BCCI is a 'shop,' provisions of ESI Act applicable: SC

The activities of the Board of Control for Cricket in India (BCCI) are commercial in nature and can be termed as a "shop" for the purposes of attracting the provisions of the Employees State Insurance Act, the Supreme Court has said.

The top court said ESI Act is welfare legislation enacted by the Centre and a narrow meaning should not be attached to the words used in the Act as it seeks to insure the employees of covered establishments against various risks to their life, health, and well-being and places the charge upon the employer.

A bench of Justices M R Shah and P S Narasimha said no error has been committed by the ESI Court and/or the High Court in treating and considering the BCCI as a “shop” for applicability of the ESI Act.

"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 bench said.

The top court was dealing with the question of whether the BCCI can be said to be a “shop” as per the notification dated September 18, 1978, and if the provisions of the ESI Act shall be applicable to the BCCI or not.

The Bombay High Court had said 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 Employees State Insurance Act, 1948.

The top court said 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 said an expansive meaning may be assigned to the word “shop” for the purposes of the ESI Act.

The apex court said submission on behalf of the BCCI that its predominant activity is to encourage cricket/sports and, therefore, the same shall not be brought within the definition of “shop” for the purposes of applying the ESI Act, has no substance.

"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.

"In view of the above and for the reasons stated above, we see no reason to interfere with the impugned judgement and order passed by the High Court as well as the ESI Court. As such, we are in complete agreement with the view taken by the High Court. The special leave petitions stand dismissed accordingly," the bench said.