturing process was started in 1997 and therefore, whatever judgment delivered earlier would not bind the ESI Corporation. It is their submission that at the time when the earlier judgment was delivered, the Petitioner unit was not in existence at all. They would also rely upon the judgment in New India Maritime Agencies (P) Ltd., Madras v. Government of Tamil Nadu (by Secretary, Department of Labour and Employment) and Anr. 1983(2)LLN 934 to the effect that ESI Act being a welfare legislation, liberal interpretation is to be given. 7. I have heard the learned senior Counsel appearing for the Petitioner as well as the learned Counsel appearing for the Respondents and given my anxious thoughts to the facts and issues involved in this case. 8.
1983(2)LLN 934 to the effect that ESI Act being a welfare legislation, liberal interpretation is to be given. 7. I have heard the learned senior Counsel appearing for the Petitioner as well as the learned Counsel appearing for the Respondents and given my anxious thoughts to the facts and issues involved in this case. 8. The Petitioner has come forward with a clear case that it got factories for manufacturing black tea in three places in southern region and it is not in dispute that the Petitioner factory at Pondicherry was started functioning from 19 November 1997 with 139 workers employed, who are all represented by the fourth Respondent-union. The Petitioner-company is stated to have owned plantations, in which original garden teas are available wherein the process of plucking, withering, oxidation, drying and grading are done in an unblended original fashion. It is those teas prepared in unblended original fashion in the plantation of the Petitioner-company are brought to the Petitioner factory for undergoing further processes of blending and packaging so as to make them marketable. 9. Under the Employees' State Insurance Act, 1948, as it stood originally, the term "seasonal factory" stood defined as follows: 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. The expression 'manufacturing process' and 'power' shall have the meanings respectively assigned to them in the Factories Act, 1948. 10.
The expression 'manufacturing process' and 'power' shall have the meanings respectively assigned to them in the Factories Act, 1948. 10. The term, 'seasonal factory' u/s 2(12) came to be amended by Amendment Act 44/66 which was given effect to from 28 January 1968 and the said term as amended stood as follows: 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 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; 11. The said term was taken away from Section 2(12) of the Act by Amendment Act 29/89 which came into force with effect from 20 October 1989 and is separately defined u/s 2(19-A) of the Act which is as follows: Seasonal factory' means a factory 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, lack rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid process 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; The definition of "seasonal factory" u/s 2(19-A) of the Act stands as on date. 12. Section 1(4) of the ESI Act which is as follows: 1(4) It shall apply, in the first instance, to all factories (including factories belonging to the Government) other than seasonal factories: Provided that nothing contained in this Sub-section shall apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. excludes seasonal factories from the purview of the ESI Act. 13.
excludes seasonal factories from the purview of the ESI Act. 13. In respect of Brooke Bond India Ltd., which got merged with Lipton India Ltd., was sought to be brought within the purview of the ESI Act, after the amendment of the term, "seasonal factory" u/s 2(12), by Amendment Act 44/66 with effect from 28 January 1968. Brooke Bond India Ltd., which was subsequently owned by the Petitioner herein, at that time was having six factories in India viz., (i) 3, Hyde Road, Kolkatta, (ii) Tundla in UP, (iii) Kanhan near Nagpur, (iv) Jam Nagar in Gujarat, (v) Ghatkeswar near Hyderabad in Andhra Pradesh, and (vi) Coimbatore in Tamil Nadu. Out of them, first three are exclusively manufacturing tea whereas the other three are engaged in the manufacturing of tea and coffee. 14. The company was having various branch offices and accounts offices, which are independent and the ESI Corporation has accepted that the factory as seasonal factory beyond the purview of the Act. However, after the amendment came into existence by virtue of Act 44/66, the authorities under the Act directed the company to comply with the provisions of the Act. The ESI Corporation took a specific stand in respect of one of the factories situate at No. 3, Hyde Road, Colkatta, that in that place, the company was engaged in the process of blending and packaging of tea and dispatching of the packets apart from doing some repairing and maintenance of machineries of the factory and the company was carrying on the activities for more than seven months in a year in blending and packaging of coffee and also roasting and mixing of chicory with coffee. When a question arose as to whether the repairing shop and blending work with packing were incidental to or connected with the manufacturing process of tea and coffee, the learned Judge of Calcutta High Court quashed the order of the authority under, the ESI Act directing the company to comply with the provisions, on the basis that the said process is incidental to and connected with the manufacturing process and the matter came up before the Division Bench of Calcutta High Court in Employees' State Insurance Corporation and Anr. v. Brooke Bond India Ltd. and Ors. 1978 (2) LLN 100 (vide supra). 15.
v. Brooke Bond India Ltd. and Ors. 1978 (2) LLN 100 (vide supra). 15. The contention of the company therein was that the definition "seasonal factory" as stood originally u/s 2(12) and also as amended under Act 44/66 had no effect as far as the said company was concerned since it continued to be a seasonal factory and by amendment there was an enlargement of definition including certain other factories within the ambit of definition of "seasonal factory." It was admitted that before the amendment came into existence, they were seasonal factories within the meaning of the Act. 16. On the above said facts, the question which was taken up by the Division Bench was, as to whether the blending, packing or repacking of tea or coffee is a manufacturing process and if it is not so, whether the blending, packing or repacking is the process incidental to or connected with the manufacturing of tea or coffee. The Division Bench observed that "it is a common knowledge that in the process of manufacturing of tea, the process of blending is a must one. The word, "blending" is thus inextricably connected with the process of making tea." The Division Bench also held that there cannot be manufacturing of tea without blending and because of the operation of blending, it cannot be said that the factory would cease to be a seasonal factory. The Division Bench also referred to Section 2(k) of the Factories Act 1948 to arrive at a conclusion that packaging is particularly mentioned in the term, "manufacturing process" under the said Act. 17.
The Division Bench also referred to Section 2(k) of the Factories Act 1948 to arrive at a conclusion that packaging is particularly mentioned in the term, "manufacturing process" under the said Act. 17. The Division Bench while explaining the significance and effect of the amendment which sought to include a factory under the ambit of the term, "seasonal factory," wherein apart from the manufacturing process incidental or connected thereto the process of blending or repacking of tea or coffee is undertaken for a period not exceeding 7 months in a year, held that the idea of the amendment was to enlarge the ambit of the term, "seasonal factory" to cover not only the factories which are exclusively engaged in the manufacturing process including the activities incidental thereto, but also the factories which are not exclusively involved in the entire manufacturing process and only a part of manufacturing process like, blending, packing or repacking of tea or coffee alone, provided the same is done for a period of not more than seven months in a year. The Division Bench has held as follows, in Para. 17, at pages 106 and 107 of 1978 (2) LLN 100 (vide supra): 17. In the definition of 'seasonal factory' as it stood before the amendment the word "means" is used and so the definition as it stood before the amendment was to be considered as explanatory and prima facie restrictive. It has already been pointed out that having regard to the definition as it stood before the amendment the factories in question were found to be seasonal factories. That part of the definition which was introduced by the amending Act must, therefore, normally be taken to have enlarged the meaning of the words 'seasonal factory' and cannot be said to have detracted from the meaning that was assigned to it by the definition as it stood before the amendment. The words 'and includes' do not in any way restrict the original definition but only seek to enlarge its scope. With a view to showing that the word 'include' when used in an interpretation clause cannot invariably in all cases be regarded as a word of enlargement, reliance was placed on the Supreme Court decision in South Gujarat Roofing Tiles Manufacturers' Association and Anr. v. State of Gujarat and Anr.
With a view to showing that the word 'include' when used in an interpretation clause cannot invariably in all cases be regarded as a word of enlargement, reliance was placed on the Supreme Court decision in South Gujarat Roofing Tiles Manufacturers' Association and Anr. v. State of Gujarat and Anr. 1977(1)LLN 1 In that case, it was observed that it was true that 'includes' is generally used as a word of extension but the meaning of a word or phrase is extended when it is said to include things that would not properly fall within its ordinary connotation. Thus, the general rule regarding interpretation of the word 'includes' is not disputed. But in the special circumstances of that case the Supreme Court held that the word 'includes' was not a word of extension but was one of limitation. In the Supreme Court case referred to above the question that arose for decision was the true construction of the Explanation to Entry 22 of Part I of the Schedule to the Minimum Wages Act, 1948. It was held that the word 'includes' was used in the said entry 22 in the sense of 'means' and in that view of the matter the word 'includes' was not a word of extension but of limitation. Thus, the general rule that the word 'includes' is one of extension can be departed from only in cases where the context with reference to which the word is used requires such departure. In the Supreme Court case referred to above the Explanation to Entry 22 says that for the purpose of entry 22 potteries industry includes the manufacture of nine articles of pottery specified in the explanation. In that context it was argued that the articles mentioned in the Explanation were intended to be exhaustive of the objects covered by Entry 22. In that context the Court declined to hold that the definition would include other articles of pottery than those specifically mentioned. In the present case, the position is otherwise and the context with reference to which the word 'includes' was used cannot warrant a departure from the general principle that the word 'includes' was one of extension and not of limitation.
In the present case, the position is otherwise and the context with reference to which the word 'includes' was used cannot warrant a departure from the general principle that the word 'includes' was one of extension and not of limitation. In the definition with which we are concerned the word 'means' was also used and after exhausting the processes the engagement wherein would make a factory a 'seasonal factory,' the definition included some particular processes the engagement wherein would render a factory a seasonal factory only if such particular processes were carried on for a period not exceeding seven months in a year. Thus, in the present case, there is no reason for regarding the word 'includes' as one of limitation. The result, therefore, is that the amendment in the present case can in any way touch those factories which before the amendment were seasonal factories within the meaning of the unamended definition. What then is the effect of the amendment? The amendment cannot be regarded as entirely redundant. The legislature brought about the amendment with a definite object and that object obviously is to enlarge the scope of the original definition and to bring within its purview some factories which before the amendment were not seasonal factories according to the restrictive meaning assigned to it by the original definition before the amendment. Before the amendment a factory to become a seasonal factory must be one which is exclusively engaged in one or more of the manufacturing processes referred to therein. But after the amendment a factory which is not exclusively engaged in the manufacturing processes referred to in the original unamended definition of 'seasonal factory' but is engaged for a period not exceeding seven months in a year in any process of blending, packing or repacking of tea or coffee would be regarded as a 'seasonal factory.' There may be factories which are not exclusively engaged in the manufacture of tea or coffee or any manufacturing process which is incidental to or connected with any of the processes referred to in the earlier part of the definition of seasonal factory but which may be engaged in the blending, packing or repacking of tea or coffee and in other pursuits but not such pursuits as may bring them within the definition of factories.
Such factories not being factories exclusively engaged in the manufacturing processes referred to in the definition of seasonal factories as it stood before the amendment would not be seasonal factories according to the definition as it stood before the amendment. But after the amendment such factories would come within the meaning of seasonal factories provided they are engaged in the process of blending, packing or repacking only for a period not exceeding seven months in a year." 19. The categorical finding of the Division Bench of the Calcutta High Court is binding upon the Respondents herein. The Division Bench held that the seasonal factories are in two forms, after the amendment, viz., (i) factories exclusively involved in the entire manufacturing process as originally stated and any other process which is incidental or connected thereto such as, blending, packaging or repackaging; and (ii) factories involved exclusively in blending, packaging or repackaging of tea or coffee and not involved any other manufacturing process like, plucking, drying, etc., which are done in the place of plantation, but, with a restriction that the period of work does not exceed seven months in a year. This restriction of seven months in a year is not applicable to the traditional, exclusive and entire manufacturing process, as stated in the first category. 19. That was also the view of the Karnataka High Court, while construing the amendment effected by way of Amendment Act 44/66. The Division Bench of Karnataka High Court in Regional Director, Employees' State Insurance Corporation, Bangalore v. High Lands Coffee Works and Ors. 1977 (1)LLN 447 (vide supra), held that the purport of the amendment was to widen and include within the ambit not only the factories which are exclusively engaged in the manufacturing coffee and tea with blending, packaging and repackaging as incidental, but also the factories which are engaged in blending, packaging or repackaging of coffee or tea, not as incidental to or connected with, but independent of other manufacturing process. The operative portion of the judgment is as follows, in Para. 8, at pages 449 and 450: In view of these settled principles of interpretation, the import of the amendment in the present case is clear and beyond doubt.
The operative portion of the judgment is as follows, in Para. 8, at pages 449 and 450: In view of these settled principles of interpretation, the import of the amendment in the present case is clear and beyond doubt. The legislative intent is clearly in favour of a widening of the definition of 'seasonal factory.' In so far as and in relation to a factory exclusively engaged in the manufacture of coffee is concerned, even the original definition of the expression 'seasonal factory' brought within its ambit a factory exclusively engaged in the manufacture of coffee, and engaged in the process of 'blending, packing or repacking' of coffee as incidental to or connected with the manufacture of coffee even though such factory may work throughout the year. After the amendment this position is unaltered and continued. In addition a factory which was engaged in "blending, packing or repacking" of coffee, not as incidental to or connected with, but independently of the 'manufacture of coffee' is also brought within the statutory rubric of a seasonal factory provided such factory worked for a period not exceeding seven months in a year. This, in our opinion, is the result of the extension of the idea of 'seasonal factory' brought about by the amendment. The amendment is not restrictive of the scope of the definition originally obtaining, but is on the contrary, an expansion of it. The contention urged by Sri Papanna that the amendment was intended to and does restrict the scope of the statutory concept of a 'seasonal factory' in the unamended definition cannot be accepted. The view taken by the Court below accords with the accepted principles of interpretation, and does not call for interference. 20. That judgment came to be confirmed by the Hon'ble Apex Court by dismissing the appeal filed by the The Regional Director, Employees'State Insurance Corporation Vs. M/s. High Land Coffee Works of P.F.X. Saldanha and Sons and another, AIR 1992 SC 129 . The relevant portion of the judgment is as follows, in Paras. 5 to 7, at pages 463 and 464: 5. After the said amendment, the Employees' State Insurance Corporation called upon the Respondents to pay the contributions payable under the Act and threatened to take coercive steps to recover the arrears under the Revenue Recovery Act and prosecute them.
The relevant portion of the judgment is as follows, in Paras. 5 to 7, at pages 463 and 464: 5. After the said amendment, the Employees' State Insurance Corporation called upon the Respondents to pay the contributions payable under the Act and threatened to take coercive steps to recover the arrears under the Revenue Recovery Act and prosecute them. Challenging the validity of the demand made, the Respondents approached the Employees' Insurance Court, inter alia, contending that the amendment to the definition of the expression 'seasonal factory' brought out by the Amending Act 44 of 1966 has not altered the position of the seasonal factory as obtained prior to the amendment and Section 1(4) of the Act would still continue to exclude such factory from the operation of the Act. The Employees' Insurance Court accepted the Respondent's plea. The Karnataka High Court has also agreed with the view taken by the Employees' Insurance Court. The Corporation has now appealed to this Court. 6. The sole question for consideration is whether the Respondents' factories in view of the amendment to the definition of 'seasonal factory' have lost the benefit of exclusion from the Act. The High Court on this aspect has observed that the purpose of the amendment was to enlarge and not to restrict the statutory concept of 'seasonal factory' and the position of Respondent's establishments as seasonal factories under and for the purpose of the Act remained unaltered even after the amendment. 7. The view taken by the High Court seems to be justified. The Statement of Objects and Reasons of the Bill which later became the Act 44 of 1966 indicates that the proposed amendment was to bring within the scope of the definition of 'seasonal factory, a factory which works for a period of 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. The amendment, therefore, was clearly in favour of widening the definition of 'seasonal factory. The amendment is in the nature of expansion of the original definition as it is clear from the use of the words 'include a factory.' The amendment does not restrict the original definition of 'seasonal factory' but makes addition thereto by inclusion.
The amendment, therefore, was clearly in favour of widening the definition of 'seasonal factory. The amendment is in the nature of expansion of the original definition as it is clear from the use of the words 'include a factory.' The amendment does not restrict the original definition of 'seasonal factory' but makes addition thereto by inclusion. The word 'include' in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction. The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include. [See (i) Stroud's Judicial Dictionary, 5th Edn. Vol. 3, p. 1263 and (ii) Commissioner of Income Tax, Andhra Pradesh Vs. Taj Mahal Hotel, Secunderabad, AIR 1972 SC 168 . (iii) State of Bombay v. Hospital Mazdoor Sabha and Ors. 1966 LLJ 251 21. After the Amendment Act 44/66 came in to effect, by virtue of the above said judgments in respect of same parties the findings are given, which are binding on them. Now the question to be decided is as to whether the said position continues as on date after the Amendment Act 29/89 came into effect from 20 October 1989, by which the term 'seasonal factory' is separately defined u/s 2(19-A) of the Act, as illustrated above. A reference to the term 'seasonal factory' as it stands in Section 2(19-A) shows that it is exactly the same as it was defined by the Amendment Act 44/66 except by including the word, 'packing' along with the term repacking.' 22. There is one other change effected by the Amendment Act 29/89. The term 'manufacturing process' which is defined under the Factories Act, 1948 was incorporated by the Amendment Act 44/66 and by the Amendment Act 29/89, the same has been taken away from Section 2(19-A) , but defined separately u/s 2(14-AA) of the Act. Section 2(14-AA) reads as follows: 2(14-AA) 'manufacturing process' shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948). Except bringing it under a separate Sub-section,.
Section 2(14-AA) reads as follows: 2(14-AA) 'manufacturing process' shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948). Except bringing it under a separate Sub-section,. viz., Section 2(14-AA) by which the same term contemplated for manufacturing process in the Factories Act has been incorporated, there is no other change. The term, 'manufacturing process' is defined u/s 2(K) of the Factories Act which is as follows: (k) "manufacturing process" means any process for-- (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal; or (ii) pumping oil, water, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing typed for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or (v) constructing, re-constructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage. 23. Therefore in effect there is no change by virtue of the Amendment Act 29/89. By construction of the term, 'seasonal factory' u/s 2(19-A) of the Act, as held by the Karnataka High Court also the Calcutta High Court which came to be upheld by the Hon'ble Supreme Court as stated above, the term, 'seasonal factory' as it stands today has a wider magnitude and the construction should be, as on date as follows: (i) The factory which carries on the manufacturing process exclusively in the manufacture of" tea, coffee, etc., which also includes any other act incidental to or connected with, such as, blending, packing, repacking of tea or coffee, etc., would continue to be 'seasonal factory' even if the manufacturing process is carried on throughout the year; and (ii) The factory exclusively carried on a part of manufacturing process of blending, packing or repacking of tea or coffee alone shall also be brought within the term 'seasonal factory' provided such factory shall not carry on such process for more than seven months in a year. This is the significance of the term, includes' in the definition of 'seasonal factory'. 24.
This is the significance of the term, includes' in the definition of 'seasonal factory'. 24. As far as the Petitioner is concerned, on facts, it is clear that it is not as if the Petitioner-company is involved in the manufacturing process of blending, packing or repacking alone in order to put the restriction of seven months in a year period for the applicability of the term 'seasonal factory.' But the process of blending, packing and repacking is done in the Petitioner's premises/ factory in continuation of the manufacturing process of plucking tea leaves, withering, oxidation drying and grading which are done in the factory of the Petitioner situate in the plantation itself. Therefore, the process of blending, packing and repacking done in the Petitioner unit at Pondicherry is the continuation of the manufacturing process done by the Petitioner in its plantation and it cannot be said that the Petitioner should be brought under the purview of the ESI Act. 25. That apart, as stated above, in all the above said judgments referred to, one of the parties involved is the Petitioner herein, which was in different form before merger/amalgamation like, Brooke Bond or Lipton Tea, and therefore, those judgments in which the ESI Corporation was also a party, are certainly binding on it. 26. In such circumstances, the Division Bench judgment of Punjab and Haryana High Court in DLF Power Ltd. v. Deputy Director (Revenue), Employees' State Insurance Corporation and Anr. 2007 (4) LLN 706 (P&H) : 2007 (2) CLR 16 on which reliance was placed by the learned Counsel for the fourth Respondent-union, has no application to the facts of the present case. That was a case where assessment was made by the authorities u/s 45 of the ESI Act and that was challenged by filing writ petition under Article 226 of the Constitution of India. In that, it was held that there is an alternative remedy of appeal available. But, on the facts of the present case, by virtue of the earlier judgments which are binding on the parties and also on the basis of unassailable facts which have been admitted in the earlier legal proceedings, I am of the considered view that the availability of appeal remedy is not a ground to refuse relief to the Petitioner in this case under Article 226 of the Constitution of India. 27.
27. The concept of full faith and credit as enunciated under Article 261 of the Constitution, which is as follows: "Article 261: (1) Full faith and credit shall be given throughout the territory of India to public acts, records and judicial proceedings of the union and of every State. (2) The manner in which and the conditions under which the acts, records and proceedings referred to in Cl. (1) shall be proved and the effect thereof determined shall be as provided by law made by Parliament. (3) Final judgments or orders delivered or passed by Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory according to law. Clause (1): Full faith and credit.-- This clause establishes a rule of evidence and not of jurisdiction Firm Gauri Lal Gurdev Das Vs. Jugal Kishore Sharma and Another, AIR 1959 P&H 265 . At a time when fairness and non-arbitrariness are the essential requirements of every administrative State action, it is more so for any administrative act of the Judges. It is necessary that the members of the subordinate judiciary get no occasion to think otherwise. The way how the High Court acted appears to share this faith. R.C. Sood Vs. High Court of Rajasthan, (1994) 4 SCALE 1031 . Full faith and credit would be forfeited by mala fides and colourable exercise of power by the bureaucrats designed to deprive the S Cs/SS Ts of their legitimate rights to promotion and to favour the general category candidates State of Punjab and Ors. v. G.S. Gill and Anr. 1997 (4) LLN 104 is squarely applicable to the facts of the present case for the judgments that have been delivered between the parties are to be enforced in full faith and it is, in order to give effect to such celebrated constitutional directive, I am of the view that the writ petition filed by the Petitioner under Article 226 of the Constitution of India cannot be said to be unwarranted. 28. One other judgment relied upon by the fourth Respondent-union in New India Maritime Agencies (P) Ltd. v. Government of Tamil Nadu 1983 (2) LLN 934 (vide supra), again has no relevance to the facts of the present case.
28. One other judgment relied upon by the fourth Respondent-union in New India Maritime Agencies (P) Ltd. v. Government of Tamil Nadu 1983 (2) LLN 934 (vide supra), again has no relevance to the facts of the present case. The principle laid down in the said judgment by this Court that the labour legislation being welfare legislation has to be given liberal interpretation cannot be disputed, but the same is subject to the provisions of the Act. 29. For all the above said reasons, I am of the considered view that the impugned order of the first Respondent is not sustainable and it cannot be said that the Petitioner ceases to be a seasonal factory/establishment in order to bring it under the purview of ESI Act. Accordingly, the writ petition stands allowed and the impugned order of the first Respondent stands set aside, holding that the Petitioner shall continue to be a "seasonal factory" to which the ESI Act is not applicable. No costs.