# NAGPUR ELECTRIC LIGHT & POWER CO., LTD v. REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION, ETC

- **Citation:** [1967] 3 S.C.R. 92
- **Court:** Supreme Court of India
- **Decided:** 1967-03-02
- **Case number:** CIVIL APPELLATE JuRISDICTIOK: Civil Appeals Nos. 491 and 492 of 1965
- **Bench:** K. N. Wanchoo, R. S. Bachawat, V. Bhargava
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nagpur-electric-light-power-co-ltd-v-regional-director-employees-state-4073
- **Pages:** 9

## Headnote

Employees State Insurance Act (34 of 1948), ss. 2(9) and 2(12)-
Factory, area comprised in-Company trari'sferring and transmitting electricity-Workers doing non-manual work whether 'employees' within the
meaning of s. 2(9),
The appellant company carried on the work of transforming
and
transmitting electrical energy. There was dispute between the company
and the respondent whether certain employees of the col1)pany like engineers, draughtsmen, clerks, accountants,
ete. mentioned in Appendices
111, IV and V of the company's petition before the Employees' Insurance
Court, were 'Employees' or not wi'hin the meaning of s. 2(9) of the
Employees Insurance Ac', 1948. The Employees Insurance Court held
the said workers to be employees under s. 2(9) and this finding was
confirmed by the Single Judge as well as the Division Bench of the High
Court. The company appealed to this Court by special leave.
HELD : (i) The pre.mises of the company were a factory within the
meaning of the Employees St.ate Imurance Act but the High Court was
wrong in laying down the proposition that every inch of the area over
which the transmission lines were spread was a factory w'.thin the meaning of s. 2(12). The company's factory had a fixed s te and was located
within the compound wall of its premises. (96 E, HJ
(ii) All the employees of the disputed categories clerks or otherwisewere employed in connection with the work of the factory, that is to
'Say, in connectio11 with the work of transforming and tran~mitting electrical power.
Some of the employees were
not engaged in manual
labour.
But a person doing: non-manual work can be an employee within the meaning of s. 2(9) (i) if he is employed in connection with the
work of the factory.
The duties of the adm;nis•rn•ive staff are directly
connected within the work of the factory. (99 C, OJ
Even those employees who worked outside
the factory but whose
duties were connected with the work of the .- factory
were
employees
within the meaning of s. 2(9)(i). Among
such employees were to be
included those att~nding to sub-stations of the factory. (100 Al
Ardeshir H. Bhiwaniwala v. The State of Bomhay, [1961] 3 S.C.R.
542, State of Uttm Pradesh v. M. P. Sin~h, [19601 2 S.C.R. 605 and
Employee<' State ln.rurance Corporation, Bombay v. Raman,
[19571 1
L.L.J. 26.7. referrd to.
CIVIL APPELLATE JuRISDICTIOK:
Civil Appeals Nos. 491
and 492 of 1965.
Appeals by special leave from the orders dated September
17, 1963 of the Bombay High Court Nagpur Bench in Letters
Patent Appeals Nos. 14 and 15 of 1963.
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NAGPUR ELECTRIC co. v. E.S.I.C. (Bachawat, !.)
93
A
S. V. Gupte, Solicitor-General and I. N. Shroff, for the appel·
!ant (in C.A. No. 491 of 1965).
A. G. Ratnaparkhi, for the appellants (in C.A. No. 492 of
1965).
Bishan Narain, M. L. Kapur and I. S. Saw/mey, for the resB
pondents Nos.I and 2 (in C.As. Nos. 491 and 492 of 1965).
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I. N .. Shrofj, for respondent No. 1 (in C.A. No. 492 of 1965).

## Text

NAGPUR ELECTRIC LIGHT & POWER CO., LTD.
A.
v.
REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE
CORPORATION, ETC.
March 2, 1967
(K. N. WANCHOO, R. S. BACHAWAT AND V. BHARGAVA, JJ.]
Employees State Insurance Act (34 of 1948), ss. 2(9) and 2(12)-
Factory, area comprised in-Company trari'sferring and transmitting electricity-Workers doing non-manual work whether 'employees' within the
meaning of s. 2(9),
The appellant company carried on the work of transforming
and
transmitting electrical energy. There was dispute between the company
and the respondent whether certain employees of the col1)pany like engineers, draughtsmen, clerks, accountants,
ete. mentioned in Appendices
111, IV and V of the company's petition before the Employees' Insurance
Court, were 'Employees' or not wi'hin the meaning of s. 2(9) of the
Employees Insurance Ac', 1948. The Employees Insurance Court held
the said workers to be employees under s. 2(9) and this finding was
confirmed by the Single Judge as well as the Division Bench of the High
Court. The company appealed to this Court by special leave.
HELD : (i) The pre.mises of the company were a factory within the
meaning of the Employees St.ate Imurance Act but the High Court was
wrong in laying down the proposition that every inch of the area over
which the transmission lines were spread was a factory w'.thin the meaning of s. 2(12). The company's factory had a fixed s te and was located
within the compound wall of its premises. (96 E, HJ
(ii) All the employees of the disputed categories clerks or otherwisewere employed in connection with the work of the factory, that is to
'Say, in connectio11 with the work of transforming and tran~mitting electrical power.
Some of the employees were
not engaged in manual
labour.
But a person doing: non-manual work can be an employee within the meaning of s. 2(9) (i) if he is employed in connection with the
work of the factory.
The duties of the adm;nis•rn•ive staff are directly
connected within the work of the factory. (99 C, OJ
Even those employees who worked outside
the factory but whose
duties were connected with the work of the .- factory
were
employees
within the meaning of s. 2(9)(i). Among
such employees were to be
included those att~nding to sub-stations of the factory. (100 Al
Ardeshir H. Bhiwaniwala v. The State of Bomhay, [1961] 3 S.C.R.
542, State of Uttm Pradesh v. M. P. Sin~h, [19601 2 S.C.R. 605 and
Employee<' State ln.rurance Corporation, Bombay v. Raman,
[19571 1
L.L.J. 26.7. referrd to.
CIVIL APPELLATE JuRISDICTIOK:
Civil Appeals Nos. 491
and 492 of 1965.
Appeals by special leave from the orders dated September
17, 1963 of the Bombay High Court Nagpur Bench in Letters
Patent Appeals Nos. 14 and 15 of 1963.
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NAGPUR ELECTRIC co. v. E.S.I.C. (Bachawat, !.)
93
A
S. V. Gupte, Solicitor-General and I. N. Shroff, for the appel·
!ant (in C.A. No. 491 of 1965).
A. G. Ratnaparkhi, for the appellants (in C.A. No. 492 of
1965).
Bishan Narain, M. L. Kapur and I. S. Saw/mey, for the resB
pondents Nos.I and 2 (in C.As. Nos. 491 and 492 of 1965).
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I. N .. Shrofj, for respondent No. 1 (in C.A. No. 492 of 1965).
The Judgment of the Court was delivered by
l>achawat, J.
The question in issue in these appeals is whether
certain ernpio)'ces of che Nagpur Elcc;ric Light & Power Co. Ltd ..
arc employees within the meaning of s. 2( 9) of the Employee,"
State h;ur.111cc Act, ! 9-~3 ( 34 o: 19+8).
'lhc company a11d the
employee; I.led two s~_parate applications before the Employees'
Insurance Court unuer s. i5 of the Act for ,he determination of
the que1tion.
Their ca'.:e i> that out of the five categ,1ries of staff
menLoncJ ia appendices 1 to 5 to the company's petition, th'""
connectcJ wit\1 the receiving stution and workshop ( appenuice<
I and 2 l were employees "ithin the meaning o[ s. 2 ( 9). but \hos~
connccteJ \Vith th~ engineering, s~ore.s anJ outJoor \\·ork. n1cter.
con:-1u111ers. and ,1llncation d..;par~n1enls and <.1Jn1ini~tralion ( appendices 3, 4 and 5) 11erc not such employees.
The Regiunal Director, Employees State l nsurancc Corparation contested the applica
tions. but he uJmitte'.l lhat the wmkcrs of the categories mentiond
in items 5 _to 14 of arpcndix 4 and items I. 7 ai1u 8 of appendix
5 were not employees within the me:rning oi s. 2(9).
The Employees ln:;urancc Court found that those workers and also the
worker, mentioned in ite1n 12 of appendix 5 were not >.uch empk1yees.
The correctness of this finding
is not in issue
in
the.,c
appeals and we express no opinion on it.
The categories of
workers mentioned in appendix llI. items 1-4 in appendix IV and
items 2-6 and 9-11 of appendix V arc as follows :-
"Appendix 111
Mains Senior : (l) assist.mt engineers, ( 2) super·
visors, (3) electricians, ( 4) overseers.
Mains junior: (1) cable jointers. (2) mistries.
( 3) sub-mistries, ( 4) lineman-H.T.O.H. mains. ( 5)
mains coolies, (6) mains coolies temporary, (7) wireman temporary, ( 8) sub-mis tries, ( 9) sub-station attendants.
Clerical staff: (I) clerk to asstt. engineers, (2)
draughtsman, (3) mains office peons.
Stores department : (I) storekeeper, (2) asstt.
storekeeper, ( 3) clerks, ( 4) coolies.
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SUPREME COURT REPORTS
(1967] 3 S.C.ll·
·Motor car staff : (1) motor drivers, (2) motor
clearners.
Mason.
Appendix IV
Meter senior & junior : (I) deputy meter superintendent, (2) senior meter mechanic, (3) junior meter
mechanic, ( 4) meter testers.
Appendix V
( 2) accounts
rlepartment :
accountant,
chief
cashier, asstt. accountant, account clerks, clerks.
( 3) Time-keeping department : group head, clerks.
( 4) Filing department : group head, clerks.
(5) Typing department: steno-typists, typists.
( 6) Telephone operators.
(9) Record-keeper and daftari.
( 9a) Station clerk.
( 10) Motor car staff: mechanic, drivers, cleaners.
( 11 ) Menial staff : peons, garden malies, chowlcidars, sweepers, rejas tempQrary."
The Employees Insurance Court held that the aforesaid
workers were employees within the meaning of s. 2(9) of the Act
The company and the employees filed two separate appeals from
this decision to the High Court of Bombay (Nagpur Bench)
unde~ s. 82 of the Act.
Abhayankar, J. affirmed the finding of
the Employees Insurance Court and dismissed the appeals. Letters
Patent appeals from his orders were summarily dismissed by a
· Bench ·of the High Court.
The company and the employees have
now preferred two separate appeals to this Court by special leave.
The Nagpur Electric Light & Power Co., Ltd., occupies certain premises at Kamptee Road, Nagpur where it carries on the
work. of transforming and transmitting electrical energy.
The
premises are located within a compound wall.
Inside the premises .there are several buildings, yards and open spaces.
The
receiving station, the workshop, the rneter testing department, the
engineers' quarters, the general office, and stores are in different
buildings inside the premises.
The company does not generate
electricity. It maintains a receiving station inside the preurises
where it receives electrical energy in bulk from the generating
station of the Maharashtra Electricity Board at Khapparkheda.
The energy when received is of 11,000 volts.
From the receiving
station, the' energy is either carried through electric supply lines
to a transformer and is stepped.down to 3,300 volts and is then
carried to the sub-stations in the city where it is again stepped
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NAGPUR ELECTRIC co. v. E.S.I.C. (Bachawat, I.)
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down to 400 volts by other transformers, or is carried from the
receiving station to sub-stations where it is stepped down directly
from 11,000 to 400 volts. From the sub-stations, the energy is
transmitted by electric supply lines and distributed to consumers.
The first question is whether the company maintains a factory
and if so, where its factory is located.
The Employees' State Insurance Act, 1948 applies in the first
instance to all factories other than seasonal factories [ s.1 ( 4)] and
may be extended to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise [s.1 (S)J.
Sec. 2(12) defines a factory.
The relevant part of that section
reads:
"Sec.2 ( I 2) : " 'factory' means any premises including the precincts thereof whereon twenty or more persons are working or were working on any day of the
preceding twelve months, and in any part of which a
manufacturing process is being carried on with the aid
of power or is ordinarily so carried on but does not
include a mine subject to the operation of the Indian
Mines Act, 1923 or -a railway running shed;
The
expressions
'manufacturing
process'
and
'power' shall have the meanings respectively assigned to
them in the Factories Act, 1948."
Any premises including the precincts tbe!reof (excepting a.
mine and a railway running shed) constitute a factory if ( 1) 20
or more persons are working or were working thereon on any day
of the preceding 12 months, and (2) in any part thereof a manufacturing process is being carried on with the aid of power. If
these two conditions are satisfied, the entire premises including
the precincts thereof constitute a factory, though the manufacturing process is carried on in only a part of the premises. The premises constituting a factory may be a building or open land or
both, see Ardeshir H. Bhiwaniwala v. The State of Bombay(').
Inside the same compound wall, there may be two or more premises; the premi~ used in connection with manufacturing processes may constttute a factory, and the other premises within the
same. compound wall may be used for the purposes unconnected
with any manufacturing process and may form no part of the
factory.
Sections 2(g) and (k) of the Factories Act 1948,
define power and manufacturing process.
They are in
these terms :
2(g). "'power' means electrical energy, or any
other form of energy which is mechanically transmitted
and is not generated by human or animal agency;"
(I) (1961) 3 S.C.R. 542.
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SUPREME COURT
R-PORTS
[1967] 3 11.C.R.
2(k).
for-
" 'manufacturing process' means any process
(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/or sewage, or
(iii) generating, transforming or transmitting power;
or
A
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(iv) composing types for printing, printing by letter
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press, lithography, photogravure or other similar
process or book binding;
( v) constructing, reconstructing, repairing, refitting,
finishing or breaking up ships or vessels."
In view of s. 2(k)(iii), the process of transforming electrical
energy from a high to a low potential and the process of transmitting the energy through supply lines are both manufacturing
processes.
In a part of the premises occupied by the company,
the two processes are carried on with the aid of power by means
of electrical gadgets and other devices.
On the premises more
than twenty persons were and are working.
No part of the premises is used for purposes unconnected with the manufacturing
processes.
The premises therefore constitute a factory within
the meaning of s. 2 (I 2) of the Employees State Insurance Act,
1948.
The High Court said :
"This manufacturing process is carried on by the
Company not only in the building called the workshop
or the receiving station but over the whole area over
which the process of transmission is carried on including the sub-stations where electricity is stored and
supplied to the consumers by further transmission lines.
Thus every part over which this process is carried on
will be a factory within the meaning of the Employees'
State Insurance Act."
We cannot accept this line of reasoning. It seems to us a startling proposition that every inch of the wide area over which the
transmission lines are spread is a factory within the meaning of
s. 2(12). "A factory must occupy a fixed site", see Halsbury's
Laws of England, 3rd ed., Vol. 17, art. 15, p. 15. The company's
factory has a fixed site. It is located inside the Kamptee Road
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NAGPUR ELECTRIC co. v. E.s.1.c. (Bachawat, J.)
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premises and its boundaries are fixed by the compound wall of
the premises.
The next question is whether the members of the staff of the
categories mentioned in appendix III, items 1-4 of appendix N
and items 2-6 and 9-11 of appendix V to the company's petition
are employees within the meaning of s. 2(9) of the Employees'
State Insurance Act.
It is common case that these workers are
employed on remuneration which in the aggregate does not exceed
four hundred rupees a month. Section 2 ( 9) is in these terms :-·
" '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 esta·
blishment or elsewhere; or
(ii)
(iii)
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; or
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;
but does not include-
(a) any member of the Indian naval, military or air
forces or;
(b) any person employed on a remuneration which
in the aggregate exceeds four hundreds rupees a
month;"
The definition of employee in s. 2( 9) may be contrasted with that
of a worker ins. 2(1) of the Factories Act 1948, which is in these
terms:
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SUPREME COURT REPORTS
(1967) 3 S.C.ll•
" '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;"
It is to be seen that the definition of an employee in the Employees'
State Insurance Act is wider than that of a worker in the Factories Act.
The· object of the Factories Act is to secure the health,
safety, welfare, proper working hours, leave and other benefits for
workers employed in factories.
The benefit of this Act does not
extend to field workers working outside the factory, see the State
of Uttar Pradesh v. M. P. Singh('). The object of the Employees'
State Insurance Act is to secure sickness, maternity, disablement
and medical benefits to employees of factories and establishments
and dependents' benefits to their dependants.
The benefit of this
Act extends inter alia to the employees mentioned in s. 2(9) (i}
whether working inside the factory or establishment or elsewhere.
The definition of "employee" ins. 2(9) deals with three classes
of employees.
We are concerned with the class . of employees
mentioned in s. 2(9)(i). The courts below concurrently found
and in our opinion, rightly, that all the workers of the disputed
categories are persons employed for wages in or in connection
with work of thx company's factory and are directly employed by
the company on work of or incidental to or connected with the
work of the factory.
Some of them do the work in the factory
and some work elsewhere, but they are all employees within the
meaning of s. 2(9)(i). Take the case of the workers mentioned
in appendix III. The assistant engineers, supervisors, electricians,
and overseers are engaged in the erection and maintenance of the
electricity supply lines connected with transmission of power. The
cable jointer, mistries, linemen, coolies and wiremen are employed
for inspection of the supply lines, digging pits, erecting poles for
laying distribution mains and service lines.
The masons attend
to the masonary work of the buildings.
The attendants in-charge
of the sub-stations look after the transformation and transmission
of power. The motor drivers and cleaners are employed for carry-.
ing materials and tower ladders in trucks for maintenance of the
supply lines.
The clerks, draughtsmen and main office peons
help the assistant engineers. The store keepers and clerks with
the assistance of coolies issue stores to all the departments and
keep accounts relating to stock.
The deputy meter superintendent, meter mechanics and meter testers mentioned in items 1 10
4 of appendix IV attend to the testfug caliberation and repairs of
(I) (196V]2 S.C.R. 60S.
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the meters. Let us now take the case of the staff mentioned in
items 2 to 6 and 9 to 11 of appendix V.
The clerks in the
accounts, time-keeping and filing departments are employed to
maintain accounts, attendance registers, muster rolls, pay-sheets,
typing,. filing and despatching documents required in connection
with all the departments including the receivmg station and the
workshop.
The telephone operators attend to the telephone calls
for all the departments.
The menial staff is required to do miscellaneous work including the cleaning of the office compound.
The motor car staff is employed to look after the cars employed
in the administration section. All these employees, clerical or
otherwise, are employed in connection with the work of the factory, that is to say, in connection with the work of transforming
and transmitting electrical power.
Some of the employees are
clerks; they are not engaged in manual labour. But a person
doing non-manual work can be an employee within the meaning
of s. 2(9) (i) if he is employed in connection with work of· the
factory.
The duties of the administrative staff are directly con.
nected with the work of the factory. The case of the Empluyeel
D
State Insurance Corporation, Bombay v. Raman(') is distinguishable.
In that case a company had a factory and an administrative office.
The office was situated in a building which was
situated within the same compound in which the factory wa.s
located.
The entire compound was surrounded by one compound wall. It was found that the work of the factory began
with the collection of raw materials and ended with the
production of finished articles and the- work of selling the proE
F
ducts was not connected with the work of the factory.
The
administrative office handled sales of the products manufactured in the factory as well as goods imported from abroad. The
factory and the administrative office maintained separate muster
and wage rolls and separate accounts. In these circumstances, it
was held that the clerks employed in the administrative office,
whose work consisted mainly of taking down dictations from the
manaser and other officers and typing out letters, were not employees within the meaning of s. 2 ( 9). The facts of the present
case are entirely different. The company maintains one establishment for its factory.
The factory does the work of transforming
G and transmitting electrical energy. All the workers in question
including the clerks and the administrative staff are engaged in
connection with this work.
None of them is employed in any
separate establishment unconnected with the work of the factory.
Some of the employees work outside the factory, but their
H
duties are connected with the work of the factory.
They are
therefore employees within the meaning of s. 2(9) (i). Some are
(2) [19S7) I L.L.1. 267.
100
SUPREME COURT REPORTS
(1967] 3 S.C.R.
employed in the sub-stations.
It is common case that the substations are not independent factories.
The sub-stations attendants attend to work which is directly connected with the work
of· the factory at the main station.
They are therefore employees
within the meaning of s. 2 ( 9) (i) .
A
In the resuli, the appeals are dismissed with costs.
One hearB
ing fee.
G.C.
Appeals dismissed.