JUDGMENT 1. For the reasons stated in affidavit filed in support of delay condonation, as the same constitutes sufficient cause for condoning the delay in filing special appeal, the Delay Condonation Application is allowed. Special Appeal is treated to have been filed well within time. 2. Employees State Insurance Corporation (hereinafter referred to as the ‘Corporation’) through its Regional Director and Deputy Director, respondent Nos. 2 and 3 in the writ petition, is before this Court assailing the validity of the order dated 22.1.2016 passed by the learned Single Judge of this Court in bunch of writ petitions being leading one Writ-C No. 23731 of 2007 (M/s. Sarswati Heart Care Hospital & Research Centre & another v. State of U.P. & others) wherein learned Single Judge has made a declaration that demand made and proceedings initiated by the Corporation against the petitioners prior to 23.5.2013 is wholly without jurisdiction and without authority of law and, therefore, it cannot be sustained. 3. Brief background of the case is that petitioner opposite party No. 1 Sarswati Heart Care Hospital & Research Centre Private Limited is a company incorporated under the Companies Act, 1956 and Smt. Vandana Agrawal is the Director of said hospital. It is a nursing home for the heart patients. Patients with various heart ailments are admitted to the said nursing home and receive treatment for the same. The Deputy Director of the Corporation issued a communication informing the petitioner opposite party that the establishment in question is covered under the provisions of Employees State Insurance Act, 1948 (hereinafter referred to as ‘1948 Act’) by virtue of Section 2(12) of 1948 Act on 14.8.2016. 4. The Deputy Director of the Corporation issued a communication informing the petitioner opposite party that the establishment in question is covered under the provisions of Employees State Insurance Act, 1948 (hereinafter referred to as ‘1948 Act’) by virtue of Section 2(12) of 1948 Act on 14.8.2016. 4. Petitioner opposite party has challenged the said action by contending that the nursing homes/medical centres which are being run are not covered under Section 1 (G) of the 1948 Act as they are not a factory within the meaning of Section 2(12) of 1948 Act and same is extracted below; “(12) ‘factory’ means any premises including the precincts thereof where on ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on which the aid of power or is ordinarily so carried on, or where on twelve or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on.” 5. Petitioner opposite party has also proceeded to mention that although ‘manufacturing process’ has not specifically been defined in 1948 Act but by virtue of Section 2(14-AA) of 1958 Act ‘manufacturing process’ shall have the meaning assigned to it in the Factories Act, 1948. The ‘manufacturing process’ has been defined in Section 2(k) of the Factories Act, 1948 and it is reproduced below for the sake of convenience; “(k) “manufacturing process” means any process for-- (i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal, (ii) pumping oil, water, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage;” 6. Petitioner opposite party submits that from the aforesaid definition of factory it is apparent that the activities of the nursing homes and hospitals are not at all of ‘manufacturing process’. Petitioner opposite party submits that from the aforesaid definition of factory it is apparent that the activities of the nursing homes and hospitals are not at all of ‘manufacturing process’. Petitioner opposite party has further mentioned that in the aforesaid definition of Section 2(k) of the Factories Act, no further amendment has been made either by the Central Government or the State Government. As such except the item Nos. (I) to (VI) referred to hereinabove, no further item can be included by any authority. It has also been submitted that the term ‘manufacturing process’ as given in the Employers’ Guide March, 2004, issued by the Director General, State Insurance Corporation, New Delhi, same refers to the following definition; “(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal, (ii) pumping oil, water, sewage or any other substance; or (iii) generating, transforming or transmitting power; or (iv) composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or (v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels; or (vi) preserving or storing any article in cold storage; (vi) tapping, collecting, cross matching and keeping in bottles, the blood or whole human blood.” 7. Petitioner opposite parties submit that they do not tap, collect, cross match and keep in bottles, the blood or humane blood, in such a situation and in this background, as they are not at all involved/engaged in manufacturing of any article, in view of this, they could not have been brought within the fold of the aforementioned provisions. Petitioner opposite parties are contending that the Corporation has issued guidelines and has provided that the hospitals and nursing homes/medical centres are excluded from the coverage of ESI Act. The guideline No. 7 which provides for the coverage of establishments has named each and every establishment that has to be covered in this direction and has given even the headings. In heading 7(e) shops have been defined and under the said guidelines, it is clearly stated that the facilities such as the department, canteens and educational institutions, hospitals, dispensaries, doctor clinics, banks and insurance company are excluded. In heading 7(e) shops have been defined and under the said guidelines, it is clearly stated that the facilities such as the department, canteens and educational institutions, hospitals, dispensaries, doctor clinics, banks and insurance company are excluded. Thus by virtue of the guidelines as issued by the Corporation itself, the petitioner opposite parties’ establishment (nursing home) are excluded from the purview of 1948 Act. Petitioner opposite parties, at the said point of time, also came up with the case that the petitioner opposite parties’ establishment cannot be covered under 1948 Act as establishment within the meaning of Section 1 (5) of 1948 Act as no notification under Section 1 (5) has been issued to cover the petitioner opposite parties nursing home as establishment. 8. Petitioner opposite parties, in this background, have challenged the validity of the action, so taken, and the said challenge in question has been sought to be countered by filing counter affidavit and mention has been made therein that the establishment in question is covered under Section 2(12) of 1948 Act because developing of x-ray films and conducting pathological tests amount to manufacturing process as per definition envisaged under Section 2(k) of Factories Act, 1948. 9. To the said counter affidavit, rejoinder affidavit has been filed and averments mentioned in the counter affidavit has been disputed and further mention has been made as of now notification dated 23.5.2013 has been issued under Section 1 (5) of the 1948 Act whereby the medical organisations/nursing homes have been brought within the purview of the said Act. 10. Learned Single Judge, in such a situation and in this background, has proceeded to make a mention that petitioner opposite parties’ establishment would be within the fold of ESI Act w.e.f. 23.5.2013 but prior to it the action taken is unjustifiable and cannot be sustained. Such opinion expressed has led to filing of this Intra-Court Appeal. 11. 10. Learned Single Judge, in such a situation and in this background, has proceeded to make a mention that petitioner opposite parties’ establishment would be within the fold of ESI Act w.e.f. 23.5.2013 but prior to it the action taken is unjustifiable and cannot be sustained. Such opinion expressed has led to filing of this Intra-Court Appeal. 11. Sri Pramod Kumar Pandey, learned counsel for the appellant respondents, contended before us that the learned Single Judge has incorrectly held that 1948 Act is not at all applicable and proceedings initiated against the petitioner opposite parties are without jurisdiction whereas said proceedings were initiated for coverage of petitioner opposite parties’ nursing homes under 1948 Act and the Corporation is fully competent to initiate such a proceeding and, accordingly, under the scheme of things the learned Single Judge has clearly misdirected himself and, as such, the order passed by learned Single Judge deserves reversal. 12. Sri Vinay Kumar Khare, Advocate, on the other hand, countered the said submission by contending that the Corporation has been labouring under misconception and the fact of the matter is that nursing homes are not factory as defined under Section 2(12) of 1948 Act and not at all engaged/involved in manufacturing process, as defined, as such, it would not at all fall within the purview of Section 1 (4) of the Act and once the Act itself was not at all applicable as on the date of issuance of demand notice as against the proceedings initiated against the petitioner opposite parties, learned Single Judge is right, at the point of time, when entire action taken against the petitioner opposite parties has been held and declared as without jurisdiction and without any authority of law. 13. 13. After respective arguments have been advanced, we, in our turn, have proceeded to examine the question that has been so raised before us, 1948 Act defines the word ‘factory’ under Section 2(12) and as per the definition, so provided, same brings within its fold any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months and in any part of which manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Mines Act, 1952 or a railway running shed. The expression ‘manufacturing process’ and ‘power’ has the same meaning respectively as is assigned to them in the Factories Act. The definition of word ‘manufacturing process’ has been adopted from the Factories Act, that has already been extracted above, and the definition of ‘manufacturing process, includes otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal. The activities carried out in nursing homes and hospitals in the wake of definition of factory and manufacturing process cannot be stretched to be an activity falling within the realm of manufacturing process. On its face value the activities carried out at the nursing homes and hospitals cannot be termed as manufacturing process as it does not produce or reshape anything. 14. The definition of ‘manufacturing process’ was considered by the Apex Court in the case of Collector of Central Excise, Madras v. Kutty Flush Doors and Furniture Company (Pvt.) Ltd., AIR 1988 SC 1164 , wherein Apex Court held as hereunder; “It may be worthwhile to note that ‘manufacture’ implies a change, but every change is not manufacture and yet every change of an article is the result of treatment, labour and manipulation. But something more was necessary and there must be transformation; a new and different article must emerge having a distinct name, character or use...........” 15. In another case i.e. Deputy Commissioner of Sales Tax (Law) v. Coco Fibres, AIR 1991 SC 378 , Apex Court considered and explained the definition of ‘manufacturing process’ in the following manner; “3. But something more was necessary and there must be transformation; a new and different article must emerge having a distinct name, character or use...........” 15. In another case i.e. Deputy Commissioner of Sales Tax (Law) v. Coco Fibres, AIR 1991 SC 378 , Apex Court considered and explained the definition of ‘manufacturing process’ in the following manner; “3. Thus by process of manufacture something is produced and brought into the existence which is different from that out of which it is made in the sense that the things produced is by itself a commercial commodity capable of being sold or supplied...... 5. Therefore, the article that emerged, as a result of the process of manufacture must be distinct and new article recognized or known as such in the commercial parlance for sale or supply......... “ 16. Mention has been made that all the clinical tests and pathological tests carried out by petitioner opposite parties involves manufacturing process with the aid of power and, accordingly, establishment in question should be accepted to be covered by the provisions of ESI Act. 17. Such an argument, raised on behalf of the Corporation, has already been repelled by Calcutta High Court in the case of Employees State Insurance Corporation v. Duncan Clean Eagles Hospital Ltd., 2005 (106) FLR 1029 , in following terms; “12. The definition of ‘manufacturing process’ includes otherwise treating or adopting any article or substance with a view to its use, sale, transport, delivery or disposal. The outcome of the test is recorded through various machineries electronically operated or otherwise. In some cases, these are recorded in special kind of papers or any photo plates or X-ray plates or certain kind of devices recording Ultra-sonographic tests. The process of these tests were not carried on either for making, altering, repairing, ornamenting, finishing or otherwise treating or adopting any article or substance, namely, the X-ray plates or the papers or the sonographic records with a view to its use, sale, transport, delivery or disposal. These articles or substances were used in aid of the process for the examination or the tests carried on. It is the report of the test, which is produced. It is the service of preparing the report or diagnosis is the services rendered. These articles or substances were used in aid of the process for the examination or the tests carried on. It is the report of the test, which is produced. It is the service of preparing the report or diagnosis is the services rendered. The process is not undertaken for the purpose of production of any article or substance in the form of developed X-ray films or sonographic records or anything else. If we interpret in such a manner, in that event, even printing floppies or writing disks or typing of papers in course of any business or commerce or any office or administration would also amount to undertaking of manufacturing process since floppies, disks, xerox and typing are undertaken for the use or disposal. But if the pathological laboratory undertakes tapping of blood and process the same and use the same for the purpose of sale or transfusion or otherwise use thereof, the same may be a manufacturing process. But the pathological tests would not amount to manufacturing process even though the production of the developed X-ray films or sonography reports may amount to manufacturing process otherwise in some other context. It has to be reconciled with the purpose and object for which it is being used or utilized. It is the ultimate product that will determine the issue the process adopted for study and research in order to diagnose would not be a manufacturing process. 13. But then the tapping of blood and selling of such blood and using of such blood, though may involve manufacturing process, yet if it is undertaken by a pathological laboratory attached to a hospital has been exempted by the Circular contained in Annexure-G (page 103 of the stay application) would not come within the purview of the ESI Act, so long it caters to the need of the patients treated in those hospitals. The Circular itself excludes the application of the provision to pathological laboratories located in the hospitals and meeting the requirements of its patients admitted. 14. The Circular (Annexure-G) has not been challenged by the appellants. The appellants cannot question the validity of this Circular. The State cannot say that its action in issuing the said Circular was ultra vires. The Circular having been issued by the Headquarters is binding on its subordinates and a regional office cannot question the vires thereof. 14. The Circular (Annexure-G) has not been challenged by the appellants. The appellants cannot question the validity of this Circular. The State cannot say that its action in issuing the said Circular was ultra vires. The Circular having been issued by the Headquarters is binding on its subordinates and a regional office cannot question the vires thereof. It cannot describe its superior’s action as ultra vires as was held in Dharmendra Trading Co. (supra). Therefore, so long the Circular contained in Annexure-G remains valid, the blood banks and pathological laboratories attached to a hospital would not come within the purview of the ESI Act until it is shown that the said pathological laboratory or blood bank caters to the need of outsiders other than the patients admitted in the hospital. Conclusion: 15. In these circumstances, in our view, the pathological tests carried on by a laboratory attached to a hospital would not amount to a manufacturing process for the purpose of attracting the application of the ESI Act and blood bank catering to the needs of the patients admitted in the hospitals by such blood bank attached to a hospital would also not attract the application of the ESI Act. But as soon it is established that it caters to the needs of the outsiders other than the patients admitted in the hospital, the application of the ESI Act cannot be overruled.” 18. Once such is the factual situation that is so emerging that there was nothing on record to show and substantiate the fact that nursing homes and hospitals could be treated as factory and could be presumed that manufacturing process is ongoing there, then on mere surmises and conjectures presuming that the nursing homes and hospitals are within the fold of 1948 Act certainly cannot be approved of unless and until both the component of factory and manufacturing process are fulfilled. In the present case, the notice that has been subjected to challenge in the writ petition therein no such averments have come forward rather the averments have been confined to the effect that incumbents more than 20 in number have been functioning in the establishment in question and on this presumption the hospitals and nursing homes were sought to be brought within the fold of 1948 Act. 19. 19. Apart from this, under Section 1 (5) of 1948 Act the appropriate Government after giving six months notice of its intention of so doing by notification in the official gazette may extend the provisions of this Act or any of them to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise. For the sake of convenience, provisions of Section 1 (5) of 1948 Act is being reproduced below; “1(5) The appropriate Government may, in consultation with the corporation and (where the appropriate Government is a State Government, with the approval of the Central Government), after giving six months’ notice of its intention of so doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise.” 20. In the present case, the factual situation is that the State Government in consultation with the ESI and with the approval of Central Government issued notification dated 13.12.2012 to extend the provisions of ESI Act to certain classes of establishment specified in the schedule to the said notification after one month from the date of notification and when no objection/suggestion has been received within the said period, then notification has been made on 23.5.2013 as follows; “The Governor is pleased to order the publication of the following English translation of notification No. 359/36-6-2013-5(5)/2011, dated May 23, 2013 for general information: No. 359/36-6-2013-5(5)/2011 Lucknow Dated: May 23, 2013 WHEREAS the State Government in Consultation with the Employees State Insurance Corporation and with the approval of Central Government gave notice of its intention in Government notification No. 815/36-6-2012-5(5)/2011, dated December 13, 2012 to extend the provisions of the Employees State Insurance Act, 1948 (Act No. 34 of 1948) to certain classes of establishments specified in the Schedule to the said notification after one month from the date of that notification. AND whereas, no objection or suggestion have been received within the said period of one month in respect of said notification. AND whereas, no objection or suggestion have been received within the said period of one month in respect of said notification. NOW, therefore, in exercise of the powers under sub-section (5) of Section 1 of the Employees State Insurance Act, 1948 (Act No. 34 of 1948), the State Government of Uttar Pradesh in Consultation with the Employees State Insurance Corporation and with the approval of Central Government, hereby extends the provisions of the said act to the classes of establishments in column (1) and situated within the areas specified in Column (2) of the Schedule in State of Uttar Pradesh: SCHEDULE Description of EstablishmentsAreas in which the establishments are situated 12 The following establishments in which ten or more persons are employed or were employed on any day of the preceding twelve months, namely-All areas where the provisions of the E.S.I. Act, 1948 have already been brought into force under sub-section 3 of Section 1 of the Act. (1) Shops; (2) Hotels; (3) Restaurants; (4) Road Motor Transport establishment; (5) Cinemas including preview theatres; (6) Newspaper establishments as defined in section 2(d) of the working Journalists (Conditions of Service) and Miscellaneous Provisions Act, 1955 (Act No. 45 of 1955); (7) Educational Institutions (including public, Private aided or partially aided) run by individuals, trustees, societies or other organisations; (8) Medical Institutions (including corporate, joint sector, trust charitable and private ownership Hospitals, Nursing Homes, Diagnostic Centres, Pathological Labs. 21. For the first time, in exercise of authority conferred under Section 1 (5) of the 1948 Act notification has been made on 23.5.2013 wherein the medication institutions that are inclusive of hospitals, nursing homes, diagnostic centers, pathological labs have been brought within the fold of 1948 Act and, in view of this, to conceive of a situation that earlier these establishments should be treated at par with the factory and being engaged in manufacturing process, rightly has not been approved by the learned Single Judge and learned Single Judge has rightly proceeded to not approve the action, so taken, prior to 23.5.2013 and has rightly opened the action to be taken after 23.5.2013 when the establishments in question have been sought to be brought within the purview of 1948 Act. 22. Special appeal sans merit and is dismissed, accordingly.