The ESIC is right in seeking contribution when we look at the definition of 'employee' under the Act.
Section 2 (9) “ employee ” means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and —
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere ; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment ; or
(iii) whose services are temporarily lent or let on hire to the principal employer by
the person with whom the person whose services are so lent or let on hire has
entered into a contract of service ;
and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment ;
or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices
Act, 1961 (52 of 1961), and includes such person engaged as apprentice whose training period
is extended to any length of time
but does not include —
(a) any member of the Indian naval, military or air forces ; or
(b) any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government
So even if they are termed as Trainees or Non-act Apprentices or even student as that work takes place (catering in this case) in your premises and it cannot be contended that organising such functions is not 'in or in connection with the work of the establishment', the ESIC is entitled to seek the contribution in this case.