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S.45(A) - (Diagnostic Laboratories - Applicability of the Act). - The Employees’ State Insurance Act, 1948

The respondent-ESIC inspected the establishment of the appellant and after issuing show cause notice passed an order directing the appellant to make contribution as per Act. Aggrieved, the appellant filed petition before Insurance Court which was dismissed. Hence the present petition has been filed contending that the appellant is a' diagnostic laboratory and are merely collecting the blood and other samples which are being analysed by the doctors hired by the establishment. There is no manufacturing process carried out by the establishment and unless and until manufacturing process is carried out with 10 or more persons, establishment will not be covered under ESI Act.

The Court examined the issue whether the Diagnostic Labs are covered by the provisions of the Act.

The Court held that medical and pathological laboratories are not covered by the definition of the term 'factory'. To bring such pathological labs within the definition of 'factory', there should be clear evidence of collecting and drawing blood samples for its further use. Hence the appellant is not covered by the definition of the term 'factory' as they do not carry out any manufacturing process. It was further held that unless and until the inspection note contains such details, it cannot be said to be a valid document since it is the basis or origin of all actions. It should contain details like, name, age, designation/ service details of ·the employees and also signatures/thumb impression of the employees and same should be counter signed by some responsible person of the establishment. Appeal Allowed.

  - H.C. A.P. LLJ (II) 2018 Nagarjuna Health Care Centre v. ESIC Rep. by its Regional Director

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