BCCI Can Be Said To Be A "Shop" To Attract Provisions Of ESI Act: Supreme Court

The Supreme Court observed 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.

The bench comprising Justices MR Shah and PS Narasimha observed that the activities of the BCCI can be said to be systematic commercial activities providing entertainment by selling tickets etc.

In this case, the Employees' Insurance Court at Bombay declared that the BCCI is covered within the meaning of "shop" as per notification dated 18.09.1978 issued by the Government of Maharashtra under the provisions of Section 1(5) of the Employees State Insurance Act, 1948. As the Bombay High Court dismissed the appeal preferred by BCCI, it approached the Apex Court.

Senior Advocate Neeraj Kishan Kaul, who appeared for the Board, contended that the revenue earned by the BCCI is ultimately used for promoting the activities of sports – cricket and thus the BCCI cannot be said to be a "shop" and, therefore, the provisions of ESI Act shall not be applicable. 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 contended. On the other hand, Advocate Manish Kumar Saran, who appeared for ESI corporation, contended that BCCI is the body involved in entertaining and/or the body carrying out systematic commercial activities and is engaged in providing public services to public at large by organizing events, promoting cricket as source of entertainment and thereby collecting funds. 

Therefore the issue considered was whether the BCCI can be said to be "shop" as per the notification dated 18.09.1978 and thereby the provisions of ESI Act shall be applicable to the BCCI or not?

The bench referred to the decision in Bangalore Turf Club Limited Vs. Regional Director, Employees' State Insurance Corporation. 2014 (9) SCC 657, wherein it was held that the activities of the Turf Clubs are in the nature of organised and systematic transactions, and that the Turf Clubs provide services to members as well as to the public in lieu of consideration, therefore, the Turf Clubs are a "shop" for the purpose of extending the benefits under the ESI Act.

The court noticed that the BCCI is involved in activities like 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 court said:

"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. After analysing the relevant evidences/material on record, the ESI Court and the High Court had recorded the findings that the 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."

Dismissing the appeal, the bench observed:

"In view of the above and for the reasons stated above, 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 as observed hereinabove, is a social and beneficial legislation. It is also required to be noted that while holding so, the High Court has also taken into consideration the relevant clauses of the Memorandum of Association of the BCCI to come to the conclusion that the activities of the BCCI can be said to be systematic commercial activities providing entertainment by selling tickets etc. The Memorandum of Association as a whole is required to be considered."

Case details

Board of Control for Cricket in India vs Regional Director Employees' State Insurance Corporation | 2022 LiveLaw (SC) 725 | SLP(C) 13554-13555 OF 2022 | 18 August 2022 | Justices MR Shah and PS Narasimha 

Headnotes

Employees State Insurance Act, 1948  - 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 - The activities of the BCCI can be said to be systematic commercial activities providing entertainment by selling tickets etc. (Para 9-12)

Interpretation of Statutes - The 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. (Para 11)

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