Summary
The ESI Corporation treated the BCCI as covered by the Employees' State Insurance Act from 2007 and demanded contributions. The ESI Court and the Bombay High Court held that the BCCI is a shop under the Maharashtra Government's 1978 notification under Section 1(5). Applying Bangalore Turf Club, the Court held that a shop under this beneficial legislation includes any establishment carrying on systematic economic or commercial activity in goods or services. The BCCI sells match tickets, provides entertainment for a price and earns from international tours and the IPL. Its overall activities, read with its Memorandum of Association as a whole, are commercial, so its predominant object of promoting cricket does not take it out of the Act. Decisions under other, non-pari materia statutes did not help it. The special leave petitions were dismissed.
Issues
- Whether the BCCI is a shop within the 1978 Maharashtra notification under Section 1(5) of the Employees' State Insurance Act, 1948, so that the Act applies to it.
- Whether coverage is to be judged by the entity's predominant object of promoting cricket or by its overall activities.
Provisions considered
- Section 1(5) and the Maharashtra Government notification dated 18.09.1978, Employees' State Insurance Act, 1948Shop in the notification is read expansively, as this is social welfare legislation, to cover any establishment carrying on systematic economic or commercial activity. The BCCI's ticketing, entertainment and tour and IPL income brought it within the term. (¶¶ 7, 8.1.2, 9, 10)
Held
- The ESI Act is beneficial social security legislation and must receive a liberal construction. Following Bangalore Turf Club, a shop is not confined to a place of retail sale of goods. It covers any establishment where systematic or organised commercial activity in the sale or purchase of goods or services takes place. (¶¶ 8, 8.1, 8.1.2, 8.1.4, 10)
- The BCCI sells tickets for matches, provides entertainment for a price and earns income from international tours and the Indian Premier League, so it carries on systematic commercial activity and is a shop for the ESI Act. These concurrent findings rest on the evidence and do not call for interference under Article 136. (¶¶ 9, 12)
- The test is the entity's overall activities and its Memorandum of Association read as a whole, not its predominant object. The argument that the BCCI's main purpose is promoting cricket was rejected. Decisions on other statutes that are not pari materia with the ESI Act do not govern the meaning of shop under it. (¶¶ 10, 11, 12)
Result
Special leave petitions dismissed, upholding the coverage of the BCCI under the ESI Act.