Case Note & Summary
The petitioner, M/s. Ramchand Onkarlal Agarwal, a bidi manufacturer in Kamptee, Nagpur, challenged the applicability of the Employees' State Insurance Act, 1948 (ESI Act) to its factory. The petitioner employed ten bidi-roller home workers and two workmen (Tendurwala-cum-Clerk and Relaiwala) at the business premises. The petition sought to strike down the amended definition of 'factory' under Section 2(12) of the ESI Act, notifications dated 20-10-1989 and 28-5-1982 extending the Act to bidi industry, and a notice dated 22-3-1991 from the Deputy Regional Director, ESIC, allocating a code number. The petitioner argued that the definition and notifications were violative of Articles 14 and 19(1)(g) of the Constitution. The court, after hearing arguments, held that the definition of 'factory' under the ESI Act includes premises where manufacturing process is carried on with the aid of power, irrespective of the number of employees. The court found that the bidi manufacturing process involves power and that home workers are employees under the Act. The court upheld the constitutional validity of the provisions and dismissed the petition, ruling that the ESI Act applies to the petitioner's establishment.
Headnote
A) Constitutional Law - Employees' State Insurance Act - Definition of Factory - Section 2(12) ESI Act - Challenge to amended definition of 'factory' as violative of Articles 14 and 19(1)(g) - Court upheld the definition, holding that it is reasonable and in public interest to extend social security benefits to workers in bidi industry, including home workers. (Paras 2-10) B) Employees' State Insurance Act - Applicability to Bidi Industry - Notifications dated 20-10-1989 and 28-5-1982 - Challenge to notifications extending ESI Act to bidi manufacturing units - Court held that the notifications are valid and not discriminatory, as bidi industry is a manufacturing process covered under the Act. (Paras 2-10) C) Employees' State Insurance Act - Home Workers - Inclusion as Employees - Section 2(9) ESI Act - Petitioner contended that home workers are not employees - Court held that home workers are employees under the Act as they are engaged in manufacturing process for the principal employer. (Paras 2-10)
Issue of Consideration
Whether the amended definition of 'factory' under Section 2(12) of the Employees' State Insurance Act, 1948, and the notifications extending the Act to bidi manufacturing units employing home workers, are constitutionally valid and applicable to the petitioner's establishment.
Final Decision
The court dismissed the writ petition, upholding the constitutional validity of the definition of 'factory' under Section 2(12) of the ESI Act and the notifications extending the Act to bidi manufacturing units. The court held that the ESI Act applies to the petitioner's establishment.
Law Points
- Definition of factory under ESI Act includes premises where manufacturing process is carried on with aid of power
- irrespective of number of employees
- home workers are employees under ESI Act
- constitutional validity of ESI Act provisions upheld
