Allowed

M/s. M. Bhaskar Rao and Co., v. Inspector, employees State Insurance Corporation

Telangana HC5 Feb 2025WP/21607/2010

Case brief

AI extract

What is this about?

High Court held that absent a Government notification, a Chartered Accountancy firm is not covered under the ESI Act. Mandamus issued prohibiting coercive measures to obtain registration.

What did the court decide?

Writ of Mandamus issued declaring petitioner not covered; direction to respondents not to take coercive steps for registration or raising demands.

M/s. M. Bhaskar Rao and Co., Vs Inspector… — Pension and Retirement Benefits | Telangana HC (2025)

I I i I I I

[32521

I I I

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD :" (Special Original Jurisdiction)

¶6

WEDNESDAY, THE FIFTH DAY OF FEBRUARY TWO THOUSAND AND TWENTY FIVE

¶7

PRESENT

¶8

T+IE HPNOURABLE MRS JUSTICE SUREPALLI NANDA

¶9

WRIT PETITION NO: 21607 OF 2010

¶10

Beweeni rrr

¶11

.- ',.

¶12

M/s. M. Bhaskar Rao & Co., a firm registered under the lndian Partnership : Act, 1932, having its office at #5D, 5th Floor, "Kautilya", 6-3.652, Somajiguda, Hyderabad - 500 082 Rep. by its Mr. Ch. Raja Rao, RJo. Hyderabad.

¶13

...PET]TIONER

¶14

AryD

¶15

lnspector, Employees State lnsurance Corporation, Adarsh Nagar, Hyderabad 2. Regional Director, Employees State lnsurance Corporation, Adarsh Naagr, Hyderabad

¶16

3 Deputy Director, Regional Office, Andhra Pradesh Employees State lnsurance Corporation, 5-9-31/1/8, Opp. Old Gandhi Medical College, Basheer Bagh, Hyderabad - 500 063

¶17

As9l6tant Director, Regional Office, Andhra Pradesh Employees State lnsirrance Corporation, 5-S-31/1/8, Opp. Old Gandhi Medical College, Basheer Bagh, Hyderabad^- 500 063

¶18

...RESPONDENTS

¶19

Petition under Article 226 of the Constitution of lndia^praying that in the circumstances staled in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, direction or order especially in the nature of a writ of Mandamus declaring that in the absence of a specific Notification by the State Government under Section 1(5) of the Employee State lnsurance Act, 1948 a firm of chartered Accountants like the^petitioner is not covered by the Act and consequently^prohibition the respondent from taking any coercive measures against the petitioner for submissron of Form - 01 to acquire Employer's code number or raising any demand on the^petitioner under the Employees state lnsurance Act, 1948.

¶20

i I l.A. NO: 1OF 2O1O WPMP. NO: 27463 OF 2010)

¶21

Petition under section i 5'l cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to direct the respondents not to take any coercive steps against the petitioner pursuant to the letter dated 13.08.2010 for submission of Form - 01 to acquire employer's code number or raising any demand on the petitioner under the Employees State lnsurance Act, 1948.

¶22

Counsel for the Petitioner: SRI CH.PUSHYAM KIRAN

¶23

Counsel for the Respondents: SRI B.G.RAVINDER REDDY

¶24

The Court made the following: ORDER

¶25

lr li E

¶26

,.--l,ffir
f

¶27

HON'BLE MRS SUREPALLI NANDA 'USTICE

¶28

WRIT P ITION No.21507 oF 2010

¶29

ORDER:

¶30

Heard Sri Ch.Pushyam Kiran, learned counsel appearing on behalf of the petitioner and Sri B.G.Ravinder Reddy, learned counsel appearing on behalf of the respondents.

¶31

i : :

¶32

The oetitioner ADDTO ached the Court see tnODraver as under:

¶33

"to issue an appropriate writ. direction or order especially in the nature of a writ of Mandamus declaring that in the absence of a specific Notification by the State Government under Section 1(5) of the Employee State Insurance Act, 1948 a firm of Chartered Accountants like the petitioner is not covered by the Act and consequently prohibiting the respondent from taking any coercive measures against the petitioner for submission of Form-01 to acquire Employer's code number or raising any demand on the petitioner under the Employees state Insurance Act, 1948 and pass such other order(s) as this Hon'ble Court deems fit and proper. "

¶34

The case of the petitioner, in brief, is that the petitioner is a firm of Chartered Accountants registered under the Chartered Accountants Act, 1949. On 31.07.2009 and 03.08.2009, the

, a

SN,J wP 21607 2010

Respondent No.1 visited the petitioner's office and served a Visit Note and Form-o1 under Regulation 10-B of the Employees' State Insurance (General) Regulations, 1950 and demanded the petitioner to furnish Form-o1, which is a registration form under the Employees' State Insurance (ESI) Act, 1948. The petitioner replied to the Respondent No.1 on 26.08.2009, stating that the petitioner firm is not covered under the ESI Act, as they do not fall under the definition of "shop" or "establishment" under the Act. Despite repeated explanations of the petitioner, the Respondents continue to demand the petitioner to register their firm under the ESI Act and threatened to take coercive measures against the petitioner if the petitioner fails to comply with the same. Aggrieved by the same, the^petitioner filed the present writ petition.

¶39

This Court. vide its order dated 3O.O8.2O1O, oassed interim orders in a 463 J 201O observinq as under:

¶40

"Respondents shall not take any coercive steps pursuant to the letter dated 13.08.2010 pending further orders.^"

PERUSED THE RECORD

SN,J wP 2t607 2010

I i I i I I I i I 1I ! ii it

¶46

'I '. ll ' 5'! *ia I t

¶47

.,4-

¶48

Sri B.G.Ravinder Reddy, learned counsel appearing on behalf of the respondents brings on record the judgment of the Hon,bh High Court of Gujarat at Ahmedabad dated t0.07.2023 passed in "Deloitte Haskins and Sells Vs. Regional Director, Employees State Insurance Corporation,, and submits that the petitioner is entitled for the relief as prayed for in the present writ petition in view of the said judgment dated 10.07.2023 and the rerevant portion of the said judgment i.e., paragraph Nos.12 to 14 are extracted hereunder:

¶49

The firm of a Chartered Accountant can be operated at various places having different branches spread over either in India or across the gtobe providing professional seruices to its clients in terms to create powerful business solutions as per the need of the ctients having multi-skilled and mutti-disciplined firm, offering clients a wide range of industry-focused business solutions. Therefore, the firm of a Chartered Accountant cannot be said to be engaged only in statutory audit work, but is atso providing tax consulting, financiat advisory, risk management and related ser]trices to its clients for consideration in terms of fees. In such circumstances, confining the office of the Chartered Accountant within the definition of "Shop,, cannot be accepted. ,,Shop,, as per the provisions of the Bombay Shop and Estabtishment Act, 1g4B

¶50

¶51

SN,J wP 21607 2010

¶52

only refers to a^{place from where seruiceis renderedto its} customers by anY establishment.

¶53

7 3. There is also a difference^{between the term} 'services' and 'professional services'.^{Relianceplacedon} behatf of the Corporation^{on the decision of the Hon'ble} Supreme Court in case of^{M/s.Hindulea Band Jaipur Versus} State of Rajasthan and Others^reportedin MANU/SC/0445/1987 1987:INSC:56^{AIR 1987 5C 1166is} also no applicabte in^{the facts of the case as it was a case of} an advertising agency^{whichwas not providing professional} services for which no specific^{qualificationis requiredto be} possessed by the person who renders such^professional services tike Advocates and^{CharteredAccountants which} are^governed and^{regulated by the special Acts.}

¶54

In such circumstances,^{respectfully following the} decision in cases of^{RamanialIShah(Supra)and} H.K.Acharya and Company^{(Supra) renderedby this Court,} no interference is required to^{be madein the impugned} judgment and order passed by the E.S.I.^{Court while} allowing the application^{filed by the firm of a Chartered} Accountant so far as^{First AppealNo.2588 of 2023 is} concerned and the^{appeal accordingly standsdismissed."}

¶55

This Court opines that the^{provisions of ESI Act are not} applicable^{to the flrm of Chartered Accountants}

SN,J wP-21607 2trc

1.:,F

Taking into consideration the view of the Hon,ble High Court of cuiarat at Ahmedabad dated LO.O7.2OZ3 passed in "Deloitte Haskins and Selts Vs. Regaonal Director, Employees state rnsurance corporation,, (referred to and extracted above), the writ petition is altowed as prayed for and mandamus is issued declaring that in the absence of specific nstification by the State Government under Section 1(5) of the Employees State fnsurance Act, 194g a farm of Charted Accountants like the petitioner herein is not covered by the Act. The respondents are further directed not to take any coercive steps against the petitioner for submission of form_ I to acquire emptoyer,s code number or raising any demand on the petitioner under the Emptoyees State fnsurance Act, 1948. However, there shalt be no order as to costs.

¶60

As a sequel, the miscellaneous petitions, if any, pending in the Writ petition shall also stand ctosed.

¶61

¶62

_ The Hon'ble That Rule sRr suJoy Nisi pAUL, has made The Acting Absolute chi.flr"tice as above witnessonttris weonesday, ,'

¶63

the Fifth Day of February, Two Thousand and Twenty Five.

¶64

SD/-N. SRIHARI S ISTANT REGISTRAR //TRUE COPY//

¶65

To,

¶66

SECTION OFFICER

¶67

The lnspector, Employees State lnsurance Corporation, Adarsh Nagar, Hyderabad

¶68

The Regional Director, Employees State lnsurance Corporation, Adarsh

¶69

Nagar, Hyderabad

¶70

3 The Deputy Director, _R-eg,ig1.ql Office, Andhra pradesh Employees State lnsurance. corporation 5-9-31/1/8, opp. ord Gandhi lt4edicat coiregt,^-Bas-heei Bagh, Hyderabad - 500 063

¶71

'!i^:;r:r.? :=*:,a+yl€+. r{.-

¶72

The Assistant^{Director'ReqionalOffice, Andhra Pradesh EmployeqsState} - Iffifi;;Coiporriion s-s-3i/1i8, opp otd Gandhi Medlcal collese' Basheer i3agh,^{HYderabad- 500063}

¶73