F. A. No. 12 of 1982

6th March, 1992.

Petitioner Counsel: Smt. Vasanti Naik
Respondent Counsel: V. A. Masodkar

JUDGMENT

JUDGMENT :- The present appeal is directed against the judgment and order of the Employees' Insurance Court at Nagpur dated 16th December 1981 in Insurance Case No. 3 of 1980, alleging that the learned trial Court wholly misconceived the law while deciding the application filed by the appellant/applicant under section 75 of the Employees' State Insurance Act, 1948.

2. The appellant/applicant filed, an application under section 75 of the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the Act') challenging Order No. 1NS/11/(3)/23/1498/91/"SF"/80-3019 dated 21st/22nd May 1980. covering the period from December 1977 to March 1980, and directing to deposit Rs. 6,405/-, and Order No. 23-1498-91-"SE" 5075 dated 28th July 1978 directing to pay Rs. 314.70, as bad and illegal and to quash the same and further to stop the recovery proceedings initiated by the respondent before the Judicial Magistrate, First Class, Nagpur.

3. According to the appellant M/s. Jayram Karsan Tank, it is a partnership concern registered under the Indian Partnership Act. It is also registered as a factory under the Factories Act and also registered under the Employees State Insurance Act from 27-11-1976 vide registration No. 23/1498/91/SF. The appellant/applicant complied with the statutory provisions of the Act and remitted contribution under the Act regularly upto 27th November 1977. By a letter dated 10/13th December 1977 the appellant/applicant informed the respondent that as the number of employees employed by the concern being less than 10 for a continuous period of 12 months i.e. from 27-11-1976 to 27-11-1977, the provisions of the Act and the regulations made thereunder ceased to apply with effect from 27-11-1977. Thus, on and from 27-11-1977 the appellant/applicant concern falls outside the scope of the Act. By letter (Exh. U-3) dated 25th July 1978, the respondent directed the appellant to pay Rs. 314.70 as contribution in respect of employee Baburao Nagoji More.

4. The Act is made applicable to the Nagpur area and the industries using power and employing 10 or more persons, with effect from 27th November, 1976.

5. After the receipt of the communication dated 25-7-1978 (Exh. U-3), the appellant sent reply on 13-8-1978 vide Exh.U-4, alleging that the said Baburao More is not an employee of the appellant concern; that no wages are paid to him; he is a deputee of the Board constituted under the Mathadi Act and the bundling work done by the said Baburao More stands charged by levy. It is specifically mentioned in Exh. U-4 that Baburao More being covered under the Mathadi Act and the levy being paid to the Mathadi and Unprotected Labour Board regularly and, therefore, double coverage both under the Mathadi Act and the E.S.I. Act for the same person is unjust and illegal. It is also submitted that since Baburao More is covered under the Mathadi Act he is not covered under the E.S.I. Act. It is also stated in the said letter that if Baburao More is not covered under the E.S.I. Act, the factory of the appellant remains uncovered from November 1977 since the number of employees remained less than 10, and therefore, no legal action or action to recover amounts as land revenue is called for.

6. The said Baburao More was doing bundling work as an unprotected worker deputed by the Mathadi Board constituted under the Maharashtra Mathadi, Hamals and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969 (hereinafter referred to as 'the Mathadi Act'). Therefore, according to the appellant, Baburao More cannot be termed as an employees or workman of the appellant concern for the purposes of the E.S.I. Act. Baburao More enjoined all benefits by virtue of his being an unprotected worker under the Mathadi Act, which are available under the E.S.I. Schemes. Thus, no further contribution can be asked for in respect of the same person, viz, Baburao More, from the appellant. The direction to the appellant to contribute money will amount to conferring double benefits as claimed by the respondent. In spite of all this, by a letter dated 21st September 1978, without any proper scrutiny, the department reported that the said Baburao More is covered by section 2(9) of the E.S.I. Act, though he is covered under the Mathadi Act, and demanded Rs. 314.70 on this count.

7. The appellant further alleged that the respondent had failed to take into account the directions issued by the Commissioner of Labour and Chairman. Mathadi and Unprotected Labour Board, Nagpur, dated 24-1-1977. in which, categories of the employees are specified, which cannot be considered as" employees under the E.S.I. Act. It is submitted that the Government of Maharashtra has issued a notification dated 7-5-1979 in which they have exempted manual workers engaged in connection with loading and unloading, stacking, carrying, weighing, measuring, stitching, sorting, cleaning or such other work including the work preparatory or incidental thereunder in the employment specified in the Schedule under the Mathadi Act. This notification fully applies to a man under consideration and, therefore, these exemptions extend to the appellant insofar as Baburao More is concerned. It is further submitted that the respondent has not considered this notification. The appellant further argued that the person sent on deputation by Mathadi Board to its legitimate constituent i.e. levy-paying member, is not an employee as such since there is no privity of contract. Baburao More worked at several places wherever he was sent by the Mathadi Board. More so, there is no bondage between Baburao More that he should report himself for work daily or that he is amenable to the disciplinary jurisdiction of the appellant. Baburao More was at liberty to undertake the work as may either be directed by the Mathadi Board or himself.

8. Shri Masodkar, the learned counsel for the respondent, resisted the claim of the appellant. The preliminary objection raised by Shri Masodkar is that the present one being an appeal under section 82 of the Act, it can only be entertained if it involves the substantial questions of law. According to Mr. Masodkar, it being a matter squarely based on facts, it be summarily dismissed on this count alone. Besides this, Mr. Masodkar submitted that even if Baburao More was deputed to work in the concern of the appellant, he is an exempted employee under section 2(10) of the Act, meaning thereby that he is exempted from the liability of paying employee's contribution, but for the purposes of coverage he shall be termed as an employee of the appellant as per section 2(9) of the Act. Under the circumstances, the employer is liable to make his own contribution towards E.S.I. Scheme for the benefits of the workers.

9. The Objects and Reasons to enact 'The Maharashtra Mathadi, Hamal and Other Hamal Workers (Regulation of Employment and Welfare) Act, 1969, are that the persons engaged in occupations like Mathadis, Hamals, fishermen, salt pan workers, casual labour, particularly employed in docks, khoka workers and lokhandi jatha workers and those engaged in similar manual work elsewhere, were not receiving adequate protection and benefits within the ambit of the labour legislation. In the study, it was revealed that in number of cases, such workers were not employed directly, but were either engaged through Mukadams or Toliwalas or gangs as and when there is work. So also such workers used to work for different employers on one and the same day. The nature and volume of work were not constant. There being no peculiar nature of work, its variety, the precarious means of employment and the system of payment, and the particular vulnerability to exploitation of such class of labour, the application of the various labour laws to such workers was impracticable. The Government of Maharashtra accepted the recommendations of the Committee and decided to make better provisions i.e. terms and conditions of their employment, to provide for their welfare, for health and safety measures, where such employments require these measures, to make provisions for ensuing an adequate supply to, and full and proper utilisation of such workers in such employments; to prevent unemployment and for such purposes to provide the establishment of Boards in respect of these employments, enacted the Mathadi Act.

10. Section 3 of the Mathadi Act, which provides Schemes ensuring regular employment to unprotected workers, reads as under -

"3(1) For the purpose of ensuring an adequate supply and full and proper utilization of unprotected workers in scheduled employments, and generally for making better provision for the terms and conditions of employment of such workers the State Government may be means of a scheme provide forthe registration of employers, and unprotected workers in any scheduled employment or employments, and provide for the terms and conditions of work of registered unprotected workers, and make provision for the general welfare in such employments.

*** *** *** ***"

Section 6 of the Mathadi Act provides for the constitution of the Boards, while section 7 lays down the powers and duties of such Boards. This section provides that the Board shall be responsible for administering a scheme, and shall exercise such power and perform such functions as may be conferred on it by the scheme. The Board is required to submit to the State Government an annual report on the working of the schemes during the preceding financial year, not later than 31 st October and provide for lying such report before each house of the State Legislature. It also provides that the Board shall be bound by such directions as the State Government may give it from time to time.

Section 8 provides for maintenance of proper accounts and other relevant records by the Board for annual audit of the accounts by the qualified person appointed by the State Government for the purpose. Section 13 provides for recovery of arrears of any sum payable to the Board under this Act or Scheme thereunder, from any employer or worker, as arrears of land revenue.

Section 21 safeguards the rights and privileges, which any registered unprotected worker employed in any scheduled employment is entitled to, on the date on which this Act comes into force, under any other law, contract, custom, or usage applicable to such worker, if such rights or privileges are more favourable to him than those to which he would be entitled under this Act and the scheme provided that such worker will not be entitled to receive any corresponding benefit under the provisions of this Act and the scheme. Section 22 empowers the State Government to issue notification with a view. to exempt from the operation of all or any of the provisions of this Act or any Scheme made thereunder, all or any class or classes of unprotected workers employed in any scheduled employment, if in the opinion of the State Government all such unprotected persons are in the enjoyment of benefits which are on the whole not less favourable to such unprotected workers than provided by or under this Act or any scheme framed thereunder.

11. In exercise of the power conferred by section (1) of the Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare) Act, 1969, to ensure an adequate supply and full and proper utilisation of unprotected workers employed in Nagpur or, the Scheme has been framed which is known "Nagpur Grocery Markets or Shops, Railway Yards and Goods-sheds, Public Transport Vehicles, Khokha Making Establishments and Timber Markets and Shops, Unprotected Worker (Regulation of Employment and Welfare) Scheme, 1974, notified on 19th March, 1974. Rule 9 deals with the function of the Secretary of the Board. Under clause (f)(i) of Rule 9, the Secretary has to collect the levy or any other contribution from the employers under the Scheme and sub-clause (ii) of clause (f) of Rule 9 is regarding the collection from registered workers of contribution to the Provident Fund, Insurance Fund or any other fund which may be constituted under the Scheme. Rule 30 deals with the obligations of registered employers. Under sub-section (5) of section 30, a registered employer shall pay to the Board, in such manner and at such times as the Board may direct, the levy payable under clause 42(i) and the gross wages due to daily workers and any other amount due to daily workers. Clause 42 deals with the cost of operating the scheme and provision for amenities and benefits to registered workers. Sub-clauses (1), (2), (3) and (4) of clause 42 read as follows :

"(1) The cost of operating this scheme and for providing different benefits, facilities and amenities to registered workers as provided in the Act and under this scheme shall be defrayed by payment made by the registered employers to the Board. Every registered employer shall pay to the Board such amount by way of levy in respect of registered workers allotted to and engaged by him as the Board may, from time to time, specify by public notice or written order to the registered employers and in such manner and at such time as the Board may direct.

(2) In determining what payments are to be made by the registered employers under sub-clause (1) the Board may fix different rates of levy for different categories of work or workers, provided that, the levy shall be so fixed that the same rate of levy will apply to all registered employers who are in like circumstances.

(3) The Board shall not sanction any levy exceeding fifty percent of the total wage bill estimated without the prior approval of the State Government.

(4) A registered employer shall on demand make a payment to the Board by way of deposit or provide such other security for the due payment of the amount referred to in sub-clause (1), as the Board may consider necessary."

Clause 43 deals with Provident Fund and Gratuity. Under this clause the Board has to frame and operate rules providing for Contributory Provident Fund for registered workers. Clause 44 provides penalties in case of contravention of the provisions of clauses 14, 30 or 31.

12. The Employees State Insurance Act, 1948, is also a piece of social security enactment. Social security is one of the fundamental needs of the day. Every one, as a member of society, has the right to social security, and is entitled to realisation, through national efforts and international co-operation and in accordance with the organisation and resources of each State of the economic, social and cultural rights indispensable for his dignity and the free development of his personality. Every citizen has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary sodal services and the right to security in the event of unemployment, sickness, disability, widowhood, old age, or other lack of livelihood or circumstances beyond his control. Social security is the security that society furnishes through appropriate organisations against certain risks to which its members are exposed. These risks are essentially contingencies against which the individual of small means cannot effectively provide by his own ability or foresight alone or even in private combination with his fellows. Realising the importance of social security to the individual/individuals of small means, this Act provides certain benefits to employees in cases of sickness, maternity, 'employment injury' and to make provisions for certain other matters in relation thereto.

Section 2(9) of the Employees State Insurance Act, defines 'Employee' and section 2(10) defines 'Exempted Employee'. Exempted employee means an employee who is not liable under this Act, to pay employee's contribution. Section 38 speaks that all employees in the factories or establishments to which this Act applies, shall be insured in the manner provided by this Act. Section 39 deals with the contribution payable by the employer in respect of an employee, as also the contribution payable by the employee.

13. Smt. Naik, the learned counsel for the appellant, referred to Chapter VIII particularly sections 87, 88 and 91-A of the Employees State Insurance Act, 1948. Section 87 deals with the exemption of a factory or establishment or class of factories or establishments from the operation of this Act. Section 87 reads as follows :-

"Exemption of a factory or establishment or class of factories or establishments :- The appropriate Government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time."

Section 88 deals with the exemption of person or class of persons employed in any factory or establishment or class of factories or establishments from the operation of this Act. Section 88 reads as under :

"Exemption of persons or class of persons :- The appropriate Government may, by notification in the Official Gazette and subject to such conditions as it may deem fit to impose, exempt any person or class of persons employed in any factory or establishment or class of factories or establishments to which this Act applies, from the operation of the Act."

Section 91 deals with the exemption from one or more provisions of the Act. It reads as under :

"Exemption from one or more provisions of the Act :- The appropriate Government may, with the consent of the Corporation, by notification in the Official Gazette, exempt any employee or class of employees in any factory or establishment or class of factories or establishments from one or more of the provisions relating to the benefit provided under this Act."

Admittedly, Shri Baburao More was the deputee of the Board under the Mathadi Act. He stands covered under the Mathadi Act and was granted registration number TWL/T/17/1 by the Mathadi Board and the bundling work done by Baburao More stands charged by levy. The said Baburao enjoyed all benefits by virtue of his being an unprotected labour under the Mathadi Act, which are also available under the E.S.I, scheme. The appellant concern had no disciplinary jurisdiction over Baburao. The said Baburao, therefore, cannot be termed or incorporated as an employee of the appellant. The appellant being paying the levy to the Board, no further contribution can be asked for, in respect of the same person viz. Baburao, from the appellant. The E.S.I. Act does not confer double benefit as claimed by the respondent by a letter dated 21-9-1979. The appellant examined Shri Mukesh Purushottam Tank, who deposed as under :

"The applicant firm is a Saw Mill and Timber Merchant. E.S.I. Scheme was applied to our industry since 27-11-1976. We have paid the contribution till 26-11-1977 regularly."

He further deposed that Shri Baburao Nagorao More was the deputee in accordance with Exh. U-13-certificate issued by the Board. The appellant concern is also registered with the Mathadi Board and paying levy to the Board. Loading, unloading, stitching and bundling work is done by the personnel of the Mathadi Board. Shri Baburao More is not their employee, but he was deputed by the Mathadi Board. The applicant firm did not exercise disciplinary jurisdiction over Baburao More. Work of bundling goes on 4 to 5 days in a month.

Besides the above evidence, he proved and exhibited various documents placed on record. In his evidence, he specifically deposed that they did not contribute any E.S.I, contribution for Baburao More. This evidence has not been rebutted by giving rebuttal evidence. Thereby it is contended that Baburao More is not the employee of the appellant.

A reliance has been placed on a case of C. E. S. C. Limited etc. vs. Subhash Chandra Bose and others, 1992 Labour Law Reporter 81 (Supreme Court), Their Lordships defined the word 'Supervision' in context of section 2(9) of E.S.I. Act, and observed as under :

"In the ordinary dictional sense "to supervise" means to direct or oversee the performance or operation of an activity and to oversee it, watch over and direct. It is a work under eye and gaze of someone who can immediately direct a corrective and tender advice. In the textual sense 'supervision' of the principal employer or his agent is on 'work' at the places envisaged and the work 'work' can neithere construed so broadly to be the final act of acceptance or rejection of work, nor so narrowly so as to be supervision at all times and at each and every step of the work. A harmonious construction alone would help carry out the purpose of the Act, which would mean moderating the two extremes. When the employee is put to work under the eye and gaze of the principal employer, or his agent, where he can be watched secretly, accidentally, or occasionally, while the work is in progress, so as to scrutinise the quality thereof and to detect faults therein, as also put to timely remedial measures by directions given, finally leading to the satisfactory completion and acceptance of the work, that would in our view be supervision for the purposes of section 2(9) of the Act. It is the consistency of vigil, the proverbial 'a stitch in time saves nine'. The standards of vigil would of course depend on the facts of each case. Now this function, the principal employer, no doubt can delegate to his agent who in the eye of law is his second self, i.e. a substitute of the principal employer. The immediate employer, instantly the electrical contractors, can by statutory compulsion never be the agent of the principal employer. If such a relationship is permitted to be established it would not only obliterate the distinction between the two, but would violate the provisions of the Act as well as the contractual principle that a contractor and a contractee cannot be the same person. The ESIC claims establishment of such agency on the terms of the contract, a relationship express or implied. But, as is evident, the creation or deduction of such relationship throws one towards the statutory scheme of keeping distinct the concept of the principal and immediate employer, because of diverse and distinct roles."

Further in para 19 of the judgment it is observed :

"Checking of work after the same is completed and supervision of work while in progress is not the same. These have different perceptions. Checking of work on its completion is an activity, the purpose of which is to finally accept or reject the work, on the touchstone of job specifications. Thereafter, if accepted, it has to be paid for. Undisputably electrical contractors had to be paid on the acceptance of the work. This step by no means is supervision exercised."

14. Exh.C-5 dated 27-4-1979 is the report of Shri V. Shrivastava, Insurance Inspector, sent to the Deputy Regional Director, Sub-Divisional Office, E.S.I. Corporation, Nagpur. In his report, he has specifically mentioned that there are no fixed timings for Shri Baburao. He has full liberty to do the work at his choice. He is doing bundling work in the factory on contract for service. He is doing bundling work in other factories also. Shri V. Shrivastava further specifically stated that since it is a marginal case having 9 employees, Shri Baburao has been considered as 10th man for coverage of the factory. It is, thus, clear from the report that even the Insurance Inspector was not sure whether Baburao will be covered as a worker or employee and thereby he is covered under the provisions of the E.S.I. Act. The Deputy Regional Director, E.S.I. Corporation, Nagpur, considered the report of the Insurance Inspector, and issued memo vide Exh. C-6, to the effect that though Shri Baburao More is working as Mathadi labour, he is working for the same factory since beginning and being paid directly by the employer and not by the Mathadi Board. He is working on the premises of the factory and is still employed for wages by the factory, he be considered as an employee of the factory for deciding the coverage of the factory. Even before the inspection note Exh. C-4 and the memo Exh. C-5, the appellant, vide its letter dated 13-8-1979, apprised the Deputy Regional Director, E.S.I. Corporation, Nagpur, that Baburao Nagorao More, is a contractor, covered under the Mathadi Act and levy being regularly paid, double coverage both under Mathadi Act and E.S.I. Act for the same person, is unjust. Since he is covered under the Mathadi Act, he is not covered under the E.S.I. Act and as such the factory remains uncovered from November, 1977 since the number of employees remains less than 10 and, therefore, no legal action or actions to recover the amount as land revenue, is called for. Exh. U-16 is the letter dated 26-2-1977 from Nagpur Timber Merchants' Association and it pertains to the levy to be paid by the employers to the Mathadi Board. Exh. U-13 is the receipt dated 31-5-1974 regarding registration of Baburao Nagorao More with the Mathadi and Unprotected Labour Board, Nagpur.

15. The Secretary of the Mathadi and Unprotected Labour Board, Nagpur, issued a letter dated 23-2-1978 to the President, Nagpur Timber Merchants' Association, Nagpur, calling upon him for discussion on the following matters :

"1. Gross wages and levy of following types of workers to be remitted directly to Board or to be deposited at the office of your Association which will be collected by the official of the Board. Workers should be given a slip on a prescribed form indicating the details of work done with date and amount of wages earned by them, so that the payment may be made to the workers on the basis of above slip immediately.

i) Four Trolies meant for loading wagons etc. (S/Shri Kuwarsingh, Sadashiv, Daulat and Parsu).

ii) Bundle binders.

iii) Log lifters.

iv) Badh Coolies.

v) Workers attached to commission agents.

vi) Workers of S. P. T. M. area".

16. Smt Naik, the learned counsel for the appellant, also placed reliance on the memo dated 24th January, 1977 issued by the Deputy Commissioner of Labour and Chairman, Mathadi and Unprotected Labour Board, Nagpur, to the Secretary, Nagpur Timber Merchants' Association, Nagpur. In this letter, it is made clear that the members of the Board applied their mind to the opinion expressed by the Deputy Regional Director I/c of Employees State Insurance Corporation, Nagpur and unanimously resolved that the workers registered with the Mathadi and Unprotected Labour Board, Nagpur, including the persons engaged in bundling of raw timber (like the work executed by Baburao More), are not permanently attached to any factory or establishment and their working hours are not fixed like the factory workers because they are called upon to perform their duty as and when there is a work otherwise they do not go to factory or establishment days together. Further, their wages are not also paid by any one employer like factory workers, because they go round the factories and establishments, and collect wages to the extent they had done the work on piece rated basis. Their employers change every week. In view of the foregoing lines, it would be evident that the nature of their work is such that they are neither employed nor work incidentally in the manufacturers process of the factory. Besides, the intermittent and irregular payment of wages involved in respect of these workers, makes the deduction of contribution, if any, practically impossible. On this basis, it is specifically made clear that E.S.I. scheme can be made applicable to those workers who are regular and borne on the muster roll of the establishment and are not registered with the Board and no levy is being received by the Board in respect of such workers.

A reliance has also been placed on the notification dated 7th May, 1979, Exh. U-11, issued by Industries, Energy and Labour Departments, Mantralaya, Bombay, in exercise of the powers conferred under section 88 read with section 91-A of the Employees State Insurance Act. By this notification, the State Government exempted all the manual workers engaged in connection with the loading, unloading, stocking, carrying, weighing, measuring, filling, stitching, sorting, cleaning or such other work including work preparatory or incidental thereto in the employments specified in the Schedule to the Maharashtra Mathadi Hamal and other Manual Workers (Regulation of Employment and Welfare) Act, 1969 and registered in the Boards set up under section 6 of the said Act, for the respective employments. If the employee is registered with Mathadi Board and is getting all benefits which are similar to those provided under the provisions of E.S.I. Act, and for that purpose the employers have to make contribution, which is recovered as levy, the demand of such additional contribution for the same benefits would be double taxation or double-punishment which is contrary to normal rule of business.

17. Shri Masodkar, the learned ceunsel for the respondent, while resisting the claim of the appellant, submitted that E.S.I. Act is the Central Act while the Mathadi Act is the State Legislation. If the benefits are accrued to the employees by the enactment of both the Acts, worker is eligible to receive the same. it is further submitted that merely because Baburao More has been deputed by Mathadi Board, he does not cease to be an employee of the appellant. Definition is more exhaustive and Baburao comes under the definition and, therefore, he is an employee. As Baburao is the employee, the appellant is liable under the provisions of E.S.I. Act, even if there may not be a contribution from him, to contribute the contribution under the provisions of E.S.I. Act. If Baburao is not said as an employee or worker of the appellant, other 9 employees will be deprived of the benefits under the provisions of E.S.I. Scheme. It is a special Act for the benefits of the workers. According to Shri Masodkar, the learned counsel for the respondent, even the casual labours, contractors are held to be the employees to attract the provisions of section 2(9) of the E.S.I. Act. A reliance has been placed on a case of Regional Director, Employees' State Insurance Corporation, Madras vs. South India Flour Mills (P.) Ltd., AIR 1986 SC 1686. In this case, Their Lordships held that the workers on construction work of additional buildings for expansion of factories, are the employees within the meaning of section 2(9) of the E.S.I. Act. In a case of Hyderabad Asbestos Cement Products Ltd. vs. Employers Insurance Court and another, AIR 1978 SC 356, Their Lordships held that an employee may be working out of the factory or outside the factory or may be employed for the administrative purpose or for purchasing of the raw material or for sale of the finished goods, but all such employees are included within the meaning of 'employee' in section 2(9) of the Act. Therefore, the persons employed in the Zonal Offices and Branch Offices of a factor)' and concerned with the administrative work or the work of canvassing sale would be covered by the provisions of the Act. In a case of The Nagpur Electric Light and Power Co. Ltd. and another vs. The Regional Director, Employees' State Insurance Corporation and another, AIR 1967 SC 1364, Their Lordships held that the benefit of the E.S.I. Act extends naturally to the employees mentioned in section 2(9)(i) whether working inside the factory or establishment or elsewhere. In a case of Royal Talkies, Hyderabad and others vs. Employees' State Insurance Corporation, AIR 1978 SC 1478, Their Lordships held that the employees of Cycle Stand and Canteen run in Cinema Theatre by the contractor, are covered by the definition of "employee" and the cinema owners are liable as principal employer for their contribution.

18. The facts in the cases relied upon by the respondent, referred supra, are altogether different than the facts in the case before me. In the instant case, Baburao was deputed by Mathadi Board to work with the appellant. He was not on the muster roll of the appellant. No fixed hours were prescribed for his work. During the working period, he was doing the work in other factories. He hardly worked 4 to 5 days during the month. Besides these facts, as Baburao More was deputed by Mathadi Board, levy was paid to the Board. However, in the cases referred supra, the worker or workers were not deputed by the Mathadi Board and none of the employers was paying any levy either to Mathadi Board or to any Government concern. Under these circumstances, as well as in view of the memo Exh. U-15 dated 24-1-1977 and notification Exh. U-11 dated 7-5-1979, the worker being exempted from the provisions of E.S.I. Act, the appellant is not liable to pay the contribution. Otherwise it will amount to penalising the concern twice and will amount to harassment. It cannot be the intention of the legislatures to impose double penalty on the factories or the establishments. To avoid this harassment, sections 87, 88 and 91 have been incorporated in Chapter VIII of the Employees State Insurance Act, regarding, exemption to the factories or establishments or persons or class of persons from the provisions of E.S.I. Act. In the result, the appeal is allowed and judgment and order passed by the Employees' Insurance Court, Nagpur, in Insurance Case No. 3/80, on 16th December, 1981, is set aside. Parties to bear their own costs.

Appeal allowed.