Bangalore Turf Club Ltd vs Regional Director, Esi Corporation

Bangalore Turf Club Ltd. .... Appellant

Versus

Regional Director, ESI Corporation .... Respondent

WITH Civil Appeal Nos. 49/2006 and 1575/2006

ORDER

Heard learned counsel for the parties.

The short question involved in these cases is whether the appellant Turf

Clubs are covered by the Employees' State Insurance Act, 1948 (for short the 'ESI Act').

Under Section 1 sub-section (5) of the ESI Act all establishments are not

automatically covered by the said Act but only such establishments as are mentioned in

the notification issued by the appropriate Government under Section 1(5). This

provision is not like sub-section (4) of Section 1 by which all factories are automatically

covered by the ESI Act. The notifications issued under Section 1(5) in these cases use the

word 'shop' and it has been held by the impugned judgments in these cases that the turf

clubs are shops. Reliance in this behalf has been placed on the judgment of this Court in

the case of Employees State Insurance Corpn. Vs. Hyderabad Race Club 2004

(6)SCC,191.

With great respect to the aforesaid decision in the case of Hyderabad Race

Club (supra), we think that the said decision requires reconsideration. In common

parlance a club is not a shop.

2

The word 'shop' has not been defined either in the ESI Act nor in the

notification issued by the appropriate government under Section 1(5). Hence, in our

opinion, the meaning of 'shop' will be that used in common parlance. In common

parlance when we go for shopping to a market, we do not mean going to a racing club.

Hence, prima facie, we are of the opinion that the appellant-club is not a shop within the

meaning of the Act or the notification issued by the appropriate government.

In our opinion, the error in the judgment in the case of Hyderabad Race

Club (supra) is that it has been presumed therein that all establishments are covered by

the Act. That is not correct. Only such establishments are covered as are notified under

Section 1(5) in the official gazette.

The High Court in the impugned judgment has placed reliance on the judgment of this

Court in the case of Bangalore Water Supply & Sewerage Board Vs. A. Rajappa &

Ors.1978(2) SCC, 213. In our opinion,reliance on the aforesaid decision is wholly

misplaced. The definition of 'industry' in the Industrial Disputes Act is very wide as

interpreted in the aforesaid decision. We cannot apply the judgment given under a

different Act to a case which is covered by the ESI Act. Under various labour laws

different definitions have been given to the words 'industry' or 'factory' etc. and we

cannot apply the definition in one Act to that in another Act (unless the statute

specifically says so). It is only where the language used in the definition is in pari materia

that this may be possible.

Hence, we are of the opinion that the decision of this Court in the case of

Hyderabad Race Club (supra) should be reconsidered by a larger Bench. In the

meantime, the respondents shall not raise any demand against the appellant-clubs.

Let the papers of these cases be placed before Hon'ble the Chief Justice of 3

India for constituting an appropriate Bench.

...........................J. (MARKANDEY KATJU)

...........................J. (H.L. DATTU) New Delhi April 28, 2009