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ESI Act 1948 – Bakery – use of fridge for storage if amounts to manufacturing process of bread

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The Insurance Inspector found that the Respondent was employing 20 or more employees and using power for manufacturing process of bread from 4.10.1976.  As a result, the respondent was called upon to pay the contribution from 4.10.1976 to 11.11.1978.

The ESI Court allowed the application of the Respondent and held that usage of domestic refrigerator does not amount to usage of powers in the manufacturing process of bread / pav and therefore, not covered by the ESI Act.

Fridge is the integral part of the manufacturing process of bread.  Since fridge is used, there is power utilization in the manufacturing process.  However, storage of yeast in the fridge is only to preserve the raw material.  Fridge is not used in the manufacturing process.  Therefore, use of 165 lts fridge in a baker for yeast storage cannot be termed as “manufacturing process”.

Whether use of fridge for storage of yeast amounts to usage of power in the manufacturing process under Section 2(k) of the Factories Act?

HELD that if the power has been used for performing a task for which labour would have otherwise been required, then such a process aided by power would be relevant to determine “manufacturing process”.  The power used for storage is not for enhancement or reduction of work force.   It is also not used for fermentation of the bread /pav.   Usage of fridge, therefore, is not in aid of manufacturing process. 

Judgment dated 10,7.2024 of the Bombay High Court in First Appeal No.133 of 1999 of the Regional  Director, ESI Corporation  Vs. M/s. Pahelvi Bakery

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