B.K. Ramadhyani and Co. Chartered Accountants vs The Employees'' State Insurance Corporation

Ram Mohan Reddy, J.—Petitioner, a firm of Chartered Accountants, aggrieved by the order dated 10.1.2012 - Annexure-C of the respondent-Employees'' State Insurance Corporation, covering the petitioner-establishment under the Employees State Insurance Act, 1948 (for short ''the Act'') w.e.f. 16.3.2011 on the premise of having employed 28 persons out of which, 9 drew wages of Rs. 15,000/- or less, and that the petitioner was a "shop", has presented this petition Learned Counsel for the petitioner submits that, the competence of the respondent-authority to treat the firm of Chartered Accounts as "shop" and covering it as an establishment under the Act, was held to be illegal, in Singhvi Dev and Unni Cartered Accountants Vs. The Regional Director, ESI Corporation, The Deputy Director ESI Corporation and The Employees'' State Insurance Court (deleted), and therefore, the lis brought before court is no more res integra.

Per contra, Smt. M.P. Geetha Dev, learned Counsel for the respondent-ESI Corporation, while not disputing the fact and the law declared by the learned Single Judge in Singhvi Dev''s case (supra), and the fact that, that judgment is final and binding, since not appealed against, nevertheless, submits that there are several other judgments of the Apex Court over consultancy service being brought within the term "shop" for the purpose of coverage under the Act, which was not brought to the notice of the learned Single Judge in Singhvi Dev''s case.

Having heard the learned Counsel, examined the order impugned. There can be no doubt that, in the first place, the order dated 10.1.2012 - Annexure-C is cryptic and bereft of reasons, findings except conclusions. Petitioner having opposed the notice-Annexure-A by filing a reply Annexure-B indicating that the firm of Chartered Accountants cannot be treated as a shop, it was for the authority, to examine the veracity of the objections and either accept or reject the same after assigning cogent reasons and lawful findings to conclude that firm of Chartered Accountants is a "shop". Such is not a procedure forthcoming from the letter Annexure-C and on that score alone, this petition deserves to be allowed and the order quashed. Be that as it may A learned Single Judge in Singhvi Dev''s case, having noticed the decision of the Bombay High Court in N.E. Merchant and Another Vs. State, holding that, a firm of Chartered Accountants with articled and salaried ordinary clerk, is not a commercial establishment under the Bombay Shops and Commercial Establishments Act and that, regard being had to the word "profession", the activities of a Chartered Accountant under the Chartered Accountants Act, 1949, statutorily recognized, are not a mere business or trade, but a profession, coupled with the standards of conduct when Practising as a Chartered Accountant, stringent restrictions placed upon him as a measure of integrity, held that Chartered Accountants'' avocation is a profession recognized under the Act and therefore, is not a business or trade. Hence, would not fall within the ambit of the word "shop" and accordingly, quashed the proceedings initiated by the ESI Corporation to cover the said establishment under the Act. In my considered opinion, the order fully covers the case of the petitioner and there is no reason to depart from that view.

In the result, this petition is allowed. The order Annexure-C and all proceedings preceding the order are quashed.