FAO-7912-2016 [229] Employees State Insurance Corporation M/s Shelly Nursing Home Coram : Present: PANKAJ JAIN [1] allowing the application filed by the respondent under Section 75 of the Employees State Insurance Act, setting aside the notice dated 01.03.2012 to be covered under ESI Act. [2] was claimed that the respondent is nursing hom On 13.01.2012, premises of the applicant wa notice dated 01.03.2012, the applicant is stated to have been covered as establishment 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 Doctors’ have been held to be employees of the nursing home 2016 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-7912 Date of Decision : Employees State Insurance Corporation versus M/s Shelly Nursing Home HON’BLE MR. JUSTICE PANKAJ JAIN Mr. Adarsh Malik, Advocate for the appellant. Ms. Triyyambika Rao, Advocate for the respondent. *** PANKAJ JAIN, J. (ORAL) Corporation is in appeal, impugning allowing the application filed by the respondent under Section 75 of the Employees State Insurance Act, 1948 (hereinafter referred to as ‘ESI Act’) setting aside the notice dated 01.03.2012 to be covered under ESI Act. As per the application filed under Section 75 was claimed that the respondent is nursing hom On 13.01.2012, premises of the applicant wa notice dated 01.03.2012, the applicant is stated to have been covered as 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 have been held to be employees of the nursing home IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 7912-2016 (O&M) Date of Decision : 27.02.2025 …Appellant ….Respondent PANKAJ JAIN Advocate Advocate Corporation is in appeal, impugning order dated 20.07.2016 allowing the application filed by the respondent under Section 75 of the 1948 (hereinafter referred to as ‘ESI Act’) setting aside the notice dated 01.03.2012 whereby, the respondent was held As per the application filed under Section 75 of the ESI Act was claimed that the respondent is nursing home, providing medical facility. On 13.01.2012, premises of the applicant was inspected. Vide impugned notice dated 01.03.2012, the applicant is stated to have been covered as 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 have been held to be employees of the nursing home, even though 1 order dated 20.07.2016, allowing the application filed by the respondent under Section 75 of the 1948 (hereinafter referred to as ‘ESI Act’), the respondent was held of the ESI Act, it e, providing medical facility. s inspected. Vide impugned notice dated 01.03.2012, the applicant is stated to have been covered as stablishment under the ESI Act w.e.f. 14.07.2011. It was claimed that in Consultant even though RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 they do not fall within the definition of Section 2(9) of the wages but are being paid directly [3] working with the nursing home within the definition of 75 by the same is based upon inspection of the premises. The since are working in the nursing home as they ambit of ‘employ [4] issues:- [5] apart from the violation of principl to be quashed applicant and the application filed under Section 75 Corporation was allowed. [6] 2016 (O&M) they do not fall within the definition of ‘ Section 2(9) of the ESI Act. As the ‘Consultant Doctors’ wages but are being paid directly by the patients. It has been further contended that since number of employees working with the nursing home was less than 10, the same would not fall within the definition of ‘establishment’. The application the establishment was contested by the Corporation same is based upon inspection of the premises. The since are working in the nursing home as they ambit of ‘employees’. On the basis of the pleadings, “(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. ” While returning findings on Issue No.1, apart from the violation of principles of Natural Justice, the notice deserves to be quashed, as there are only 08 regular employees working with the applicant and the ‘Consultant Doctors’ cannot be held application filed under Section 75 being challenge to the notice issued by the Corporation was allowed. Mr. Malik, counsel for the appellant ‘Employee’ as contemplated under ‘Consultant Doctors’ are not working by the patients. It has been further contended that since number of employees as less than 10, the same would not fall . The application filed under Section ment was contested by the 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 On the basis of the pleadings, the Court framed following (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 declaration as claimed? OPP. Whether the suit is not maintainable in the present form? Whether this Court has no jurisdiction to try the present suit as per Section 75(3) of The ESI Act? OPD. eturning findings on Issue No.1, the Court held that s of Natural Justice, the notice deserves are only 08 regular employees working with the cannot be held to be employees. The challenge to the notice issued by the Mr. Malik, counsel for the appellant, while assailing the 2 as contemplated under working on It has been further contended that since number of employees as less than 10, the same would not fall under Section , claiming that the ‘Consultant Doctors’ included within the Court framed following (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 Whether the suit is not maintainable in the present form? Whether this Court has no jurisdiction to try the present suit Court held that s of Natural Justice, the notice deserves are only 08 regular employees working with the to be employees. The challenge to the notice issued by the while assailing the RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 impugned order passed by establishment that 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 unde Court erred in quashing the impugned notice. [7] there is no evidence on record to show that the being paid w establishment, no effort was made to record the statements of Doctors’ to ascertain as to whether they were receiving any wages from the establishment. There being no suggestive evidence even i upon by the Corporation regarding payment of wages, Court has rightly held the ‘Consultant Doctors’ has rightly quashed notice issued by the Corporation. In order to hammerforth 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 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 [8] through the records of the case. 2016 (O&M) impugned order passed by the Court submits that establishment that the ‘Consultant Doctors’ 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 Section 2(9) of the ESI Act Court erred in quashing the impugned notice. Ms. Triyyambika Rao, counsel for the respondent there is no evidence on record to show that the being paid wages. Despite there being establishment, no effort was made to record the statements of to ascertain as to whether they were receiving any wages from the establishment. There being no suggestive evidence even i upon by the Corporation regarding payment of wages, Court has rightly held ‘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 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 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. I have heard counsel for the parties and have carefully gone he records of the case. Court submits that it is an admitted case of 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 of the ESI Act. He thus, submits that the Court erred in quashing the impugned notice. Ms. Triyyambika Rao, counsel for the respondent, submits that there is no evidence on record to show that the ‘Consultant Doctors’ were re being communication from the establishment, no effort was made to record the statements of ‘Consultant to ascertain as to whether they were receiving any wages from the establishment. There being no suggestive evidence even in the report relied upon by the Corporation regarding payment of wages, Court has rightly held not to be the employees of the establishment and has rightly quashed notice issued by the Corporation. In order to 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-I L.L.N. 584, ‘Regional Director 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 I have heard counsel for the parties and have carefully gone 3 case of the 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 . He thus, submits that the submits that were communication from the ‘Consultant to ascertain as to whether they were receiving any wages from the t relied upon by the Corporation regarding payment of wages, Court has rightly held not to be the employees of the establishment and has rightly quashed notice issued by the Corporation. In order to ‘Employees Provident Fund Organization versus The Employees Provident Fund and others’, 2011 SCC Online Ker 3822, ‘Power Tools and Appliances Company Limited 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 I have heard counsel for the parties and have carefully gone RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 [9] falls for consideration of this Court is would fall within the definition of employees or not? peruse Section 2(9) of 2016 (O&M) In the considered opinion of this Court, the primary falls for consideration of this Court is would fall within the definition of employees or not? peruse Section 2(9) of the ESI Act that defines “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 of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the pur 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 o 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 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 by the Central Government a month: Provided that an employee whose wages (excluding remuneration In the considered opinion of this Court, the primary issue that falls for consideration of this Court is “whether the Consultant Doctors would fall within the definition of employees or not?”. It will be apt to that defines ‘employees’:- “employee” means any person employed for wages in or in connection with the work of a factory or establishment to which this 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 in the factory or establishment or elsewhere; or who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or 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 and includes any person employed for wages on any work 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 engaged as apprentice, 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 any member of the Indian naval, military or air forces; or any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may bed by the Central Government a month: Provided that an employee whose wages (excluding remuneration 4 that whether the Consultant Doctors . It will be apt to “employee” means any person employed for wages in or in connection with the work of a factory or establishment to which this 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 who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of ly part of the work of the factory or establishment or which is preliminary to pose of the factory or 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 n any work connected 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 tice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), and includes such person engaged as apprentice whose training any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may Provided that an employee whose wages (excluding remuneration RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 [10] employee defined under Section 2 [11] paid by the employer in terms of the contract of employment. Question is who pays the [12] being paid not by view thereof, this Court finds that the Court has rightly held that the ‘Consultant Doctors’ establishment a establishment. 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.” A perusal of definition of ‘employee employee a person must be employed under Section 2 (22) of the ESI Act “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 respect of any period of authorized leave, lock not illegal or lay-off and other additional remunera 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 concession; (c) any sum paid to the person employed to defray special expenses entailed on him by the nature of his employment; or (d) any gratuity payable on discharge; Thus, the test for payment of wages is paid by the employer in terms of the contract of employment. Question is who pays the ‘Consultant Doctors’. In the present case, admittedly, the being paid not by the nursing home/employer 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 thus, cannot be held to be employees of the establishment. for overtime work) exceed such wages as may be prescribed by the Central Government at any time after (and not before) the beginning period, shall continue to be an employee until the employee’ would reveal that to be an a person must be employed for wages. ‘Wages’ have been of the ESI 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-out, strike which is off and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include any contribution paid by the employer to any pension fund or provident fund, or under this Act; any travelling allowance or the value of any travelling any sum paid to the person employed to defray special es entailed on him by the nature of his employment; or ty payable on discharge;” 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 In the present case, admittedly, the ‘Consultant Doctors’ /employer but by the patients directly. In view thereof, this Court finds that the Court has rightly held that the were not getting any wages from the employer nd thus, cannot be held to be employees of the 5 for overtime work) exceed such wages as may be prescribed by the Central Government at any time after (and not before) the beginning period, shall continue to be an employee until the that to be an have been “wages” means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or to an employee in out, strike which is tion, if any, paid any contribution paid by the employer to any pension fund or lling any sum paid to the person employed to defray special es entailed on him by the nature of his employment; or need to be paid by the employer in terms of the contract of employment. Question is ‘Consultant Doctors’ are but by the patients directly. In view thereof, this Court finds that the Court has rightly held that the were not getting any wages from the employer nd thus, cannot be held to be employees of the RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document FAO-7912-2016 [13] involves substantial question of law. Finding no illegality in the order passed by ESI Court, the present appeal i [14] be dismissed [15] disposed off 27.02.2025 ‘R. Sharma' 2016 (O&M) 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 no question of law. Finding no merits in the present appeal, the same is ordered to dismissed. All pending miscellaneous application(s), if any, stands disposed off. 27.02.2025 Whether speaking/ reasoned Whether reportable Section 82(2) appeal to this Court shall lie only if it involves substantial question of law. Finding no illegality in the order nvolves no question of law. Finding no merits in the present appeal, the same is ordered to All pending miscellaneous application(s), if any, stands (PANKAJ JAIN) JUDGE : Yes/No : Yes/No 6 Section 82(2) appeal to this Court shall lie only if it involves substantial question of law. Finding no illegality in the order Finding no merits in the present appeal, the same is ordered to All pending miscellaneous application(s), if any, stands RAJNEESH SHARMA 2025.03.25 18:47 I attest to the accuracy and integrity of this document