Lijjat Papad ESIC Appeals Quashed, Remanded

Authority: High Court of Gujarat at Ahmedabad

Order Date: 16 July 2026

Case Overview

• Parties: Employees State Insurance Corporation (appellant) vs Shree Mahila Gruh Udyog Lijjat Papad (respondent), concerning First Appeal Nos. 4451/2006 and 4452/2006.
• The appeals challenged the ESIC Court’s orders in ESIC applications Nos. 32/90 and 29/90, which had cancelled contribution notices issued under Section 75 of the Employees State Insurance Act, 1948.
• Central legal questions: (A) Whether the society constitutes an “establishment” under Section 2(12) of the ESIC Act; (B) Whether the women members are “employees” under Section 2(9) of the Act.
• The society is a registered society under the Society Act, 1960 and a Bombay Public Trust; it operates through approximately 9,000 women members who roll papads at home and receive no wages, profits being distributed among members.
• The ESIC argued that more than 600 women were working at the Rajkot branch, that raw material is supplied to them, and that the papads are sold under the “Lijjat Papad” brand, thus constituting an industry.
• The respondent contended that the women are members, not employees, and that there is no supervision or control that would bring them within the definition of “employee” or “establishment”.

Final Outcome

• The High Court set aside the ESIC Court’s judgments cancelling the contribution notices.
• Both ESIC applications (Nos. 32/90 and 29/90) are quashed and remanded to the ESIC Court for fresh consideration.
• The ESIC Court is directed to decide the matter within nine months of receipt of this order and to allow parties to lead fresh evidence.
• The record and proceedings are to be sent back and a copy of the order placed in the registry.

Topics: Employees State Insurance, Labor Law