In M/s. Deloitte Haskins and Sells vs. Regional Director, ESIC (Gujarat High Court, Judgment dated 10.07.2023), the key issue was whether the Employees State Insurance Act, 1948 (ESI Act) applied to a Chartered Accountants’ (CA) firm. The ESI Corporation argued that a CA office qualifies as a “shop” under the Bombay Shops and Establishments Act, making it subject to ESI coverage. They cited Supreme Court precedents where service-oriented entities like advertising agencies were treated as shops.
However, the Court emphasized that a Chartered Accountant’s practice is a “profession,” not a “commercial establishment” or “shop.” It distinguished professional services from commercial activities, relying heavily on prior rulings, including Employees State Insurance Corporation v. H.K. Acharya & Co. and M/s Singhvi Dev & Unni v. Regional Director, ESIC, where it was held that professional firms like those of advocates or CAs are outside the ESI Act’s ambit unless specifically notified.
Ultimately, the Gujarat High Court affirmed that CA offices, offering professional services based on specialized knowledge and qualifications, are not “shops” and thus not automatically covered by the ESI Act. The matter was remanded in one appeal only on the ground of violation of natural justice, without altering the substantive finding that the ESI Act does not apply to CA firms.
