The Supreme Court has recently ruled that Board of Control for Cricket in India (BCCI) can be said to be a 'shop' for the purposes of attracting the provisions of Employees State Insurance Act, 1948 as its activities can be said to be 'systematic commercial activities' providing entertainment by selling tickets etc.
The Division Bench comprising of Justice MR Shah and Justice PS Narasimha while adjudicating upon an SLP filed by BCCI against the ESI Court's order observed that words used in a particular statute cannot be used to interpret the same word in a different statute especially when the two statues are not pari materia with each other and have a wholly different scheme from one another.
Regional Director Employees’ State Insurance Corporation at Bombay had declared that the BCCI is covered within the meaning of 'shop' as per notification dated 18.09.1978 issued by the Maha Govt under the provisions of Section 1(5) of the Employees State Insurance Act, 1948. It send a Notice claiming contribution amount to the tune of Rs. 5,04,075/- as Employees’ State Insurance Contribution.
The above was challenged before the ESI Court on the grounds inter alia that the coverage of the BCCI under the provisions of 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. It was also the case on behalf of the BCCI that it is not primarily engaged or involved in any trading or commercial activities and therefore, BCCI is not covered within the meaning of Section 1(5) of the ESI Act.
By the impugned judgment and order and on considering the various documents produced before it, including BCCI’s Memorandum of Association, Rules and Regulations; its Annual Reports, the ESI Court concluded that the activities of the BCCI can be said to be purely commercial activities and therefore, the provisions of the ESI Act shall be applicable to BCCI. The judgment and order passed by the ESI Court was the subject matter of first appeal before the High Court which came to be dismissed as well.
BCCI submitted that the revenue earned by the BCCI is ultimately used for promoting the activities of sports – cricket. It was further submitted that therefore, the BCCI cannot be said to be a “shop” and, therefore, the provisions of ESI Act shall not be applicable. Heavy reliance is placed on Clauses 2 and 3 of the Memorandum of Association of BCCI.
The Counsel for BCCI contended that to bring a particular entity within the definition of “shop” and while considering whether the activities of such entity can be said to be commercial activities, the predominant activity of such entity is to be considered. It was submitted that so far as the BCCI is concerned, the primary and dominant object is to promote the cricket. It is submitted that therefore if the pre-dominant activity of the BCCI is considered, in that case, BCCI shall not fall within the definition of “shop” and therefore the provisions of the ESI Act shall not be applicable. Reliance was placed on The Secretary, Ministry of Information & Broadcasting Vs. Cricket Association of Bengal & ANR, 1995 Latest Caselaw 124 SC and Commissioner of Sales Tax Vs. Sai Publication Fund, 2002 Latest Caselaw 166 SC
The Court at the outset referred to its decision in Bangalore Turf Club Limited (supra) wherein it was observed and held that the ESI Act is a welfare legislation enacted by the Central Government as a consequence of the urgent need for a scheme of health insurance for workers and, therefore, 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 Court opined that based on the law laid down and 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.
"BCCI is engaged in systematic commercial activities and is a profit earning institution and is engaged in entertainment industry as it provides entertainment to the customers at a price, i.e., by selling tickets and therefore, it must pass on benefits to its employees by extending the coverage of ESI contribution on the wages payable to the coverable employees. The findings recorded by the ESI Court and the High Court are on appreciation of evidence/material on record, which as such are not required to be interfered by this Court in exercise of the powers under Article 136 of the Constitution of India."
CASE TITLE: Board of Control for Cricket in India versus Regional Director Employees’ State Insurance Corporation and Anr.
CASE DETAILS: SPECIAL LEAVE PETITION (C) NOS. 13554-13555 OF 2022
CORAM: Justice MR Shah and Justice PS Narasimha
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