NEW DELHI: The Supreme Court has declared that the Board of Control for Cricket in India (BCCI) can be termed as a 'shop' for the purposes of the Employees State Insurance (ESI) Act since the top cricket body of the country is engaged in activities like selling tickets for matches, and receiving income from Indian Premier League, which are commercial in nature.
A bench of Justices M R Shah and P S Narasimha dismissed a special leave petitions filed by the BCCI against the judgements of the Bombay High Court as well as the ESI court.
“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 in its order on August 18.
The issue before the court was 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 court said the BCCI is a profit earning institution, and is also engaged in entertainment industry as it provides entertainment to the customers at a price, 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 bench relied upon its previous judgement in the Bangalore Turf Club Limited (2014), in which the apex court had held that the ESI Act is a welfare legislation enacted by the Centre 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.
“A narrow meaning should not be attached to the words used in the ESI Act as the ESI Act seeks to insure the employees of covered establishments against various risks to their life, health and well-being and places the said charge upon the employer,” the court said.
The top court also pointed out that 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 and an expansive meaning may be assigned to the word “shop” for the purposes of the ESI Act.
Senior advocate Neeraj Kishan Kaul, appearing for the BCCI, submitted that its predominant activity is to encourage the cricket/sports and, therefore, the same shall not be brought within the definition of “shop” for the purposes of applying the ESI Act.
Finding no substance in the arguments, the bench said, "What is required to be considered is the overall activities. If the test as observed by this court in the case of Bangalore Turf Club Limited is adopted, the activities carried out by the BCCI can be said to be commercial activities, providing entertainment by selling the tickets. Therefore, for the purposes of ESI Act, the BCCI can be said to be a shop.”
The court also pointed out the Bombay 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 High Court had on June 26, 2022 dismissed an appeal against the order of the Employees Insurance Court which had on September 9, 2021 declared that the BCCI is covered within the meaning of “shop” as per notification of September 18, 1978 issued by the Maharashtra government.
