ESI Act will remain applicable on establishment even if the employees number fall below the limit: SC

ESI Act will remain applicable on establishment even if the employees number fall below the limit

Supreme Court in the ESI Corporation vs. M/s. Radhika Theatre S.L.P No. 12520/2022, on January 20, 2023,  while answering the question as to whether demand notices issued, post 20.10.1989 (from the date by which sub-section (6) of Section 1 of the ESI Act came be inserted), on a factory or an establishment, established prior to 20.10.1989 shall be governed by the ESI Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the ESI Act, observed that for the demand notices for the period after 20.10.1989, there shall be liability of every factory or establishment irrespective of the number of persons employed therein.

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The Supreme Court while answering an incidental question that whether Section 1(6) shall be applicable even with respect to those establishments, established prior to 31.03.1989/20.10.1989 observed that the ESI Act shall be applicable even to the said establishments irrespective of the number of persons employed or notwithstanding that the number of persons employed at any time falls below the limit specified by or under the ESI Act.

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