M S Bharat Caterers Through Its Partners Abdul Mattalib Khan vs The State Of Jharkhand Through Secretary Department Of Labour And Ors
- Court
- Jharkhand High Court
2026:JHHC:31236
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 6330 of 2015
M/s. Bharat Caterers, through one of its Partners, Abdul Mattalib Khan,
Son of Late Abdul Khalil Khan, resident of 25, Dhatkidih Market, P.O.&
P.S. Bistupur, Town Jamshedpur, District East Singhbhum, (Jharkhand)
… … Petitioner
Versus
1. The State of Jharkhand, through the Secretary, Department of Labour,
Employment and Training, Government of Jharkhand, Project Bhawan,
P.O.- Dhurwa, P.S.-Jagarnathpur, District- Ranchi (Jharkhand).
2. Employees State Insurance Corporation, through the Regional Director,
Regional Office, Employees State Insurance Corporation, P.O. & P.S.-
Namkum, District-Ranchi (Jharkhand).
3. Deputy Director, Employees State Insurance Corporation, Regional
Office, Employees State Insurance Corporation, P.O. & P.S.- Namkum,
District-Ranchi (Jharkhand).
4. Assistant Director, Employees State Insurance Corporation, Regional
Office, Employees State Insurance Corporation, P.O.& P.S.-Namkum,
District-Ranchi (Jharkhand). … … Respondents
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CORAM :HON'BLE MRS. JUSTICE ANUBHA RAWAT CHOUDHARY
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For the Petitioner : Ms. Rashmi Kumar, Advocate
For the Opp. Party : Mr. Ashutosh Anand, AAG-III
: Ms. Rishi Bharti, AC to AAG-III
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C.A.V. on 18.06.2026 Pronounced on 26.10.2026
1. This writ petition has been filed for the following reliefs: -
“(a) For issuance of appropriate writ(s)/order(s)/,
direction(s) quashing the office order as contained in
Memo No. 2446 date 12.11.2015 (Annexure 26) issued by
the respondent No. I whereby and whereunder the
application filed by the petitioner seeking exemption
under Section 88 read with 91A of the Employees’ State
Insurance Act, 1948 for the period November, 2014 to
October, 2015 has been rejected.
b) For issuance of a writ of mandamus or in nature
thereof commanding/ directing the respondents to allow the
application of the petitioner filed under Section 88 read
with Section 91A of the Employees’ State Insurance Act,
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1948 for exemption from applicability of the provisions of
the Act of 1948;
c) For issuance of an appropriate writ(s)/order(s)/
direction(s) declaring that the provisions of the ESI Act,
1948 is not applicable to the Establishment of the
petitioner- canteen; and
d) For issuance of any other relief or reliefs as Your
Lordships may deem fit and proper for which the petitioner
is very much entitled under the facts and circumstances of
the case and in the interest of justice.”
2. The learned counsel for the petitioner has submitted that the
impugned order at Annexure-26 is relating to the period November,
2014 to October, 2015 and each of the grounds for rejecting the
application for exemption from contribution to ESIC is incorrect. A
reference has been made to paragraph 47 of the writ petition wherein
grounds have been raised to challenge each of the reasons.
3. The learned counsel submits that the petitioner is a partnership
firm and a licensed contractor for the purpose of cooking and serving
diets, Nasta, meals and tea etc. to the indoor patients of Telco Hospital
and Nurses Home and to the employees of the hospital and for the
allied work at Jamshedpur. The petitioner is not a factory which may
be an establishment.
4. A reference has been made to the provision of section 1(5) of
the Employees State Insurance Act, 1948 (hereinafter referred to as
ESI Act, 1948) to submit that no notification has been issued in terms
of that section to extend the provision of ESI Act, 1948 to the
petitioner and therefore entire action of the respondent ESIC is ex-
facie without jurisdiction.
5. The learned counsel has submitted that the petitioner has been
filing petition seeking exemption before the authority from time to
time and when the petition seeking exemption was pending, one writ
petition was filed being W.P. (C) No. 351 of 2007 which was disposed
of on 02.03.2007 stating that the petitioner’s application was still
pending before the authority and the matter was remitted to the
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Secretary, Department of Labour, Employment and Training,
Government of Jharkhand, to consider the application for exemption.
Pursuant thereto, an order rejecting the application seeking exemption
was passed vide memo no. 364 dated 31.03.2009 (Annexure-15)
which was challenged before this court in W.P. (C) No. 2213 of 2009
which was disposed of vide order dated 24.11.2011 (Annexure-16)
and the matter was remitted back to the authority for passing fresh
order in accordance with law. She submits that it has been mentioned
in the writ petition that no fresh order was passed. However, the
petition seeking exemption for the period involved in this case i.e.,
November, 2014 till October, 2015 has been rejected by the impugned
order.
6. The learned counsel submits that the employees under the
petitioner are enjoying all the facilities which are available to the
employees of Tata Motors i.e., Telco Ltd. The learned counsel has
further submitted that the principal employer of the petitioner is Telco
Ltd. and since the employees are enjoying all the facilities, therefore,
exemption granted in favour of Telco Ltd. is also applicable to the
present petitioner. She has submitted that this aspect of the matter if
taken into consideration would show that the impugned order is ex-
facie perverse and cannot be sustained in the eyes of law.
7. The learned counsel for the petitioner upon a query of this
court has not been able to refer to any paragraph of this writ petition
to show that even Telco Ltd. was exempted for the period involved in
the present case.
8. The learned counsel appearing on behalf of the petitioner has
further referred to an affidavit dated 30.01.2015 as contained in
Annexure-20 and has submitted that this affidavit would show that all
the facilities are available which have been shown to be not available
to the employees of the petitioner in the impugned order.
9. The learned counsel then referred to the application filed by the
Telco Workers Union to the Principal Secretary, Department of
Labour, Employment and Training wherein they have also filed
application to grant exemption to the employees under Section 88 of
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st st
the ESI Act for the period from 1 of November, 2014 to 31 October,
2015 which is a letter dated 29.01.2015. The learned counsel submits
that the application filed by the Telco workers Union was rejected
without giving any hearing, however, the Telco Workers Union is
neither a party before this court nor the order of rejection in the
application filed by Telco Workers Union has been placed on record.
10. The learned counsel refers to Annexuure-22 which is document
relating to settlement arrived at between the management of the
petitioner and their workman engaged in the canteen located in Telco
Hospital represented by Telco Workers Union. She has submitted that
Telco Workers Union having represented before the authority with
respect to the employees of the petitioner seeking exemption for the
petitioner, the parties should have been noticed and then the order
could have been passed.
11. However, during the course of argument, the learned counsel
for the petitioner could not point out any clause in the settlement
relating to any kind of medical facilities which are prime concern of
the respondent ESIC in the present case.
12. The learned counsel appearing on behalf of the ESIC has
submitted that there is nothing on record and not even a statement that
the employees of the petitioner are the employees of Telco Ltd. and
therefore exemption, if any, granted to Telco Ltd. has no bearing in
this case. The learned counsel has referred to the counter affidavit and
has submitted that each of the grounds mentioned in paragraph 47 of
the writ petition has been specifically dealt with in the counter
affidavit in paragraph 20, 28 to 35 and have been denied and such
statements made in the writ petition is neither based on any materials
placed on record nor any such material was placed before the
authority. It is not the case of the petitioner that such materials were
placed before the authority and the same has not been considered. The
learned counsel has then referred to paragraph 8 of the counter
affidavit to submit that the petitioner is covered by Factories Act as
they are using power and under such circumstances, there is no need
for issuance of a separate notification under Section 1(5) of the ESI
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Act. He submits that the argument of the petitioner on that basis that
the entire proceeding is without jurisdiction is not sustainable in the
eyes of law. The learned counsel has also submitted that the petitioner
is now paying contribution to the ESIC with respect to those persons
who are covered under the Act.
13. The learned counsel for the petitioner does not dispute this fact
that as of now the petitioner is paying contribution to ESIC with
respect to those who are otherwise covered under the Act.
Findings of this Court
14. The impugned order dated 12.11.2015 (Annexure-26) reveals
that the application filed by the petitioner seeking exemption under
section 88 read with section 91-A of the ESI Act, 1948 for the period
November, 2014 to October, 2015 has been rejected by citing as many
as 6 reasons. Apart from challenging the impugned order on merits,
the petitioner has also sought a declaration that the provision of ESI
Act, 1948 is not applicable to the establishment of the petitioner
canteen by submitting that the petitioner is not a factory, but it is a
canteen and therefore, the provision of ESI Act, 1948 is not
automatically applicable without there being notification issued under
section 1(5) of the ESI Act, 1948. It is also their case that the
compliance of the provisions of the acts and the rules and regulations
framed thereunder at the first instance is mandatory for the factories
under section 1(4) of the ESI Act, 1948 and not for other
establishment without there being any notification under section 1(5)
of the ESI Act, 1948.
15. So far as the prayer seeking a declaration that the provision of
ESI Act, 1948 is not applicable to the petitioner is concerned, the
respondent, in their counter-affidavit, have specifically stated that it is
an admitted position that the petitioner canteen is associated with
TELCO hospital and is carrying out business of canteen for the
purposes of cooking and serving diets, Nasta, meals and tea etc. to the
indoor patients of Telco Hospital. The petitioner is using electricity
and therefore, it is covered within the definition of ‘factory’ under the
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Factories Act, 1948. Paragraphs 17 and 18 of the counter-affidavit
filed by the respondent nos. 2 to 4 are quoted as under:
“ 17. That the statements made in para 4 is misleading and
hence denied. It is stated that the petitioner establishment
carries on manufacturing activities with the aid of power
and hence is covered under the purview of the Employees
State Insurance Act, 1948.
18. That the statements made in para 7 to 13 is denied and
disputed. It is stated that the petitioner establishment
carries on manufacturing activities with the aid of power
and hence is covered under the purview of the Employees
State Insurance Act, 1948 and there is no separate
requirement of notification u/s 1(5) of the ESI Act as being
indicated by the petitioner.”
16. Sub-section (4) of section 1 of the ESI Act, 1948 is as under:
“1. Short title, extent, commencement and application. –
(1)…
(2)…
(3)…
(4) It shall apply, in the first instance, to all factories (including
factories belonging to the Government) other than seasonal
factories:
Provided that nothing contained in this sub-section shall
apply to a factory or establishment belonging to or under the
control of the Government whose employees are otherwise in
receipt of benefits substantially similar or superior to the benefits
provided under this Act.”
17. Definition of ‘factory’ as mentioned in section 2(12) of the ESI
Act, 1948 is as under:
“(12) “factory” means any premises including the precincts
thereof whereon ten or more persons are employed or were
employed on any day of the preceding twelve months, and in any
part of which a manufacturing process is being carried on or is
ordinarily so carried on, but does not include a mine subject to
the operation of the Mines Act, 1952 (35 of 1952), or a railway
running shed;”
18. Section 14-AA of the ESI Act, 1948 defines ‘Manufacturing
process’ to be the same as defined under Factories Act, 1948.
19. ‘Manufacturing process’ as defined in section 2(k) of the
Factories Act, 1948 is as under:
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“(k) “manufacturing process” means any process for—
(i) making, altering, repairing, ornamenting, finishing,
packing, oiling, washing, cleaning, breaking up,
demolishing, or otherwise treating or adapting any article or
substance with a view to its use, sale, transport, delivery or
disposal; or
(ii) pumping oil, water, sewage or any other substance; or
(iii) generating, transforming or transmitting power; or
(iv) composing types for printing, printing by letter press,
lithography, photogravure or other similar process or book
binding; or
(v) constructing, reconstructing, repairing, refitting,
finishing or breaking up ships or vessels; or
(vi) preserving or storing any article in cold storage;”
20. The conjoint reading of the aforesaid provision reveals that the
establishment of the petitioner would be covered under the definition
of ‘Factory’ as defined under the ESI Act of 1948. No rejoinder has
been filed to the counter-affidavit. In view of the admitted fact that the
petitioner establishment carries on manufacturing activity with the aid
of power, it is a factory within the meaning of Factories Act, 1948 and
hence no separate notification under section 1(5) of ESI Act, 1948 is
required to make the Factories Act applicable to the petitioner
establishment.
21. Further, the fact remains that the petitioner themselves had
applied for exemption, which has been rejected by the impugned order
(Annexure- 26). Further, as per supplementary affidavit dated
20.07.2022 filed by the petitioner, the petitioner is depositing its
contribution under the ESI Act, 1948 since 2017.
22. In the aforesaid discussions and the circumstances, the prayer of
the petitioner seeking a declaration that the establishment of the
petitioner is not covered by the ESI Act, 1948, is devoid of any merits
and such contention raised on behalf of the petitioner is hereby
rejected.
23. So far as the point regarding non-issuance of notice to the
employees through their union while considering the application
seeking exemption is concerned , this Court is of the view that the
concerned authority has considered the case of the petitioner as put
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forth before the authority to claim exemption and no adverse order has
been passed against the employees. Rather, the petition seeking
exemption has been rejected.
24. So far as the merits of challenge to the impugned order
(Annexure-26) is concerned, there are altogether 6 grounds mentioned
in the impugned order for rejection of the application seeking
st
exemption. The 1 ground is that the petitioner is getting the medical
facility only through Tata Motors hospital and they do not have any
medical infrastructure of their own nor they have any tie-ups with
st
other famous hospitals. It has also been mentioned in the 1 ground of
rejection itself that the petitioner is running a canteen in Tata Motors
hospital but the same is not a part of Tata Motors hospital and under
such circumstances, upon completion of contract of the petitioner with
Tata Motors hospital, the future of its employees will be completely
insecure/uncertain.
25. With respect to the aforesaid ground, the stand of the petitioner,
as pointed out by the learned counsel appearing on behalf of the
petitioner, is mentioned in paragraph 47(b) of the writ petition wherein
it is stated that the petitioner has been running the canteen since 1969
and further, in paragraph 47(c) of the writ petition, it has been stated
that the Act does not require the establishment to have their own
hospital and medical infrastructure. It has been asserted that the
authority has failed to appreciate that Tata Motors hospital has been
recognized to ESI Corporation as an important and credible medical
institution and the ESI Corporation itself has recognized Tata Motors
hospital as a good hospital and the petitioner is in the process of tie-up
arrangement with the said Tata Motors Hospital and has also made
arrangement with about 10/12 other big and important hospitals for
treatment of insured persons. It has further been stated by the
petitioner that the authority is more concerned of providing security of
service to the employees of the petitioner rather than looking into the
standard of medical benefits provided to them as long as they are in
service. With respect to termination of contract between the petitioner
and Tata Motors Hospital resulting in uncertainty of the future of
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employees is concerned, it has been asserted by the petitioner that in
the circumstances where the establishment is closed down, the
employment will automatically come to an end.
The respondents have filed counter affidavit and have stated that the
ESI Code was allotted to the petitioner on 24.02.2005 itself and have
rightly taken a stand that admittedly the petitioner does not have a
hospital and further, no tie up document has been brought on record to
substantiate the averments in the writ petition. It has also been
asserted that ESI Act is a Social Security legislation and caters during
and post-employment too.
The petitioner has not filed any rejoinder to the counter affidavit.
26. This Court is not satisfied with the grounds of challenge with
st
respect to 1 reason mentioned the impugned order, inasmuch as,
there is no dispute that the petitioner is a separate establishment
having a separate ESI code and no material is available on record to
show that the petitioner has any tie-up arrangement with Tata Motors
hospital, rather the petitioner has taken a specific stand that the
petitioner is in the process of tie-up arrangement with the said Tata
Motors hospital. Further, the records do not reflect as to whether Tata
Motors hospital by itself has been extended any exemption for the
period involved in this case so as to extend such benefit of exemption
to the petitioner who claims to be availing the medical facilities from
Tata Motors hospital. As per the provisions of ESI Act, 1948, the
employees stand protected and are entitled to medical benefits even
after their superannuation and therefore, in the impugned order, it has
been rightly observed that once the contract of canteen work between
the petitioner and Tata Motors hospital is over, the future of the
employees of the petitioner would be completely uncertain. The
reference to uncertain future is essentially not in relation to service
security, rather it is in relation to the medical facility post-retirement
or post termination of contract for canteen between the petitioner and
Tata Motors hospital.
nd
27. So far as the 2 reason for rejection, as mentioned in the
impugned order (Annexure-26) is concerned, it has been mentioned in
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the impugned order that the employees of the petitioner are not being
given the benefit of cashless facilities. To this, in paragraph 47(e) of
the writ petition, it has been mentioned that the treatment either at
Tata Motors hospital or in any other hospital, if so required, is made
available to the employees on cashless basis and that the employees
are not required to make any payment to the hospital providing
treatment and the cost of treatment is free to the employees. However,
in response to this statement made in paragraph 47(e) of the writ
petition, the counter-affidavit reveals that no document has been
brought on record to substantiate such averment. During the course of
hearing also, no such document could be pointed out by the petitioner
with respect to cashless facilities. It has further been stated in the writ
petition that Tata Motors hospital was granted exemption in the past
with one pre-condition that the benefit of treatment extended to the
employees at Tata Motors hospital should be cashless which is being
adhered to by Tata Motors hospital in connection with their employees
as well as the employees of the petitioner. However, no document
with respect to any kind of arrangement between the petitioner and the
Tata Motors hospital has been placed on record to substantiate the
averments made in the writ petition regarding cashless facilities.
rd
28. With respect to the 3 ground for rejection of the claim of
exemption, the impugned order reveals that the employees of the
petitioner company are entitled to only 6 days’ medical leave, but the
employees covered under the ESI Act, 1948 are entitled to 91 days of
th
medical leave. With respect to the 4 ground in the order of rejection
as contained in annexure- 26, it has been mentioned therein that no
document was produced with respect to any policy with regard to
extended sickness benefit and enhanced sickness benefit, but to the
employees covered under the ESI Act, 1948, both the benefits are
available and merely because the company has extended certain
medical benefit to two of its employees, the same cannot be taken as a
matter of policy of the petitioner.
29. It has been stated by the writ petitioner in paragraph 47(g) that
whenever required, the employer has provided considerable long
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period of leave to the employees on medical grounds and abstention
from work on false medical ground, as is prevalent in practice, results
in abstention from duty causing bottleneck in production and lowering
down productivity and production. The said ground of challenge by
the petitioner is also not acceptable. There is no specific provision for
medical leave to the employees of the petitioner equivalent to what is
provided under the ESI Act, 1948 and merely because one or the other
person has been extended long medical leave, the same does not
satisfy the requirement of law to say that the employees of the
petitioner have similar medical facilities as that of the establishments
who avail the medical facilities and medical leave under the ESI Act,
1948. This Court is of the considered view that mere extension of
certain sickness benefit to two employees on ad-hoc basis does not
satisfy the requirement of law unless the benefit which is available to
the employees covered under the ESI Act, 1948 is available to the
employees of the petitioner through a policy decision and as a matter
of right.
th
30. The 5 ground which has been assigned while passing the
impugned order as contained in annexure- 26 is that the petitioner is
not providing maternity benefit to the employees. The petitioner has
contended that since there is no female employee working in the
establishment of the petitioner, there is no need for providing for
maternity benefits. The contention of the petitioner was held to be not
acceptable as in case of future employment of a female employee, the
terms and conditions of employment would be against her.
In response to this ground for rejection of application seeking
exemption, the petitioner has simply stated that as and when a female
is employed, the benefit would be extended to female employees.
This court is of the considered view that absence of any female
employee is not an acceptable reason for not having any provision for
maternity benefits. In absence of provision of maternity benefits as a
part of terms and conditions of employment as and when a female
employee joins the petitioner, she may not be able to avail maternity
benefits as a matter of right.
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In absence of any such benefit included in the terms and conditions of
employment, it cannot be accepted that in absence of any female
employees, there is no need to have any maternity benefit under the
terms and conditions of employment.
31. Another ground which has been taken by the authority while
passing the order contained in Annexure- 26 is that the petitioner has
never been granted any such exemption earlier. The said observation
and the ground of rejection is not acceptable in view of the fact that
every period seeking exemption has to be considered on its own merits
depending upon the facilities which are available for such period.
32. Considering the totality of the facts and circumstances of this
case, this Court is of the considered view that the petitioner has not
been able to make out a case in their favour calling for any
interference in the impugned order rejecting the application seeking
exemption under the ESI Act, 1948. Consequently, the present writ
petition is hereby dismissed .
33. Pending interlocutory application, if any, is closed.
34. Interim order, if any, is vacated.
(Anubha Rawat Choudhary, J.)
Date of Judgment: 26.10.2026
Pankaj
Date of Uploading: 27.10.2026
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