The Employees Insurance Court (Principal Labour Court) has ruled that the Madras Stock Exchange Limited comes under the purview of Employees State Insurance (ESI) Act 1948, and their employees are amenable for coverage.
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In its petition, the Madras Stock Exchange sought to declare that it is not liable to be covered under the ESI Act. It also sought for a refund of about ₹4,05,380 along with interest at 18% per annum from the Employees State Insurance Corporation Limited (ESIC), which was collected in 2002.
Madras Stock Exchange said it was established to oversee and regulate the transactions in securities between its members and it does not render any service to customers. The present system of online trading, buying and selling of shares involves no physical activity in the premises. There is no commercial activity in the petitioner premises, it added.
In its response, ESIC said that the provision of the ESI Act extended to shops and establishments other than a factory
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Madras Stock Exchange is rendering service to cater to the needs of member brokers and others who want to carry on the share business. It is carrying on a systematic economic and commercial activity. It is immaterial whether the commercial activity is done in the physical mode or online, ESIC added.
The Labour Court noted that as per the rules of Tamil Nadu government, if any establishment employs more than 20 persons, then it is amenable for coverage under ESI.
It also noted that there have been verdicts which have clearly stated that any establishment where there is systematic, economic and commercial activity going on, is sufficient to bring the establishment within the meaning of shop and to make it amenable to the ESI Act and rejected the plea of Madras Stock Exchange.