Punjab-Haryana High Court
Employees State Insurance Corporation vs M/S Shelly Nursing Home on 27 February, 2025
Author: Pankaj Jain
Bench: Pankaj Jain
Neutral Citation No:=2025:PHHC:028221
1
FAO-7912-2016
2016 (O&M)
[229] IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
FAO-7912
7912-2016 (O&M)
Date of Decision : 27.02.2025
Employees State Insurance Corporation ...Appellant
versus
M/s Shelly Nursing Home ....Respondent
Coram : HON'BLE MR. JUSTICE PANKAJ JAIN
Present: Mr. Adarsh Malik, Advocate
for the appellant.
Ms. Triyyambika Rao, Advocate
for the respondent.
***
PANKAJ JAIN,
JAIN J. (ORAL)
[1] Corporation is in appeal, impugning order dated 20.07.2016, 20.07.2016 allowing the application filed by the respondent under Section 75 of the Employees State Insurance Act, 1948 (hereinafter referred to as 'ESI Act'), Act') setting aside the notice dated 01.03.2012 whereby, the respondent was held to be covered under ESI Act.
[2] As per the application filed under Section 75 of the ESI Act, Act it was claimed that the respondent is nursing hom home, e, providing medical facility.
On 13.01.2012, premises of the applicant wa wass inspected. Vide impugned notice dated 01.03.2012, the applicant is stated to have been covered as establishment stablishment under the ESI Act w.e.f. 14.07.2011. It was claimed that in order to hold that the nursing home is an establishment even the 'Consultant Consultant Doctors' have been held to be employees of the nursing home home, even though 1 of 6 ::: Downloaded on - 28-03-2025 21:38:27 ::: Neutral Citation No:=2025:PHHC:028221 2 FAO-7912-2016 2016 (O&M) they do not fall within the definition of ''Employee' as contemplated under Section 2(9) of the ESI Act. As the 'Consultant Doctors' are not working on wages but are being paid directly by the patients. [3] It has been further contended that since number of employees working with the nursing home was as less than 10, the same would not fall within the definition of 'establishment'.. The application filed under Section 75 by the establishment ment was contested by the Corporation Corporation,, claiming that the same is based upon inspection of the premises. The 'Consultant Doctors' since are working in the nursing home as they will be included within the ambit of 'employees'.
'employ [4] On the basis of the pleadings, the Court framed following issues:-
"(1) (1) Whether the impugned notice and order No. 12000607600001402/221 dated 01.03.2012 is illegal. null, void, arbitrary, unjustified and unlawful and the plaintiff is entitled to declaration as claimed? OPP. (2) Whether the suit is not maintainable in the present form?
OPD.
(3) Whether this Court has no jurisdiction to try the present suit as per Section 75(3) of The ESI Act? OPD.
(4) Relief. " [5] While returning
eturning findings on Issue No.1, the Court held that apart from the violation of principles principl s of Natural Justice, the notice deserves to be quashed, quashed as there are only 08 regular employees working with the applicant and the 'Consultant Doctors' cannot be held to be employees. The application filed under Section 75 being challenge to the notice issued by the Corporation was allowed.
[6] Mr. Malik, counsel for the appellant appellant, while assailing the 2 of 6 ::: Downloaded on - 28-03-2025 21:38:28 ::: Neutral Citation No:=2025:PHHC:028221 3 FAO-7912-2016 2016 (O&M) impugned order passed by the Court submits that it is an admitted case of the establishment that the 'Consultant Doctors' have been engaged by the establishment. It has also come on record that they are being paid by the patients directly and thus, they would fall within the definition of employees as contemplated under unde Section 2(9) of the ESI Act Act.. He thus, submits that the Court erred in quashing the impugned notice. [7] Ms. Triyyambika Rao, counsel for the respondent respondent, submits that there is no evidence on record to show that the 'Consultant Doctors' were being paid wages.
w Despite there re being communication from the establishment, no effort was made to record the statements of 'Consultant Doctors' to ascertain as to whether they were receiving any wages from the establishment. There being no suggestive evidence even iin the reportt relied upon by the Corporation regarding payment of wages, Court has rightly held the 'Consultant Doctors' not to be the employees of the establishment and has rightly quashed notice issued by the Corporation. In order to hammerforth her contentions, she relies upon 'Employees Provident Fund Organization versus The Employees Provident Fund and others', 2011 SCC Online Ker 3822, 'Power Tools and Appliances Company Limited versus Union of India and others', 1995 1995-I L.L.N. 584, 'Regional Director irector versus Vinod', Kerala High Court M.F.A. No.485 of 1986, decided on 10.06.1991 and 'Kuldeep Singh and others versus State of Haryana and another', 2024 SCC Online P&H 6346. 6346 [8] I have heard counsel for the parties and have carefully gone through the he records of the case.
3 of 6 ::: Downloaded on - 28-03-2025 21:38:28 ::: Neutral Citation No:=2025:PHHC:028221 4 FAO-7912-2016 2016 (O&M) [9] In the considered opinion of this Court, the primary issue that falls for consideration of this Court is "whether whether the Consultant Doctors would fall within the definition of employees or not?
not?".. It will be apt to peruse Section 2(9) of the ESI Act that defines 'employees':-
"Definition 'employee' 2(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and
(i) who is directly employed by the principal employer, on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinari ordinarily ly part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the pur purpose pose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;
and includes any person employed for wages oon n any work connected connect with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment or any person en engaged as apprentice, tice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), and includes such person engaged as apprentice whose training period is extended to any length of time but does not include
(a) any member of the Indian naval, military or air forces; or
(b) any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed bed by the Central Government a month:
Provided that an employee whose wages (excluding remuneration
4 of 6 ::: Downloaded on - 28-03-2025 21:38:28 ::: Neutral Citation No:=2025:PHHC:028221 5 FAO-7912-2016 2016 (O&M) for overtime work) exceed such wages as may be prescribed by the Central Government at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period."
[10] A perusal of definition of 'employee employee' would reveal that to be an employee a person must be employed for wages. 'Wages' have been defined under Section 2 (22) of the ESI Act Act, which reads as under:-
"Section 2(22) in The Employees' State Insurance Act, 1948 "wages" means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorized leave, lock lock-out, out, strike which is not illegal or lay-off off and other additional remunera remuneration, tion, if any, paid at intervals not exceeding two months, but does not include
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any trave travelling lling concession;
(c) any sum paid to the person employed to defray special expenses es entailed on him by the nature of his employment; or
(d) any gratuity ty payable on discharge;
discharge;"
[11] Thus, the test for payment of wages is that the same need to be paid by the employer in terms of the contract of employment. Question is who pays the 'Consultant Doctors'.
[12] In the present case, admittedly, the 'Consultant Doctors' are being paid not by the nursing home/employer /employer but by the patients directly. In view thereof, this Court finds that the Court has rightly held that the 'Consultant Doctors' were not getting any wages from the employer establishment and and thus, cannot be held to be employees of the establishment.
5 of 6 ::: Downloaded on - 28-03-2025 21:38:28 ::: Neutral Citation No:=2025:PHHC:028221 6 FAO-7912-2016 2016 (O&M) [13] In terms of Section 82(2) appeal to this Court shall lie only if it involves substantial question of law. Finding no illegality in the order passed by ESI Court, the present appeal involves involves no question of law.
[14] Finding no merits in the present appeal, the same is ordered to be dismissed.
dismissed [15] All pending miscellaneous application(s), if any, stands disposed off.
off (PANKAJ JAIN) JUDGE 27.02.2025 'R. Sharma' Whether speaking/ reasoned : Yes/No Whether reportable : Yes/No 6 of 6 ::: Downloaded on - 28-03-2025 21:38:28 :::