BCCI A 'Shop' For Purpose Of Extending Benefits To Its Employees Under Employee State Insurance Act – SC

The Bench of Justice MR Shah & Justice PS Narasimha observed –

"…the ESI Court as well as the High Court have rightly concluded that the BCCI is carrying out systematic economic commercial activities and, therefore, the BCCI can be said to be "shop" for the purposes of attracting the provisions of ESI Act."

The Court held since BCCI is engaged in the entertainment industry it must pass the benefits to its employees by extending the coverage of ESI contribution on the wages payable to the coverable employees.

In this case, BCCI had filed Special Leave Petitions assailing the impugned judgment of the Bombay High Court in First Appeal. The Court had upheld the findings of the Employees Insurance Court (EIC) declaring that BCCI is covered within the meaning of 'shop' as per notification dated September 18, 1978, issued by the Government of Maharashtra under the provisions of Section 1(5) of the ESI Act, 1948, and remitted the matter for determining the contribution from BCCI.

The BCCI had resisted its contribution contending that the coverage of the BCCI under the provisions of the ESI Act is in violation of Section 2A of the ESI Act read with Regulation 10B of the Employees' State Insurance (General) Regulations 1950 since the primary object of the BCCI is to administer, promote and control the game of cricket throughout the country, and therefore, it is not covered or registered as "shop" under the provisions of Mumbai Shop and Establishment Act.

Further, it was argued that it is not primarily engaged or involved in trading or commercial activities and therefore, BCCI is not covered within the meaning of Section 1(5) of the ESI Act.

Senior Advocate Neeraj Kishan Kaul appeared for BCCI while Counsel Manish Kumar Saran appeared for the Respondents before the Apex Court.

The issue which was dealt with by the Court was –

• Whether the BCCI can be said to be a "shop" as per the notification dated 18.09.1978 and thereby the provisions of the ESI Act shall be applicable to the BCCI or not.

The Court placed reliance on the judgment of Bangalore Turf Club Limited Vs. Regional Director, Employees' State Insurance Corporation. 2014 (9) SCC 657 which dealt with the very same issue and the applicability of the ESI Act.

The Apex Court in the above-mentioned precedent had held that the ESI Act is welfare legislation enacted by the Central Government as a consequence of the urgent need for a scheme of health insurance for workers and, therefore, a liberal rule of interpretation should be adopted to ensure that the benefits extend to those workers, who need to be covered based on the intention of the legislature.

The Bench thus observed, "…the scheme and context of the ESI Act must be given due consideration. A narrow meaning should not be attached to the words used in the ESI Act as the ESI Act seeks to insure the employees of covered establishments against various risks to their life, health and well-being and places the said charge upon the employer. It is further observed that the term "shop" should not be understood and interpreted in its traditional sense as the same would not serve the purpose of the ESI Act. It is further observed that an expansive meaning may be assigned to the word "shop" for the purposes of the ESI Act."

The Court held that considering the systematic activities being carried out by the BCCI namely, selling of tickets of cricket matches; providing entertainment; rendering the services for a price; receiving the income from international tours and the income from the Indian Premier League, the ESI Court as well as the High Court have rightly concluded that the BCCI is carrying out systematic economic commercial activities and, therefore, the BCCI can be said to be "shop" for the purposes of attracting the provisions of ESI Act.

The Court additionally observed that no error has been committed by the ESI Court and/or the High Court in treating and considering the BCCI as a "shop" for the purposes of applicability of the ESI Act which is a social and beneficial legislation.

Accordingly, the Court dismissed the SLPs.