TMI Blog2016 (2) TMI 1362X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Corporation, Madras v. South India Flour Mills (P) Ltd. [ 1986 (4) TMI 368 - SUPREME COURT ] has overruled the decision of the Madras High Court in Employees State Insurance Corporation v. Gnanambikai Mills Ltd. [ 1973 (2) TMI 142 - MADRAS HIGH COURT ] in which the High Court laid down that though casual employee may come within the definition of the term employee under section 2(9) of the Act, yet they may not be entitled to sickness benefits in case their employment is less than the benefit period or contribution period and that it does not appear from the Act that casual employee should be brought within its purview. Coming to the submission that the ESI Corporation should be held bound by the consent terms, the submission is factually incorrect, misconceived, legally untenable and otherwise also devoid of the substance - the demand in the instant case is based upon the notification dated 18.9.1978 which left no room to entertain any doubt that the establishments of the aforesaid department in question were also covered under the ESI Act. Thus, no benefit can be derived by the consent terms which related to the earlier period when notification dated 18.9.1978 had not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (General) Regulations, 1950, it would be difficult to calculate the contribution for the employees who work casually on the racing days. It was also submitted that the direction issued by the High Court not to recover the amount before 1987 does not call for any interference in the appeal filed by ESI Corporation, for which reliance has been placed on a decision of this Court in Employees State Insurance Corporation v. Hyderabad Race Club (2004) 6 SCC 191. 4. Whereas it was contended on behalf of the ESI Corporation that in view of the specific notification dated 18.9.1978 so far as Royal Western India Turf Club Ltd. is concerned in Maharashtra, position was clear as to applicability of ESI Act. The consent terms which have been relied upon related to the earlier period in which other establishments of the Turf Club were covered. In the notification issued on 18.9.1978, the departments in question of the Turf Club were also covered. Even the consent term reflects that there was no doubt that the Turf Club was covered under provisions of the ESI Act w.e.f. 1968. 5. First we take up the question whether casual employees are covered within the purview of ESI Act. Section 2(9) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislation and is required to be interpreted so as to ensure extension of benefits to the employees and not to deprive them of the same which are available under the Act. 6. Section 39 deals with the contribution payable under the Act with respect to the employee in respect of each wage period shall ordinarily fall due on the last day of the wage period, and where an employee is employed for part of the wage period or is employed under two or more employers during the same wage period, the contributions shall fall due on such days as may be specified in the Regulations. Section 39 is extracted hereunder : 39. Contributions. (1) The contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer s contribution) and contribution payable by the employee (hereinafter referred to as the employee s contribution) and shall be paid to the Corporation. (2) The contribution shall be paid at such rates as may be prescribed by the Central Government: Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance has been placed on behalf of the Turf Club, on the definitions of wages and wage period. Sections 2(22) and 2(23) dealing with wages and wage period are as follows : 2(22). wages means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lock-out, strike which is not illegal or layoff and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include (a) any contribution paid by the employer to any pension fund or provident fund, or under this Act; (b) any travelling allowance or the value of any travelling concession; (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (d) any gratuity payable on discharge ; (23) wage period in relation to an employee means the period in respect of which wages are ordinarily payable to him whether in terms of the contract of employment, express or implied or otherwise; A bare reading of the aforesaid provisions makes it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile overruling decision of High Court held thus : 8. Section 39 provides for contributions payable under the Act. Sub-section (4) of Section 39 provides as follows: The contributions payable in respect of each week shall ordinarily fall due on the last day of the week, and where an employee is employed for part of the week, or is employed under two or more employers during the same week, the contributions shall fall due on such days as may be specified in the regulations. 9. Sub-section (4) clearly indicates employment of a casual employee when it provides and where an employee is employed for part of the week . When an employee is employed for part of a week, he cannot but be a casual employee. We may also refer to sub-section (3) of Section 42 relating to general provisions as to payment of contributions. Sub-section (3) reads as follows: Where wages are payable to an employee for a portion of the week, the employer shall be liable to pay both the employer s contribution and the employee s contribution for the week in full but shall be entitled to recover from the employee the employee s contribution. 10. Sub-section (3), inter alia, deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extiles Mills Pvt. Ltd., not being the work of the factory or incidental or preliminary to or connected with the work of the factory, such workers cannot be employees within the meaning of Section 2(9) of the Act. The contention of the learned counsel is that the work of the factory being weaving , an employee within the meaning of Section 2(9) must be employed on any work incidental or preliminary to or connected with the work of weaving that is carried on in the mill or factory. Counsel submits that the work of construction of factory buildings cannot be said to be an activity or operation incidental to or connected with the work of the factory, which is weaving. Mr D.N. Gupta, learned counsel appearing on behalf of the respondent companies in the other cases adopts the contention of Dr. Chitaley and submits that the workers employed for the construction of the factory buildings do not come within the purview of the definition of employee under Section 2(9) of the Act. In view of the aforesaid decision it is apparent that the submission raised by Royal Turf Club that casual workers are not covered under the ambit of ESI Act is too tenuous for its acceptance. 12. Mr. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation dated 18.9.1978 which left no room to entertain any doubt that the establishments of the aforesaid department in question were also covered under the ESI Act. Thus, no benefit can be derived by the consent terms which related to the earlier period when notification dated 18.9.1978 had not been issued. Notification has statutory force and agreement cannot supersede it. It is also clear that several departments of race club were covered under the notification issued in 1968. Thus, the submission raised on the basis of consent terms is hereby rejected. 14. Coming to the appeal preferred by the ESI Corporation raising question that the payment should have been ordered with effect from 1978-79 onwards instead of 1987 as in view of notification dated 18.9.1978, there was no room to doubt that departments in question of the Turf Club were also covered under ESI Act. In our opinion, the notification of 1978 is clear and has to be given full effect, for earlier period also the consent terms indicated that various other departments of Turf Club were covered under the notification of 1968. Reliance on the decision of this Court in Hyderabad Race Club case (supra) so as to waive the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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