Architects Firm is a ‘shop’, covered under ESI Act

The division bench of Kerala High Court consisting of Justice S. Siri Jagan & Justice Babu Mathew P. Joseph, discarded the contrary interpretation of Madras High Court in Pithavadian & Partners, Chennai v. Deputy Director, Regional Office, that ‘architects like lawyers are professionals’, and termed the judgment and its reasoning as bad law.

The Kerala High Court in M/s. Design Combines, Cochin v. ESI Corporation, Trichur and Others  (Ins.Appeal Nos. 56, 70 of 2007, decided on 1st April, 2013) held that “an Architects Firm who prepare plans, using their professional skills in accordance with the specifications of the customers and sell it to the customers would come within the meaning of ‘shop’ as defined under the notification dated 18/09/1974”, which extended the coverage of the ESI Act to ‘shops’.

According to Kerala High Court, subsequent to the decision of the Supreme Court in Kirloskar’ Consultants Ltd.’s, case(2001 (1) SCC 57) the definition of the word `shop’ as in the Shops and Commercial Establishment Act cannot be looked into for the purpose of deciding coverage under the Employees State Insurance Act. Instead, the notification dated 18/9/1974 should be interpreted as such, and it would thereon include professional firms like that on an architect.

Nevertheless, the court remembered to distinguish lawyers from other professionals like architects and kept them beyond the reach of the ESI Act.