HYDERABAD RACE CLUB Vs. ESI CORPORATION

JUDGEMENT

(1.) The appellant has come before this Court assailing the order passed by the Employees Insurance Court at Hyderabad in a case brought before it by the appellant seeking setting aside of the order passed by the respondent in No.APMEC/6701-101, dt.29-1-1992. In the order the respondent raised the demand for Rs.32,06,177/- as contribution payable by the appellant from 30-3-1975 to31-12-1991.TheE.I.Court having upheld the demand rejecting the submissions advanced of the appellant being not liable to be covered under the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the Acf), this appeal has been preferred.

(2.) It appears from the order passed by the E.I. Court that the respondent justified the application of the Act to the appellant treating it as a 'shop' as notified in paragraph 3 of G.O.Ms. No.297-Health dt.26-3-1975 issued by the Government of Andhra Pradesh under Section 1(5) of the Act. The E.I. Court dismissed the case accepting the stand of the respondent, Mr. K. Srinivasa Murthy, learned Counsel for the appellant, urges the appellant as not being liable to be treated as a shop and the Act as not applicable. It is his submission that the Hyderabad Race Club is neither an establishment nor a shop within the meaning of A.P. Shops & Establishments Act, 1988 and hence the notification-G.O.Ms. No.297 is not applicable to the appellant for which it cannot be treated as having been brought under the Act.

(3.) Section 1(5) of the Act makes the provision, so far as relevant for the purpose of this case, that the State Government after following the procedure stipulated may extend the provisions of the Act or any of them to any other establishment or class of establishments - industrial, commercial, agricultural or otherwise. In pursuance of the provisions the notification - G.O.Ms. No.297 was issued to extend the Act to the class of establishments mentioned in column 1 of the Schedule there to which in paragraph 3(iii) included 'shops'. Since it is the case of the respondent that the appellant is covered under this category, it has to be seen as to whether the appellant can be regarded as "shop" for the purposes of the Act. The other question, faintly urged by Mr. Srinivasa Murthy that shop is not an establishment so as to invite the provisions of the Act, has rightly not been seriously pursued in view of the decisions of the Apex Court upholding other different establishments as being shops covered under the Act. The two decisions placed before us as to the meaning of the "shop" are - M/s. Cochin Shining Co. vs. E.S.I Corporation' and Employees' State Insurance Corpn. vs. R.K. Swawy. In the first case the Court relied upon an earlier decision - M/s. International Ore & fertilizers (India) Pvt. Ltd. vs. E.S.I Corpn. where the meaning of the words "shop" was examined in detail and the Court adopted the approach that "while construing a welfare legislation like the Act and the notification issued thereunder a liberal construction should be placed on their provisions so that the purpose of the legislation may be allowed to be achieved rather than frustrated or stulti fled. "This approach was confirmed in the Cochin Shipping case taking the view "as rightly contended by the learned counsel for the respondent, the object is to envelope as many establishments as possible without leaving any room for doubt. That is precisely what the notification intends to do". The question for consideration in the case was whether the Cochin Shipping Co. could be called as shop. The Court pointed out that the company was carrying on stevedoring, clearing and forwarding operations. Clearing the documents, even it be in me custom house, is necessary for the export or import of goods and these services are part of the carrier's job. It cannot be gainsaid that the appellant is rendering services to cater the needs of exporters and importers and others who want to carry the goods further. Therefore, the Court held, it is a shop carrying on a systematic economic or a commercial activity, (emphasis supplied)