BANGALORE TURF CLUB LTD.versusREGIONAL DIRECTOR, ESI CORPORATION
- Citation
- 2009 INSC 628
- Decided
- 28 April 2009
- Disposal
- Matter referred to larger bench
Holding
A club is not a "shop" within the meaning of Section 1(5) of the Employees' State Insurance Act, 1948.
Summary
Bangalore Turf Club Ltd. challenged the Regional Director of the Employees' State Insurance Corporation's demand for ESI contributions, contending that as a club it does not qualify as a "shop" under Section 1(5) of the Employees' State Insurance Act, 1948. The central issue was whether turf clubs fall within the definition of "shop" and are therefore covered by the Act, especially in light of the earlier decision in Employees State Insurance Corp. v. Hyderabad Race Club which held they were. The Supreme Court observed that Section 1(5) only covers establishments specifically notified and that the term "shop" is not defined in the Act, so it must be given its ordinary meaning, which does not include clubs. It distinguished the Hyderabad Race Club case, stating that the earlier judgment incorrectly presumed all establishments were covered. The Court also held that the definition of "industry" in the Industrial Disputes Act cannot be imported into the ESI Act. Consequently, the Court concluded that turf clubs are not shops under the Act and ordered that the matter be referred to a larger Bench for reconsideration of the Hyderabad Race Club decision. The respondents were directed not to raise any demand against the clubs pending the larger Bench.
Issues considered
- Whether a turf club qualifies as a "shop" under Section 1(5) of the Employees' State Insurance Act, 1948 and is therefore covered by the Act
- Whether the decision in Employees State Insurance Corp. v. Hyderabad Race Club should be reconsidered
Legislation cited
- Employees' State Insurance Act, 1948s. 1(4), s. 1(5)
Subjects
Judgment
[2009] 7 S.C.R. 106
A BANGALORE TURF CLUB LTD.
V.
REGIONAL DIRECTOR, ESI CORPORATION
Civil Appeal No. 2416 of 2003
APRIL 28, 2009
B
(MARKANDEY KATJU AND H.L. DATTU, JJ.)
EMPLOYEES' STATE INSURANCE ACT, 1948:
s. 1(5) - 'Shop' - Turf Club - Held: Is not 'shop' - Besides,
c uls 1(5) only such establishments are covered as are notified
in official gazette - Decision in Hvderabad Race Club requires
reconsideration - Matter referred to larger Bench.
Employees State Insurance Corpn. Vs. Hyderabad
Race Club 2004 (6) SCC 191 - referred to.
D
Bangalore Water Supply & Sewerage Board Vs.
A. Rajappa & Ors. 1978 (2) SCC 213 - held inapplicable.
Case Law Reference
2004 (6) sec 191 referred to para 3
E
191s (2) sec 213 held inapplicable para 3
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 2416
of 2003
•
F From th~ Judgement and Order dated 04.09.2002 of the
Hon'ble High Court of Karnataka at Bangalore in MFA No. 3699
of 1998
WITH
G Civil Appeal Nos. 49 of 2006
Civil Appeal Nos. 1575 of 2006
K.K. Venugopal, J.P. Cama (NP), C.S. Rajan, B.C.
Prabhakar, Kanika Gamber, Rajeshwari Shukla, Gopal
H 106
BANGALORE TURF CLUB LTD. V. 107
REGIONAL DIRECTOR, ES! CORPORATION
...
Sankaranarayanan, R. K. Dubey, Rajan Narain, Ruby Singh A
Ahuja, Gobindram D. Talreja, Simran Brar,Abeer Kumar, Manik
' Karajawala, Anupam Mishra, V. J. Francis, with them for the
"""\
- appearing parties.
The following order of the Court was delivered :
Heard learned counsel for the parties.
8
• The short question involved in these cases is whether the
appellant Turf Clubs are covered by the Employees' State
Insurance Act, 1948 {for short the 'ESI Act').
c
Under Section 1 sub-section (5) of the ESI Act all
establishments are not automatically covered by the said Act
but only such establishments as are mentioned in the notification
issued by the appropriate Government under Section 1(5). This
-\
provision is not like sub~section (4) of Section 1 by which all D
factories are automatically covered by the ESI Act. The
notifications issued under Section 1(5) in these cases use the
' word 'shop' and it has been held by the impugned judgments in
these cases that the turf clubs are shops. Reliance in this behalf
has been placed on the judgment of this Court in the case of. E
Employees State Insurance Corpn. Vs. Hyderabad Race Club
2004 (6)SCC, 191.
j,
With great respect to the aforesaid decision in the case of
Hyderabad Race Club (supra), we think that the s9id decision
F
requires reconsideration. In common parlance a club is not a
shop.
~~
The wo!d 'shop' has not been defined either in the ESI Act
' nor in the notification issued by the appropriate government
under Section 1(5). Hence, in our opinion, the meaning of 'shop'· G
t will be that used in common parlance. In common parlance
when we go for shopping to a market, we do not mean going to
a racing club.
Hence, prima facie, we are of the opinion that the appellant~ ·
H
108 SUPREME COURT REPORTS [2009) 7 S.C.R.
A club is not a shop within the meaning of the Act or the notification />
issued by the appropriate government.
In our opinion, the error in the judgment in the case of
Hyderabad Race Club (supra) is that it has been presumed f
therein that all establishments are covered by the Act. That is
B not correct. Only such establishments are covered as are
notified under Section 1(5) in the official gazette.
The High Court in the impugned judgment has placed
reliance on the judgment of this Court in the case of Bangalore
c Water Supply & Sewerage Board Vs. A. Rajappa & Ors.1978(2)
SCC, 213. In our opinion,reliance on the aforesaid decision is
wholly misplaced. The definition of 'industry' in the Industrial
Disputes Act is very wide as interpreted in the aforesaid
decision. We cannot apply the judgment given under a different
Act to a case which is covered by the ESI Act. Under various
D
labour laws different definitions have been given to the words
'industry' or 'factory' etc. and we cannot apply the definition in
one Act to that in another Act (unless the statute specifically says
so). It is only where the language used in the definition is in pari '
materia that this may be possible.
E
Hence, we are of the opinion that the decision of this Court
in the case of Hyderabad Race Club (supra) should be
reconsidered by a larger Bench. In the meantime, the
respondents shall not raise any demand against the appellant-
•
F clubs.
Let the papers of these cases be placed before Hon'ble
the Chief Justice of India for constituting an appropriate Bench.
I•,
R.P. Referred to larger Bench
Search Indian case law
Ask in plain English, not just keywords. 25,000 AI words free, no card.