CHRISTIAN MEDICAL COLLEGE versus EMPLOYEES STATE INSURANCE CORPORATION

Citation: [2000] SUPP. 5 S.C.R. 24 · Decided: 23-11-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed

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Judgment (excerpt)

A 
CHRISTIAN MEDICAL COLLEGE 
v. 
EMPLOYEES' STATE INSURANCE CORPORATION 
NOVEMBER 23, 2000 
B 
[S. RAJENDRA BABU AND S.N. VARIAVA, JJ.] 
Employees State Insurance Act, I 948-Sections 2(12); 2(l 4AA)-,-
Department of a hospital, employing 45 persons, maintaining and repairing 
C equipments of the hospital-Whether department is governed by provisions 
of ES! Act even if hospital is not governed-Held, yes-Factories Act, 1948; 
Section 2(k). 
Appellant is a hospital, which is a part of a Medical College. It has a 
department called Equipment Maintenance Department, which maintains and 
D repairs various equipments used in the hospital. There are 45 persons 
working in the department. Respondent issued a notice to the appellant stating 
that the department fell within the purview of section 2(12) of the Employees 
State Insurance Act, 1948 (ESI Act) and that the appellant should comply with 
the provisions of the Act with retrospective effect. The appellant's 
representation, that the ESI Act would not apply to it on the ground that the 
E department was part and parcel of the appellant hospital, was rejected. The 
appellant filed a petition under section 75 of the ESI Act before the District 
Court. The District Judge allowed the petition. The respondent filed an appeal 
before the High Court, which was dismissed by Single Judge. The respondent 
then filed a Letters Patent Appeal, which was allowed. 
F 
In appeal to this Court, the appellant contended that the department is 
not independent of the appellant hospital but merely a limb of the hospital; 
and that the department cannot be considered as a factory, even though some 
process is carried on therein. 
G 
Dismissing the appeal, the Court 
HELD: I.I. As per section 2(k) of the Factories Act, 1948, amongst 
other things, if any repairing takes place with a view to use the equipment 
then it amounts to manufacturing process. It is appellant's own case that the 
Equipment Maintenance Department maintains and repairs their equipment 
H 
24 
CHRISTIAN MEDICAL COLLEGE v. E.S.I.C. [VARIAVA, J.] 
25 
for the efficient use of the equipment in the hospital. Therefore, this A 
department is clearly covered by the term "factory" under the Employees State 
Insurance Act, 1948. Once it squarely falls within this term the provisions 
of the Act become applicable to this department. 133-A-BI 
1.2. The test of dominant nature would have become applicable only if 
on the basis of this department falling within the definition of the term B 
"factory", the respondent had sought to make the appellant Hospital also 
amenable to the provisions of the ESI Act. As that is not the case here no 
question arises of applying the dominant nature test. 133-CI 
Andhra University v. R.P.F. Commissioner of A.P., 11985] 4 SCC 509 and 
Osmania University v. Regional Director, E.S.f.C., 11985] 4 SCC 514, relied C 
on. 
Bangalore Water Supply and Sewerage Boardv. Rajappa, ]1978] 2 SCC 
213; Associated Industries (P) Ltd. v. Regional Provident Fund Commissioner, 
Kera/a, Trivandrum, 11964] 2 SCR 905; The Regional Provident Fund, D 
Bombay v. Shree Krishna Metal Manufacturing Co., Bhandara, 119621 Supp. 
3 SCR 815; General Manger, Telecom v. A. Srinivasa Rao, 11997] 8 SCC 767 
and Dr. P.S.S. Sundar Rao v. Inspector of Factories, Ve/lore, (1984) II LLJ 
237, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3125of1998. E 
From the Judgment and Order dated 25.7.97 of the Madras High Court 
in L.P.A. No. 143of1995. 
Anil B. Divan, P.H. Parekh, Sanjay Mohan, E.R. Kumar, Ranvir Singh and 
Zulfikar for the Appellant. 
F 
V.J. Francis for the Respondent. 
The Judgment of the Court was delivered by 
S.N. Y ARIAV A, J. This Appeal is against an Order dated 25th July, 1997 
passed in a Letters Patent Appeal filed by the Appellant. 
G 
Briefly stated the facts are as follows: 
The Appellant is a Hospital which is part of a Medical College. The 
Appellant has a department, which is called the Equipment Maintenance 
Department. This department maintains the equipment in the hospital suc:1 as H 
26 
SLl'RlcME COURT REPORTS 12000) SUPP. 5 S.C.R. 
A X-ray, ECG and Radiation equipment, kidney dialysis, heart and lung machine, 
operating table equipment etc. In effect this department, inter alia, repairs the 
equipment which is being used in the hospital. Admittedly, in this department 
there are 45 pers9ns working. 
In 1978 the Respondent issued a notice to the Appellant stating that 
B the Equipment Maintenan

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