The term 'shop' in the Employees' State Insurance Act, 1948 should be interpreted broadly to include places where a systematic economic or commercial activity is carried on, even if it does not involve buying or selling of goods.

S. S. Subramani, J

1. Petitioner in E.I.O.P. No. 2 of 1984, on the file of the Civil Court, Madras, is the appellant in this Letters Patent Appeal.

2. The respondent herein, on 15.7.1976, issued a notification whereby certain establishments were also brought into its coverages and one of the establishments was 'shops'. Thereafter, respondent issued notice to the appellant herein why it is not implementing the Notification. A reply was sent and since the same did not satisfy the respondent, it issued a notice on 9.6.1983 that in case the Act is not implemented and the contributions thereunder are not paid, coercive steps will be initiated against it. The appellant/petitioner being aggrieved by the said notice, filed the above original petition before City Civil Court, Madras, for declaration that the provisions of the Employees State Insurance Act, 1948 are not applicable to the petitioner/Society and that the Notification is not binding on it and for a further declaration that it is not liable to pay any amount mentioned in the notice issued by the respondent or for any future contribution, and for other consequential reliefs.

3. A written statement was filed by the respondent E.S.I. Corporation contending that the petitioner is an establishment to which the Act is applicable, and that these petitioner/Society acts as an agent for purchasing domestic and other requirements for its members and that it is also transacting surety loans, and that it is also rendering service for consideration. Therefore, it was contended that it is a 'shop' coming with the definition of Sec. 1(5) of the Act and, therefore, liable for contribution.

After taking evidence, the Employees' State Insurance Court, as per order dated 13.3.1985, came to the conclusion that the petitioner/Society is neither a shop nor an establishment and, therefore, the Notification has no application. It also declared that the petitioner/Society is not liable to contribute any amount as demanded.

4. Against the order of the Insurance Court, an appeal was taken by the respondent under S.82 of the Act as appeal against Order no. 51 of 1986 before this Court. The learned Judge, after hearing, came to the conclusion that the appellant/petitioner is an establishment and, therefore, bound by the Notification. The appeal was allowed and the E.I.O.P. was dismissed.

It is against the judgment of the learned Judge, this letters patent appeal is filed.

The only point that requires consideration in this L.P.A. is, whether the petitioner/Society is a 'shop' and, therefore, bound by the Notification.

Learned counsel for the petitioner submitted that even though the bye-laws of the Society provide for the Society to act as agent for purchasing domestic requirements of its members, such business is not being done by it. The main contention that is put forward by the learned counsel for the appellant is that it is only financing the members or their use and recovering the same with interest. In paragraphs 3 and 4 of the petition filed before the City Civil Court, it is averred thus :

"... The object of the Society shall be to borrow funds from members or others to be utilised for loans to members for useful purposes, and to generally encourage thrift, self-help and co-operation among the members by providing the necessary facilities therefor ...."

Further down, it is said :

"... The petitioner/Society is purely a credit institution catering to the needs in the form of financial assistance to the members of the Society ....."

On the basis of this contention, it is urged that the Act or Notification will have no application.

Before the City Civil Court, P.W. 1 was examined and he gave evidence in accordance with the allegations in the petition. From his evidence, it is clear that the petitioner/Society is running a financial institution though the assistance is given only to its members and not to the public at large.

5. While interpreting a Statute, the court will have to look into the inten