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2006 Supreme(Del) 338

High Court Of Delhi
INDRAPRASTHA MEDICAL CORPORATION LTD. - Appellant
Versus
NCT OF DELHI - Respondent
Decided On : 02/22/2006

The main legal point established in the judgment is the interpretation of the definitions of 'industrial establishment' and 'factory' under the Standing Orders Act and the Factories Act, and the determination of the main activities of a hospital in relation to these definitions.

Headnote:

Standing Orders Act - Applicability to Hospital - [Companies Act, Standing Orders Act] - The court discussed the applicability of the Standing Orders Act to a hospital under the Companies Act. It analyzed the definitions of 'industrial establishment' and 'factory' under the Standing Orders Act and the Factories Act, and interpreted the main activities of a hospital in relation to the definitions. The court also distinguished its decision from a previous Supreme Court ruling and concluded that the hospital did not fall under the definition of an industrial establishment.

Fact of the Case:

The petitioner, a company running a hospital, challenged the applicability of the Standing Orders Act to the hospital. The Certifying Officer held the hospital to be an industrial establishment under the Act, leading to the filing of a writ petition and subsequent appeal.

Finding of the Court:

The court analyzed the definitions of 'industrial establishment' and 'factory' under the Standing Orders Act and the Factories Act, and interpreted the main activities of a hospital in relation to the definitions. It distinguished its decision from a previous Supreme Court ruling and concluded that the hospital did not fall under the definition of an industrial establishment.

Issues: The main issue was whether the Standing Orders Act applied to a hospital.

Ratio Decidendi: The court determined that the main activity of a hospital is to cure diseases and ailments, and activities such as cleaning and washing are only incidental. It also clarified that the definition of 'industrial establishment' in the Standing Orders Act differs from that of 'industry' in the Industrial Disputes Act, and hence, previous rulings on 'industry' did not apply to the interpretation of 'industrial establishment'.

Final Decision: The appeal was allowed, and the impugned judgment of the learned single Judge as well as the impugned order of the Certifying Officer were quashed.

MARKANDEY KATJU, C. J.

( 1 ) THIS writ appeal has been filed against the impugned judgment of the learned single Judge dated June 1, 2001 by which he has dismissed the writ petition.

( 2 ) HEARD learned counsel for the parties and perused the record.

( 3 ) THE facts in detail have been set out in the judgment of the learned single Judge and hence we are not repeating the same except where necessary.

( 4 ) THE petitioner/appellant is a company incorporated under the Companies Act which runs a Hospital called Indraprastha Apollo hospital at Sarita Vihar, New Delhi. The respondent No. 2, a Certifying Officer under the Industrial Employment (Standing Orders) act, 1946 (hereinafter referred to as the standing Orders Act (sic) issued a letter to the petitioner dated October 7, 1999 stating that as per a complaint filed by the employees Union of the Hospital there are more than 100 workers working in the establishment and hence the industrial Employment (Standing Orders) Act is applicable to it. Hence, the petitioner was directed to submit five copies of the Draft standing Orders for certification within thirty days of the receipt of this letter, failing which legal action will be taken against it. True copy of letter dated October 7, 1999 is Annexure P-l to the writ petition.

( 5 ) THE petitioner filed its written submissions dated November 4, 1999 before the respondent No. 2, inter alia, challenging the applicability of the Act to the Hospital. It was alleged that the petitioner is not an industrial establishment within the meaning of the definition in Section 2 (e) of the Standing Orders act which states:-2 (e) "industrial establishment" means- (i) an industrial establishment as defined in clause (ii) of Section 2 of the Payment of wages Act, 1936, or (ii) a factory as defined in clause (m) of section 2 of the Factories Act, 1948 or (iii) a railway as defined in clause (4) of section 2 of the Indian Railways Act, 1890, or the establishment of a person who, for the purpose of fulfilling a contract with the owner of any industrial establishment, employs workmen;

( 6 ) HOWEVER, by the order dated July 11, 2000 which was impugned in the writ petition, the Certifying Officer held that the Hospital is an industrial establishment and hence the standing Orders Act applies. Aggrieved, the petitioner filed the writ petition which was dismissed and hence this appeal.

( 7 ) THE short question in this case is whether the Standing Orders Act applies to a hospital or not.

( 8 ) SECTION 1 (3) of the Standing Orders Act states that it applies to every industrial establishment wherein 100 or more workmen are employed or were employed on any day of the preceding 12 months, and to such class or classes of other industrial establishments as the appropriate Government may from time to time, by notification in the Official Gazette.

( 9 ) HENCE, the establishment can be covered by the Standing Orders Act if it is an industrial establishment.

( 10 ) SECTION 2 (e) of the Standing Orders act defines Industrial Establishment and it has already been quoted above.

( 11 ) CLAUSE (i) of Section 2 (e) states that an industrial establishment will include an industrial establishment as defined in Section 2 (ii) of the Payment of Wages Act. We have carefully perused Section 2 (ii) of the Payment of Wages Act and we find that a Hospital is not mentioned therein.

( 12 ) AS regards the submission of the respondent that a Hospital will be covered by section 2 (ii) (f) of Payment of Wages Act, 1936, we do not agree with this submission. That Clause refers to"workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale. "

( 13 ) IN our opinion, a Hospital is certainly not a workshop or establishment in which articles are produced, adapted or manufactured. A hospital is a place where medical treatment is given to those who are suffering from some disease or ailment. That is the main function of a hospi

















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