Holding

The Supreme Court held that the band's premises is a shop, the intermittent nature of its business does not exempt it, the delegation under section 1(5) is constitutionally valid, and the application of the Act does not violate Articles 14, 19(1)(g) or 21.

Summary

M/s Hindu Jea Band, a partnership firm in Jaipur that employs 23 musicians to provide music at weddings and other social functions, was directed by the Employees' State Insurance Corporation to pay contributions under the Employees State Insurance Act, 1948 after a Rajasthan Government notification extended the Act to shops employing 20 or more persons. The band challenged the demand on two grounds: that its premises were not a "shop" and that its intermittent, seasonal business should be exempt. It also filed a writ petition under Article 32 alleging that the power conferred by section 1(5) of the Act amounted to excessive delegation of legislative authority and violated Articles 14, 19(1)(g) and 21 of the Constitution. The Supreme Court held that the premises where musical services are offered for a fee constitute a shop, that the intermittent nature of the work does not exempt the band, and that the delegation under section 1(5) is valid and does not infringe constitutional guarantees. Consequently, both the special leave petition and the writ petition were dismissed.

Issues considered

The place where Hindu Jea Band carries on its business is a "shop" within the meaning of the notification issued under section 1(5) of the Employees State Insurance Act.
Whether the intermittent or seasonal character of the band's business exempts it from the provisions of the Act.
Whether the power conferred on the State Government by section 1(5) of the Act constitutes an excessive delegation of essential legislative powers.
Whether the application of the Act to the band violates Articles 14, 19(1)(g) and 21 of the Constitution.

Legislation cited

Employees' State Insurance Act, 1948s. 1(4), s. 1(5), s. 2(12), s. 2(9)(i)

Subjects

Employees State Insurance Actshop definitiondelegation of legislative powerconstitutional challengeArticle 14Article 19(1)(g)Article 21intermittent businessspecial leave petitionwrit petition

Judgment

HINDU JEA BAND, JAIPUR
v. A
REGIONAL DIRECTOR, EMPLOYEES' STATE
• ·I INSURANCE CORPORATION, JAIPUR ETC.

FEBRUARY 20, 1987
B
[E.S. VENKATARAMIAH AND K.N. SINGH, JJ.]

Employees State Insurance, Act, 1948, section 1(5)-Whether the
power conferred under section 1(5) of the Act on the State -Government
to extend all or any of the provisions of the Act to other Establishments
in the State suffers from the vice of excessive delegation of essential
legislative powers. c
Notification issued by the Rajasthan State dated 20.9.1975 under
section 1(5) of the E.S.I. Act, whereby shops in which 20 or more
persons had been employed for wages on any day of the preceding 12
months were also brought under the purview of the Act with effect from D
26.10.1975-Whether the place where business of supplying the services
of musicians or band players a "shop"-Whether the business being
intermittent or seasonal, offends Articles 14, 19(J)(g) and 21 of the
Constitution-Employees State Insurance Act, 1948, sections 1(4),
2(12).
--+ All the provisions of the Employees State Insurance Act, 1948
E

- were extended with effect from 26. 10.1975, to certain classes of estab-
lishments and areas in the State of Rajasthan, by virtue of a Notification
dated September 20, 1975 issued under sub-section (5) of section 1 of
the Act. Item 3(iii) in the Schedule to the said Notification brought
-)c
within the purview of the Act shops in which 20 or more persons had F
been employed for wages on any day of the preceding 12 months.

M/s Hindu Jea Band, Jaipur had employed 23 persons on wages
during the relevant period, but did not comply with the provisions of
the Act. The demand made by the authorities of the Employees' State
Insurance Corporation to make contributions as required under the Act G
with effect from 26.10.1975 was questioned by M/s Hindu Jea Band by
a petition under section 75 of the Act before the Employees State Insu-
rance Court on two grounds; (i) that the place where it was carrying on
business was not a shop; and (ii) that its business being one of the
intermittent or seasonal character of the Act could not be extended to
its business. Having lost the case before the E.S.I. Court and in appeal H
377
378 SUPREME COURT REPORTS [1987] 2 S.C.R.

before the High Court, the petitioner has come in appeal before the
A
Supreme Court. The petitioner also filed a writ petition under Article
32 of the Constitution challenging the Notification as violative of Arti-
cles 14, 19(1)(g) and 21 of the Constitution, and section 1(5) of the Act
itself as suffering from the vice of excessive delegation of legislative
powers.
B
Dismissing the petitions, the Court
HELD: 1. The place, where the petitioner has been carrying on 1•
business of making available on payment of the stipulated price the I

~-
services of the members of the group of musicians employed by it on
wages is a shop, to which the Act is applicable by virtue of the Notifica-
tion dated 20.9.1975 issued under section 1(5) of the Act which is a
c beneficient legislation. Though the word 'shop' has not been defined in
the Act, a shop is no doubt an establishment (other than a factory) to
which the Act can be e~tended under section 1(5) of the Act provided
other requirements are satisfied. [380D-E]

D 2. The fact that the services are rendered by the emoloyees' en-
gaged by the petitioner intermittently or during marriages does not
entitle the petitioner to claim any exemption from the operation of the
Act, as much as the place of business of the petitioner is a "shop"' and
not a "factory" as defined in section 2(12) and section 1(4) refers only
to the factories. Further, the services of the employees of the petitioner t--
E are not confined only to marriages which now a days take place throu-
ghout the year but also to provide music at several other social functions
also l"hich may take place during all seasons. [380G-H; 381A 1

The definition of an "employee" under the Act has a "'tler mean- A.:
ing. The employees who w~rked outside the business premises but those
F whose duties are connected with the business are also 'employees' +~
within the meaning of section 2(9)(i) of the Act. Even those employees
who are paid daily wages or those who are part-time employees are
employees for purposes of the Act. [381B]

Nagpur Electric Light & Power Ltd. v. Regional Director
G Employees State Insurance Corporation etc., [1967] 3 SCR 92, referred
to.
3. The power conferred upon the State under secti11n 1(5) does
not. suffer from the vice of excessive delegation of essential legislative
powers. Nor does the application of the Act to businesses like the one
H which is being carried on by the petitioner cannot be said to be violative
of Articles 14 or 19(1)(g) or section 21 of the Constitution. [381D-E]

..
HINDU JEA BAND v. E.S.l.C. [VENKATARAMIAH, J.l 379

. ., CIVIL APPELLATE JURISDICTION: Special Leave Petition
(Civil) No. 1743 of 1987.
A

From the Judgment and Order dated 7.11.1986 of the Rajasthan
high Court in S.B. Civil Misc. Appeal No. 59 of 1980.

I WITH B

" ~ Civil Writ Petition No. 197 of 1877

Under Article 32 of the Constitution of India.
-'r-
S. Rangarajan, B.P. Singh and San jay Parikh for the Petitioner.
c
•i The Judgment of the Court was delivered by

VENKATARAMIAH, J. The petitioner M/s. Hindu Jea Band,
Jaipur which is a partnership firm carrying on the business of playing
music on occasions, such as, marriages and other social functions D
questioned its liability to pay the contribution under the provisions of
the Employees' State Insurance Act, 1948 (hereinafter referred to as
'the Act') in a petition filed under section 75 of the Act before the
--+ Employees' State Insurance Court, Jaipur principally on two grounds
(i) that the place where it was carrying on business was not a shop and
(ii) that its business being one of intermittent or seasonal character the E
Act could not be extended to its business. The Employees' State Insu-
rance Court rejected the petition filed by the petitioner and directed it
to pay the amount which had been computed as the arrears by the
Regional Director of the Employees' State Insurance Corporation,
Jaipur. An appeal filed against the decision of the Employees' State
Insurance Court, Jaipur by the petitioner was dismissed by the High F
Court of Rajasthan. This petition under Article 136 of the Constitu-
tion is filed against the judgment of the High Court. The petitioner has
also filed a writ petition under Article 32 of the Constitution question-
ing the validity of sub-section (5) of section 1 of the Act and the
notification issued by the State Government under it to which refer-
ence will be made hereafter. G

The Act did not apply to shops and such other establishments
straight away on the Act coming into force in the State of Rajasthan.
But by the notification dated September 20, 1975 issued under sub-
section (5) of section 1 of the Act the Government of Rajasthan ex-
tended all the provisions of the Act to certain classes of establishments H
380 SUPREME COURT REPORTS (1987] 2 S.C.R.

A and areas in the State notification. Item 3 (iii) in the Schedule to the
said notification brought within the purview of the Act shops in which
20 or more persons had been employed for wages on any day of the
preceding 12 months and appointed on October .26, 1975 as the date
from which the said notification would come into force. The petitioner
as held by the Employees' State Insurance Court, had employed 23
B persons on wages during the relevant period. Since the petitioner did
not comply with the provisions of the Act the authorities of the Emp-
loyees' State Insurance Corporation, Jaipur called upon the petitioner
to make contributions as required by the Act with effect from October
26, 1975. The petition before the Employees' State Insurance Court
was filed by the petitioner on such a demand being made on it ques- --r-
tioning the validity of the said demand.
c
The first contention urged in support of the petition is that since
the petit.ioner was not selling any goods in the place of its business but
was only engaged in arranging for musical performances on occasions
such as marriages etc. its business premises cannot be called a 'shop'.
D We do not agree with the narrow construction placed by the petitioner
on the expression 'shop' which appeafS in the notification issued under
section 1(5) of the Act which is a beneficient legislation. The word
'shop' has not been defined in the Act. A shop is no doubt an establish-
ment (other than a factory) to which the Act can be extended under
section 1(5) of the Act provided other requirements are satisfied. In t-·
E Collins English Dictionary the meaning 1>f the word 'shop' is given
thus: "(i) a place esp. a small building for the retail sale of goods and
services and (ii) a place for the performance of a specified type of
J
work; workshop." It is obvious from the above meaning that a place
where services are sold on retail basis is also a shop. It is not disputed
that the petitioner has been making available on payment of the ·
F stipulated price the services of the members of the group of musicians
employed by it on wages. We, therefore, hold that the place where the
petitioner has been carrying on business is a shop to which the Act is
applicable by virtue of the notification referred to above. The first
contention, therefore, fails.

G We do not find much substance in the second contention too.
The fact that the 'services are rendered by the employees engaged by
the petitioner intermittently or during marriages does not entitle the
petitioner to claim any exemption from the operation of the Act. The
petitioner cannot rely on sub-section (4) of section 1 of the Act which
••
....

refers to factories only in support of its case. We are concerned in this
H case with a shop and not a factory as defined under section 2(12) of the
HINDU JEA BAND v. E.S.l.C. [VENKATARAMIAH, J.] 381

Act. Moreover the services of the employees o.f the petitioner are not A
confined only to marriages. It cannot also be said that marriages take
place only during a specified part of the year. Nowa-days marriages
take place throughout the year. The petitioner povides music at
several other social functions also which may take place during all
seasons. The definition of an 'employee' under the Act has a wider
B
meaning. The employees who worked outside the business premises
but those whose duties are connected with the business are also
'employees'. within the meaning of section 2(9)(i) of the Act. (se~
Nagpur Electric Light & Power Co. Ltd. v. Regional Director
Employees State Insurance Corporation Etc.), [1967] 3 S.C.R. 92.
Even those employees who are paid daily wages or those who are
part-time employees are employees for purposes of the Act. Hence we c
do not find any merit in this special Leave Petition. The petition,
therefore, fails and it is dismissed.

Along with the Special Leave Petition the petitioner has pre-
sented before this Court a Writ Petition under Article 32 of the Con-
D
stitution questioning the validity of the notification issued by the State
Government on the ground that the power conferred under the Act on
the State Government by sub-section (5) of section 1 authorising the
State Government to extend all or any of the provisions of the Act to
other establishments in the Staie suffers from the vice of excessive
delegation of essential legislative powers. It is also contended that the

- application of the Act to businesses like the one which is being carried
on by the petitioner during certain seasons only of the year is violative
of Article 14, Article 19(1)(g) and Article 21 of the Constitution.
Having carefully considered the submission made by the learned
E

counsel for the petitioner we find no merit in any of the contentions
urged in the writ Petition. The Writ Petition is also, therefore,
F
dismissed. '

S.R. Petition dismissed.