Quick Summary: Madhu Malti Enterprises, a medicine distributor in Mumbai, won an appeal against the Employees State Insurance Corporation (ESI) about whether keeping medicines in a fridge counts as a manufacturing process under the ESI Act.
Madhu Malti Enterprises, located in Mazgaon, Mumbai, is a business that deals with pharmaceutical products. They challenged a decision from September 8, 2015, by the ESI Court, which said that storing medicines in a fridge was part of the manufacturing process. This decision meant they had to follow the rules of the Employees’ State Insurance Act, 1948.
The main question was whether using a fridge to store medicines is part of making them. This appeal, filed on February 2, 2026, was heard by Judge Jitendra Jain.
Quote from the Judgment: "The mere act of preserving or storing any article in cold storage would not amount to manufacturing process."
Mr. Vaidya, the lawyer for Madhu Malti, argued that the company is just a business that buys medicines from manufacturers and keeps them in fridges until they are sold. He insisted that this activity does not involve making the medicines and should not make them responsible under the ESI Act.
Mr. Pathak, representing the ESI Corporation, argued that keeping medicines in cold storage is part of making them according to the ESI and Factories Acts. He emphasized that the ESI Act is meant to help employees, suggesting a broader interpretation in favor of employee benefits.
Judge Jitendra Jain looked at the definitions of "manufacturing process" under both the ESI and Factories Acts. He decided that just storing medicines in a fridge does not count as making them. The judgment pointed out the difference between a fridge and a large cold storage facility, noting that Madhu Malti used a 365-liter fridge, not a large cold storage.
Important Note: "Cold storage refers to a large, insulated, mechanically cooled facility... whereas a refrigerator is a domestic appliance."
The court ruled in favor of Madhu Malti Enterprises, stating that their activity of storing medicines did not count as a manufacturing process. The appeal was allowed, and the ESI Court's earlier decision was overturned.
The judgment clarified that not all storage activities fall under manufacturing for ESI purposes. The operation of this order is paused for eight weeks, allowing the ESI Corporation time to respond if needed.
