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2022 Supreme(Bom) 713

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BHARATI DANGRE, J.
The Board of Control for Cricket in India – Petitioner
Vs.
Regional Director Employees State Insurance Corporation and Another – Respondents
First Appeal St. No. 25980 of 2021
Decided On : 24-06-2022

Advocates:
Advocate Appeared:
For the Petitioners: Aditya Thakkar, Ranjit Shetty, Rahul Dev.
For the Respondents: Shailesh Pathak, Jay Vora.

The term 'shop' in the ESI Act and the notification issued thereunder must be interpreted liberally to achieve the Act's social welfare objectives. A 'shop' is a business establishment where systematic or organized commercial activity takes place regarding the sale or purchase of goods or services, including establishments that facilitate such transactions.

Headnote:

BCCI - ESI ACT - COVERAGE - 'SHOP' - COMMERCIAL ACTIVITY - ENTERTAINMENT - EMPLOYEES' STATE INSURANCE ACT, 1948 - SECTION 1(5) - NOTIFICATION DATED 18/9/1978 ISSUED BY THE GOVERNMENT OF MAHARASHTRA - BOMBAY SHOP AND ESTABLISHMENT ACT - MEMORANDUM OF ASSOCIATION OF BCCI - OBJECTS AND PURPOSES - ADMISSIONS BY BCCI'S WITNESS - BANGALORE TURF CLUB LTD. V. REGIONAL DIRECTOR, ESIC, 2014 (9) SCC 656 - ESI COURT'S DECISION - LEGALITY - REMAND - STAY.

Fact of the Case:

BCCI challenged the ESI Court's decision declaring it covered under the ESI Act as a 'shop' and remitting the matter for determining the contribution. BCCI claimed it was a non-profit body promoting cricket, not a 'shop' under the Bombay Shop and Establishment Act. ESIC argued BCCI's activities, including selling tickets and broadcasting rights, were commercial and covered under the Act.

Finding of the Court:

The ESI Court's decision was upheld. BCCI's activities, including organizing matches, selling tickets, and broadcasting rights, were commercial and provided entertainment, thus falling within the definition of 'shop' under the ESI Act and the notification issued by the Maharashtra Government. The Memorandum of Association and admissions by BCCI's witness supported this finding. The Bangalore Turf Club case, where a race club was held to be a 'shop,' was persuasive.

Issues: 1. Whether BCCI is a 'shop' covered under the ESI Act, 1948, and the notification issued by the Government of Maharashtra? 2. Whether BCCI's activities are commercial and provide entertainment, thus falling within the definition of 'shop'?

Ratio Decidendi: 1. The term 'shop' in the ESI Act and the notification issued thereunder is not defined and must be interpreted liberally to achieve the Act's social welfare objectives. 2. A 'shop' is a business establishment where systematic or organized commercial activity takes place regarding the sale or purchase of goods or services, including establishments that facilitate such transactions. 3. BCCI's activities, including organizing matches, selling tickets, and broadcasting rights, are commercial and provide entertainment to viewers, thus falling within the definition of 'shop.' 4. The Memorandum of Association and admissions by BCCI's witness support the finding that BCCI is engaged in systematic commercial activities and is a 'shop.'

Final Decision: The ESI Court's decision declaring BCCI covered under the ESI Act as a 'shop' was upheld. The matter was remanded to the ESI Corporation to determine the outstanding ESI contribution payable by BCCI, considering whether the contractors employed by BCCI had paid ESI contributions on behalf of their employees.

JUDGMENT :

BHARATI DANGRE, J.

1. The present Appeal is filed by the Board of Control for Cricket of India (hereinafter referred to as ‘BCCI’), being aggrieved by the impugned judgment and order passed by the Employees Insurance Court at Bombay (ESI Court dated 9/9/2021, declaring that the BCCI is covered within the meaning of ‘shop’ as per notification dated 18th September 1978 issued by the Government of Maharashtra under the provisions of Section 1(5) of the Employees State Insurance Act and the ESI Court, has remitted the matter for determining the contribution from the appellant Board in the wake of the observations made in the impugned judgment.

2. In support of the Appeal, I have heard the learned Advocate Mr. Aditya Thacker with Mr.Rahul Dev i/b Argus Partners for the appellant and Mr.Shailesh Pathak along with Jay Vora for the respondent.

Since the parties expressed their desire to argue the Appeal finally and have placed on record the compilation of documents, and also the compilation of the relevant judgments on which they seek to place reliance, at the request of the parties, I have heard the Appeal finally.

3. The brief facts in the background of which the present Appeal deserve consideration, can be culled out as under:

    The BCCI is a Society registered under the provisions of Tamil Nadu Societies Registration Act, 1975 in Central Chennai. It claims to be a National Government Body for Cricket in India and stake it’s existence since the year 1928. It is an autonomous non-profit making sports body established for promoting the sports of Cricket in India.

In the month of April-May 2011, the Board office was surveyed by the Insurance Inspector and the salary details of it’s employees were verified. Upon completion of the inspection, a visit note was recorded by the Inspector on 10/5/2011 and by communication dated 22/6/2011, issued by Regional Director of Employees State Insurance Corporation, Mumbai, it was communicated that the BCCI is covered under the provisions of Employees State Insurance Act, 1948 with effect from 1/1/2007 and it was allotted a Code number, indicating applicability of the provisions of ESI Act to the Board. The Board was communicated a notice in Proforma C-18 dated 1/7/2014, claiming contribution amount to the tune of Rs.5,04,075/- as Employees State Insurance Contribution for the period commencing from May 2007 to March 2014, being subjected to the provisions of ESI Act, the Board resisted by letter dated 11/8/2014, and clarified that it is a non-profit organization, where no commercial/ economic/manufacturing activities are performed or carried on and it requested the ESI Corporation to reconsider it’s decision of allotment ESI Code. On various dates, hearing was conducted before the Assistant Director of ESI Corporation, and on 23/6/2015, the legal Advisor of the Assistant Director of ESI Corporation called for personal hearing, but refused to accept the claim of the Board that it is not covered under the provisions of the ESI Act, and the decision came as a shock, since no opportunity of hearing was afforded to it before the decision was taken.

In short, the claim of the BCCI, the appellant is, that the coverage of the appellant Board under the provisions of ESI Act is in utter violation of Section 2-A of the ESI Act read with Regulation 10-B of the ESI (General) Regulations 1950, since the Board is a governing body for cricket in India and it’s primary object is to administer, promote and control the game of cricket throughout the country, including women’s cricket and to encourage formation of State, regional and other cricket associations and therefore, it is not covered or registered as ‘shop’ under the provisions of Mumbai Shop and Establishment Act. It is the claim of the appellant that it is not primarily engaged or involved in any trading or commercial activities and therefore, by no st

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