The Regional Director, Employees’ State Insurance Corporation Vs. M/s High Land Coffe Works of P.F.X. Sal
EmailAppeal: Civil Appeal Nos. 1837-1841 OF 1977
WITH
(Special Leave Petition No.2481 of 1982)
WITH
(Special Leave Petition No.2481 of 1982)
Petitioner: The Regional Director, Employees’ State Insurance Corporation
Respondent: M/s High Land Coffe Works of P.F.X. Saldanha & sons. & anr.
Apeal: Civil Appeal Nos. 1837-1841 OF 1977
WITH
(Special Leave Petition No.2481 of 1982)
WITH
(Special Leave Petition No.2481 of 1982)
Judges: K. JAGANNATHA SHETTY, V. RAMASWAMI & YOGESHWAR DAYAL, JJ.
Date of Judgment: Jul 26, 1991
Head Note:
EMPLOYEES’ STATE INSURANCE ACT, 1948:
Sections 1(4) and 2(12) – Seasonal factory – Exclusion from the scope of the Act – Amendment Act 44 of 1966 amending the defi nition of ‘seasonal factory’ – Interpretation of the word ‘include’ – Purpose of Amendment was to enlarge and not to restrict the original definition of ‘seasonal factory’ – Deci sion of the High Court that the position of respondents estab lishments as seasonal factories remained unaltered even after amendment held justified.
WORDS AND PHRASES
‘Include’ – It is used to enlarge the meaning of the words or phrases occurring in the body of the Statute – When it is so used, these words or phrases must be construed as comprehend ing, 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. (Para 7)
Cases Reffered:
1. C.I.T. Andhra Pradesh v. M/s Taj Mahal Hotel, Secunderabad: 1971 (3) SCC 550 (Para 7)
2. State of Bombay v. The Hospital Mazdoor Sabha & ors. : 1960 (2) SCR 866 (Para 7)
2. State of Bombay v. The Hospital Mazdoor Sabha & ors. : 1960 (2) SCR 866 (Para 7)
Books and Articles Referred:
Stroud’s Judicial Dictionary, 5th Edition Vol.3, p.1263. (Para 7)
JUDGEMENT:
K.JAGANNATHA SHETTY, J. :
1. 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).
2. Section 1(4) excludes “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.”
3. 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.
4. 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:
“Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing pro cesses, namely, cotton ginning, cotton or jute pressing, decor tication 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 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 or coffee; or
(b) in such other manufacturing process as the Central Gov ernment 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″.
5. 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.
6. The sole question 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. 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 even after the amendment.
7. 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 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 Central 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 definition as it is clear from the use of the words ‘include a factory’. The amendment does not restrict the original definition of “seasonal factory” but makes addition thereto by inclusion. 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.I.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).
8. In view of these well accepted statutory construction, the decision of the High Court does not call for interference.
9. In the result the appeals and the special leave petition fail and are dismissed with costs.
1. 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).
2. Section 1(4) excludes “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.”
3. 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.
4. 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:
“Seasonal factory means a factory which is exclusively engaged in one or more of the following manufacturing pro cesses, namely, cotton ginning, cotton or jute pressing, decor tication 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 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 or coffee; or
(b) in such other manufacturing process as the Central Gov ernment 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″.
5. 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.
6. The sole question 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. 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 even after the amendment.
7. 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 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 Central 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 definition as it is clear from the use of the words ‘include a factory’. The amendment does not restrict the original definition of “seasonal factory” but makes addition thereto by inclusion. 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.I.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).
8. In view of these well accepted statutory construction, the decision of the High Court does not call for interference.
9. In the result the appeals and the special leave petition fail and are dismissed with costs.
