{"id":116663,"date":"1987-10-27T00:00:00","date_gmt":"1987-10-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/regional-director-employees-vs-ram-chander-on-27-october-1987"},"modified":"2015-09-18T09:13:24","modified_gmt":"2015-09-18T03:43:24","slug":"regional-director-employees-vs-ram-chander-on-27-october-1987","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/regional-director-employees-vs-ram-chander-on-27-october-1987","title":{"rendered":"Regional Director, Employees … vs Ram Chander on 27 October, 1987"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Regional Director, Employees … vs Ram Chander on 27 October, 1987<\/div>\n
Equivalent citations: 1988 AIR 113, \t\t 1988 SCR (1) 835<\/div>\n
Author: S Mukharji<\/div>\n
Bench: Mukharji, Sabyasachi (J)<\/div>\n
           PETITIONER:\nREGIONAL DIRECTOR, EMPLOYEES STATE INSURANCECORPORATION A\n\n\tVs.\n\nRESPONDENT:\nRAM CHANDER\n\nDATE OF JUDGMENT27\/10\/1987\n\nBENCH:\nMUKHARJI, SABYASACHI (J)\nBENCH:\nMUKHARJI, SABYASACHI (J)\nOZA, G.L. (J)\n\nCITATION:\n 1988 AIR  113\t\t  1988 SCR  (1) 835\n 1988 SCC  Supl.   90\t  JT 1987 (4)\t313\n 1987 SCALE  (2)941\n\n\nACT:\n     Employees\tState\tInsurance  Act,\t  1948\tWhether\t the\nrespondent's L\ttailoring  establishment  falls\t within\t the\npurview thereof\t by  virtue  of\t notification  issued  under\nsection 1(5).\n\n\n\nHEADNOTE:\n%\n     The  respondent  Ram  Chander  ran\t a  tailoring  shop,\nemploying  about  10  to  12  tailors.\tThe  number  of\t his\nemployees never\t exceeded 20.  At  the\tshop,  clothes\twere\nstitched and  electric iron  was  used\tin  the\t process  of\nstitching and also for ironing the finished goods.\n     The dispute  that arose  for decision  in the  case was\nwhether by  virtue of Notification dated September 20, 1975,\nissued under  Section 1(5) of the Employees' State Insurance\nAct, 1943,  the respondent's  establishment came  within the\npurview of the Act.\n     Allowing  the  Appeal  by\tspecial\t leave\tagainst\t the\njudgment and  order of\tthe High  Court, and  restoring\t the\ndecision of the Employees' State Insurance Court the Court,\n^\n     HELD:  Stitching\tprocess\t is   carried  on   in\t the\nrespondent's  establishment.   By  stitching   commercially,\ndifferent goods\t with distinctive names, characters and uses\nare brought  into existence.  If by  a process,\t a different\nentity comes  into existence,  the process is a manufacture,\nas held\t by this  Court in  Empire Industries Limited & Ors.\netc. v.\t Union of  India &  Ors. etc., [1985] (Suppl. 1) SCR\n292. In the stitching process, ironing is an essential part,\nand for\t that electric\tpower is used. Also the respondent's\nshop employed  more than  ten but  less than 20 persons. The\nrespondent's establishment  clearly falls within the purview\nof the Employees' State Insurance Act. [837G-H;838C]\n     Deputy Commissioner,  Sales Tax  (Law) Board of Revenue\n(Taxes), Ernakulam  v. Pio  Food Packers,<\/a> [1980] 3 SCR 1271;\nChowgule & Co. Pvt. Ltd & Anr. v. Union of India and others<\/a>,\n[1981] 2  SCR 271;  Ardeshir H. Bhiwandiwala v. The State of\nBombay,<\/a> [1961] 3 H\n836\nSCR 592;  M\/s. Hindu  Jea Band, Jaipur v. Regional Director,\nEmployees' State  Insurance Corpn. Jaipur, AIR<\/a> 1987 SC 1166;\nMetro Readywear\t Company v.  Collector of  Customs,<\/a> [1978] 2\nExcise\tLaw   Times  520   and\tEmployees'  State  Insurance\nCorporation  v.\t  M\/s.\tNew   Empire  Tailores\tand  others,\n(unreported) referred to.\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2904 of
\n1987.\n<\/p>\n
     From the  Judgment and  order  dated  2.9.1986  of\t the
\nRajasthan High\tCourt in  D.B. (Civil) Special Appeal No. 43
\nof 1986.\n<\/p>\n
     M. Chandrasekhran,\t V.J. Francis and N.M. Popli for the
\nAppellant.\n<\/p>\n
     B.D. Sharma for the Respondent.\n<\/p>\n
     The Judgment of the Court was delivered by
\n     SABYASACHI MUKHARJI, J. Special leave granted.
\n     This appeal arises out of the judgment and order of the
\nDivision  Bench\t of  the  Rajasthan  High  Court  dated\t 2nd
\nSeptember, 1986.  The judgment\tunder appeal was rendered in
\nan appeal  under  section  82(2)  of  the  Employees’  State
\nInsurance Act,\t1948 (hereinafter  called  ‘the\t Act’).\t The
\nrespondent,  Ram   Chander,  was   the\tproprietor  of\tM\/s.
\nCommercial Tailors,  Sojati Gate,  Jodhpur. At\tall material
\ntimes, he  used to  run a tailoring shop, where clothes were
\nstitched. The shop employed at the relevant time about 10 or
\n12 persons  as tailors.\t The number  of employees,  however,
\nnever exceeded\t20. The\t clothes  were\t.  supplied  by\t the
\ncustomers and these were stitched according to the different
\nsizes of  the customers.  Such stitchings  were done  at the
\nshop of\t the respondent\t herein manually  by  electric\tiron
\nwhich was  also used in the process of stitching. There were
\nironing\t of  finished  clothes\talso.  The  Employers  State
\nInsurance  Court,   Rajasthan  came  to\t the  conclusion  as
\nfollows:\n<\/p>\n
\t  “The applicant  is  a\t tailoring  shop  which\t has
\n\t  employed more\t than 20 persons on one occasion and
\n\t  less on  other days  and makes use of power in the
\n\t  shape of  electric press which is used for ironing
\n\t  of stitched  clothes for  customers. The  electric
\n\t  iron is  also used during the process of stitching
\n\t  in addition to the ironing of finished clothes.”<\/p><\/blockquote>\n
837<\/span><\/p>\n
     The question  before  the\tRajasthan  High\t Court.\t was
\nwhether such A establishment was covered by the Notification
\ndated 20th  September, 1975  and came within the mischief of
\nthe Act.  The answer  to that  question would  depend on the
\nrelevant notification  being  the  Notification\t dated\t20th
\nSeptember, 1975\t issued under  section 1(5)  of the Act. The
\nschedule   which    extends   the    scheme   to   different
\nestablishments, inter  alia, provided  by clause  (1)(b)  as
\nfollows: B
\nDESCRIPTlON OF ESTABLISHMENTS
\n\t\t\t\t\t  AREAS IN WHICH THE
\n\t\t\t\t\t      ESTABLISHMENTS
\n\t\t\t\t\t       ARE SITUATED.\n<\/p>\n
1. Any premises including the precincts thereof\t 1.Alwar
\n   whereon ten or more persons but in any case\t 2.Ajmer
\n   less than twenty persons are employed or were 3.Bikaner
\n   employed for wages on any day of the preced-\t 4.Jaipur
\n   ing twelve months, and in any part of which a 5.Jodhpur
\n   manufacturing process is being carried on with 6.Kota
\n   the aid of power or is ordinarily so carried\t 7.Udaipur
\n   on but excluding a mine subject to the
\n   operation of the Mines Act, 1952 (35 of 1952)
\n   or a rail way running shed or an establishment
\n   which is exclusively engaged in any of the
\n   manufacturing processes specified in clause
\n   (12) of section 2 of the Employees’ State
\n   Insurance Act, 1948 (34 of 1948)
\n\t\t\t    (emphasis supplied)
\n     In\t order\t to  answer   the   question   whether\t the
\nestablishment of the respondent comes within the mischief of
\nthe Act,  it is\t necessary therefore,  in view\tof the facts
\nfound  as   noted   before   to\t  determine   only   whether
\nmanufacturing process  was carried on with the aid of power.
\nIt is  manifest that  there is\tuse of electric power in the
\nprocess of  stitching. This  is a  finding of  fact that the
\nestablishment of  the shop  employed more  than 10  but less
\nthan  20  persons.  It\tcannot\talso  be  disputed  that  by
\nstitching commercially\tdifferent  goods  are  brought\tinto
\nexistence. These  are known  differently, stitched  shirt is
\nindubitably a  different commodity than unstitched cloth. It
\nis so  commercially known  and treated.\t If by\ta process  a
\ndifferent entity  comes into  existence then  it can be said
\nthat this  was manufactured.  See  in  this  connection\t the
\nobservations of this Court in Empire lndustries Limited & H
\n838<\/span>
\nothers etc.  v. Union of India & others etc., [ 1985] Suppl.
\n1 S.C.R.  292. It  was observed\t therein that manufacture is
\ncomplete as  soon as  by the  application  of  one  or\tmore
\nprocess, the  raw material  undergoes some  change. If a new
\nsubstance is brought into existence or if a new or different
\narticle having\ta distinctive  name, character or use result
\nfrom particular\t processes, such  process or processes would
\namount\tto   manufacture.  Whether   in\t a  particular\tcase
\nmanufacture has resulted by a process or not would depend on
\nthe-facts and circumstances of the particular case. There is
\nno doubt  that the  process must  bring into existence a new
\nitem or\t a new\tcommodity known differently in the market as
\nsuch by\t people who  use or  deal with\tthat good.  In\tthat
\nprocess the  ironing of\t clothes as  has been found to be an
\nessential part\tand for\t that power is used. These are facts
\nfound and are not disputed. If that is the position, then in
\nour opinion,  it comes clearly within the purview of the Act
\nin view\t of the\t other facts  noted before and the employees
\nare covered by the Act.\n<\/p>\n
     Our attention was drawn by learned counsel appearing on
\nbehalf of  the respondent  to the observations of this Court
\nin Deputy  Commissioner, Sales\tTax (Law)  Board of  Revenue
\n(Taxes) Ernakulam  v. Pio Food Packers,<\/a> [1980] 3 S.C.R. 1271
\nand the decision of this Court in Chowgule & Co. Pvt. Ltd. &
\nAnr. v.\t Union of India & others<\/a>, [ 1981] 2 S.C.R. .271. The
\neffect of  both these  decisions have been considered in the
\naforesaid Empire  Industries’s case (supra). Learned counsel
\ndrew our attention to the decision of this Court in Ardeshir
\nH. Bhiwandiwala v. The State of Bombay,<\/a> [1961] 3 S.C.R. 592,
\nwhere the  question arose under the Factory Act. It was held
\ntherein that  the  salt\t works\twas  a\tfactory\t within\t the
\ndefinition given  in the  Act and  the appellant therein was
\nrightly convicted  for working\tit without  a  licence.\t The
\ndecision is  of no assistance to the respondent in resolving
\nthe contentions involved in this appeal.\n<\/p>\n
     Our attention  was also  drawn to\tthe decision of this
\nCourt in  M\/s. Hindu  Jea Band, Jaipur v. Regional Director,
\nEmployers’ State  Insurance Corporation, Jaipur, A.I.R.<\/a> 1987
\nS.C. 1166,  where it  was held\tthat it was not that a place
\nwhere goods  were sold\twas  only  a  shop.  A\tplace  where
\nservices were  sold on\tretail basis  was also\ta shop.\t The
\nfacts of  that case  were entirely  different from  these in
\nthis case. But the ratio of that decision is apposite to the
\nissue in  dispute here.\t There this Court reiterated that it
\nwas not\t that a place where goods were sold was only a shop.
\nBut a  place where  services were  sold on  retail basis was
\nalso a shop. The place of business of a firm carrying on the
\nbusiness of playing music on occasion such as, marriages and
\n839<\/span>
\nOther social  functions which  made available  on payment of
\nthe stipulated\tprice the  services of\tthe members  of\t the
\ngroup of  musicians employed  by it  on wages  was a shop to
\nwhich the  Act was applicable by virtue of the notification.
\nThe fact  that the  services were  rendered by the employees
\nengaged by  the firm  intermittently or during marriages did
\nnot entitle  the  firm\tto  claim  any\texemption  from\t the
\noperation  of\tthe  Act.  In  Metro  Readywear\t Company  v.
\nCollector of  Customs,<\/a> [ 1978] 2 Excise Law Times 520 of the
\nHigh Court  of Kerala  at Ernakulam  it was  held  that\t the
\nbrassieres were undoubtedly undergarments falling within the
\ndescription  “articles\t of  ready-to-wear   apparel  (known
\ncommercially as\t ready\tmade  garments)\t and  therefore\t was
\nclassified under  Item 22D of Central Excise Tariff. Ironing
\nwith electric iron amounted to a process of manufacture with
\nthe aid\t of power.  It was  held that  ironing\tof  stitched
\nbrassieres is  incidental or  ancillary to their manufacture
\nsince the  said process\t was intended  to give\ta finishing,
\ntouch in order to render them marketable. In our opinion the
\nratio or the reasoning of the said decision is applicable to
\nthe facts of this case.\n<\/p>\n
     Our attention  was drawn  to the unreported decision of
\nthe Andhra  Pradesh High  Court in Employees State Insurance
\nCorporation v.\tM s.  New Empire  Tailors and  others, where
\nthe aforesaid reasoning was accepted by the High Court.\n<\/p>\n
     In the  light of  the aforesaid,  we are of the opinion
\nthat the High Court in the instant case was in error and the
\ndecision of  the E.S.I.\t Court must be upheld. The appeal is
\naccordingly allowed  and the  judgment and order of the High
\nCourt are  set aside  and the  order  of  the  E.S.I.  Court
\nrestored. In  the facts\t and circumstances  of the  case the
\nparties will  pay and  bear their  own costs.  This judgment
\nwill apply  to the  facts as  pertinent to  the facts in the
\nrelevant year in question.\n<\/p>\n
S.L.\t\t\t\t\t     Appeal allowed.\n840<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Regional Director, Employees … vs Ram Chander on 27 October, 1987 Equivalent citations: 1988 AIR 113, 1988 SCR (1) 835 Author: S Mukharji Bench: Mukharji, Sabyasachi (J) PETITIONER: REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCECORPORATION A Vs. RESPONDENT: RAM CHANDER DATE OF JUDGMENT27\/10\/1987 BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) OZA, G.L. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-116663","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nRegional Director, Employees ... vs Ram Chander on 27 October, 1987 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/regional-director-employees-vs-ram-chander-on-27-october-1987\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Regional Director, Employees ... vs Ram Chander on 27 October, 1987 - 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