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TMI Blog1987 (4) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 75 and 76 of the ESI Act before the Employee's Insurance Court, Nagpur, for decision on the dispute whether the respondent Company is a 'factory' within the meaning of section 2(12) of the ESI Act and whether its Managing Director is an 'employee' within the meaning of section 2(9) of the said Act. The appellant Corporation filed its written statement in the case opposing the claim of the respondent Company. The parties led evidence before the Employees' Insurance Court. 2. The learned Judge of the Employees' Insurance Court on the basis of the evidence on record held that there were only 19 employees in the factory of the respondent Company besides its Managing Director and, therefore, the only question which necessitated consideration was whether its Managing Director was an 'employee' within the meaning of section 2(9) of the ESI Act. As regards the said question, the learned Judge of the Employees' Insurance Court held that looking to the nature of the powers and duties conferred upon the Managing Director of the respondent Company, he was not an employee within the meaning of section 2(9) of the ESI Act. The appellant Corporation pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee in the factory or establishment or elsewhere; or (ii) 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 (iii) 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; (and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, departmental or branch thereof with the purchase of raw materials for, or the distribution or sale of the products of the factory or establishment but does not include- (a) any member of (the Indian) naval, military or air force; or (b) any person so employed whose wages (excluding remuneration for service work) exceed one thousand and six hundred rupees a month: Provided that an employee whose wages (including remuneration for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing the said definition is to bring the employees of the contractor engaged by the principal employer within the purview of the. ESI Act. The 'managing agent', who is included within the definition of the expression 'principal employer' is defined in section 2( 14A) of the Act. According to the said definition the 'managing agent' means any person appointed or acting as the representative of another person for the purpose of carrying on such other person's trade or business; but does not include an individual manager subordinate to an employer. 9. It is clear from the definition of the word 'employee' that it means any person employed for wages and the expression "wages" is defined in section 2(22) of the ESI Act. The relevant part of the said definition reads as under:. 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........" It may also be seen that by virtue of the definition of clause 2(24) the words and expressions used but not defined in the ESI Act have the same meaning which is assigned to them in the Industrial Disputes Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Joseph Ellis and Co. (1905) I KB 324 that the same person can occupy the position of both master and servant or employer and employee is a legal impossibility. The observations of Lord Justice Cozcns-Hardy in the above case of Ellis vs. Joseph Ellis and Co. are also worthy of notice. They are as follows: "All that our decision in this case amounts to, I think, is that the Act only applies where there is on one side an employer, and in the other side a workman, who are different persons." (Emphasis supplied). It is thus clear that the theory of dual capacity is not accepted by the Supreme Court in the Judgment cited supra. 13. The learned counsel for the appellant Corporation has, however, pressed into service the judgment of the Supreme Court in the case of Shri Ram Prasad, cited supra, to show that a Managing Director also can be an employee in the company. The question in the said case was whether the remuneration paid to the Managing Director was salary within the meaning of section 7 of the Income-tax Act and the said question was answered in the affirmative in the said case. However, in our view the question whether the Managing Director is an employee within the meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- on security to any person at a time and the aggregate of such total amount (sic) by him has not to exceed Rs. 50,000/- at any time. Besides the above owners he was allowed to exercise all the powers exercisable by a Director under the supervision and control of the Board of Directors. 16. Perusal of clause 94 of the Articles of Association would show that the First Managing Director was to be elected by the Board of Directors on such remuneration and terms as it thought fit and he was to hold the often until the immediate next General Meeting of the Board. Clause 85 of Articles of Association of the respondent Company deals with the appointment of the Managing Director and clause 96 deals with his powers and duties. It is clear from clause 96 that any of the powers of the Directors can be entrusted to the Managing Director by the Directors. Clause 93 of the Articles of Association provides that unless otherwise decided by the Board, the Managing Director in the absence of the appointment of a secretary of the Company, shall duly comply with the provisions of the statute, and particularly the provisions as to registration and keeping records of mortgages and charges, maintenan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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