Case Note & Summary
The Regional Director, Employees' State Insurance Corporation appealed against an order of the Judge, Employees' Insurance Court, Bombay dated 30th March 1992. The trial court had allowed applications filed by M/s. Reliance Corporation, an interior decorator firm, declaring that the firm was not liable to pay contribution in respect of its activities as an interior decorator. The crucial issue was whether professionals and consultants engaged by the respondent in its business of interior decorations, furnishers, and designers of industrial and household premises would be employees within Section 2(9) of the ESI Act, 1948. The High Court, after hearing both sides, held that such professionals and consultants are not employees under the Act. The court noted that the question was of importance to both parties and similarly placed persons. The appeal was allowed, setting aside the trial court's order and dismissing the applications filed by the respondent.
Headnote
A) Employees' State Insurance - Definition of Employee - Section 2(9) ESI Act, 1948 - Professionals and Consultants - The issue was whether professionals and consultants engaged by an interior decorator firm are employees under the ESI Act. The Court held that such professionals and consultants are not employees as they are not under the control and supervision of the employer in the manner required for an employer-employee relationship. (Paras 2-4)
Issue of Consideration
Whether professionals and consultants engaged by an interior decorator firm in its business of interior decorations, furnishers, and designers of industrial and household premises would be employees within the meaning of Section 2(9) of the Employees' State Insurance Act, 1948.
Final Decision
The appeal is allowed. The order of the Judge, Employees' Insurance Court, Bombay dated 30th March 1992 is set aside. The applications (ESI) No.125 of 1986 and 25 of 1987 filed by the respondent are dismissed.
Law Points
- Definition of employee under Section 2(9) of ESI Act
- 1948
- Professional consultants not employees
- Control and supervision test
- Interior decoration business
Case Details
2005 LawText (BOM) (02) 295
First Appeal No.329 of 1995
Mr. R.M. Jaykar i/by M.V. Jaykar & Co. for the appellants, Mr. S.M. Dharap for the respondent
The Regional Director, Employees' State Insurance Corporation
M/s. Reliance Corporation
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Nature of Litigation
Appeal against order of Employees' Insurance Court declaring that the respondent firm is not liable to pay ESI contribution for its interior decoration activities.
Remedy Sought
The appellant (ESI Corporation) sought to set aside the trial court's order and uphold the demand for contribution.
Filing Reason
The respondent firm filed applications before the Employees' Insurance Court seeking a declaration that it is not liable to pay contribution for professionals and consultants engaged in its interior decoration business.
Previous Decisions
The Employees' Insurance Court allowed the applications and declared that the respondent firm is not liable to pay contribution as claimed by the Corporation.
Issues
Whether professionals and consultants engaged by the respondent in its business of interior decorations, furnishers, and designers of industrial and household premises would be employees within Section 2(9) of the ESI Act, 1948?
Submissions/Arguments
Appellant argued that the professionals and consultants are employees under the ESI Act.
Respondent argued that they are not employees and thus not liable to pay contribution.
Ratio Decidendi
Professionals and consultants engaged by an interior decorator firm are not employees under Section 2(9) of the ESI Act, 1948, as they are not under the control and supervision of the employer in the manner required for an employer-employee relationship.
Judgment Excerpts
Whether the professionals and consultants engaged by the respondent in its business of interior decorations, furnishers, and designers of industrial and household premises would be the employees within of Section 2(9) of the E.S.I. Act, 1948?
Procedural History
The respondent firm filed applications (ESI) No.125 of 1986 and 25 of 1987 before the Employees' Insurance Court, Bombay, which were allowed on 30th March 1992. The Regional Director, ESI Corporation appealed to the High Court by way of First Appeal No.329 of 1995.
Acts & Sections
- Employees' State Insurance Act, 1948: Section 2(9)
