(Per Dr. G. YETHIRAJULU, J.)

C.M.A. No. 447/2006 was preferred against the decree and order in O.P. No. 20/2000, dated December 30, 2005, on the file of the Principal senior Civil Judge, Visakhapatnam. O.P. No. 20/2000 was filed by the petitioner under Section 75 of the Employees State Insurance Act to declare the petitioner club from the exemption of the Employees State Insurance Act similar to the exemption given to other clubs in the State of Andhra Pradesh; to declare the show-cause notice dated June 8, 2000 issued by the third respondent-Employees State Insurance Corporation, as illegal, arbitrary and without jurisdiction and to declare the observations of the Insurance Inspector in the report dated March 31,2000 as illegal and void and without jurisdiction, but the Court, after considering the oral and documentary evidence adduced by both parties, held that the petitioner club comes within the purview of ESI Act and that the observations of the Insurance Inspector made in the report are valid and the demand by the Corporation to make contributions of its employees by its club is legal and valid. Being aggrieved by the said order, C.M.A. No.447/2006 has been preferred.

2. The application was filed by the petitioner under Section 75 of the Employees State Insurance Act with the following averments in brief:

The petitioner is a club established in the year 1883, which was registered under Section 25 of the Indian Companies Act. It is a members club and not a proprietary club. The object of the club is to provide a venue for sports and games and facilities for recreation and entertainment. The petitioner is maintaining tennis court, squash, swimming pool and also billiards, table tennis and other indoor games. The petitioner club is also arranging some cultural programmes and other parties and runs a catering department, which provides food and refreshments generally and also dinners and parties on special occasions. These activities are restricted to its members only and outsiders have no access to the amenities. None of the provisions of the Factories Act or ESI Act are applicable to the petitioner club. There is no manufacturing process being carried out in the premises. It is having a kitchen rendering service to its members. Though power is being used in the kitchen for operating refrigerators, coolers etc., still it cannot be said to be a factory within the meaning of Section 2(12) of the ESI Act. The second respondent-Employees State Insurance Corporation issued a notice on February 1, 1989 under Section 45-A of the ESI Act that the petitioner club is an establishment covered under the ESI Act and directed it to pay contribution of Rs. 23,925/- from April, 1988 to September 1988 with interest at Rs. 689/-. Notices were also issued for the period from January, 1987 to February, 1988. The notice issued by the respondent directing the club to pay the contribution is illegal, void and without jurisdiction. As against the said notice, the petitioner club preferred revision before the High Court. The High Court dismissed the application. Subsequently, on August 19, 1999, , the second respondent issued a demand notice demanding to pay a sum of Rs. 35,035/- and interest from January, 1987 to June, 1999 to a tune of Rs. 41,431/- totalling Rs. 76,736/-. On February 16, 2000, the respondents officers served another notice along with recovery notice dated August 26, 1999 for recovery of the amount. The petitioner thereafter moved an application before the High Court challenging the notice. The said application was dismissed. The respondents recovered the amount from the petitioner's bank without the knowledge of the petitioner. The clubs in AP were given exemption by the respondents, which are running on very parallel to the petitioner club. When the above clubs are exempted from the purview of the Act, the petitioner's club shall also be exempted. Therefore, the notices issued are not legal and valid, hence the petition