New Delhi, Aug 31 : The Supreme Court has said the Board of Control for Cricket in India (BCCI) sells tickets for matches, offers entertainment, and earns money from the Indian Premier League (IPL) which is a commercial event in nature and, therefore can be described as an “shop” for the purpose of getting the benefits of the Employees State Insurance (ESI) Act.A bench of Justices M.R.Shah and P.S.Narasimha declared: “Considering the systematic activities that are carried out by the BCCI specifically, the selling of tickets of cricket matches, providing entertainment; providing services at an amount; and receiving the revenue from international tours and revenue from the Indian Premier League, the ESI court and the supreme court have correctly found that the BCCI is conducting systematic commercial activities that are economic in nature and, consequently the BCCI is considered to be a “shop” to the purpose of being a target for compliance with the requirements of ESI Act.”
It was stated that the BCCI is involved in regular commercial operations, is a profit making institution, and is involved in entertainment as it provides entertainment to customers for a fee by selling tickets and , therefore, must transfer the benefits of its employees through increasing the scope of ESI contribution to the wages of its coverable employees.
In the matter of Bangalore Turf Club Ltd (supra) the highest court ruled that the ESI Act is a welfare legislation passed by the Centre in light of the need to create a system of health insurance for employees.
Consequently the rule of a liberal interpretation of interpretation should be applied to ensure that benefits are extended to those who require coverage in accordance with the intent of the legislature.
“A strict meaning shouldn’t be attributed to the terms employed in the ESI Act as the ESI Act is designed to safeguard employees of covered establishments against a variety of dangers to their lives, health and well-being and places the burden on the employer” the supreme court declared.
It was noted that the term “shop” is not to be understood or interpreted in its original meaning, because it does not be in line with the intent of the ESI Act.Furthermore, a broad definition could be assigned to “shop” to fulfill the requirements of the ESI Act.
“It is also observed that the actions of the Turf Clubs are in the form of coordinated and systematic transactions as well as that Turf Clubs offer services to members and to the general public in place of payment, thus, they are a shop.Turf Clubs are shops with the aim of expanding the benefits of the ESI Act,” said the highest court.
The BCCI stated that its primary purpose is to promote cricket and sports and, as such it should not be included in the meaning of “shop” to the purpose of using the ESI Act.
However, the highest court ruled: “The aforesaid has no substance.What needs to be looked at is the totality of activities.If the test as interpreted by the court in the case of Bangalore Turf Club Limited (supra) is followed in the BCCI’s activities, then the activities performed by the BCCI can be considered to be commercial that provide entertainment through the sale of tickets.Thus, for the purpose of ESI Act, the BCCI could be considered to be an outlet for retail.”
It stated that it was the Bombay High Court has also considered the pertinent clauses of the Memorandum of Association of the BCCI in order to arrive at the conclusion that the operations of the BCCI can be deemed to be a systematic commercial activity offering entertainment through the sale of tickets or other items and that the Memorandum of Association in its entirety all of it must be examined.
The highest court dismissed the BCCI’s appeal, stating that it has no justification to interfere with the decision and order issued by the high court and the ESI court.
The top court’s ruling on a motion of the BCCI against the high court ruling that considered whether the BCCI could be considered to be an “shop” according to the notification issued on September 18 1978, and whether the provisions of the ESI Act shall be applicable to the BCCI or not.
The high court ruled against the appeal that was brought against the ruling and order issued by the Employees’ Insurance Court in Bombay on the 9th of September, 2021.The court ruled that the BCCI is covered under the scope of “shopa according to a notification that was issued on the 18th of September, 1978” issued by the state government of Maharashtra pursuant to the provisions of Section 1(5) of the ESI Act 1948.
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