1 S.B. CIVIL WRIT PETITION NO.8695/2008. M/S. TANTIA GENERAL HOSPITAL VS. STATE OF RAJASTHAN AND OTHERS DATE OF ORDER : 04.11.2008. HON'BLE MR. GOVIND MATHUR, J. Mr. G.R. Goyal for the petitioner. The petitioner – a partnership firm, by this petition for writ, is challenging validity of a notification dated 07.12.2006 issued by the Government of Rajasthan exercising powers conferred by sub-Section 5 of Section 1 of the Employees State Insurance Act, 1948. By the notification aforesaid, the State Government after consultation with the employees of the State Insurance Corporation and with the approval of the Central Government made application of the Employees State Insurance Act to the Medical Institutions (including corporate, joint sector, trust, charitable and private ownership hospitals, nursing homes, diagnostics centres, pathological labs) wherein 20 or more persons are employed or were employed on any day of the preceding 12 months. 2 The contention of the petitioner is that the medical institutions are neither industrial nor commercial or profit making establishments, therefore, the State Government lacks jurisdiction to issue notification under Section 1(5) of the Act of 1948 to apply provisions of it on these institutions. The Act of 1948 is a welfare legislation intended to provide for insurance in case of illness, disablement, matrimonial or employment injury. The Act at first instance is having application to all the factories belonging to government and others then seasonal industries can be applied to other establishments also by the Government as per the provisions of Section 1(5). Section 1(5) of the Act of 1948 reads as follows: “Section 1(5) – The appropriate Government may, in consultation with the corporation, and (where the appropriate Government is a State Government with the approval of the Central Government) after giving six months notice of its intention of so doing by notification in the official Gazette, extend the provisions of this Act or any of them to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise. [Provided that where the provisions of this Act have been brought into force in any part of a 3 State, the said provisions shall be extended to any such establishment or class of establishments within part, if the provisions have already been extended to similar establishment or class of establishments in another part of that State.] From reading of Section 1(5) of the Act of 1948 it is apparent that beside the primary application to factories the application of the Act may subsequently extended in part or wholly to any establishment or class of establishments. The impugned notification has been issued by the Government of Rajasthan by strength of Section 1(5) of the Act of 1948. The term “establishment” has not been defined in the Act of 1948. As such the expressions “establishment” and the “class of establishments”, “industrial”, “commercial”, “agricultural” or otherwise is required to be interpreted in consonance to the objects of the Act of 1948. The Act of 1948 provides medical benefits, sickness benefits, maternity benefits, disablement benefits and dependent benefits to the employees. The Act of 1948 provides for grant of cash benefits to the employees in recognised contingencies of sickness, maternity and employment injury. It also provides for medical benefit in kind to the employees and their families. The 4 provisions of the Act of 1948 are extended by the Government time to time, area-wise in a phased manner. The area of application and operation of the Act of 1948 is quite wide. Primarily it is having application on all factories other than the seasonal factories and it may be extended in part or wholly to any establishment or establishments or class of establishments. No exclusion is provided under the Act with regard to its application except to the member of Indian Navel, Military or Air Force or to any person employed whose wages excluding remuneration for over time work exceed such wages as may be prescribed by the Central Government. From reading of the Act of 1948 and its scheme it is quite clear that the legislature intended to have application of the Act of 1948 for grant of medical, sickness, maternity, disablement and dependent benefits to the employees at large working in factories and other establishments irrespective of their nature. It is pertinent to note that exclusion with regard to application of the Act of 1948 is given under Section 2(9) of the Act of 1948 while giving definition to term “employee”. This fact clearly shows that intention of legislature is to cover all kind of factories (except seasonal) and establishments irrespective of their nature. The exclusion is made for some employees those are the members of Armed Forces and the person having wages 5 exceeding to ceiling prescribed by the Government. According to the provisions referred above it is clear that the provisions of Employees State Insurance Act 1948 can be applied even for the establishments related to Navel, Military or Air Force but shall not apply to the members of these forces. Meaning thereby, that civil servants working in Indian Navel, Military or Air Force can also be covered under the Act of 1948. The question required to be adjudicated in view of discussion made above is as to whether medical institutions can be termed and treated as class of establishments for application of the Act of 1948. The term “industrial establishments” is defined under Section 2(ka) of the Industrial Disputes Act, 1947 which reads as under:- “2(ka) “industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then.- (a) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such 6 establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking; (b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of, such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking.” The medical activity is an industry as defined under Section 2(3) of the Industrial Disputes Act, 1947 as held by Apex Court in the case of Banglore Water Supply vs. A. Rajappa and others reported in AIR 1978 SC -548. While analysing the nature of the medical institutions like the petitioner, it was held that such institutions are discharging systematic activity organised by co-operation between employer and employees for distribution of goods and services calculated to satisfy human wants and wishes, not spiritual or religious but inclusive of material things. The institutions to those the impugned notification applies including the petitioner are certainly industrial 7 establishments and as such comes within the purview of term “Class of Establishments” as provided in Section 1(5) of the Act of 1948. The issue that whether there is any existence of carrying of business, trade or profession by the institutions like petitioner was examined by this Court in Bhopalwala Arya Higher Secondary Managing Committee, Sriganganagar vs. State of Rajasthan and others (SB Civil Writ Petition NO.2291/2005, decided on 18th May, 2005). In the case aforesaid, this Court held as follows: “The contention of the counsel for the petitioner is that to treat a body as an establishment the ingredients required to be in existence are that the body must be carrying on business, trade or profession. In my considered opinion the law laid down by Hon'ble Supreme Court in the case of Ram Kumar Misra (supra) is having no application in present controversy. In the aforesaid case the controversy was with regard to application of Minimum Wages Act, 1948 upon the Bhagalpur and Sultanganj ferries. Hon'ble Supreme Court while considering the provisions of Minimum Wages Act, 1948 and Bihar Shops and Establishments Act, 1953 held that Bhagalpur and Sultanganj ferries are establishments 8 as defined under Section 2(6) of Bihar Shops and Establishments Act, 1953. In the case of Ram Kumar Misra (supra) Hon'ble Supreme Court held that in view of State amendment under a notification dated 20.1.1979 the term “establishment” under Minimum Wages Act, 1948 has the same meaning which is assigned to it in Bihar Shops and Establishments Act, 1953. Accordingly the Court in light of definition of term “establishment” given under Bihar Shops and Commercial Establishments Act, 1953 treated Bhagalpur and Sultanganj ferries as establishments. It is pertinent to note that under Bihar Shops and Commercial Establishments Act, 1953 the term “establishment” is defined to mean an establishment which carries on any business, trade or profession or any work in connection with or exceptional or ancillary to or business, trade or profession. This is not the position in the present case, therefore, while dealing with the term “establishment” under the Act of 1948 the ingredients business, trade or profession cannot be imported. The educational institutions are certainly a class of establishments of industrial nature and, therefore, the State Government is empowered to apply the Act of 1948 as done by impugned notification. Beside the above it is also pertinent to note that the term “otherwise” in Section 1(5) of the Act of 1948 empowers the Government to include the establishments which are not even industrial, 9 commercial or agricultural. The Act of 1948 is having very large amptitude with view to provide social security to the employees. No restricted meaning as advised by the petitioner can be given to it. The ratio propounded in the case of Bhopalwala Arya Higher Secondary Managing Committee (supra) is having absolute application in present case too. In view of whatever discussed above, I do not find any merit in this petition for writ, accordingly the same is dismissed. (GOVIND MATHUR)J. Anil/