27.02.2025 Employees loyees State Insurance Corporation v. M/s Shelly Shelly Nursing Home
Case Details
FAO-7912-2016 2016 (O&M) 1 [229] IN THE HIGH COURT OF PU AT CHANDIGAR IGARH OF PUNJAB AND HARYANA FAO-7912 Date of De 7912-2016 (O&M) of Decision : 27.02.2025 Employees loyees State Insurance Corporation …Appellant versus M/s Shelly Shelly Nursing Home ….Respondent Coram : HON’BLE MR. JUSTICE PA PANKAJ JAIN Present: cate Mr. Adarsh Malik, Advocate for the appellant. Ms. Triyyambika Rao, Advoca for the respondent. dvocate *** PANKAJ J KAJ JAIN, J. (ORAL) [1] Corporation is in appeal, imp al, impugning order dated 20.07.201 7.2016, allowing th ing the application filed by the resp e respondent under Section 75 of th of the Employees loyees State Insurance Act, 1948 (her 8 (hereinafter referred to as ‘ESI Act’ I Act’), setting asid g aside the notice dated 01.03.2012 2012 whereby, the respondent was he as held to be cover covered under ESI Act. [2] As per the application filed un iled under Section 75 of the ESI Act I Act, it was claime claimed that the respondent is nursing ursing home, providing medical facilit facility. On 13.01.2 3.01.2012, premises of the applicant licant was inspected. Vide impugne pugned notice date e dated 01.03.2012, the applicant is ant is stated to have been covered a ered as establishme lishment under the ESI Act w.e.f. 14 e.f. 14.07.2011. It was claimed that that in order to ho r to hold that the nursing home is an es s an establishment even the ‘Consulta nsultant Doctors’ ha have been held to be employees o yees of the nursing home, even thoug though RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 2016 (O&M) 2 they do no do not fall within the definition of ‘ ‘Employee’ as contemplated und d under Section 2(9 on 2(9) of the ESI Act. As the ‘Consu ‘Consultant Doctors’ are not working rking on wages but a s but are being paid directly by the pat the patients. [3] It has been further contended tended that since number of employee ployees working w ing with the nursing home was less s less than 10, the same would not fa not fall within the d in the definition of ‘establishment’. T . The application filed under Sectio Section 75 by the the establishment was contested by t ed by the Corporation, claiming that th that the same is ba is based upon inspection of the prem e premises. The ‘Consultant Doctor octors’ since are w are working in the nursing home as me as they will be included within th ithin the ambit of ‘em t of ‘employees’. [4] issues:- [5] On the basis of the pleadin leadings, the Court framed followin llowing “(1) Whether the impug pugned notice and order N No. 12000607600001402/221 /221 dated 01.03.2012 is illegal. nu . null, void, arbitrary, unjustifie
Legal Reasoning
stified and unlawful and the plaintiff ntiff is entitled to declaration as as claimed? OPP. (2) Whether the suit is not not maintainable in the present form form? OPD. (3) Whether this Court has no suit s no jurisdiction to try the present suit as per Section 75(3) of Th f The ESI Act? OPD. (4) Relief. ” While returning findings on s on Issue No.1, the Court held th eld that apart from from the violation of principles of N s of Natural Justice, the notice deserve deserves to be quas quashed, as there are only 08 regu 8 regular employees working with th with the applicant an cant and the ‘Consultant Doctors’ can cannot be held to be employees. Th es. The application cation filed under Section 75 being ch challenge to the notice issued by th d by the Corporation oration was allowed. [6] RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document
Legal Reasoning
Mr. Malik, counsel for the or the appellant, while assailing th ing the FAO-7912-2016 2016 (O&M) 3 impugned o gned order passed by the Court submi submits that it is an admitted case of th se of the establishme lishment that the ‘Consultant Docto Doctors’ have been engaged by th by the establishme lishment. It has also come on record record that they are being paid by th by the patients dir nts directly and thus, they would fall w d fall within the definition of employee ployees as contemp ntemplated under Section 2(9) of the E f the ESI Act. He thus, submits that th that the Court erred t erred in quashing the impugned notic d notice. [7] Ms. Triyyambika Rao, counse counsel for the respondent, submits th its that there is no is no evidence on record to show th ow that the ‘Consultant Doctors’ we were being paid paid wages. Despite there b om re being communication from the th establishme lishment, no effort was made to reco to record the statements of ‘Consulta nsultant Doctors’ to to ascertain as to whether they w hey were receiving any wages from th rom the establishme lishment. There being no suggestive estive evidence even in the report relie t relied upon by the by the Corporation regarding paymen ayment of wages, Court has rightly he tly held the ‘Consu Consultant Doctors’ not to be the em he employees of the establishment an ent and has rightly rightly quashed notice issued by by the Corporation. In order rder to hammerfor rforth her contentions, she relies up upon ‘Employees Provident Fun t Fund Organizati nization versus The Employees Pro es Provident Fund and others’, 201 s’, 2011 SCC Onlin Online Ker 3822, ‘Power Tools and ls and Appliances Company Limite Limited versus Uni s Union of India and others’, 1995 1995-I L.L.N. 584, ‘Regional Directo irector versus Vin s Vinod’, Kerala High Court M.F t M.F.A. No.485 of 1986, decided o ided on 10.06.1991 .1991 and ‘Kuldeep Singh and othe d others versus State of Haryana an na and another’, 2 her’, 2024 SCC Online P&H 6346. [8] I have heard counsel for the or the parties and have carefully gon lly gone through the he records of the case. RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 2016 (O&M) 4 [9] In the considered opinion of t on of this Court, the primary issue th that falls for co for consideration of this Court is rt is “whether the Consultant Docto octors would fall fall within the definition of employ ployees or not?”. It will be apt e apt to peruse Sect se Section 2(9) of the ESI Act that defi at defines ‘employees’:- “Definition ‘employee’ 2(9) “employee” means any p ny person employed for wages in or or in connection with the work of a fa Act applies and a factory or establishment to which th ch this (i) who is directly employed oyed by the principal employer, on a n any work of, or incidental or prelim eliminary to or connected with the wo e work of, the factory or establishment ent, whether such work is done by t by the employee in the factory or establ stablishment or elsewhere; or (ii) who is employed by or thr r through an immediate employer, on t on the premises of the factory or establ stablishment or under the supervision sion of the principal employer or his ag s agent on work which is ordinarily pa ly part of the work of the factory or esta establishment or which is preliminary ary to the work carried on in or incide cidental to the purpose of the factory tory or establishment; or (iii) whose services are temp temporarily lent or let on hire to t to the principal employer by the per person with whom the person who whose services are so lent or let on h on hire has entered into a contract act of service; and includes any person employ ployed for wages on any work connect nected with the administration of the fa he factory or establishment or any pa y part, department or branch thereof or of or with the purchase of raw materia terials for, or the distribution or sale sale of the products of, the factory ory or establishment or any person en n engaged as apprentice, not being a ing an apprentice engaged under the A the Apprentices Act, 1961 (52 of 1961 1961), and includes such person enga period is extended to any length engaged as apprentice whose trainin gth of time but does not include aining (a) (b) any member of the Indian dian naval, military or air forces; or any person so employed whose wages empl (excludin luding remuneration for overtim rtime work) exceed such wages as m s may RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document be prescribed by the Cent entral Government a month: Provided that an employee who whose wages (excluding remuneratio ration FAO-7912-2016 2016 (O&M) 5 for overtime work) exceed such such wages as may be prescribed by t by the Central Government at any time time after (and not before) the beginnin inning of the contribution period, shall shall continue to be an employee until t til the end of that period.” [10] A perusal of definition of ‘emp employee’ would reveal that to be a to be an employee oyee a person must be employed oyed for wages. ‘Wages’ have bee ve been defined und under Section 2 (22) of the ESI Act SI Act, which reads as under:- “Section 2(22) in The Emplo mployees' State Insurance Act, 1948 “wages” means all remunerati eration paid or payable in cash to a to an employee, if the terms of the c the contract of employment, express ess or implied, were fulfilled and inclu includes any payment to an employee yee in respect of any period of author thorized leave, lock-out, strike which hich is not illegal or lay-off and other a er additional remuneration, if any, pa y, paid at intervals not exceeding two mo o months, but does not include (a) (b) (c) any contribution paid by by the employer to any pension fund und or provident fund, or under t der this Act; any travelling allowanc ance or the value of any travellin lling concession; any sum paid to the p e person employed to defray speci pecial expenses entailed on him him by the nature of his employment; o nt; or (d) any gratuity payable on d on discharge;” [11] Thus, the test for payment of w nt of wages is that the same need to b ed to be paid by the by the employer in terms of the cont e contract of employment. Question estion is who pays th pays the ‘Consultant Doctors’. [12] In the present case, admitted mittedly, the ‘Consultant Doctors’ ors’ are being paid paid not by the nursing home/employ mployer but by the patients directly. I ctly. In view there thereof, this Court finds that the t the Court has rightly held that th that the ‘Consultant sultant Doctors’ were not getting tting any wages from the employ mployer establishme lishment and thus, cannot be h be held of to be employees of the th establishme lishment. RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 2016 (O&M) 6 [13] In terms of Section 82(2) appe ) appeal to this Court shall lie only if nly if it involves su lves substantial question of law. Fi w. Finding no illegality in the ord e order passed by E d by ESI Court, the present appeal inv nvolves no question of law. [14] Finding no merits in the prese present appeal, the same is ordered dered to be dismisse smissed. [15] All pending miscellaneous neous application(s), if any, stand stands
Decision
disposed of ed off. .2025 27.02.2025 ‘R. Sharma' (PANKAJ JAIN) JUDGE Whether speaking/ reasoned Whether reportable : : Yes/No Yes/No RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document