Manufacturing process under ESI coverage includes power-assisted ironing of stitched garments, bringing tailoring firms within the notification.

Ironing stitched garments with electrical power was treated as part of the manufacturing process for extended coverage under the Employees' State Insurance Act because the expression was given wide scope and included finishing or preparing goods for delivery and commercial use, even without creation of a new product. The tailoring firms therefore fell within clause (1) of the notification. The firms were not excluded by reference to the definition of "shop" under the Andhra Pradesh Shops and Establishments Act, since that meaning could not be imported into the ESI notification. The extended ESI notification applied, the ESI Court's view was set aside, and the employees' applications were dismissed.

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Issues: (i) Whether ironing of stitched garments with the aid of power formed part of the manufacturing process so as to bring the tailoring firms within the scope of the notification issued under section 1(5) of the Employees' State Insurance Act, 1948. (ii) Whether the tailoring firms could be excluded from the notification on the ground that they were shops under the Andhra Pradesh Shops and Establishments Act, 1966.

Issue (i): Whether ironing of stitched garments with the aid of power formed part of the manufacturing process so as to bring the tailoring firms within the scope of the notification issued under section 1(5) of the Employees' State Insurance Act, 1948.

Analysis: The expression "manufacturing process" in the allied definition under the Factories Act was construed as having wide amplitude and not confined to the creation of a new product. Finishing, ornamenting, adapting or otherwise treating an article for use, sale or delivery were treated as sufficient. Ironing stitched garments with electrical power was held to improve the finished product and to be an integral step in preparing the garments for delivery and commercial use. The absence of a new commercial article did not prevent the process from being manufacturing in character.

Conclusion: Yes. Ironing of stitched garments with the aid of power formed an integral part of the manufacturing process and attracted clause (1) of the notification.

Issue (ii): Whether the tailoring firms could be excluded from the notification on the ground that they were shops under the Andhra Pradesh Shops and Establishments Act, 1966.

Analysis: The notification under the Employees' State Insurance Act was required to be read on its own terms, and the meaning of "shop" in the Shops and Establishments Act could not be imported into it. Since clause (1) of the notification was already satisfied, clause (3) dealing with other establishments was unnecessary to consider. A harmonious reading of the notification and the Act showed that the firms remained establishments covered by the extended ESI coverage.

Conclusion: No. The tailoring firms were not excluded on that basis and remained covered by clause (1) of the notification.

Final Conclusion: The extended ESI notification applied to the tailoring firms, the ESI Court's view was set aside, and the employees' applications were dismissed.

Ratio Decidendi: For purposes of extending ESI coverage, a process used to finish or prepare goods for delivery with the aid of power may itself be a manufacturing process, and a definition from another statute cannot be imported to defeat the plain scope of the ESI notification.

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