HC: BCCI’s commercial activities akin to a shop, bound to contribute to ESI

Mumbai: Noting that the Board of Control for Cricket in India (BCCI) was indulging in commercial activities and making profits, the Bombay high court held that it falls within the meaning of the term “shop” as defined under the Mumbai Shops and Establishment Act, and is therefore bound to contribute towards Employees State Insurance (ESI)

Mumbai: Noting that the Board of Control for Cricket in India (BCCI) was indulging in commercial activities and making profits, the Bombay high court held that it falls within the meaning of the term “shop” as defined under the Mumbai Shops and Establishment Act, and is therefore bound to contribute towards Employees State Insurance (ESI).

The ESI issued a demand notice to the board asking it to pay ₹5.04 lakhs as a contribution towards employee insurance for May 2011 to March 2014.

The HC made the observation while rejecting the appeal of the governing body of cricket in India against an order of the ESI court which had directed BCCI to pay ₹5 lakh as the employer’s contribution towards employee insurance.

Upholding the ESI court order, the HC held that as the ESI was for the general welfare of the employees and BCCI was having an income through the IPL and by selling broadcasting rights of the league, it was bound to pay the amount which an insurance inspector had levied following an inspection of employee records of BCCI in 2011.

A single-judge bench of justice Bharti Dangre while hearing the appeal filed by BCCI through advocates Aditya Thacker, Ranjit Shetty and Rahul Dev had submitted that the appeal against the ESI court order was on the ground that it had termed BCCI as a shop. The advocates had submitted that the BCCI was a governing body for cricket in the country and also took initiatives to promote the sport not only across India but also worked for promoting cricket amongst women.

Considering these submissions, the advocates stated that the board could not be deemed as a shop under the Shops and Establishment Act and hence not liable under the ESI Act.

In 2011, an insurance inspector visited the BCCI office and had inspected the employee records and salaries. Thereafter in 2015, the ESI issued a demand notice to the board asking it to pay ₹5.04 lakhs as a contribution towards employee insurance for May 2011 to March 2014.

The board had challenged the notice in the ESI court which was set aside. The BCCI then challenged that order in the HC.

Advocates Shailesh Pathak and Jay Vora for the Regional Director Employees State Insurance Corporation opposed the appeal stating that the ESI court had rightly held that BCCI was involved in commercial activities and hence came under the Shops and Establishment Act.

After hearing the submissions, the bench said, “The Board is admittedly involved in entertaining and carrying out the systematic commercial activity and is engaged in providing services to the public at large by engaging its employees, organizing events, promoting cricket as a source of entertainment and thereby collecting funds. It is also engaged in acquisition or purchase of movable or immovable assets, tangible or intangible and authorised to sell or transfer the same for achieving its objectives.”

The bench then referred to the Indian Premier League and said, “It can be seen that the BCCI is carrying out a business, commercial activity and earn money out of the said activity. Furthermore, its activities are not only restricted to providing entertainment but TV broadcasting rights are also sold by the Board to TV companies by auction, which is again a systematic commercial activity.”

Considering this the bench noted that though the board was intended to promote cricket but the fact that it was also making profits and having an income came under the definition of ‘shop’ and rejected the appeal.