Kerala High Court
The Recovery Officer vs Dr. Sunny Joseph on 31 October, 2025
WA Nos.325 & 358/2023 1
2025:KER:81976
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 31ST DAY OF OCTOBER 2025 / 9TH KARTHIKA, 1947
WA NO.358 OF 2023
ARISING OUT OF THE JUDGMENT DATED 01.11.2022 IN WP(C)
NO.15366/2022 OF HIGH COURT OF KERALA
APPELLANT/RESPONDENT IN W.P(C):
THE DEPUTY DIRECTOR,
EMPLOYEES' STATE INSURANCE CORPORATION (ESIC),
SUB REGIONAL OFFICE, PANCHDEEP BHAVAN,
ASRAMAM, KOLLAM, PIN - 691002
BY ADVS.
SRI.ADARSH KUMAR
SRI.SHASHANK DEVAN
RESPONDENTS/PETITIONERS IN WP(C):
1 DR.SUNNY JOSEPH,
AGED 63 YEARS
S/O.CHACKO JOSEPH, THE PROPRIETOR/PARTNER,
ST. GREGORIOUS MEMORIAL THEKKEDATHU HOSPITAL,
PATHANAPURAM P.O., KOLLAM DISTRICT,
RESIDING AT THEKKEDATHU HOUSE, PATHANAPURAM P.O.,
KOLLAM DISTRICT, PIN - 689695
2 DR.LEENA SUNNY JOSEPH,
AGED 61 YEARS
W/O.DR.SUNNY JOSEPH, PARTNER, ST. GREGORIOUS
MEMORIAL THEKKEDATHU HOSPITAL, PATHANAPURAM P.O.,
KOLLAM- 689695, RESIDING AT THEKKEDATHU HOUSE,
PATHANAPURAM P.O., KOLLAM DISTRICT-689695
WA Nos.325 & 358/2023 2
2025:KER:81976
BY ADVS.
SRI.R.NIKHIL, R1 & R2
SMT.K.K.NESNA
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
20.08.2025, ALONG WITH WA.325/2023, THE COURT ON 31.10.2025
DELIVERED THE FOLLOWING:
WA Nos.325 & 358/2023 3
2025:KER:81976
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 31ST DAY OF OCTOBER 2025 / 9TH KARTHIKA, 1947
WA NO.325 OF 2023
ARISING OUT OF THE JUDGMENT DATED 01.11.2022 IN WP(C)
NO.14819/2022 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENT NOS.1 & 2:
1 THE RECOVERY OFFICER,
EMPLOYEES' STATE INSURANCE CORPORATION (ESIC),
SUB REGIONAL OFFICE, PANCHDEEP BHAVAN,
ASRAMAM, KOLLAM, PIN - 691002
2 THE DEPUTY DIRECTOR,
EMPLOYEES' STATE INSURANCE CORPORATION (ESIC),
SUB REGIONAL OFFICE, PANCHDEEP BHAVAN,
ASRAMAM, KOLLAM, PIN - 691002
BY ADVS.
SRI.ADARSH KUMAR
SRI.SHASHANK DEVAN
RESPONDENTS/PETITIONERS:
1 DR.SUNNY JOSEPH,
AGED 63 YEARS
S/O.CHACKO JOSEPH, THE PROPRIETOR, THEKKEDATHU
HOSPITAL, PATHANAPURAM P.O., KOLLAM DISTRICT,
RESIDING AT THEKKEDATHU HOUSE, PATHANAPURAM P.O.,
KOLLAM DISTRICT, PIN - 689695
WA Nos.325 & 358/2023 4
2025:KER:81976
2 DR.LEENA SUNNY JOSEPH,
AGED 61 YEARS, W/O.DR.SUNNY JOSEPH, PARTNER,
ST.GREGORIOUS MEMORIAL THEKKEDATHU HOSPITAL,
PATHANAPURAM P.O., KOLLAM- 689695,
RESIDING AT THEKKEDATHU HOUSE,
PATHANAPURAM P.O., KOLLAM DISTRICT 689 695.
BY ADVS.
SRI.R.NIKHIL, R1 & R2
SMT.K.K.NESNA
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
20.08.2025, ALONG WITH WA.358/2023, THE COURT ON 31.10.2025
DELIVERED THE FOLLOWING:
WA Nos.325 & 358/2023 5
2025:KER:81976
JUDGMENT
Dated this the 31st day of October, 2025 Syam Kumar V.M., J.
These appeals are filed by the Employees' State Insurance Corporation (ESIC), challenging a common judgment dated 01.11.2022 of the learned Single Judge disposing of W.P.(C) No.14819 of 2022 and W.P.(C) No.15366 of 2022.
2. The subject matter in dispute concerns the ESI coverage of a private nursing home viz., St. Gregorious Memorial Thekkedath Hospital, Pathanapuram P.O., Kollam, run by the respondents, who are a doctor couple. The ESI Corporation had issued a notice to the establishment under Section 40 read with Section 39 of the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the ESI Act') demanding an amount of Rs.3,76,035/- towards contribution for the period from September 2016 to October 2021. The respondents contended that their establishment is not covered under the ESI Act since the employees working therein are fewer than the statutorily required number of 10. To substantiate the same, the respondents had produced before the concerned officer of WA Nos.325 & 358/2023 6 2025:KER:81976 the ESI Corporation the attendance register, wages register, labour registration certificate, with application forms for the relevant period. During the hearing afforded, the relevant aspects to prove that the establishment does not fall within the cover had also been apprised. However, without a proper appreciation of the documents produced and on an incorrect appreciation of the dispute raised, the ESIC had issued the orders, which were impugned in both W.P.(C)s.
3. The learned Single Judge, after hearing the parties, disposed of the Writ Petitions inter alia quashing both the orders issued by the ESIC, holding that there had been prima facie non- compliance of the principles of natural justice and the orders impugned were not legally sustainable. Aggrieved by the said judgment of the learned Single Judge, ESIC has filed these Writ Appeals.
4. We heard Sri.Adarsh Kumar, Advocate on behalf of the appellant Corporation and Sri.R.Nikhil, Advocate, on behalf of respondents 1 and 2.
5. It is submitted by the learned counsel for the appellant that the learned Single Judge had erred in rendering the impugned WA Nos.325 & 358/2023 7 2025:KER:81976 judgment quashing the orders issued by the ESIC. The said orders had been issued strictly in accordance with law and were sustainable. It is contended that, as per Section 1(6) of the ESI Act once an establishment is brought under the coverage of ESI Act and its schemes, then the said establishment shall continue to be governed by the said Act, notwithstanding whether the number of persons employed falls below the limit prescribed by the Act at any time. It is contended that the respondents had filed I.C.No.14 of 2014 before the Employees Insurance Court, Kollam, challenging the notice issued by the ESI Corporation directing implementation of the ESI Act with respect to the establishment as well as to register the said establishment under the Act. The same had been dismissed for default. The order so rendered had been produced as Ext.R1(B) along with the counter affidavit. Insofar as the said I.C. had been dismissed, the coverage of the said establishment under the ESI Act had become settled in favour of the ESI Act, and the coverage has become final. The said aspect was not considered at all by the learned Single Judge. Reliance is placed on the dictum laid down in Employees State Insurance Corporation v. Hotel Kalpaka WA Nos.325 & 358/2023 8 2025:KER:81976 International (AIR 1993 SC 1530) to contend that if the establishment is a notified industry and in the establishment more than 20 employees were working at the relevant time, the same would fall within the purview of the Act. Reliance is also placed on the dictum laid down by the Supreme Court in Employees' State Insurance Corporation v. F. Fibre Bangalore (P) Ltd. (AIR 1997 SC 2441), wherein it had been held that the authorities of the ESIC under Section 45A of the ESI Act are empowered to carry out best judgment assessment with respect to contribution amounts due to be paid by the concerned employer. It is further contended that the learned Single Judge erred in arriving at a finding that, on a bare perusal of the wages register, it could be prima facie established that the respondents' establishment did not have workers more than 9 in number. The said finding had been arrived at by overlooking the preliminary survey conducted by the Social Security Officer, who had found that 10 persons were employed in the establishment on 01.04.2013.
6. As regards the names of the respondents who are doctors as well as owners of the establishment, it is contended by the WA Nos.325 & 358/2023 9 2025:KER:81976 learned counsel for ESIC that since they had been drawing a monthly salary of Rs.40,000/- their names also ought to have been included in the wage register, thus making the total number of persons employed in the establishment as on 01.04.2013 above the requisite statutorily ordained number of 10. The Social Security Officer had recommended the coverage of the establishment under the ESI Act based on real facts. The learned Single Judge had overlooked the said aspect. It is further contended that the issue as to the coverage and number of employees employed under the respondents' establishment is a matter involving disputed questions of fact which require evidence and proof to be adduced. The learned Single Judge thus erred in setting aside the orders issued by the ESIC without any legal backing or factual basis. It is thus prayed that the Writ Appeals may be allowed and judgment of the learned Single Judge may be set aside.
7. Per contra, the learned counsel appearing for respondents 1 and 2 submitted that the judgment rendered by the learned Single Judge is valid and proper and the same does not require any interference. It is submitted that the learned Single Judge had, after WA Nos.325 & 358/2023 10 2025:KER:81976 a correct appreciation of Section 1 (5) and 1(6) of the ESI Act, 1948, validly concluded that Ext.R1(A) communication dated 13.09.2013 cannot be equated with the expression 'notification' referred to in the said provisions. The finding arrived at by the learned Single Judge, that in the absence of any notification, a mere communication and allotment of the code cannot bring any establishment under the purview of the ESI Act, 1948, thus making it liable to make contributions under the Act, is valid and correct. It is submitted that the establishment of the respondents is not covered under the ESI Act since the number of persons employed in the establishment in the year 2013 to 2021 was less than 10 in number, thus placing the establishment beyond the purview of Section 2 (12) of the ESI Act. Even though the respondents had submitted Ext.P3 and Ext.P4 statements of objection and Ext.P5 documents in pursuance of Ext.P1 and Ext.P2 notices (produced in W.P.(C)No.15366 of 2022), the same had not been considered and appreciated before issuing Ext.P6 order. There was no effective opportunity of being heard afforded by the ESIC and the learned Single Judge had rightly concluded that Ext.P3 and Ext.P6 produced in the relevant W.P.(C)s WA Nos.325 & 358/2023 11 2025:KER:81976 are not legally sustainable. It is submitted that the learned Single Judge had, after taking note of the wage register, concluded that the respondents did not have more than 9 workers and that the said conclusion arrived at is valid. It is thus prayed that the Writ Appeals may be dismissed.
8. We have heard both sides and have considered the contentions put forth. The judgment of the learned Single Judge has been challenged mainly on three counts. Firstly, it is contented that the finding of the learned Single Judge that no notification as envisaged under Sections 1 (5) and 1 (6) of the 1948 Act had been issued is incorrect insofar as Annexure A1 notification dated 28.06.2011 bearing GO ( P) No.76/2011/LBR had been published in the Gazette dated 07.07.2011 bearing No. 1324 Vol. LVI and thus the statutory mandates have been complied with. The said notification had included medical institutions within the ambit and cover of the ESI Act of 1948. Secondly, as regards the coverability of the respondents' establishment, the same has been settled by Annexure R1 (B), which is the order dated 19.11.2021 of the ESI Court, Kollam. The said order has become final, and hence the WA Nos.325 & 358/2023 12 2025:KER:81976 contentions put forth by the respondents are unsustainable. Thirdly, though Ext.P3 order, which is challenged in W.P.(C) No.14819 of 2022 is dated 15.02.2017, the Writ Petition had only been filed in the year 2022. Thus, there has been an inordinate delay disentitling the respondents from any reliefs.
9. We find merit in the contention that Annexure A1 notification dated 28.06.2011 covers the class of establishments to which the respondents' establishment falls. Annexure A1 dated 28.06.2011 in its schedule mentions as (viii), "Medical Institutions (including corporate, joint sector, trust, charitable and private ownership hospitals, diagnostic centres, pathological labs). This notification had not been produced before the learned Single Judge and the same had apparently led the learned Judge to conclude that in the absence of notification, simple communication and allotment of the code cannot bring any establishment under the purview of the ESI Act making it liable to make contributions. Since the notification has now been produced, albeit late, at the appellate stage, the finding that there had been no notification and the other conclusions arrived at in the impugned judgments basing on the absence of WA Nos.325 & 358/2023 13 2025:KER:81976 notification, cannot be sustained. As regards the finding arrived at by the learned Single Judge, basing on the wage register that it has been prima facie established that the establishment did not have workers more than nine in number, we note that such questions are essentially questions of fact which needs to be decided by the jurisdictional EI Court constituted under Section 74 of the ESI Act in due proceedings under the relevant provision of the Act. Section 75 of the ESI Act stipulates that the EI courts have the jurisdiction to decide disputes regarding contributions, benefits, and other dues between a person and the ESI Corporation, an employer and the Corporation, or between employers and employees. The EI Courts have thus been established with exclusive jurisdiction over such matters and also possess the jurisdiction to decide on other matters under the Act. We note from Ext.R1(B) order of the EI Court dated 19.11.2021 that the earlier proceedings initiated before the EI Court had been dismissed on default. Having found that the relevant establishment is covered by the ESI Act, we deem it fit and proper to relegate all matters which require factual appreciation including the question regarding number of employees based on wage register WA Nos.325 & 358/2023 14 2025:KER:81976 and other documents to the jurisdictional EI Court, so as to enable a fresh assessment on merits.
10. In view of the above, we hold that Annexure A1 notification dated 28.06.2011 covers the class of establishments to which the respondents' establishment falls. As regards all other questions including whether the relevant establishment had workers more than nine in number during the relevant time, we relegate the matter to the jurisdictional EI Court, to be decided on merits as per the law. All questions are left open.
Writ Appeals are disposed as above.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI JUDGE Sd/-
SYAM KUMAR V.M. JUDGE csl WA Nos.325 & 358/2023 15 2025:KER:81976 APPENDIX OF WA 358/2023 PETITIONER ANNEXURES Annexure A1 A TRUE COPY OF NOTIFICATION DATED 28-06-2011 ISSUED BY THE GOVERNMENT OF KERALA