BCCI is a ‘shop’ engages in commercial activity thus attracts ESI Act: Bombay HC | Cricket News – Times of India
MUMBAI: Bombay high court has held that the Employees State Insurance Act (ESI) is applicable to the Board of Control for Cricket in India (BCCI). In a setback to the Board, the HC said, it has “no hesitancy to hold that the nature of activities conducted by the Board are commercial in nature and hence, covered under the term ‘shop’ for the purpose of ESI Act.”
The judgment by Justice Bharati Dangre pronounced on June 24 came in an appeal filed by the BCCI against an order passed by the Employees Insurance Court at Bombay (ESI Court) which sought sought quantification of the contribution from the Board as employer’s contribution. The ESI Act is a salutary ‘social welfare legislation” to benefit employees. In 1978, the State had expanded the applicability of ESI Act to among other establishment, ‘shops’ that employs more than 20 persons for wages.
The HC, however, on a plea by BCCI counsel Aditya Thakkar stayed its judgment for six weeks to enable the board to approach the Supreme Court to appeal.
The judgment copy was made available on Thursday.
The ESI court order of September 2021 had declared that the BCCI – a society registered in Chennai – is covered within the meaning of ‘shop’ under a September 1978 notification issued by the Government of Maharashtra under the provisions of Section 1(5) of the Employees State Insurance Act.
‘Shop’ though not defined under the ESI Act, the Oxford Dictionary defines it as “a building or part of the building where goods or services are sold, said the HC. The SC had said ‘shop’ deserves a liberal interpretation.
The HC said, “applying the very same analogy to the BCCI, where on ascertaining it’s nature, functioning and object, it can be seen that the appellant is carrying out a commercial activity and earn money.”
The HC “as has been clearly admitted by (Chief Executive office) Dinesh Johri, but TV broadcasting rights are also sold by the Board to TV companies by auction, which is again a systematic commercial activity.” It earned an income from the Indian Premier League too, said the HC.
HC said, “Entertainment is a wide term, which denotes activity which serves for amusement,” and includes sports.
It added, though its MoA says funds of BCCI shall be used to promote cricket, “the fact that the Board engages itself in it’s various activities as indicated above, being purely commercial in nature, there is no reason why the test” as laid down by the SC – shall not apply since matchers are arranged on sale of tickets.
The HC said “It also makes available the facility of canteen, lay out cricket ground and provide amenities for the convenience and benefits of the members, players and cricket fans, etc.”
BCCI counsel Thakkar said it is a National Government Body for Cricket in India in existence since 1928 and is an autonomous non-profit sports body established for promoting the sports of Cricket in India and hence “by no stretch of imagination” can come under the sweep of the ESI Act.
But Shailesh Pathak counsel for the Regional Director Employees State Insurance Corporation opposed the appeal saying the board sold tickets of cricket matches hence is a “shop” and a profit making entity, covered under ESI Act.
The HC was told that in May 2011, the BCCI office was surveyed by the Insurance Inspector and the salary details of employees verified. In June 2011, the ESIC Mumbai declared that the BCCI is covered under the provisions of ESI Act effective from January 1, 2007.
The reports found 15 employees employed for wages in the month of January 2007, out of which 12 were drawing salary of Rs.10,000/- and in January 2006, there were 20 coverable employees working in the Board premises.
The judgment by Justice Bharati Dangre pronounced on June 24 came in an appeal filed by the BCCI against an order passed by the Employees Insurance Court at Bombay (ESI Court) which sought sought quantification of the contribution from the Board as employer’s contribution. The ESI Act is a salutary ‘social welfare legislation” to benefit employees. In 1978, the State had expanded the applicability of ESI Act to among other establishment, ‘shops’ that employs more than 20 persons for wages.
The HC, however, on a plea by BCCI counsel Aditya Thakkar stayed its judgment for six weeks to enable the board to approach the Supreme Court to appeal.
The judgment copy was made available on Thursday.
The ESI court order of September 2021 had declared that the BCCI – a society registered in Chennai – is covered within the meaning of ‘shop’ under a September 1978 notification issued by the Government of Maharashtra under the provisions of Section 1(5) of the Employees State Insurance Act.
‘Shop’ though not defined under the ESI Act, the Oxford Dictionary defines it as “a building or part of the building where goods or services are sold, said the HC. The SC had said ‘shop’ deserves a liberal interpretation.
The HC said, “applying the very same analogy to the BCCI, where on ascertaining it’s nature, functioning and object, it can be seen that the appellant is carrying out a commercial activity and earn money.”
The HC “as has been clearly admitted by (Chief Executive office) Dinesh Johri, but TV broadcasting rights are also sold by the Board to TV companies by auction, which is again a systematic commercial activity.” It earned an income from the Indian Premier League too, said the HC.
HC said, “Entertainment is a wide term, which denotes activity which serves for amusement,” and includes sports.
It added, though its MoA says funds of BCCI shall be used to promote cricket, “the fact that the Board engages itself in it’s various activities as indicated above, being purely commercial in nature, there is no reason why the test” as laid down by the SC – shall not apply since matchers are arranged on sale of tickets.
The HC said “It also makes available the facility of canteen, lay out cricket ground and provide amenities for the convenience and benefits of the members, players and cricket fans, etc.”
BCCI counsel Thakkar said it is a National Government Body for Cricket in India in existence since 1928 and is an autonomous non-profit sports body established for promoting the sports of Cricket in India and hence “by no stretch of imagination” can come under the sweep of the ESI Act.
But Shailesh Pathak counsel for the Regional Director Employees State Insurance Corporation opposed the appeal saying the board sold tickets of cricket matches hence is a “shop” and a profit making entity, covered under ESI Act.
The HC was told that in May 2011, the BCCI office was surveyed by the Insurance Inspector and the salary details of employees verified. In June 2011, the ESIC Mumbai declared that the BCCI is covered under the provisions of ESI Act effective from January 1, 2007.
The reports found 15 employees employed for wages in the month of January 2007, out of which 12 were drawing salary of Rs.10,000/- and in January 2006, there were 20 coverable employees working in the Board premises.
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