Case Note & Summary
The case involves two writ petitions: one by Royal Western India Turf Club Ltd. challenging the applicability of the Employees' State Insurance Act, 1948 (ESI Act) to its employees, and another by the Regional Director of ESIC challenging an order that excluded the club from coverage. The club argued that it is not a 'shop' under the ESI Act and that its employees, engaged in betting activities, are not covered. The court analyzed the definition of 'shop' under Section 1(5) of the ESI Act, which includes any premises where goods are sold or services are rendered. The court held that the club provides services (betting facilities) for remuneration, thus falling within the definition of 'shop'. The court also rejected the argument that betting is illegal, noting that the club operates under a license from the government. Consequently, the court allowed the ESIC's petition and dismissed the club's petition, holding that the club's employees are covered under the ESI Act.
Headnote
A) Employees' State Insurance Act, 1948 - Section 1(5) - Definition of 'shop' - Club engaged in betting and horse racing activities held to be a 'shop' - The court interpreted 'shop' broadly to include any commercial establishment where goods or services are sold or services are rendered for remuneration, including betting services - Held that the Turf Club is a shop and its employees are covered under the ESI Act (Paras 10-15).
B) Employees' State Insurance Act, 1948 - Coverage of employees - Betting establishment - Employees of a club providing betting services are employees under the Act - The court rejected the argument that betting is illegal and thus not covered, noting that the club is licensed and regulated - Held that the employees are entitled to ESI benefits (Paras 16-20).
Issue of Consideration
Whether the Royal Western India Turf Club Ltd. is a 'shop' within the meaning of Section 1(5) of the Employees' State Insurance Act, 1948, and whether its employees are covered under the Act.
Final Decision
The court allowed the ESIC's writ petition and dismissed the club's writ petition, holding that the Royal Western India Turf Club Ltd. is a 'shop' under the ESI Act and its employees are covered under the Act.
Law Points
- Interpretation of 'shop' under ESI Act
- Coverage of employees in betting establishments
- Applicability of ESI Act to clubs
Case Details
2018 LawText (BOM) (12) 44
Writ Petition No. 6816 of 2018 and Writ Petition No. 7916 of 2018
Dr. Shalini Phansalkar-Joshi, J.
Mr. J. P. Cama, Senior Advocate a/w Gobindram D. Talreja for Petitioner; Mr. H. V. Mehta for Respondent Nos. 1 to 3; Ms. Alka Mungekar for Respondent Nos. 4 and 5
Royal Western India Turf Club Ltd. (in WP 6816/2018); Regional Director, ESIC (in WP 7916/2018)
Employees State Insurance Corporation & Ors. (in WP 6816/2018); Royal Western India Turf Club Ltd. (in WP 7916/2018)
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Nature of Litigation
Writ petitions challenging the applicability of the Employees' State Insurance Act, 1948 to the Royal Western India Turf Club Ltd.
Remedy Sought
The club sought a declaration that it is not a 'shop' under the ESI Act and that its employees are not covered; ESIC sought to set aside an order excluding the club from coverage.
Filing Reason
Dispute over whether the club's employees are covered under the ESI Act.
Issues
Whether the Royal Western India Turf Club Ltd. is a 'shop' within the meaning of Section 1(5) of the Employees' State Insurance Act, 1948.
Whether the employees of the club are covered under the ESI Act.
Submissions/Arguments
Petitioner (Club): The club is not a 'shop' as it does not sell goods or render services; betting is not a service but a wagering contract; employees are not covered.
Respondent (ESIC): The club provides services (betting facilities) for remuneration and is a 'shop' under the ESI Act; employees are entitled to coverage.
Ratio Decidendi
The term 'shop' under Section 1(5) of the ESI Act includes any commercial establishment where services are rendered for remuneration, including betting services provided by a licensed club. The employees of such an establishment are covered under the Act.
Judgment Excerpts
The club provides betting facilities to its members and visitors for a consideration, and thus it is a 'shop' within the meaning of the ESI Act.
The employees of the club are engaged in the service of the club and are entitled to the benefits under the ESI Act.
Procedural History
The matter came before the High Court by way of two writ petitions: one by the club challenging the applicability of the ESI Act, and another by the ESIC challenging an order that excluded the club from coverage. Both petitions were heard together and disposed of by this common judgment.
Acts & Sections
- Employees' State Insurance Act, 1948: Section 1(5), Section 3
