Case Note & Summary
The dispute arose regarding the applicability of the Employees State Insurance Act, 1948 to a tailoring establishment run by the respondent, Ram Chander, who employed between 10 to 12 tailors. The establishment utilized electric power for stitching and ironing clothes, which were supplied by customers. The Rajasthan High Court had previously ruled on the matter, leading to an appeal by the Employees State Insurance Corporation. The core legal issue was whether the tailoring shop fell under the purview of the Act based on a notification issued under section 1(5) of the Act. The court analyzed the nature of the work performed at the shop, concluding that the process of stitching clothes, which resulted in a different commodity, constituted manufacturing. The court referenced previous judgments to support its reasoning, emphasizing that the use of electric power in the stitching process was integral to the definition of manufacturing. Ultimately, the Supreme Court allowed the appeal, restoring the decision of the Employees State Insurance Court and confirming that the establishment was indeed covered by the Act. The parties were directed to bear their own costs.
Headnote
A) Employees State Insurance - Coverage of Establishment - Tailoring shop deemed to engage in manufacturing process - Employees State Insurance Act, 1948, Section 1(5) - The court held that the respondent's tailoring establishment employed more than ten but less than twenty persons and engaged in a manufacturing process by stitching clothes, thus falling under the purview of the Act as per the relevant notification. Held that the use of electric power for stitching and ironing constituted a manufacturing process (Paras 837-840).
Issue of Consideration
Whether the respondent's tailoring establishment falls within the purview of the Employees State Insurance Act by virtue of the notification issued under section 1(5).
Final Decision
The Supreme Court allowed the appeal, restoring the decision of the Employees’ State Insurance Court and confirming that the tailoring establishment was covered by the Employees State Insurance Act. The parties were directed to bear their own costs.
Law Points
- Employees State Insurance Act
- 1948
- manufacturing process
- notification under section 1(5)
- commercial stitching
- use of electric power
