Holding

Administrative and editorial staff of the printing presses are employees under section 2(9) of the Employees' State Insurance Act, 1948, and the demand for contributions is justified.

Summary

Shri Narakesari Prakashan Ltd and Nav Samaj Ltd, printers and newspaper publishers, were served a notice to pay Employees' State Insurance (ESI) contributions for their administrative and editorial staff from 28 January 1968. They challenged liability for the period up to 19 November 1976, arguing that such staff were not "employees" under section 2(9) of the Employees' State Insurance Act, 1948 until a notification under section 1(5) extended the Act to those establishments. The Supreme Court examined the definition of "employee" and held that staff engaged in work connected with the printing presses, even if not directly involved in operating machines, fall within the meaning of section 2(9). The Court further ruled that the notification under s.1(5) was irrelevant to the definition and that the demand for contributions was justified. Consequently, the appeals were dismissed with costs.

Issues considered

Whether administrative and editorial staff of a printing press are "employees" within the meaning of section 2(9) of the Employees' State Insurance Act, 1948.
Whether the Act applies to such staff before the issuance of a notification under section 1(5).

Legislation cited

Employees' State Insurance Act, 1948s. 1(4), s. 1(5), s. 2(12), s. 2(9), s. 38, s. 39
Employees' State Insurance (Amending) Act, 1966s. 2(9)
Mines Act, 1952
Working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955

Subjects

Employees' State Insurance Actdefinition of employeeadministrative staffeditorial staffcontribution liabilitysection 2(9)section 1(5)statutory interpretationSupreme Court of India

Judgment

962

A

SHRI NARAKESARI PRAKASHAN LTD AND OTHERS
B v.

EMPLOYEES STATE INSURANCE CORPORATION ETC. ETC.
October 15, 1984
0 [A.P. SEN AND E.S; VENKATARAMIAH, JJ.]
Employee1• State Insurance Act 1948. section 2(9)-_Members of the
administrative staff and editorial staff of printing presses-.whether •Employee'.

Words and Phrases : "employee'-'any person emplo1ed for wages on any.
work connected with the administralion of the factory'-Meaning of. Emp/oyee1'
D State Insurance Act 1948, section 2(9):
'
Interpretation of Statutes-Whe'I can the provisions of an Act be controlled
. by the provisions of another Act.

The appellants in the appeals were printers and publishers of newspapers.
The Assistant Regional Director or the Employee's State Insurance Corporation
E issued a notice to the appellants on October l. 1975 c3.11ing upon them to make
contributions in respect of the ildmioistrative and editorial staff of the news..
papers, with effect from January 28, 1968 on the ground that the aforesaid
staff came within the definition of the expression 'employee' in section 2(9) of
the Employee'.s State Insurance Act 1948 as amended by the Amending Act

F
No. 44 of 1966. After the aforesaid d~mands were made, the appellants filed
applications before the Employees' State Insurance Court under section 75 of
the Act questioning the liability to make contribution.s in respect of the said
·-
employees during the period between January 28, 1968 and November 19, 1976.
They however did not dispute the~ liability in respect of the period subsequent
to November 19. 1976 on which date the notification was issued under section
1 (5) by the State Government. -These applications were contested by the
Employees' State Insurance Corporation. ·
G
The Employees' Insurance Court allowed the applications holc\ing that
until the notification under section 1(S) of the Act was issued by the State
Government making the Act applicable to the establishments of the appellants
viz. the administrative and editorial sections of the presses, the said employee~
could not be considered as 'employees' as defined by section 2(9) of t~e Act.

The Corporation thereupon filed appeals before the High Courts under
section 32 of the Act, which were allowed, holding that the employees con..
corned came within the definition given in section 2(9} a~d; therefore, the
H
S. N. PARK:ASllAN v. B.S.I. CORPN. 963
appellants Were liable to make contributions during the relevant period in A
respect of them also under the Act.

Dismissing the Appeals to this Court,

HELD : 1 An examination of the provisions of the Employees• State
Insurance Act 1948 indicates that the persons employed for wages in the
administrative section and the editorial section of each of the printing presses
are employees as defined in section 2(9) of the Act and the demand made by B
the Employees' State Insurance Corporation is a justified one. [970EJ

2. The object of the Employees' State Insurance Act, 1948 is to provide
for certain benefits to employees in case of sickness, maternity and _employment
injury and to make provisions for certain other matters in relation thereto.
Section 1(4) of the Act provides that it shall apply in the first instance, to all
factories (including factories belonging to the Government) other than seasonal c
factories. Section 1(5) of the Act, however, provides that the appropriate
Government, in consultation with the Employees' State Insurance Corporation
and where the appropriate Government is a State Government with the appro-
val of the Central Government after giving, six months' notice of its intention
of so doing by a notification in the Official Gazette, extend the provisions of the
Act or any of th.em to any other establishment or class of establishments,
industrial, commercial, agricultural or otherwise. The expression 'establish- D
ment' however was not defined in the Act. [967A~E]

3. Section 2(9) of the Act defines the expression 'employee' to mean
any person employed for wages in a factory or any person employed for wages
in connection with the work of a factory. It also means any person employed
for wages in or in connection with the work of an establishment to which the E
Act applies. [967HI
Jn the instant cases, the members of the administrative staff and of the
editorial staff in each of the printing presses have to be treated as employees
under section 2(9). They are directly employed by the management concerned
00 work incidental or preliminary or connected with the work of the factory.
The work of the factory in each case being printing and pub1ication of a news- F
paper, its work cannot be carried on without the assistance of the members of
the editorial staff who are engaged in preparing the material for printing the
newspaper and of the administrative staff which is needed for managing the
affairs of the factory. [969C-D)

Hyderabad Asbesros Cement Products Ltd. v. The Employees Insurance G
Court and Anr., [1978) 2 S.C.R. 345, Royal Talkies, Hyderabad and Ors. v.
Employees State Insurance Corp., [1979] 1 S.C.R. 80 and Nagpur Electric Light
and Power Co. Ltd. v. Regional Director Employees, State Insurance Corporation
etc., (1967] 3 S.C.R. 92, referred to.

4. The members of the editorial staff clearly fall under clause (i) of
section 2(9) of the Act. The administrative staff fall under the clause contain- H
964 SUPREME COURT REPORTS [1985] I s.c.R.
ing the words •includes any person employed for wages on any work Connected
with the administration of the factory'. [969H ; 970A]
-
5. The effect of an Act cannot be controlled by the provisions of another
Act unless the provisions in one have bearing on the provisions of the other.
[970D]

CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 3296-67
B
of 1984.

Appeals by special leave from the Judgment and Order dated
the 23rd January, 1981 of the Bombay High Court in P.A. Nos. 35
of 1978 & 139 of 1973. -
J B.Kanta Rao and Vijay Phadke for the Appellants.
Abdul Khader and R.N. Poddar for the Respondent.
The Judgment of the Court was delivered by
VENKATARAMlAN, J. Shri Navakesari Prakashan Ltd. and Nav
Samaj Ltd., Nagpur are the appellants in the above two appeals by
) special leave filed under Article 136 of the Constitution. The appel-
lants respectively are printers and publishers of newspapers known
as 'Tarun Bharat' and 'Nagpur Times'. Their case is that their emp-
loyees working for wages in the administrative and editorial sections
of their respective concerns were not 'employees' as defined in sec-
tion 2 (9) of the Employees' State Insurance Act, 1948 (hereinafter
referred to as 'the Act') prior to November 19, 1976 on which date
by a notification issued under s. 1 (5) of the Act the Govornment of
the State of Maharashtra made the Act applicable to the said em-
ployees also and that therefore they were not liable to make any
contributions under the Act in respect of the employees up to that
date. They however admit their liability to make contributions
during that period in respect of persons employed by them for w_ages
in the printing presses belonging to them.

The dispute regarding the liability of the appellants to make
contributions under the Act in respect of the members of the adminis-
trative and editorial staff arose on the Assistant Regional Director
of the Employees' State Insurance Corporation calling upon them by
notice issued on October 1, 1975 to make contributions in respect
of the said members also with effect from January 28, 1968 on which
date the amended definition of the expression 'employee', in section
2 (9) of the Act as per the Amending Act No. 44 of 1966 came into
force. After the above demands were made, the appellants filed
S.N. PARKASHAN v. E.S.I. CORPN (Venkataramiah, J.) 965

applications before the Employees' Insurance Court, Nagpur under
A
section 75 of the Act questioning their liability to make contributions
in respect of their employees working in the administrative and
editorial sections of their presses during the period between January
28, 1968 and November 19, 1976. They, however, did not dispute
their liability in respect of the period subsequent to November 19,
1976 on which date the notification was issued under section I (5) of
the Act by the Maharashtra State Goverment. The applications B
were contested by the Employees' State Insurance Corporation. The
Employees Insurance Conrt allowed the applications holding that
until the notification under section (5) of the Act was issued by the
State Government making the Act applicable to the establishments
of the appellants viz. the administrative and editorial sections of their
presses, the employees working in those sections could not be con- c
sidered as 'employees' as defined,by section 2(9) of the Act. Aggriev-
ed by the judgment of the Employees' Insurance Court, the
Employees' State Insurance Corporation filed appeals before the
High Court of Bombay under section 82!of the Act. The High Court
allowed the said appeals holding that the employees concerned came
D
within the definition given in section 2 (9) of the Act and, therefore
the appellants were liable to make contributions during the relevent
period in respect of them also under the Act. The appellants have
filed these appeals against thd judgment of the High Court.

Before dealing with the contentions raised by the appellants, E
it has to be stated that the members of the administrative staff and
the editorial staff of each of the printing presses are employed by the
management concerned for the purpose of carrying on the business
of printing .and publishing the newspaper brought out by it. The
correctness of this finding of fact recorded to the above effect by the F
High Court is not assailed before us. The main contention of the
appellants however is that. since during the relevant period they had
maintained a distinction between the factory sections of their prin-
ting presses and the establishment sections which included the admi·
nistrative and editorial sections of their presses, the employees in
the establishment sections could not be treated as employees to G
whom the Act was applicable until the notification issued under
- section I (5) of the Act expressly brought the said establishment
sections also within the scope of the Act.
Section 2 (9) of the Act which defines the expression 'employee'
during the period in question read thus : ff
966 SUPREME COURT REPORTS [1985] 1 s.c.R.

A "2(9)" employee" means any person employed for
wages in or in connection with the work of a factory or esta.
blishment to which this Act applies and-

(i} who is directly employed by the principal employer on
any work of, or incidental or preliminari to or conec-
B ted with the work of, the factory or establishment
whether such work is done by the 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
c 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
D (iii) whose service are temporarily lent or let on hire to
the princapal employer by the person with whom the
person whose services are so lent or let on hire has
entered into a contract of senvice; and includes any
pers.on employed for wages on any work connected
with the administration of the factory or establishment
E or any part, department or branch thereof or with
the purchase of zaw materials for, or the distribution
or sale of the products of, the factory or establishment;
but does not include-
' Indian naval, military or air forces;
.-
(a) any member of the
F or.
(b) any person so employed whose wages excluding
remuneration for overtime work exceed five hundred
rupees a month:
Provided that an employee whose wages excluding
G
remuneration for overtime work exceed five hundred rupees
a month at any time after and not before the beginning of
the contribution period, shall continue to be an employee
until the end of that period."
The object of the ;\ct is to provide for certain benents to
S.N. PARKASHAN v. B.S.I. CORPN. (Venkataramiah, J.) 967

employees in case of sickness, maternity and employment injury and A
to make provisions for certain other matters in relation thereto.
Section 1(4) of the Act provides that it shall apply, in the first
instance, to all factories (including factories belonging to the
Government) other than seasonal factories. The expression 'factory'
is defined by section 2 (12) of the Act as any premises including the
precincts thereof whereon twenty or more persons are employed or B
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 is ordinarily so carried on but does not
include a mine subject to the operation of the Mines Act, 1952 or a
railway rnnning shed. It is admitted, as mentioned earlier, that the
printing presses owned by the managements where the newspapers are
c
~;
printed and published are factories and are governed by the Act.
Section I (5) of the Act, however, provides that the appropriate
Government, in COJlSUltation with the Employees' State Insurance
Corporation and where the appropriate Government is a State
I Government with the approval of the Central Government after D
giving six months' notice of its intention of so doing by notification
in the Official Gazette, extend the provisions of the Act or any
of them, to any other establishment or class of establishments,
industrial, commercial, agricultural or otherwise. Jte expression
'establishment' is not defined in the Act. lt may be any industrial,
commercial, agricultural or any other establishment where employees E
are engaged in connection with the business lof the establishment.
Section 38 of the Act provides that subject to the provisions of the
-.
-~
Act, all employees in factories or establishments to which the Act
applies shall be insured in the manner provided by the Act. Sec-
tion 39 of the Act states that the contribution payable nnder it shall
(I
comprise contribution payable by the employer and contribution
payable by the employee. The contributions have to be paid at the
rates specified in the First Schedule to the Act except where the
employees concerned are excluded from some of the benifits under
the Act in which case the Corporation is authorised to fix the
rates of the contributions~ G

Now reverting to section 2 (9) of the Act it is seen that the
expression 'employee' means any person employed for wages in a
factory or any person employed for wages in connection with the
work of a factory, it also means any person employed for wages
in or in connection with the work of an establishment to which the q
968 SUPREMo COURT REPORTS (1985] l s.c.R.

A Act applies. If it is held in these cases that the employees in the
administrative or editorial sections of the printing presses are
employed in connection with the work of the printing presses which
are admittedly factories, then they have to be treated as employees
under section 2 (9) of the Act even though no notification is issued
under section 1 (5) of the Act making the Act applicable to those
B sections. The fact that such a notificaton has been issued, either as
a matter of abudant caution or on a wrong understanding of the
true implication of the definition in section 2 (9), becomes irrelevant.
The members of the administrative and editorial staff of the appel-
lants are no doubt not working in the printing presses. But the
c question is whether they are not working in connection with the
work of the printing presses which are factories under section 2 (12)
of the Act. •
In Royal Talkies, Aydraboe & Ors. v. Employees Stm;
Insurance Corp. (1) employees working in a canteen and at the
D cycle stand attached to a cinema theatre were held to be \
persons employed in connection with the work of the cinema
theatto. The Court, however, observed that merely being employed
in connectioJ! with the work of a factory or of an establishment in
itself did nl!t entitle a person to be an employee but it must be
proved that he was not only employed in connection with the work
F of the establishment but also be shown to be employed in one or
other of the three categories mentioned in section 2 (9) of the Act.

At this stage, two decisions of this Court are required to be
considered. In Hydmbad Asbsets Cement Products Ltd. v. The
F Employees Insurance Court & Anr(I) the appellant company which
had a factory at Sanatnagar where it was manufacturing asbestos •
sheets contenned that the emloyees working in its zonal offices
situated at various other places who were doing the work of canvas-
sing for the sale of produets manufactured by it at Sanatnagar were
not employees within the definition of section 2 (9) of the Act as the
G zonal offices were establishments and not factories. Negativing the
above contention, this Court held that any person employed for
wages in the zonal offices for the purpose of purchase of raw mate-
rials or distribution or sale of the produets of the factory or for

(!) [1979] I S.C.R. 80.
JI (2) [1978] 2 S.<;:.R. 34S,
N.S. PARKASHAN v. B.S.I. CORPN. (Venkataramfah, J.) 969
adminiStrative purposes of the factory was a person employed in
connection with the worker~ofthe factory and hence was an employee A
as defined by section 2 (9) of the Act. The Court in reaching the
conclusion also relied on the amendent of section 2 (9) of the Act
by Act No. 44 of 1966 which provided that the exprssion 'employee'
included 'any person employed for wages on any work connected
with the administration of the factory'. · B
When the present appeals are considered in the light of the
above decisions, the members of the administrative staff and of the
editorial staff in each of the printing presses in question have to be
treated as employees under section 2(9) of the Act. These persons
are directly employed by the management conco.rned on work c
incidental or preliminary or connected with the work of the factory.
The work of the factory in each case being printing and publication
of a newspaper, its work cannot be carried on without the assistance
of the members of the editorial staff who are engeged in preparing
the material for printing the newspaper and of the administrative
staff which is neeMd for managing the affairs of the factory. It is a D
matter of common knowledge that the members of the editorial
staff work almost round the clock at the premises where the printing
press is situated or at the precincts thereof. Their principal job' is to
pick up and select from out of the mass of information which flows
in to the press, messages which have news value, trim them and
make them fit for communication through newspaper. Even though £
they may not be actually engaged in!operating the printing machines,
their presence at the spot is essential right upto the moment the
'strike order' is given for the printing of the newspaper. There are
cases where changes in the matter to be printed are effected even a
few minutes before the process of printing is begun and cases where
' even after a few copies of newspaper are printed, they are withheld
and destroyed on the last minute advice of a responsible members of
the editorial staff are not unknown. The editors, news editors, sub-
editors, reporters etc. who constitute the editorial staff at the press
are the collectively referred to as the gate keepers' of news because
they determine what should be published and what. should not be G
published. A printing press established for the purpose of publishing
a newspaper cannot effectively function at all without the services of
the members of the editorial staff being made available almost till
the time the newspaper comes out of the printing machine. They
virtually constitute an integral part of the newspaper press and they
are employed in connection with the work done at the printing
press. The members of the editorial staff clearly fall under clause (i) ff
970 SUPREME COURT REPORTS . (1985] 1 S.C.R.
'
of section 2(9) of the Act. It is so even in the case of the administra·
A
tiy_e staff. They fall under the clause containing ihe words includes
a!'y person employed for wages on any work connected with ihe ad-.
ministration of the 'factory', It may be stated here that even without
the amendment made by Act No. 44 of 1966 this Court in Nagpur
Electric Light & Power Co. Ltd. v. Regional Director Employee.• State
B . insurance Corporation etc. (1)had taken the view that the clerical staff
etc. of a factory whether they worked within the factory or outside·
its premises would be employees under section 2(9) of the Act as it
stood before its amendment.

. · The argument that since a person mainly employed in a mana-
c. ;. g'erial or administrative capacity cannot be treated as a working
journalist under section 2(9) of the Working Journalists (Conditions
of Service) arid Miscellaneous Provisions Act, 1955, the members
employed in the administrative staff should not . be treated as
employees in a printing press is an extremenly Jenuous argument and.
it is not worth probing further. The effect of on Act cannot be
D; controlled by the provisions of another Act unless the provisions ill
· oni: have bearing on the provisions of the. other. No such provision
is brought· to· our notice. The contention that since the Act is not
expressly made applicable to newspaper establishments by the
Working Journalists (Conditions of Se1vice) Miscellaneous Provisions
Act. 1955, as it has made certain laws applicable by sections 3, 14
F and 15 thereof, the Act should not be applied to the editorial staff
has. also no merit. We are satisfied that section 2(9) of the Act
clearly.brings'them witWn the scope of the Act.

. On an
examination of the provisions. of the Act, we are of the
E view that the, persons employed for wages in the administrative
section and the editorial iiection of e~ch of the printing presses in
question are employees as defined in section 2(9) of the Act and the
demand made by the Employees' State Insurance Corporation is a
justified one,, . ·.·
G In .the result the appeals fail and they are dismissed with
costs. ·

l ,- .

N,V.K. Appeals dismissed.
H (I) · [1967] 3S.C.R. 92

'