BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 25/08/2011 CORAM THE HONOURABLE MR.JUSTICE VINOD K.SHARMA W.P.(MD)No.11463 of 2008 and M.P.(MD)No.1 of 2008 The Management of Kumar Medical Centre, (Wholesale Pharmaceutical Distributors) 51 East of Tower, Nagercoil 629 001. Rep. by its Proprietor Mr.P.Kumaraswamy ... Petitioner Vs. Employees State Insurance Corporation, (Sub Regional Office, (Tirunelveli) Municipal Shooping Complex, Salai Street, Sindupponthurai, Tirunelveli 627 001. Rep. by its Assistant Director. ... Respondents PRAYER Writ Petition is filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorari, to call for the records of the respondent in Proceedings No/6630706/INS/SRO/TLI and quash its order, dated 13.10.2008. !For Petitioner ... Mrs.T.Malini ^For Respondent ... Mr.P.Sermakani :ORDER
The petitioner has approached this court, with a prayer for issuance of a
writ, in the nature of certiorari, to quash the notice, covering the petitioner
under ESI Act.
2.The impugned notice reads as under:-
Web site:www.esiindia.org Phone:0462-2332106
www.esic.nic.in 0462-2332105
E-mail: esicsrothi@dateone.in Fax: 046202332107
SUB-REGIONAL OFFICE (TIRUNELVELI)
EMPLOYEES' STATE INSURNCE CORPORATION
MINICIPAL SHOOPING COMPLEX
SALAI STREET, SINDUPPONTHURAI
TIRUNELVELI-627 001.
No/66/30706/34/INS/SRO/TLI Date: 13/10/08
To,
M/s.Kumar Medical Centre,
51, East of Tower,
Nagercoil-629 001.
Sir,
Sub: Coverage of the Unit under ESI Act 1948-Reg.
Ref: Your letter, dated 1/9/2008.
With reference to your letter cited, above it is informed that preserving
medicines under refrigeration amounts to manufacturing process with the aid of
power under section 2(k) of the Factories Act. Therefore, the unit is coverable
under section 2(12) read with section 2(14AA) of the EST Act.
It is hereby confirmed that your unit is coverable under the EST Act as
stated in this office letter, dated 6/6/08. Immediate compliance is requested.
Yours faithfully,
sd/-xxxx
ASSITANT DIRECTOR
(INSURANCE BRANCH)
3.The petitioner is a practicing Doctor, who is practicing in medicine.
The petitioner in addition to practice also started business of wholesale
distributorship, for the products of various pharmaceutical companies, like
Glaxo India Limited, Cipla Limited, Torrent Pharmaceuticals Limited, Ranbaxy
Laboratories Limited, Zudus Cadila Limited,Lupin Pharmaceuticals Limited,Abbot
Labs Limited, Anglo French Limited, Workhardt Limited, Eli Lilly & Company (I)
Pvt., Limited, etc. The petitioner is a licensed stockist, under the Drugs &
Cosmetics Act, 1940.
4.The petitioner stores the medicines in refrigerators and two coolers,
and has employed 16 employees, including three pharmacists. The shop of the
petitioner is established under the Tamil Nadu Shops & Commercial Establishments
Act.
5.The petitioner is not covered under the Employees’ Provident Fund &
Miscellaneous Act, as employees working with him are less than 20.
6.The impugned order has been passed, by invoking section 2(12) of the ESI
Act, which defines the ‘Factory’ to mean as under:-
“(a)wherein ten or more persons are employed or were employed for wages 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 it ordinarily so carried on
or
(b)whereon twenty or more persons are employers or were employed for wages
on any date of the preceding twelve months and in any part of which a
manufacturing process is being carried on without the aid of power or is
ordinarily carried on.
The term “manufacturing process” shall have the same meaning as assigned
to it in the Factories Act, 1948, Section 2(k)of the Factories Act, defines the
terms “manufacturing process” to mean that;-
(i)making, altering, repairing, ornamenting, finishing, packing, oiling,
washing, cleaning, breaking up, demolishing or otherwise treating or adopting
any article or substance with a view to its use, sale transport, delivery or
disposal; or
(ii)pumping oil, water sewage or any other substances; or
(iii)generating, transforming or transmitting power; or
(iv)composing types for printing, printing by letter press, lithography,
photogravure or other similar process or book binding; or
(v)constructing, reconstructing, repairing, refitting, finishing or
breaking up ships or vessels; or
(vi)preserving or storing any article in cold storage.
7.The pleaded case of the petitioner is that though number of employees
working with the petitioner are less than 20, the Inspector of ESI, visited the
premises of the petitioner and reported, that as the refrigerators and coolers
are used for storing some of the medicines, it amount to manufacturing process,
therefore, the premises are covered under ESI Act.
8.The learned counsel for the petitioner challenged the impugned order, on
the ground that there is no manufacturing process, carried out by the
petitioner, therefore, premises of petitioner do not come under definition of
‘factory’.
9.The refrigerators and coolers are only used to store the medicines for
distribution/sell, under a license.
10.The learned counsel for the petitioner contends that the impugned order
on the face of it is outcome of non-application of mind, and perverse, thus, hit
by Article 14 of the Constitution of India.
11.The learned counsel appearing on behalf of the respondent, has
challenged the maintainability of the writ petition, on the ground that the writ
is premature, as notice has only been issued. It will be open to the petitioner,
to take all the defenses available in reply.
12.It is also the contention of the learned counsel for the respondent
that the use of refrigerators and coolers, in the premises of the petitioner
amounts to manufacturing process, in view of the law laid down by the Hon’ble
Division Bench of this court, in the case of The Kumbakonam Milk Supply
Cooperative Society, represented by its Secretary vs. The Regional Director,
Employees’ State Insurance Corporation, Madras [(2003)2 MLJ 349], wherein this
court has pleased to lay down as under:-
“Sec.2(14AA) of the Act ‘manufacturing process’ shall have the meaning
assigned to it in the Factories Act, 1948. Sec.2(k) of the Factories Act, 1948
defines the expression “manufacturing process” and we have already referred to
the insertion of Clause (vi) of Sec.2(k) by Act 94 of 1976 which makes it clear
that preserving or storing any article in cold storage is deemed to be a
manufacturing process. Though it is stated that only two persons are being
engaged in cold storage and others are messengers and their main work is to
procure milk from its members, in the light of the definition of the words
“employees”, “factor” and “manufacturing process”, as referred to in the
Employees State Insurance Act, and the Factories Act and in the light of the
details furnished in the documents produced by the society, that the appellant
society is an establishment which comes within the ambit of Employees’ State
Insurance Act and that the learned District Judge was perfectly right in
arriving at a conclusion, confirming the action initiated by the Employees’
State Insurance Corporation.
The Employees’ State Insurance Act is a piece of social welfare
legislation enacted primarily with the object of providing certain benefits to
employees in case of sickness, maternity and employment injury and also to make
provisions for certain other matters incidental thereto. In an enactment of
this nature, the endeavour of the Court should be to interpret the provisions
liberally in favour of the persons for whose benefit the enactment has been
made. In the light of the statutory provisions of the Employees’ State
Insurance Act, 1948 and the Factories Act, 1948, complied with the factual
details available in the case on hand, the Court do not want to take a different
view than that taken by the District Judge, and hence the Court in agreement
with the conclusion arrived at by the learned District Judge.”
13.The stand of the respondent is totally misconceived. The order
impugned is not merely a notice, but an order confirming that the shop of the
petitioner is covered under the ESI Act, as in the letter, dated 6th June 2008,
directions have been issued to take steps under the ESI Act. The writ petition,
therefore, cannot be said to be premature.
14.The contention of the learned counsel for the petitioner, is that
keeping of the refrigerator and cooler would amount to manufacturing process, is
again misconceived. The refrigerators or coolers are not used by the petitioner
for carrying out any manufacturing process, but for storage for sale, in view of
the nature of particular medicine, for the benefit of the customer. The
judgments relied upon is regarding preserving the article in cold storage, which
cannot be equated to the ordinary refrigerator.
15.If the contention of the respondent is accepted, then every household
would become a manufacturing process, as the refrigerators are keeping for
storage of household goods for use. The judgment relied upon by the learned
counsel for the respondent, can have no application to use of refrigerator or
cooler for the purposes of storage of medicine, nor it can be termed as a
manufacturing process.
16.The learned counsel for the respondent challenged the maintainability
of the writ, on account of alternative remedy under section 75 of the ESI Act,
by placing reliance on the Division Bench Judgment of this court, in the case of
the Tuticorin Thermal Power Station Industrial Cooperative Society Ltd.,
Tuticorin vs. The Deputy Regional Director etc., & others [2005 Writ L.R.332].
17.There can be no dispute with the proposition laid down by the Hon’be
Division Bench judgment of this court that alternative remedy is a ground to
non-suit the petitioner. It is always equally well settled that alternative
remedy is not a complete bar, specially when writ petition, is admitted.
18.The writ petition was admitted in the year 2008, therefore, at this
stage, it would not be appropriate to relegate the petitioner to alternative
remedy, under section 75 of the ESI Act, to challenge, the order which on the
face of it is perverse, and also without jurisdiction, as the premises of the
petitioner on admitted facts can not be covered under ESI Act.
19.It is an imagination of the respondent that storing of medicine in the
refrigerator will amounts to manufacturing process, by equating ordinary
refrigerator with cold storage, which in itself is an industry.
20.The impugned order on the face of it is perverse, arbitrary and outcome
of colourable exercise of power, thus, hit by Article 14 of the Constitution of
India.
21.While rejecting the plea of the respondent, that the writ petition
deserves to be dismissed, for alternative remedy, it is appropriate to notice
that in-spite of the Hon’ble Division Bench judgment of this court, in the case
of the Tuticorin thermal Power Station Industrial Co-operative Society Ltd., vs.
The Deputy Regional Director etc., [2005 Writ L.R.332], writ petitions are
filed, in this court, by not disclosing the statutory remedies available to the
petitioner and all the writ petitions are entertained and admitted by ignoring
the availability of alternative statutory remedy. The objection to
maintainability is only taken at final hearing, that is after number of years.
The office should make a note about availability of alternative statutory
remedy, so that question of maintainability of writ can be decided at the time
of admission of writ.
22.As already observed, the impugned order on the face of it, is arbitrary
and outcome of non-application of mind and thus, hit by Article 14 of the
Constitution of India.
23.The writ petition is allowed, the impugned order is set aside.
24.Consequently, connected Miscellaneous Petition is closed. But with no
order as to costs.
er