BOARD OF CONTROL FOR CRICKET IN INDIA versus REGIONAL DIRECTOR EMPLOYEES’ STATE INSURANCE CORPORATION AND ANR on 18 August 2022

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the High Court of Judicature at Bombay dated24.06.2022 passed in First Appeal ST No. 25980 of 2021 preferred bythe appellant – the Board of Control for Cricket in India (hereinafterreferred to as “BCCI”) by which the High Court has dismissed the saidfirst appeal, which was filed against the judgment and order passed bythe Employees’ Insurance Court at Bombay dated 09.09.2021, declaringthat the BCCI is covered within the meaning of “shop” as per notificationdated 18.09.1978 issued by the Government of Maharashtra under theprovisions of Section 1(5) of the Employees State Insurance Act, 1948(hereinafter referred to as the “ESI Act”) and remitted the matter fordetermining the contribution from BCCI, BCCI has preferred the presentspecial leave petitions.

2. By communication dated 22.06.2011, issued by the RegionalDirector of Employees’ State Insurance Corporation, Mumbai, it wascommunicated that the BCCI is covered under the provisions of ESIAct w.e.f.01.01.2007 and it was allotted a Code number, indicatingapplicability of the provisions of the ESI Act to the BCCI. The BCCIwas communicated a notice in Proforma C-18 dated 01.07.2014, claimingcontribution amount to the tune of Rs.5,04,075/- as Employees’ StateInsurance Contribution for the period commencing from May, 2007 toMarch, 2014, being subjected to the provisions of the ESI Act. The BCCIresisted the same on the grounds inter alia that the coverage of theBCCI under the provisions of ESI Act is in violation of Section 2A of the

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AESI Act read with Regulation 10B of the Employees’ State Insurance(General) Regulations 1950, since the primary object of the BCCI is toadminister, promote and control the game of cricket throughout thecountry, and therefore, it is not covered or registered as “shop” underthe provisions of Mumbai Shop and Establishment Act. It was also thecase on behalf of the BCCI that it is not primarily engaged or involved inBany trading or commercial activities and therefore, BCCI is not coveredwithin the meaning of Section 1(5) of the ESI Act.

2.1 An appeal was preferred before the Employees’ StateInsurance Court, Bombay (hereinafter referred to as “ESI Court”) againstthe order passed under Section 45A of the ESI Act, which determinedtheCamount of contribution to the tune of Rs.4,93,350/- for the period fromJune, 2010 to March, 2014. By a detailed judgment and order and onconsidering the various documents produced before it, includingBCCI’sMemorandum of Association, Rules and Regulations; its AnnualReports, the ESI Court concluded that the activities of the BCCI can beDsaid to be purely commercial activities and therefore, the provisions ofthe ESI Act shall be applicable to BCCI. The judgment and order passedby the ESI Court was the subject matter of first appeal before the HighCourt.

2.2 On appreciation of entire evidence on record, the activitiesEcarried out by the BCCI and the relevant clauses of the Memorandumof Association and after following the decision of this Court in the caseof Bangalore Turf Club Limited Vs. Regional Director,Employees’ State Insurance Corporation. 2014 (9) SCC 657, theHigh Court has concurred with the findings recorded by the ESI Courtthat the BCCI can be said to be a “shop” as per the notification datedF18.09.1978 and therefore, subjected to the provisions of the ESI Act andspecifically observed and held that the activities of the BCCI can besaid to be commercial activities for the purpose of definition of “shop”and for applicability of the provisions of the ESI Act. Consequently, bythe impugned judgment and order, the High Court has dismissed the firstGappeal, which is the subject matter of present special leave petitions.

3. Shri Neeraj Kishan Kaul, learned Senior Advocate has appearedon behalf of the petitioner – BCCI and Shri Manish Kumar Saran, learnedcounsel has appeared on behalf of the respondent – ESI Corporation.

4. Shri Neeraj Kishan Kaul, learned Senior Advocate appearingHon behalf of the petitioner – BCCI has reiterated what was submitted before the High Court and the ESI Court. It is vehemently submittedthat the activities of the BCCI cannot be said to be commercial activitiesto bring it within the definition of “shop” as per the notification dated18.09.1978. It is submitted that the revenue earned by the BCCI isultimately used for promoting the activities of sports – cricket. It issubmitted that therefore, the BCCI cannot be said to be a “shop” and,therefore, the provisions of ESI Act shall not be applicable. Heavyreliance is placed on Clauses 2 and3 of the Memorandum of Associationof BCCI.

4.1 It is further submitted by Shri Kaul, learned Senior Advocateappearing on behalf of the petitioner – BCCI that to bring a particularentity within the definition of “shop” and while considering whether theactivities of such entity can be said to be commercial activities, the pre-dominant activity of such entity is tobe considered. It is submitted that sofar as the BCCI is concerned, the primary and dominant object is topromote the cricket. It is submitted that therefore if the pre-dominantactivity of the BCCI is considered, in that case, BCCI shall not fallwithin the definition of “shop” and therefore the provisions of the ESIAct shall not be applicable. Shri Kaul, learned Senior Advocate appearingon behalf of the BCCI has heavily relied upon the decisions of this Courtin the case of Secretary, Ministry of Information & Broadcasting,Govt. of India and Ors.Vs. Cricket Association of Bengal andOrs.,(1995) 2 SCC 161 as well as the subsequent decision in the caseof Commissioner of Sales Tax Vs. Sai Publication Fund, (2002) 4SCC 57 (paras 10, 11, 13 and 17) in support of this submission that theBCCI cannot be said to be a “shop” as per notification dated 18.09.1978and that the provisions of the ESI Act shall not be applicable.

5. While opposing the present special leave petitions, Shri ManishKumar Saran, learned counsel appearing on behalf of the respondents –ESI Corporation has taken us to the specific findings recorded by theESI Court as well as the High Court holding that the activities of theBCCI can be said to be commercial activities to bring the BCCI withinthe definition of “shop” It is submitted that the findings recorded by theESI Court and the High Court are on appreciation of evidence/materialon record and considering the relevant clauses namely Clauses (e), (f),(k), (m), (n), (o), (p), (r), (s) of the Memorandum of Association. It issubmitted that on considering the material on record and even consideringthe statement of the Chief Executive Officer of the BCCI, the ESI Court A

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Ahas specifically observed and held that the BCCI is the body involved inentertaining and/or the body carrying out systematic commercial activitiesand is engaged in providing public services to public at large by organizingevents, promoting cricket as source of entertainment and therebycollecting funds.

B5.1 It is further submitted by the learned counsel appearing onbehalf of the ESI Corporation that the ESI Act being a beneficiallegislation and therefore, as held by this Court in the case of BangaloreTurf Club Limited (supra), a liberal meaning should be given to theword “shop”. It is submitted that as held by this Court in the above casethat since the ESI Act is passed for conferring certain benefits toCemployees in case of sickness, maternity in case of female employeesand employment injury, the ESI Act should receive a liberal and beneficialconstruction so as to achieve legislative purpose.

5.2 Now, so far as reliance placed upon the decision of this Courtin the case of Sai Publication Fund (supra) relied upon by the learnedDcounsel appearing on behalf of the petitioner – BCCI is concerned, it isvehemently submitted by the learned counsel appearing on behalf of theESI Corporation that the said decision shall not be applicable whileconsidering the provisions of ESI Act as the decision in the said case isrelating to Income Tax Act. It is submitted that as observed and held byEthis Court in the case of Bangalore Turf Club Limited (supra),thewords used in a particular statute cannot be used to interpret the sameword in a different statute especially in light of the fact that the twostatutes are not pari materia with each other and have a wholly differentscheme from one another. It is submitted on the contrary that the decisionof this Court in the case of Bangalore Turf Club Limited (supra),Fwhich is dealing with the very provisions under the ESI Act shall beapplicable with full force.

5.3 Making above submissions and heavily relying upon the decisionof this Court in the case of Bangalore Turf Club Limited (supra), it isprayed to dismiss the present special leave petitions.G6. Heard the learned counsel appearing on behalf of the respectiveparties at length.

7. The short question which is posed forconsideration of this Court is:- H

“Whether the BCCI can be said to be “shop” as per the notificationdated 18.09.1978 and thereby the provisions of ESI Act shall beapplicable to the BCCI or not?”

8. While considering the aforesaid issue/question posed forconsideration, a direct decision of this Court in the case of BangaloreTurf Club Limited (supra), which is dealing with the very issue andthe applicability of the ESI Act is required to be referred to andconsidered.

8.1 In the case of Bangalore Turf Club Limited (supra), thisCourt observed and held that the ESI Act is a welfare legislation enactedby the Central Government as a consequence of the urgent need for ascheme of health insurance for workers and, therefore, liberal rule ofinterpretation should be adopted to ensure that the benefits extend tothose workers, who need to be covered based on the intention of thelegislature. In paragraph 17, this Court considered the object and purposeof the enactment of the ESI Act and in paragraphs 18 to 20 consideredthe earlier decisions of this Court in the case of RegionalDirector,E.S.I.Corporation Vs. Francis De Costa, 1993 Supp (4)SCC 100; Transport Corporation of India Vs. Employees’ StateInsurance Corpn. and Anr., (2000) 1 SCC 332; Buckingham andCarnatic Co. Ltd. v. Venkatiah [AIR 1964 SC 1272] and BombayAnand Bhavan Restaurant Vs. Deputy Director, Employees’ StateInsurance Corporation, (2009) 9 SCC 61, the relevant observationsmade in the aforesaid decisions are as under:- “18. In ESI Corpn. v. Francis De Costa [1993 Supp (4) SCC 100],this Court held that : (SCC pp. 105-06, paras 5-6)

“5. The Act seeks to cover sickness, maternity, employmentinjury, occupational disease, etc. The Act is a social securitylegislation. It is settled law that to prevent injustice or to promotejustice and to effectuate the object and purpose of the welfarelegislation, broad interpretation should be given, even if it requiresa departure from literal construction. The court must seek lightfrom loadstar Articles 38 and 39 and the economic and socialjustice envisaged in the Preamble of the Constitution whichwould enliven meaningful right to life of the worker under Article21. The State is enjoined under Article 39(e) to protect thehealth of the workers, under Article 41 to secure sickness and A

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disablement benefits and Article 43 accords decent standardof life. Right to medical and disability benefits are fundamentalhuman rights under Article 25(2) of the Universal Declarationof Human Rights and Article 7(b) of the InternationalConvention on Economic, Social and Cultural Rights. Right tohealth, a fundamental human right stands enshrined in socio-economic justice of our Constitution and the UniversalDeclaration of Human Rights. Concomitantly right to medicalbenefit to a workman is his/her fundamental right. The Actseeks to succour the maintenance of health of an insuredworkman. The interpretative endeavour should be to effectuatethe above. Right to medical benefit is, thus, a fundamental rightto the workman.

6. Moreover, even in the realm of interpretation of statutes, ruleof law is a dynamic concept of expansion and fulfilment for whichthe interpretation would be so given as to subserve the social andeconomic justice envisioned in the Constitution. Legislation is a conscious attempt, as a social direction, in the process ofchange. The fusion between the law and social change would beeffected only when law is introspected in the context of ordinarysocial life. Life of the law has not been logic but has beenexperience. It is a means to serve social purpose and felt necessitiesof the people. In times of stress, disability, injury, etc. the workmanneeds statutory protection and assistance. The Act fastens in aninsured employment, statutory obligation on the employer and theemployee to contribute in the prescribed proportion and mannertowards the welfare fund constituted under the Act (Sections 38

to 51 of the Act) to provide sustenance to the workmen in theirhours of need, particularly when they become economicallyinactive because of a cause attributable to their employment ordisability or death occurred while in employment. The fact thatthe employee contributed to the fund out of his/her hard-earned wages cannot but have a vital bearing in adjudicating whether theinjury or occupational disease suffered/contracted by an employeeis an employment injury. The liability is based neither on anycontract nor upon any act or omission by the employer but uponthe existence of the relationship which employer bears to theemployment during the course of which the employee had beeninjured. The Act supplants the action at law, based not upon the fault but as an aspect of social welfare, to rehabilitate a physicallyand economically handicapped workman who is adversely affectedby sickness, injury or livelihood of dependents by death of aworkman.”

19. A three-Judge Bench of this Court, in reference to the ESIAct, in Transport Corpn. of India v. ESI Corpn. [(2000) 1 SCC332], held that : (SCC pp. 357-58, paras 27-28)

“27. Before parting with the discussion on this point, it isnecessary to keep in view the salient fact that the Act is abeneficial piece of legislation intended to provide benefits toemployees in case of sickness, maternity, employment injuryand for certain other matters in relation thereto. It is enactedwith a view to ensuring social welfare and for providing safeinsurance cover to employees who were likely to suffer fromvarious physical illnesses during the course of theiremployment. Such a beneficial piece of legislation has to beconstrued in its correct perspective so as to fructify thelegislative intention underlying its enactment. When two viewsare possible on its applicability to a given set of employees,that view which furthers the legislative intention should bepreferred to the one which would frustrate it.…

28. Dealing with this very Act, a three-Judge Bench of thisCourt in Buckingham and CarnaticCo. Ltd. v. Venkatiah [AIR1964 SC 1272] speaking through Gajendragadkar, J., (as hethen was) held, accepting the contention of the learned counsel,Mr Dolia that : (AIR p. 1277, para 10)

‘10. … It is a piece of social legislation intended to conferspecified benefits on workmen to whom it applies, and so,it would be inappropriate to attempt to construe the relevantprovisions in a technical or a narrow sense. This positioncannot be disputed. But in dealing with the plea raised byMr Dolia that the section should be liberally construed, wecannot overlook the fact that the liberal construction mustultimately flow from the words used in the section. If thewords used in the section are capable of two constructionsone of which is shown patently to assist the achievement A

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of the object of the Act, courts would be justified in preferringthat construction to the other which may not be able tofurther the object of the Act.’”

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20. In Bombay Anand Bhavan Restaurant v. ESI Corpn. [(2009)9 SCC 61], it was observed that : (SCC p. 66, para 20)

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“20. The Employees’ State Insurance Act is a beneficiallegislation. The main purpose of the enactment as the Preamblesuggests, is to provide for certain benefits to employees of afactory in case of sickness, maternity and employment injuryCand to make provision for certain other matters in relationthereto. The Employees’ State Insurance Act is a social securitylegislation and the canons of interpreting a social legislationare different from the canons of interpretation of taxation law.The courts must not countenance any subterfuge which woulddefeat the provisions of social legislation and the courts mustDeven, if necessary, strain the language of the Act in order toachieve the purpose which the legislature had in placing thislegislation on the statute book. The Act, therefore, must receivea liberal construction so as to promote its objects.”

E8.1.1 That thereafter in paragraph 21, it is observed and held asunder:-

“21. The legislature enacted the ESI Act to provide certain benefitsto employees in case of sickness, maternity in case of femaleemployees, employment injury and to make provision in certainFother matters in relation thereto. The provisions of the ESI Actapply to all the factories other than seasonal factories. The StateGovernment with the approval of the Central Government isauthorised to make the provisions of the ESI Act applicable toany other establishment or establishments. The provisions of theESI Act provide that all employees in factories or establishmentsGto which the ESI Act applies shall be insured in the manner providedunder the ESI Act. Since the ESI Act is passed for conferringcertain benefits to employees in case of sickness, maternity andemployment injury, it is necessary that the ESI Act should receivea liberal and beneficial construction so as to achieve legislativepurpose without doing violence to the language of the enactment.”

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8.1.2 Thereafter while interpreting the terms “establishment” and“shop”, it is observed in paragraphs 37, 38.6 and 39 to 42 as under:- “37. The term “establishment” would mean the place fortransacting any business, trade or profession or work connectedwith or incidental or ancillary thereto. It is true that the definitionin dictionaries is the conventional definition attributed to trade orcommerce, but it cannot be wholly valid for the purpose ofconstructing social welfare legislation in a modern welfare State.The test of finding out whether professional activity falls withinthe meaning of the expression “establishment” is whether theactivity is systematically and habitually undertaken for productionor distribution of the goods or services to the community with thehelp of employees in the manner of a trade or business in such anundertaking. If a systematic economic or commercial activity iscarried on in the premises, it would follow that the establishmentat which such an activity is carried on is a “shop”. This Court,in Hyderabad Race Club case [ESI Corpn. v. Hyderabad RaceClub, (2004) 6 SCC 191] , keeping in view the systematiccommercial activity carried on by the club has held that the raceclub is an establishment within the meaning of the said expressionas used in the notification issued under Section 1(5) of the ESIAct. Therefore, in our considered view, the view expressed bythis Court is in consonance with the provisions of the ESI Act andalso settled legal principles. Therefore, the said decision does notrequire reconsideration.

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38.6. From the above, it can be said that a “shop” is a place ofbusiness or an establishment where goods are sold for retail.However, it may be noted that the definitions as given in thedictionaries are very old and may not reflect, with completeaccuracy, what a “shop” may be referred to as in the present day.Therefore, it may be pertinent to consider the manner in whichthis Court has dealt with the word “shop” in its judicial decisions.

39. The term “shop”, in regard to the ESI Act, has been discussedin earlier cases by this Court. In Hindu Jea Band [Hindu JeaBand v. ESI Corpn., (1987) 2 SCC 101 : AIR 1987 SC 1166] it isobserved that a “shop” would be a place where services are soldon a retail basis. In International Ore and Fertilizers (India) (P)

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ALtd. v. ESI Corpn. [(1987) 4 SCC 203] this Court stated that a“shop” would be a place where the activities connected with buyingand selling of goods are carried on. In Cochin Shipping Co. [CochinShipping Co. v. ESI Corpn., (1992) 4 SCC 245] the Court observedthat a “shop” must be held to be a place where commercial activityof buying and selling of merchandise takes place. In R.K. SwamyBcase [ESI Corpn. v. R.K. Swamy, (1994) 1 SCC 445] the Courtextended the meaning of a “shop” to include even sale of services.

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40. Therefore, certain basic features of a “shop” may be culledout from the above. It can be said that a “shop” is a businessestablishment where a systematic or organised commercial activityCtakes place with regard to the sale or purchase of goods or services,and includes an establishment that facilitates the above transactionas well.

41. The word “shop” is not defined either in the ESI Act or in thenotification. The ESI Act being a social welfare legislation intendedDto benefit as far as possible workers belonging to all categories,one has to be liberal in interpreting the words in such a welfarelegislation. The definition of a shop which meant a house or buildingwhere goods are sold or purchased has now undergone a greatchange. The word “shop” occurring in the notification is used inEthe larger sense than its ordinary meaning. What is now requiredis a systematic economic or commercial activity and that issufficient to bring that place within the sphere of a “shop”.

42. In view of the fact that an “establishment” has been found tobe a place of business and further that a “shop” is a businessFestablishment, it can be said that a “shop” is indeed covered under,and may be called a subset of, the term “establishment”.”

8.1.3 That thereafter and after observing so, this Court consideredwhether the Turf Clubs fall under the definition of the term “shop” forthe purposes of ESI Act and it is observed in paragraph 47 as under:- G

G“47. It is not the case of the appellants that the club does notprovide services. It may be gainsaid that the said services, apartfrom providing the viewers with a form of entertainment, is availableto all members of the public at a mere payment of an admission orentrance fee. The only question, therefore, would be whether suchservices may be construed to be along the same lines as thoseH

provided for by a shop. If the answer is in the affirmative, thensuch race clubs would surely fall within the definition of the term“shop”, and thereby under the ESI Act as well.”

8.1.4 In the aforesaid decision, it is specifically observed and heldthat the scheme and context of the ESI Act must be given dueconsideration.A narrow meaning should not be attached to the wordsused in the ESI Act as the ESI Act seeks to insure the employees ofcovered establishments against various risks to their life, health and well-being and places the said charge upon the employer.It is further observedthat the term “shop” should not be understood and interpreted in itstraditional sense as the same would not serve the purpose of the ESIAct. It is further observed that an expansive meaning may be assignedto the word “shop” for the purposes of the ESI Act. It is further observedthat the activities of the Turf Clubs are in the nature of organised andsystematic transactions, and that the Turf Clubs provide services tomembers as well as to the public in lieu of consideration, therefore, theTurf Clubs are a “shop” for the purpose of extending the benefits underthe ESI Act.

9. Applying the law laid down by this Court in the case ofBangalore Turf Club Limited (supra) to the facts of the case onhand and considering the systematic activities being carried out by theBCCI namely, selling of tickets of cricket matches; providingentertainment; rendering the services for a price; receiving the incomefrom international tours and the income from the Indian Premier League,the ESI Court as well as the High Court have rightly concluded that theBCCI is carrying out systematic economic commercial activities and,therefore, the BCCI can be said to be “shop” for the purposes of attractingthe provisions of ESI Act. After analysingthe relevant evidences/materialon record, the ESI Court and the High Court had recorded the findingsthat the BCCI is engaged in systematic commercial activities and is aprofit earning institution and is engaged in entertainment industry as itprovides entertainment to the customers at a price, i.e., by selling ticketsand therefore, it must pass on benefits to its employees by extending thecoverage of ESI contribution on the wages payable to the coverableemployees. The findings recorded by the ESI Court and the High Courtare on appreciation of evidence/material on record, which as such arenot required to be interfered by this Court in exercise of the powersunder Article 136 of the Constitution of India.

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A10. The submission on behalf of the BCCI that what is required tobe considered is the predominant activities and the predominant activityof BCCI is to encourage the cricket/sports and, therefore, the sameshall not be brought within the definition of “shop” for the purposes ofapplying the ESI Act, the aforesaid has no substance. What is requiredto be considered is the overall activities. If the test as observed by thisBCourt in the case of Bangalore Turf Club Limited (supra) is adopted,the activities carried out by the BCCI can be said to be commercialactivities, providing entertainment by selling the tickets. Therefore, forthe purposes of ESI Act, the BCCI can be said to be a “shop”. Asobserved and held by this Court in the case of Bangalore Turf ClubCLimited (supra)the ESI Act being abeneficial legislation, the broadestmeaning should be given so as to achieve the object and purpose ofenactment of ESI Act namely to provide certain benefits to employeesin case of sickness, maternity in case of female employees, employmentinjury etc.D11. Now, so far as the reliance placed upon the decisions of thisCourt in the case of Secretary, Ministry of Information &Broadcasting, Govt. of India and Ors. Vs. Cricket Association ofBengal and Ors., (1995) 2 SCC 161 and Commissioner of SalesTax Vs. Sai Publication Fund, (2002) 4 SCC 57 relied upon by thelearned counsel appearing on behalf of the BCCI is concerned, whileEconsidering the provisions of the ESI Act and/or for the purposes ofapplicability of the ESI Act, which is a social beneficial legislation, theaforesaid decisions shall not be applicable and/or of any assistance tothe BCCI. In the case of Sai Publication Fund (supra), this Court wasconsidering the provisions of Income Tax Act. As observed and held byFthis Court in the case of Bangalore Turf Club Limited (supra), thetwo statutes are said to be pari materia with each other when they dealwith the same subject matter. It is further observed that the words usedin a particular statute cannot be used to interpret the same word in adifferent statute especially in light of the fact that the two statues are notpari materia with each other and have a wholly different scheme fromGone another.

12. In view of the above and for the reasons stated above, noerror has been committed by the ESI Court and/or the High Court intreating and considering the BCCI as a “shop” for the purposes ofapplicability of the ESI Act, which as observed hereinabove, is a socialH

BOARD OF CONTROL FOR CRICKET IN INDIA v. REGIONAL DIRECTOREMPLOYEES’ STATE INSURANCE CORP. [M. R. SHAH, J.]

and beneficial legislation. It is also required to be noted that while holdingso, the High Court has also taken into consideration the relevant clausesof the Memorandum of Association of the BCCI to come to theconclusion that the activities of the BCCI can be said to be systematiccommercial activities providing entertainment by selling tickets etc. TheMemorandum of Association as a whole is required to be considered.

13. In view of the above and for the reasons stated above, we seeno reason to interfere with the impugned judgment and order passed bythe High Court as well as the ESI Court. As such, we are in completeagreement with the view taken by the High Court. The special leavepetitions stand dismissed accordingly.

Pending application(s), if any, also stands disposed of.

Divya Pandey

SLPs disposed of

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