# REGIONAL DIRECTOR, EMPLOYEE'S STATE INSURANCE CORPORATION v. HIGH LAND COFFEE WORKS OF P.F.X. SALDANHA AND SONS AND ANR

- **Citation:** [1991] 3 S.C.R. 307
- **Court:** Supreme Court of India
- **Decided:** 1991-07-26
- **Case number:** Civil Appeal Nos. 1837-1841of1977
- **Bench:** K. Jagannatha Shetty, V. Ramaswami, Yogeshwar Dayal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/regional-director-employee-s-state-insurance-corporation-v-high-land-coffee-11083
- **Pages:** 5

## Headnote

Employees State Insurance Act, 1948-Sections 1(4) and 2( 12)-
A
B
Seasonal factory' exemption from Statute-Whether arises.
C
The Regional Director, State Employees Corporation the appellant in the instant case claimed for covering the factories of the respondents M/s. High Land Coffee Works of P.F.X. Saldanha & Sons under
the provisions of the Employees State Insurance Act 1948.
Section 1(4) of the Act excludes "seasonal factory" from the scope
of the Act. The seasonal factory is defined under section 2(12) of the
Act.
The factories of the respondents were excluded from the operation
D
of the Act since they were declared to be seasonal factories within the
E
meaning of the definition of section 2(12) of the Act.
By amending Act 44 of 1966 which came into force from 28th
January, 1966,the definition of 'seasonal factory' has been amended
and accordingly the seasonal factory means a factory which exclusively
engaged in one or more of the manufacturing processes detailed in t':te
F
definition and includes a factory which is engaged for a period not
exceeding seven months in a year. The expressions manufacturing process & power shall hav' the meaning respectively assigned to them in.
the Factories Act 1948.
So after the amendment the Corporation called upon the responG
dents 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 respondents challenged the demand made by the appellants
in the Employees Insurance Court contending that even the amending
H
307
A
308
SUPREME COURT REPORTS
[1991] 3 S.C.R.
Act 44 of 1966 has not altered the definition of seasonal factory, would
still excludes such factory from the operation of the Act. The Employees
Insurance Court accepted the plea of the respondents and even the
Karnataka High Court agreed to the view of aforesaid Court. So the
Corporation appealed to this Court.
B
The sole question before the Court 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.
Dismissing t!te appeals and the ·special leave petition the Court,
QELD: That in the instant case the High Court observation that
· C
the purpose of the definition by the amending act was to enlarge and not
to restrict the Statutory concept of seasonal factory so the position of the
respondents establishments as seasonal factories remain unaltered. This
view seems to be justified because the objects reasons of the Bill of the
amending Act clearly indicates that the proposed amendment was to
D ·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 orJepacking of tea or coffee b) in
such other manufacturing processes as the Central Government may,
by notification in the official Gazettee specify. Thus amendment is
. clearly jn favour of widening the definition of seasonal factory' because
E the word 'include' in the Statutory definition is generally used to
enlarge the meaning of the preceeding words. This is well accepted
statutory construction that in interpretation clauses in order to enlarge
the words or phrases occuring in the body of the statute the word
include is very generally used. [3JOF-311C)
F
Stroud's Dictionary, 5th Edn. Vol. 3 page 1263.
C./. T. Andhra Pradesh v. M/s. Taj Mahal Hotel, Secunderabad,
[1971] 3 SCC 550 and State of Bombay v. The Hospital Mazdoor Sabha
& Ors., [1960] 2 SCR p. 666 at 875, referred to.
G

## Text

REGIONAL DIRECTOR, EMPLOYEE'S STATE INSURANCE
CORPORATION
v.
HIGH LAND COFFEE WORKS OF P.F.X. SALDANHA
AND SONS AND ANR
JULY 26, 1991
[K. JAGANNATHA SHETTY, V. RAMASWAMI AND
YOGESHWAR DAYAL, JJ.]
Employees State Insurance Act, 1948-Sections 1(4) and 2( 12)-
A
B
Seasonal factory' exemption from Statute-Whether arises.
C
The Regional Director, State Employees Corporation the appellant in the instant case claimed for covering the factories of the respondents M/s. High Land Coffee Works of P.F.X. Saldanha & Sons under
the provisions of the Employees State Insurance Act 1948.
Section 1(4) of the Act excludes "seasonal factory" from the scope
of the Act. The seasonal factory is defined under section 2(12) of the
Act.
The factories of the respondents were excluded from the operation
D
of the Act since they were declared to be seasonal factories within the
E
meaning of the definition of section 2(12) of the Act.
By amending Act 44 of 1966 which came into force from 28th
January, 1966,the definition of 'seasonal factory' has been amended
and accordingly the seasonal factory means a factory which exclusively
engaged in one or more of the manufacturing processes detailed in t':te
F
definition and includes a factory which is engaged for a period not
exceeding seven months in a year. The expressions manufacturing process & power shall hav' the meaning respectively assigned to them in.
the Factories Act 1948.
So after the amendment the Corporation called upon the responG
dents 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 respondents challenged the demand made by the appellants
in the Employees Insurance Court contending that even the amending
H
307
A
308
SUPREME COURT REPORTS
[1991] 3 S.C.R.
Act 44 of 1966 has not altered the definition of seasonal factory, would
still excludes such factory from the operation of the Act. The Employees
Insurance Court accepted the plea of the respondents and even the
Karnataka High Court agreed to the view of aforesaid Court. So the
Corporation appealed to this Court.
B
The sole question before the Court 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.
Dismissing t!te appeals and the ·special leave petition the Court,
QELD: That in the instant case the High Court observation that
· C
the purpose of the definition by the amending act was to enlarge and not
to restrict the Statutory concept of seasonal factory so the position of the
respondents establishments as seasonal factories remain unaltered. This
view seems to be justified because the objects reasons of the Bill of the
amending Act clearly indicates that the proposed amendment was to
D ·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 orJepacking of tea or coffee b) in
such other manufacturing processes as the Central Government may,
by notification in the official Gazettee specify. Thus amendment is
. clearly jn favour of widening the definition of seasonal factory' because
E the word 'include' in the Statutory definition is generally used to
enlarge the meaning of the preceeding words. This is well accepted
statutory construction that in interpretation clauses in order to enlarge
the words or phrases occuring in the body of the statute the word
include is very generally used. [3JOF-311C)
F
Stroud's Dictionary, 5th Edn. Vol. 3 page 1263.
C./. T. Andhra Pradesh v. M/s. Taj Mahal Hotel, Secunderabad,
[1971] 3 SCC 550 and State of Bombay v. The Hospital Mazdoor Sabha
& Ors., [1960] 2 SCR p. 666 at 875, referred to.
G
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
1837-1841of1977.
From the Judgment and Order dated 28.10.1976 of the Karnataka High Court in Misc. First Appeal Nos. 557 to 561 of 1975.
H
Cr. Anand Prakash, Ms. Kitty Kumaramangalam and C. V.
Subba Rao for the Appellant.
•
,...
E.S.l. v. HIGH LAND COFFEE WORKS ISHETTY. J.]
309
G.B. Pai, Dr. Shankar Ghosh, D.N. Mishra and Ms. Mridula
Ray for the Respondents.
The Judgment of the Court was delivered by
K. JAGANNATHA SHETTY, J. These appeals by special leave
are directed against the judgment of the Karnataka High Court rejecting the claim of the appellant-Corporation for covering the factories of
the respondents under the provisions of the Employees' State Insurance Act, 1948 (the Act).
Section 1(4) excluses "seasonal factory" from the scope of the
Act. The "seasonal factory" is defined under Section 2( 12) of the Act
which is extracted hereunder:
"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 factories of the respondents were excluded from the operation of the Act since they were declared to be the seasonal factories
within the meaning of the above stated definition. There is no dispute
on this aspect.
By Amending Act 44 of 1966 which came into force with effect
from 28th January 1968, the definition of "seasonal factory" has been
amended. The definition as amended reads:
A
B
c
D
E
F
"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
G
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, packing or re-packing of tea
H
or coffee; or
A
B
c
D
310
SUPREME COURT REPORTS
[1991] 3 S.C.R.
(b) in such other manufacturing process as the Central
Government may, by notification in the Official Gazette,
specify;
The
expressions
"manufacturing process"
and
"power" shall have the meaning respectively assigned to
them in the Factories Act, 1948".
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.
The sole question for consideration is whether the respondents'
E
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 respondents establishments as seasonal
factories under and for the purpose of the Act remained unaltered
F
even after the amendment.
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
G
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 Cenrtral Government may, by
notification in the Official Gazette, specify. The amendment therefore, was clearly in favour of the widening the definition of 'seasonal
factory'. The amendment is in the nature of expansion of the original
H
definition as it is clear from the use of the words 'include a factory'.
'
I
..... J
',
'
'
il.S.I. v. HIGH LAND COFFEE WORKS ISHETTY, J.]
311
The amendment docs not restrict the original definition of "seasonal
factory" but makes addition thereto 'by inclw·icm. 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 ed. Vol. 3, p. 1263 and (ii) C./. T. Andhra
Pradesh v. M/s Taj Mahal Hotel, Secunderabad, [1971] 3 SCC 550 (iii)
State of Bombay v. The Hospital Mazdoor Sabha & Ors., [1960] 2 SCR
866 at 875.
In view of these well accepted statutory construction, the decision of the High Court does not call for interference.
In the result the appeals ,:nd the special leave petition fail and
are dismissed with costs.
S.B.
Appeais and petition
dismissed.
A
B
c
D