Tag Archives: Labour Code

Maternity Benefits under SS Code : Piloting it the wrong way ! – Part 1


Maternity Benefit slide_page-0001 (2)

The year was 1983. The ESI Corporation wanted to make some path-breaking changes and to bringing in suitable amendments. The Contribution Card system with stamps had already been replaced with the Contribution Card system with cash. The issue now was that the classification of employees into three sets, viz., A, B and C, was to be given a go by. Common Contribution Period and Benefit Period was being contemplated. The Hqrs. Office of the ESI Corporation asked the Regional Directors to offer their opinion. The Regional Directors asked, in turn, the field officers the Managers of the Local Offices and the Insurance Inspectors to explain their stand. The outcome was the evolvement of law which ensured the introduction of new system providing for all the practical difficulties in its implementation.  The opinions offered ensured that the procedure evolved was not only not cumbersome but also one that advanced the purpose of the Act.

Hear the subordinates

Such a practice of obtaining opinions from subordinates in the field was followed, again in the year 1988, before certain vital amendments were made in the ESI Act, in the year 1989. The management principle recommended by Mr. Gordon M.Bethune, former Chief Executive of the Continental Airlines was to ‘hear the subordinates’. For, he knew that they knew more about the work and the weak-spots.

Gordon Continental Airlines

Mr. Bethune said, “I was a mechanic in the Navy. And mechanics in the Navy are like mechanics in airlines. You may have more stripes than I do, but you don’t know how to fix the airplane. You want me to fix it? You know how much faster I could fix the airplane when I wanted to, than when I didn’t want to? So I’ve always felt that if you treat me with respect, I’ll do more for you.”…”And we never lied. You don’t lie to your own doctor. You don’t lie to your own attorney, and you don’t lie to your employees.” (Corner Office -Adam Bryant – 02.01.2010 – New York Times).

Legislative Policy,  kept a mystery

But, here is a bureaucracy, now, at the centre, especially in the Ministry of Labour & Employment and in the Ministry of Law & Justice, which does not hear even the Corporation, the supreme body of the ESI Corporation, let alone its Director General or his subordinates. Because many of the provisions in the Bill No. 375 of 2019 are intended to destroy the well-conceived social security network that provides social insurance and enable the private players to loot the masses in the name of commercial insurance. The bureaucracy is, therefore, afraid of the proper law-making process.

What is more? Even the Director General of the ESI Corporation and the Central PF Commissioner of the EPFO were not made aware beforehand and at every crucial stage, what was being drafted by the Drafting Team of the Labour Code, although the Ministry of Labour enacted a drama of roping in some junior officers from these organisations to be part of the team. More of this can be read in the following links:


These two ministries have been made captives by their political masters, and have been made to prepare a law that is intended to serve only those private interests and not public interest. In the absence of publication of the Legislative Policy, the Bill No. 375 of 2019 deserve only be categorised as a Private Bill dressed up as a Bill mooted by the government.

Innumerable dubious words, phrases and clauses inserted on the sly at various places for wrong reasons in the said Bill, indicate clearly that the intention of these Ministries is not to give priority to run the ESIC corruption-free  but to destabilise it and provide a ground for the private players to cheat and loot the public. These bureaucrats forget or suppress that the ESI Act does not prevent private players from operating even now on the same field, provided they are ready to provide benefits which are superior or substantially similar to the ones provided by the ESI Corporation. That they are not interested in giving priority to eradicate corruption would become evident from the manner in which the CAG himself has not filed counter-affidavit in the W.P. 35184 of 2016 pending before the Hon’ble High Court of Madras for the past four years.

Pulling wool over the eyes of law-makers

The Statement of Objects and Reasons and the Notes on Clauses, justifying the Bill No. 375 of 2019 are full of half-information, misinformation, disinformation and no-information on various core issues. They are intended to deceive the parliamentarians and get them vote for this dubious Bill to make it a law. The method of manipulation adopted by them in meddling with the Maternity Benefit provisions, through this ill-conceived Bill would give real shock to every well-meaning citizen. The unholy nexus between the ‘educated’ officers in these Ministries and the ‘private interests’, causes the former to assist the latter by subverting the due process of law, and enacting laws which are clearly against the interests of the working women whose living conditions do not matter for these high-paid officials.

Their actions bring into existence a law that would never attain its proclaimed goal but would ensure that the society is made chaotic and insecure. There is no explanation anywhere as to why and by whom and at whose instance various unlawful tinkerings have been made in the ESI Scheme, without any written direction to anyone by anyone. What has happened is a conspiracy by the top officials against the large masses of the nation whose voice cannot be heard and whose living conditions do not matter for these officials. All these officials are required to be made accountable for such commissions and omissions. They are the persons responsible for piloting the highflying aircraft to disastrous crash.

Clause 32 (1) (b) and Clause 32 (3) of the Chapter IV read with the entire Chapter VI of the Bill on the Code on Social Security, 2019 (Bill No. 375 of 2019) in the matter of Maternity Benefit provide a classic example of collusion of various vested interests to deny the large multitude of workingwomen of the nation the Maternity Benefit that was available to them under the existing provisions of the ESI Act for decades and decades.

Shock ad infinitum

The manner in which questionable words, phrases and clauses have been inserted at various places, in the Bill No. 375 of 2019, with the intention of cheating the workforce, causes a lot of depression and annoyance even for a reader. One wonders how the educated bureaucrats could stoop so low to deceive the poor people of the nation and to please the rich anti-labour elements and prepared such a draft Code to make patently unlawful things lawful. It is very sad and it causes depression and annoyance in the reader. One has to take a lot of efforts to motivate oneself to come out of such depression, before and for writing about the social impact of such cunning insertions in the Code.

The text of the Bill No. 375 of 2019 shows that the persons behind the Bill wanted to drastically reduce the quantum of Maternity Benefit available to the working women and make it just a farce. And the bureaucracy obliged willingly (Details in Part 2).

ESI Act and MB Act do not go together

When the ESI Act 1948 is in force in a factory or establishment, there is be no need or scope for the Maternity Benefit Act, 1961 to be applied to the Insured Women of that unit. For example, when the wage ceiling for coverage under the Maternity Benefit Act is Rs. 15000 pm, and the wage ceiling for coverage under the ESI Act is Rs. 21000 pm, there will be no need for the Insured Women covered under the ESI Act to seek benefit under the Maternity Benefit Act. The Maternity Benefit Act, therefore, does not operate and is not applicable to the said factory or establishment, as had been made clear in the Statement of Objects and Reasons of the Maternity Benefit Act in the year 1961 itself.

Yet there was the need for the Maternity Benefit Act to be in existence, as all the factories and establishments everywhere in the nation were not covered or coverable under the ESI Act.  The ESI Act could not be implemented and is not implementable everywhere, in practice, unless there was a cluster of factories or establishments justifying the setting up of a dispensary with doctors, nurses and para medical staff ( or at least a mobile dispensary ) before implementing the provisions of the ESI Act in that area. Consequently, the factories and establishments in outlying areas were made to enforce the Maternity Benefit Act, 1961, for the women working there. In other words, whenever the ESI Corporation wants to extend its operation to a new area where there are adequate number of factories and establishments and the families of insured persons, it is required to notify through the gazette of its intention to implement the scheme in that area. Such an area is called as “Implemented Area”. The ESI Act can thus be extended only in phases.

That was the reason the phrases, “different dates” and “different parts” have been inserted in Sec. 1 (3) of the ESI Act, in the year 1951 itself very thoughtfully.  But the present Bill on the Code on Social Security does not show that it took into account the concept of “Implemented Area” at all, when its Clause 1 (3) it refers to the applicability of the Code which is pending consideration of the Lok Sabha now.

As a result, one has to presume that the persons who drafted the Bill No. 375 of 2019 intended to enforce the provisions of the present ESI Act everywhere throughout India at one go, through the aforesaid Clause 1 (3) and Chapter IV of the said Bill. Well, but one does not understand the need, then, for the enforcement of the provisions of MB Act, 1961 anywhere in India, through Chapter VI of the same Bill.

ESI Act and MB Act can go together

Still, it is possible to enforce the enforce the provisions of the Maternity Benefit Act, 1961 (proposed Chapter VI of the Bill No. 375 of 2019) in the same factory in which the ESI Act, 1948 (proposed Chapter IV of the same Bill) is in force, if the wage ceiling for coverage of working women under the Maternity Benefit Act (proposed Chapter VI) is more than the wage ceiling prescribed under the ESI Act (proposed Chapter IV). But such decisions had never been taken by the government during the last 59 years, after the Maternity Benefit Act came into force. The liability to pay the Maternity Benefit under the ESI Act, 1948, is taken over by the ESI Corporation while the liability to pay the same benefit under the MB Act, 1961, is on the shoulders of the employers, with varies consequences.   The wage ceiling for coverage under the MB Act, 1961 had, therefore, been kept always below the ceiling provided under the ESI Act, 1948.

In other words, the ESI Act and the MB Act cannot apply to the same factory or establishment as long as the wage ceiling for coverage under the MB Act remains lower than the ceiling provided under the ESI Act.

In other words, the ESI Act and the MB Act cannot apply to the same set of working women at one and the same time. Consequently, Chapter IV of the Bill No. 375 of 2019 and Chapter VI thereof cannot apply to the same set of working women at one and the same time. The provisions of Chapter IV would alone prevail.

Definitions and absence of definitions

While these are vital technical incongruities in the Bill No. 375 of 2019, with reference to the definition and absence of definition for crucial words, which do have far-reaching consequences, the definition of the term ‘wages’ given in the said Bill and is made applicable for Chapter IV and VI make the entire Code a chimera. The Code simply pretends to provide Maternity Benefit to working women while it actually reduces drastically the benefit now available to them both under the ESI Act, 1948 and the Maternity Benefit Act, 1961. (This happens not only to the Maternity Benefit but also to all other benefits provided under the ESI Act, at present).

\The significance of such lapses in the Bill will be placed before the readers in the upcoming pieces, pertaining to Maternity Benefit, separately one by one, with reference to various court verdicts under the MB Act, 1961. They are stories of human tragedies showing the conflict of interest in the functional relationship between the benefit-needing employees and the profit-seeking employers (who prefer donating hefty amount to the political parties and bribing the politicians and officials while, at the same time, reducing the wages and total strength of their staff). Numerous instances of such cruelties are on record throughout the world indicating the uncivilised nature of the Strong against the Weak and Meek.

It would be appropriate in the context to recall an incident that had happened more than a century ago when an employer did not want to pay Disablement Benefit to his employee who was suffering from life-threatening employment injury sustained by him during the course of and out of his employment in the factory of the employer concerned. The employer chose rather to pay a hefty fee to a ‘clever’ lawyer, who used all the dishonest means to enact a drama in the court and had, sadly but successfully, helped the employer deny the legitimate dues payable to the poor workman. The present Bill No. 375 of 2019 is, directly, leading the Indian society in that undesirable direction.

Employee Vs. Employer

It was the 19th century England when Commoners chose to sit and suffer injustice in silence than to stand up and fight against in the costly courts. Not every employer in England was the noble George Cadbury. The money power of merciless employers and the cleverness of dishonest lawyers worked against the workmen.   As a result, cases were decided not on facts.

There was an employee of a railroad company who had sustained injury during the course of employment. He was denied compensation by the employer-company. He approached the court seeking remedy. His case was that the accident had resulted in his becoming a victim of neurasthenia or nervous prostration. The evidence produced by him showed that because of that problem, his mental and physical health had deteriorated rapidly. It was also proved during the cross-examination of an expert doctor that the workman was suffering from neurasthenia. The expert witness informed the Court that the workman suffered no pain when pricked with a pin on top of the head and that was a sure sign of his suffering from neurasthenia.

The lawyer for the defendant-company of the employer began his argument. He was “an ex-judge, somewhat advanced in years and exceedingly resourceful”. Incidentally, “he was as bereft of hair as the oft-cited billiard ball. When it came time to argue the case to the jury, he proceeded to expound the facts with clearness and vigour for a considerable length of time and finally approached the subject of neurasthenia.”

He paid his respects to the learned doctor who was called in as an expert witness. He then expressed his surprise and astonishment at the conclusion arrived at during the examination that “one who did not experience pain by the prick of a pin on the top of the head was a neurasthenic and rapidly progressing to complete mental decline.”  He, then, informed the jury that he was under the impression that he was a man of reasonable physical vigour and had always supposed that he was still possessed of his normal mental faculties. But he became afraid that he discovered that he himself was a hopeless neurasthenic as per the evidence given by the expert doctor. If he was a patient suffering from neurasthenia, he had no business trying lawsuits, but “should be preparing rapidly to meet his Maker”, he added.

“Thereupon he turned back the lapel of his coat and extracted good-sized needles, which he promptly stuck in the top of his head. He kept this up until he had some ten or twelve needles sticking in the top of his bald head and looked like an animated pin cushion”. He finished his argument.” Everyone was stunned.  The verdict returned was “in favour of the defendant”, i.e., the employer.

But what had happened was that the lawyer had got a portion of his scalp injected with cocaine with the help of a physician to avoid feeling pain when sticking the pins on his head. He had thus cheated the Judge, the Jury and the Law with the only aim of denying the legitimate compensation payable to the workman who was actually suffering from neurasthenia as a result of the employment injury sustained by him.

In later years, the lawyer confided to the same judge, Mr. Justice Faville, “that the last needle got outside the area of the cocaine which his physician had hypodermically injected into his scalp just before he began his argument and had almost unmasked the hoax”. He had to pretend hard that there was no pain although the last needle gave him very sharp pain.  (Ref: Oxford Book of Legal Anecdotes – Michael Gilbert – Oxford University Press –Pages 10-11). The hapless worker simply suffered and there was no one to help him.

The Questions and the Answers

Who will save such workers from the tentacles of such employers and advocates, if not the State? What else should be the responsibility of the State? Why should the State abdicate its Constitutional responsibility and privatise the social security in India? Why should the people of a nation allow its rulers to make the State abdicate its responsibility to provide Social Security?

In the Indian context, which employee of the nation asked for lesser Maternity Benefit than what is being provided under the ESI Act? Should not the bureaucrats be made to give reply to this question in the appropriate forum?

Will these ‘educated’ bureaucrats who give all impressions that they prepared the draft Code without any legislative policy given by anyone, and have exercised unlimited discretion to prepare the Code as they pleased, allow the already evolved democracy in India to survive and allow the ESI Corporation to flourish?

Atifete 2


  • Let the Indian government hold a survey among the Insured Persons and the beneficiaries of the ESI Corporation first in a honest and transparent manner. A cursory survey done in Mumbai in the latter 1990s showed that 85% of the insured persons wanted the ESIC while 85% of the employers did not want. That sums up the entire picture.
  • Let them make the CAG, who is shying away from the W.P. 35184 of 2016 for the past four years, to file counter-affidavit at least now, that the bureaucratic cartel that colluded together in mismanaging the funds involving thousands of crores would come to light.
  • Let them allow the ESIC to be run corruption-free! The ESIC will, then, reach greater heights!!


Images; Courtesy: Web.

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Innocent MPs Vs. Wily bureaucrats !

Hon’ble Supreme Court has, in Vasantlal Maganbhai Sanjanwala Vs. The State of Bombay and others on 25.08.1960 referred, in a different context,  to the possibility of legislature,  “controlled by a powerful executive”. That possibility is proved to have become a reality in India as demonstrated by the wily bureaucrats when it came to the amendment of Labour laws, especially the Bill No. 66-C of 2009 and the Bill No.375  of 2019.

The manner in which the Cl. 40 (9) had been inserted in the Bill on The Code on Social Security, 2019, (Bill No. 375 of 2019) pending in the House of the People (Lok Sabha) shows how wily the bureaucrats could be, again and again. Identical Clause was introduced in the Bill No. 66-C of 2009 to amend the ESI Act, 1948.

But the then Parliamentary Standing Committee on Labour  (PSCL) rejected that provision categorically assigning strong reasons. Yet without being aware of the said observations of the PSCL, the provision was made to become law during a pademonium without discussion on 03.05.2010.

Now the Bill No. 375 of 2019 containing the same provision is before the present PSCL. Attempt is made to apprise the PSCL of the history of the case to save the social security structure from being corroded further.

Copy of the letter dated 14.05.2020 sent to the Hon’ble Speaker, House of the People is reproduced hereunder:



1 Hon’ble Speaker,
House of the People (Lok Sabha),
17, Parliament House,
New Delhi 110011
2 Mr. Bhartruhan Mahtab,
Hon’ble M.P. & Chairman,
Standing Committee of Parliament on Labour,
South Block,
New Delhi – 110011.

(Through Mr. Kulvinder Singh, Deputy Secretary, Parliament of India,House of the People. Email: comm.labour-lss@sansad.nic.in)

Sub: Third party participation in running the ESIC hospitals and medical institutions – insertion of Sec. 59 (3) of the ESI Act, 1948 in the year 2010 – Clause 40 (9 ) of the Bill No. 375 of 2019 – bureaucracy deceiving the Parliament – Representation – submitted.
Ref: 1.  Bill No. 66-C of 2009 placed before the Lower House of the Parliament as The ESI (Amendment) Bill, 2009 on 30.07.2009.
2.  Report dated 09.12.2009 of the Parliamentary Standing Committee on Labour.
3.  Record (Minutes) of the proceedings of the Lok Sabha on 03.05.2010.
4.  Bill No. 66-C of 2009 as passed by the House of the People on 03.05.2010 titled The ESI (Amendment) Bill, 2010.
5.  Hqrs. Letter No. U-11/14/1/20-15-Med.I (ICU) dated 20.04.2018 addressed to M/s Sheel Nursing Home Pvt Ltd, Uttar Pradesh.
6.  Draft Code on Social Security circulated in the MOL&E Circular No. Z-13025/13/2015-LRC dated 17.09.2019.
7.  The Code on Social Security, 2019, placed as Bill No. 375 of 2019 before the House of the People (Lok Sabha).


I submit that Hon’ble Supreme Court has, in Vasantlal Maganbhai Sanjanwala Vs. The State of Bombay and others on 25.08.1960 referred, in a different context,  to the possibility of legislature,  “controlled by a powerful executive”. That possibility is proved to have become a reality in India as demonstrated by the bureaucrats, again and again, when it came to the amendment of Labour Laws, especially the Bill No. 66-C of 2009 and the Bill No.375  of 2019, as explained below. In the context, I consider it necessary to invite your kind attention to Clause 40 (9) of the Bill No. 375 of 2019 which is under the consideration and scrutiny of the Parliamentary Standing Committee on Labour at present. The said Clause reads as under:

“The Corporation may also enter into agreement with any local authority, local body or private body for commissioning and running Employees’ State Insurance hospitals through third party participation for providing medical treatment and attendance to insured persons and (where such medical benefit has been extended to their families), to their families.”

2. Identical is the provision under Sec. 59 (3) of the ESI Act, which was inserted through the amendment of the year 2010, vide Bill No. 66-C of 2009:

Sec 59 2 Bill Text

3. I submit that this provision, i.e., the Sec. 59 (3) of the ESI Act which is in force as on date and the proposed Cl. 40 (9) of the Bill No. 375 of 2019, enable Third Party participation in commissioning and running the ESI hospitals and providing medical treatment and attendance to insurance persons and their families.

4. When the above  provision was proposed  to be inserted in the ESI Act in 2009, as Sec. 59 (3), vide Clause No. 14 of the Bill No. 66-C of 2019 introduced in the Lok Sabha, the Parliamentary Standing Committee on Labour had examined the issue rejected the proposal outright as could be from Para 113 of its Report presented to  the Lok Sabha on 09.12.2009. The Committee did not permit making such an enabling provision in the Bill for commissioning and running these hospitals through third party participation Para 113 said,

“113. The Committee note the proposal of the Government for making a provision for commissioning and running of ESI hospitals through third party participation. The Committee find that ESIC has the required capacity and wherewithal to run hospitals on their own since Government have taken a decision that all new hospitals would be run by ESIC directly. The Committee, do not find any justification in, and therefore outright reject, the contention of the Government that ‘some of the hospitals constructed on the request, and not taken over by the concerned State Governments may be commissioned through third party participation’. The Committee take note of the reply of the Government that there were only three hospitals which had not been taken over by the State Government and out of these three, one, at Chinchwad, had already been commissioned by the ESIC directly and already handed over to the State Government. Another hospital at Bibvewadi has also been commissioned by the State Government. Therefore, the Committee feel that there is no justification on the part of the Government for making such an enabling provision in the Bill for commissioning and running these hospitals through third party participation”.

Para 113 page 70 PSC report

Page 71 of the PSC report

5. Yet, those observations of the Parliamentary Standing Committee on Labour had not been taken to the notice of the Members of the Lok Sabha on 03.05.2010 in an appropriate manner that would make them pay attention to the differing views of the Standing Committee. Consequently, the original Clause 14 in the Bill No. 66 of 2009 was made to become law in the form of Sec.59 (3) of the ESI Act. That provision was, thus, the outcome of an unlawful and unjust and undemocratic law-making-process.

6. It becomes clear, from the Minutes of the Parliamentary Proceedings, that the authorities did not want to care for the well-considered  observations of the Parliamentary Standing Committee on Labour and had, therefore, omitted any reference to the abovementioned observation of the Committee in Para 113 of its report. That was why even the already prepared speech of the Hon’ble Minister did not contain any reference, at all, to the Para 113 of the Report containing the objection of the Parliamentary Standing Committee to Clause 14 which was to become Sec. 59 (3) in the Act, later.

7. Besides, the Bill got passed by the Lok Sabha within a time span of nine minutes between 1420 hours and 1429 hours on that day, the 3rd May 2010, when the issue pertaining to Sibu Soren was creating a pandemonium in the House without allowing any meaningful discussion. Significantly, the Hon’ble Minister did not, actually, deliver, in the house, that portion of the speech which is available in Pages 60, 61 & 62 of the Minutes dated 03.05.2010 but had just laid it on the table on the advice of the Hon’ble Deputy Speaker, as could be seen from the live telecast that day.

8. The fact, in essence, is that the Parliament of India had not consciously approved the amendment for and before inserting the aforesaid Sec. 59 (3) in the ESI Act, 1948. It did not examine the observations of the report of the Parliamentary Standing Committee on Labour dated 09.12.2009. The Legislature had been tricked on 03.05.2010 by the Executive, whose intention was only to observe the formality of getting the Bill declared by the Speaker as passed on the floor of the Lok Sabha. The Executive had not been sincere and honest in giving right and complete information to the Legislature on this issue before asking for its approval.

9. The Executive had, with mala fide intention, placed the Clause 14 of the original Bill No. 66 of 2009, in its original form itself before the Parliament, even after the Parliamentary Standing Committee had objected to the said draft proposal in Para 113 of its Report. It is not the ‘end’ result but the ‘means’ adopted by the Executive to achieve that ‘end’ which makes the said Sec. 59 (3) vulnerable and amenable to judicial scrutiny.

10. While Parliament is not bound by the recommendations of the Parliamentary Standing Committee, it cannot just ignore the findings of the latter. Parliament has to apply its mind to the observations of the Parliamentary Standing Committee and record that it was differing from the stand of the said Committee. But in this case the Lok Sabha had simply been oblivious of the vital observations of the Standing Committee in Para 1134 of its report. The Executive did not make any efforts to draw the particular attention of the Parliamentarians to the stand of the Standing Committee to the then proposed Sec. 59 (3) of the ESI Act.

11. What is shocking all the more is that the same provision appeared as follows as Cl. 43 (9) in the draft circulated on 17.09.2019 and withdrawn in the first week of October 2019, at the behest of the PMO to rejig the draft.  The present Cl. 40(9) in the Bill on the Code on Social Security, 2019, (Bill No. 375 of 2019) is the identical replica of the same provision, as quoted in Para 1 supra. This Bill has also been referred now to the Parliamentary Standing Committee on Labour without informing that Committee that the same issue had been examined by the earlier Parliamentary Standing Committee and had been rejected by it. The Executive has thus been consistently playing tricks with the Parliamentarians and cheat them as a matter of routine by suppressing facts from the knowledge of the Parliamentarians.

12. I, therefore, request that the members of the present Parliamentary Standing Committee on Labour may be informed,specifically, of the contents of Para 113 of the of the Report presented to the Lok Sabha on 09.12.2009 by the earlier Committee, so that the present Committee concerned could take an informed decision.

13. It would also be appropriate for the present Parliamentary Standing Committee on Labour to delve a little deeper into the manner in which various instances had taken place during the last decade through that Sec. 59 (3) of the ESI Act, 1948, especially those involving the agency called M/s Sheel Nursing Home Pvt Ltd referred to in the Hqrs. letter dated 20.04.2018, before and for taking decision on the Clause No. 40 (9) of the Bill on Social Security Code, 2019, which is now under the consideration of the said Committee.

Thanking you,

Yours faithfully,

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