Holding

A petrol pump is a "factory" within the meaning of the Employees' State Insurance Act because pumping oil is a "manufacturing process" under Section 2(k) of the Factories Act, 1948.

Summary

The appellant, a petrol pump operator, challenged an order directing him to pay contributions under the Employees' State Insurance Act, 1948, arguing that his premises did not qualify as a "factory" within the meaning of the Act. The central issue was whether the activity of pumping petrol/diesel constituted a "manufacturing process" and whether the terms "manufacturing process" and "power" in the ESI Act should be given the same meaning as in the Factories Act, 1948. The Court examined Section 2(k) of the Factories Act, which expressly includes pumping oil as a manufacturing process, and applied the literal rule of statutory interpretation. It held that a petrol pump, by virtue of pumping oil using power, falls within the definition of a factory under Section 2(12) of the ESI Act. Consequently, the appellant was required to make the prescribed contributions, and the appeal was dismissed.

Issues considered

Whether a petrol pump is a "factory" under Section 2(12) of the Employees' State Insurance Act, 1948.
Whether the activity of pumping oil qualifies as a "manufacturing process" as defined in the Factories Act, 1948.
Whether the literal rule of interpretation applies to the definitions of "manufacturing process" and "power" in the ESI Act.

Legislation cited

Employees' State Insurance Act, 1948s. 1(4), s. 2(12), s. 2(14-AA), s. 2(15-C), s. 45-C, s. 45-G
Factories Act, 1948s. 2(k)

Subjects

Employees' State Insurance ActFactories Actfactory definitionmanufacturing processstatutory interpretationliteral rulepetrol pumpcontribution liability

Judgment

(2009] 11 S.C.R. 705

~ MIS. QAZI NOORUL H.H.H. PETROL PUMP & ANR. A
V.
DY. DIRECTOR, ESf CORPORATIO~
(Civil Appeal No. 5840 of 2004)
JULY 29, 2009
B
[MARKANDEY KATJU AND H.L. DATIU, JJ.]

Employees' State lnsilrtmce Act, 1948:
->I
ss. 1(4), 2(12), 2(14-AA), 2(15-C), 45-C and 45-G - c
'Factory' - "Manufacturing process" - "Power" - Petrol Pump
- Received order requiring it to make contribution under the
Act - Plea that Petrol Pump was not 'factory' within the
meaning of ss.1(4) 'and 2(12) of the Act - HELD: In view of
ss.2(14-AA) and 2(15-C) of the Ac):, 'manufacturing process' D
and 'power' are given the same meaning as under the
- .
,.... Factories Act - Pumping the oil is a manufacturing process
under s. 2(k) of the Factories Act - Petrol Pump does the work
of pumping the oil - Therefore, the Employees' State
Insurance Act applies to it - Claim of Petrol Pump dismis~ed
E
- Factories Act, 1948 - s.2(k) - Interpretation of Statutes -
Uteral rule of interpretation.

Interpretation of Statutes:
·~·
Literal rule of interpretation - HELD: Once the statute is F
-.l
clear, the literal rule of interpretation applies and there is no
need to go into the object and intention of statute - Language
used in s.2(k)(ii) of Factories Act is clear- Factories Act, 1948
- s.2(k)(ii).
G
Words and Phrases:
i Expression 'manufacturing process' - Occurring in s.2
_,. ~
(14-AA) of Employees' State lnsuranc& Act and s.2 (k) of
Factories Act - Connotation of
705 H
706 SUPREME COURT REPORTS [2009] 11 S.C.R.

A Word 'factory' occurring in s.2(12) of Employees' State ~
)o
Insurance Act - Connotation of.

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
5840 of 2004.

B From the Judgment & Order dated 24.1.2003 of the High
Court of Judicature at Allahabad in Civil Misc. Petition No.
53564 of 2002.

Dinesh Dwivedi, Prateek Dwivedi, Vandana Mishra
lo.
Manish Kumar, Ashutosh Kr. Sharma (for Shail Kumar Dwivedi)
c
for the' Appellants.

V.J. Francis for the Respondents.

The following Order of the Court was delivered
D
ORDER
~

1. Heard learned counsel for the parties. "'
2. This Appeal has been filed against the impugned
E judgment of the Allahabad High Court dated 24th January, 2003
passed in Civil Misc. Writ Petition No.53564 of 2002. By the
impugned judgment, the High Court has dismissed the writ
petition filed by the appellant herein.

3. The appellant is running a petrol pump (public retail
F
outlet) for dispensing petrol/diesel. He filed the aforesaid Writ ..
Petition No. 53564 of 2002 in the High Court of Allahabad
challenging an order dated 17th October, 2002 issued by the
Deputy Director, Employees State Insurance Corporation,
Regional Office, Kanpur directing the appellant to make
G contribution under the Employees' State Insurance Act, 1948
(for short 'the Act') from August, 1993 to May, 2000 and interest
on the aforesaid amount failing which recovery shall be issued
under Sections 45-C and 45-G of the Act. "
H 4. The short question in this case is whether the appellant
QAZI NOORUL H.H.H. PETROL PUMP & ANR. v. DY. 707

- ... DIRECTOR, ESI CORPORATION
is covered by the Act. Section 1(4) of the Act states that the A
Act, in the first instance, shall apply to all factories. Section
2( 12) of the Act provides:

"(12) "factory" means any premises including the precincts
thereof~
B
(a) whereon 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 er is ordinarily
so carried on, or c
(b) whereon twenty 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 without the aid of power or is ordinarily D
- "' so carried on, but does not include a mine subject to the
operation of the Mines Act, 1952 (35 of 1952) or a railway
running shed;)"

6. The expressions "manufacturing process'' as well as
"power" used in the Act have been given the same meaning E
as in the Factories Act, 1948, vide Sections 2(14-AA) and
Section 2(15-C) of the Act.

- ~
Section 2(k) of the Factories Act, 1948 defines
"manufacturing process" as follows: F
"(k) "manufacturing process" means process for-

(i) making, altering, repairing, ornamenting, finishing,
packing, oiling, washing, cleaning, breaking up,
demolishing, or otherwise treating or adapting any article G
or substance with a view to its use, sale, transport, delivery
- ~
or disposal, or

(ii) pumping oil, water, sewage or any other substance, or
H
708 SUPREME COURT REPORTS [2009] 11 S.C.R.

)f

A (iii) generating, transforming or transmitting power, or

(iv) composing types for printing, printing by letter press,
litho_graphy, photogravure or other similar process or book
binding;
B (v) constructing, reconstructing, repairing, refitting, finishing
or breaking up ships or vessels; or

(vi) preserving or storing any article in cold storage;" .
c oil is 7.also
A perusal of the aforasaid provision shows that pumping
a manufacturing process.

8. In this connection, it may be stated that the words
"manufacturing process" in different statutes have different
meanings. For instance, in the Central Excise Act, 1944, the
D word "manufacture" means bringing into existence a different
commodity, though this is not the definition of "manufacturing .. -
process" in the Factories Act, 1948. We cannot apply the
definition of "manufacturing process" in one Statute to another
Statute.
E
10. Section 2(k), sub-clause (ii) of the Factories Act, 1948
states that pumping oil is a manufacturing process. Admittedly,
the appellant does the work of pumping oil. When we go to a

F
Petrol Pump for getting petrol or diesel, the petrol or diesel is
in a tank and it does not on its own flow from the tank to the
pipe and thereafter into the vehicle, but only by means of a pump
>- -
by using power.

11. Learned counsel appearing for the appellant has
submitted that we should see the object and intention of the
G Statute. It is well settled that once the Statute is clear, the literal
Rule of Interpretation applies, and there is no need to go into )f -.
the object and intention of the Statute (vide article entitled 'A
Note on Interpretation of Statutes' by Markandey Katju, J.,
published in the Journal Section of AIR 2007 SC page 22). In
H the present case, Section 2(14-AA) of the Act states that
QAZI NOORUL H.H.H. PETROL Pl:JMP & ANR. v. DY. 709
DIRECTOR, ESI CORPORATION

"manufacturing process" shall have the meaning assigne~:f to it A
in the Factories Act, 1948. In the Factories Act, 1948, Section
2(k) of the Act includes pumping oil as a manufacturing
process.

11. In our opinion, the only rule of interpretation which 8
applies to the facts of the present case is the Literal Rule of
Interpretation, which means that we should go simply by the
.-
' wording of the Statute and nothing else and there is no scope
for applying any other Rule of Interpretation. In our opinion, the
language used in Section 2(k)(ii) of the F~ctories Act, 1948 is C
clear. Hence, the Act applies t~ the appellant and the
respondent was right in issuing notice to the appellant for
making contribution and interest thereon for the period in
question.

12. Accordingly, this appeal is dismissed. No costs. D
However, we reduce the rate of interest to 10% on the principal
amount.
'
4'
R.P. Appeal dismissed.

·,