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2014 Supreme(SC) 1301

H.L.DATTU, R.K.AGRAWAL, ARUN MISHRA
Bangalore Turf Club Ltd. – Appellant
Versus
Regional Director, Employees State Insurance Corporation – Respondent


Advocate Appeared:
For the Appellant in CA 2416 of 2003 :Mr. K.K. Venugopal, Senior Advocate, Ms. Ruchika, Ms. Neha Malik, Mr. Rajan Narain, Mr. V.J. Francis, Advocates.
For the Appellant in C.A. Nos. 49 of 2006, 3422 of 2012 and 1575 of 2006 :Mr. Chander Uday Singh and Mr. J.P. Cama, Senior Advocates, Mr. Gobindram D. Talreja, Mr. R.N. Karanjawala, Ms. Manik Karanjawala, Ms. Ruby Singh Ahuja, Mr. Chahat Chawla, Ms. Neha Gupta, for M/s. Karanjawala & Co., Advocates.
For the Appellant in C.A. No. 6212 of 2012 :Mr. V. Giri, Senior Advocate, Mr. M.A. Chinnasamy, Advocate.
For the Respondent in CA 2416 of 2003:Mr. M.N. Krishnamani, Senior Advocate, Mr. Mahesh Srivastava, Mr. V.M. Srivastava, Mr. Kanak Tyagi, Mr. Rahul Bandari and Mr. P.N. Puri, Advocates.
For the Respondent in C.A. Nos. 49 of 2006:Mr. M.N. Krishnamani, Senior Advocate, Mr. Mahesh Srivastava, Mr. V.M. Srivastava and Mr. P.N. Puri, Advocates.
For the Respondent in CA 2413 of 2003:Mr. M.N. Krishnamani, Senior Advocate, Mr. Mahesh Srivastava, Mr. V.M. Srivastava, Mr. P.N Puri, Mr. Yakesh Anand, Ms. Sonam Anand, Mr. Sanjeev Anand, Mr. P.V. Yogeswaran, Mr. S. Thananjayan, Mr. Rakesh K. Sharma, Ms. Sangita Chauhan and Ms. Shubha, Advocates.

Judgement Key Points

Certainly. Based on the provided legal document, the key points are as follows:

  1. The primary issue is whether a 'race-club' falls under the scope of the word 'shop' as used in notifications issued under the Employees' State Insurance (ESI) Act (!) (!) .

  2. The interpretation of the term 'shop' is crucial, and in the absence of a statutory definition, it is to be understood in its common parlance, which generally refers to a place where goods or services are sold (!) (!) (!) .

  3. The courts have historically adopted an expansive interpretation of 'shop' for social welfare legislation, considering the scheme, purpose, and context of the legislation, rather than a narrow or traditional meaning (!) (!) .

  4. The activities of a 'race-club' involve systematic and organized commercial transactions, including providing entertainment, facilitating betting, and charging admission fees and commissions, which align with the broader understanding of a 'business establishment' or 'place of business' (!) (!) (!) .

  5. The activities undertaken by such clubs are systematic, involve organized services, and are conducted for the benefit of the public, which supports their classification as 'shops' under the relevant notifications (!) (!) (!) .

  6. The term 'establishment' is broadly interpreted to include places where systematic business or commercial activities are conducted, which would encompass race-clubs engaged in organized entertainment and betting activities (!) (!) .

  7. The interpretation of 'shop' should not be confined to its traditional or narrow sense but should be understood expansively to fulfill the legislative intent of social security and welfare for employees and workers (!) (!) .

  8. The doctrine of 'pari materia'—that similar statutes dealing with related subjects should be interpreted in harmony—has been considered, but differences in the scope and purpose of relevant statutes suggest that each should be interpreted according to its own context (!) (!) .

  9. The purpose of the ESI Act is social welfare, aiming to provide benefits related to health, sickness, and employment injuries, which warrants a broad and liberal interpretation of terms like 'shop' to include establishments engaged in organized commercial activities (!) (!) .

  10. Overall, the activities of the race-clubs, including betting and entertainment services provided systematically and organized for the public, are sufficiently similar to commercial establishments to be classified as 'shops' under the relevant notifications, thereby extending the provisions of the ESI Act to such clubs (!) (!) (!) .

Please let me know if you need further analysis or clarification on any specific point.


JUDGMENT :

H.L. Dattu, J.

Civil Appeal No. 2416 of 2003, Civil Appeal No. 49 of 2006, Civil Appeal No. 1575 of 2006, Civil Appeal No. 3421 of 2012 and Civil Appeal No. 3422 of 2012.

1. The issue that arises for our consideration and decision is, whether a 'race-club' would fall under the scope of the definition of the word 'shop', for the purposes of notification issued under sub-section (5) of section 1 of the Employees' State Insurance Act, 1948 (for short, "the ESI Act").

2. The matter is referred to three-Judge Bench of this Court as two-Judge Bench of this Court is of the view that the decision of two-Judge Bench of this Court in the case of Employees State Insurance Corporation v. Hyderabad Race Club, (2004) 6 SCC 191 may require reconsideration. By the aforesaid judgment, it was observed by this Court that ‘race-club' is an 'establishment' within the meaning of the said expression as used under Section 1(5) of the ESI Act. The order of reference reads as under :

    ORDER

    Heard learned counsel for the parties.

    The short question involved in these cases is whether the appellant Turf Clubs are covered by the Employees' State Insurance Act, 1948 (for short ‘ESI Act').

    Under Section 1 sub-s

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