Back
IN THE HIGH COURT AT CALCUTTA
Shampa Dutt (Paul), J.
M/s. Diamond Silk Khadi Society & Anr. - Appellant
Vs.
Employees’ State Insurance Corporation & Ors. - Respondent
WPA 21943 of 2025
Decided On : 27-04-2026
| Table of Content |
|---|
| 1. establishment details and the nature of the entity's operations under kvic guidelines. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. petitioner's defense: non-applicability of the esi act due to the nature of artisans as self-employed individuals. (Para 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23) |
| 3. respondent's justification for esi coverage based on the inspection report and employee count. (Para 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
| 4. judicial assessment of wage components ('allowances') and legal status of artisans regarding esi coverage. (Para 33 , 34 , 35 , 36) |
| 5. determination that establishment qualifies for esi coverage and dismissal of the writ application. (Para 37 , 38 , 39 , 40 , 41 , 42 , 43) |
Judgment :
SHAMPA DUTT (PAUL), J.
1. The writ application has been preferred against an orders dated 02.05.2022 and 07.01.2025 passed under Section 45-A and 45-AA of the Employees State Insurance Act, 1948.
2. The respondent no.1 is a body corporate constituted under the provisions of the Employees' State Insurance Corporation Act, 1948. The respondent no.2 to 4 are officers discharging duties under the respondent no. 1.
3. The petitioner states that it abides by the "Bye-laws" as provided by the Khadi and Poly Vastra Artisan Welfare and Pension Trust (in short AWFT) KVIC, MSME Government of India. KVIC in its meeting No. 493 dated 29/30.6.1999 resolved in consideration of the resolution to set up Khadi and Poly Vastra Artisan Welfare and Pension Trust, that is, AWFT (Artisan Welfare Fund Trust). It implies that all certified Khadi institutions are to be a member of the said Trust. A Circular was issued on 06.02.2003 for the formation of Khadi and Polyvastra Artisans Welfare and Pension trust state wise in India.
4. The petitioner states that the draft deed of the proposed Trust has been finalized in consultation with the Directorate of Legal Affairs for adherence. The “ARTISAN WELFARE FUND TRUST” was formed as per the deed, with "Bye-laws" that were implemented state wise in India. Thus, the "Bye-laws" of Khadi and Polyvastra Artisans Welfare and Pension Trust came into existence, and the objective is to create a welfare fund for the benefit of the artisans who are "self-employed".
5. It is further stated that the KVIC, MSME, Government of India, issued Guidelines on 19.5.2003, for the operation of the state level 'Artisan Welfare Trust fund', to facilitate the artisans to make their livelihood in accordance with the 'cost chart' prescribed by the Central Certification Committee of KVIC. As per the guidelines, Khadi institutions are required to make contribution for the welfare benefit of the artisans.
6. The petitioner no.1 is a certified 'KHADI MARK' institution and is authorized to use Khadi Mark 'tags and labels' as governed by the Khadi Mark Regulations, 2013. KVIC provides certain exemptions to certified Khadi institution using Khadi Mark registrations. 'Khadi Mark' registration process involves an application that is scrutinized by a committee and verified by accredited agencies to confirm adherence to hand spinning and hand weaving.. 'Khadi' is a hand-spun and hand- woven natural fiber cloth primarily made from cotton, silk and wool. Handspun Yarn is made manually on a spinning wheel (charkha) and the handspun yarn is woven on a handloom by artisans. The word "handloom" has been defined in section 2(d) of the Khadi and Village Industries Commission Act, 1956 which defines "khadi" as any cloth woven on handlooms in India from cotton, silk, or woolen yarn handspun in India or from a mixture of any two or all such yarns. Therefore, the petitioner no.1 does not fall within the meaning of factory and the ESI Act, 1948 does not ipso facto apply to the petitioner no.1 establishment.
7. The petitioner is a certified "KHADI" institution which works under the framework of KVIC, MSME, Government of India. The KVIC Act 1956, is framed to design, govern, guideline and mandate those involved in
The central legal point established in the judgment is the direct employment of artisans/karigars by the petitioners for work connected with the establishment, as interpreted under the Employees' Sta....
The main legal point established is that the apprentices appointed under Certified Standing Orders of a factory are exempted from the purview of the Employees'' State Insurance Act, 1948.
The voluntary contribution under the EPF Act does not automatically encompass an establishment under the ESI Act, and the Act cannot be extended to establishments without a notification from the appr....
The Sale Depot of the corporation is not covered under the Employees’ State Insurance Act due to the absence of manufacturing activities and failure to meet employee thresholds.
The central legal point established in the judgment is the interpretation of the term 'seasonal factory' under Section 2 (19-A) of the ESI Act, particularly in relation to the manufacturing processes....
The functional integrality of the establishments justified their clubbing and coverage under the Employees State Insurance Act, 1948.
A factory is classified as seasonal under the ESI Act if its predominant activity is seasonal, and it is exempt from ESI applicability if it employs fewer than ten workers.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
