Supreme Court Ruling on ESI Act Coverage
Turf clubs and chit fund firms are covered by the ESI Act, the Supreme Court ruled last week in two cases: Bangalore Turf Club vs. ESI and Sri Visalam Chit Funds Ltd vs. ESI. A three-judge bench was dealing with two conflicting streams of judgments of the court on the applicability of the law to the horse racing clubs in different cities. The court gave a liberal interpretation of the word 'shop', not defined in the law. It rejected the argument of the clubs and the chit fund firms that the meaning of shop should be given the traditional meaning.
In the chit fund case, it was argued that there was no buying or selling in its offices and it was a matter of contract. Therefore, it was not running shops. The court rejected this contention and asserted that the activities of chit funds would fall within the meaning of shops.
Source: Business Standard. Attached: Copy of Supreme Court order dated 31.7.2014
Turf clubs and chit fund firms are covered by the ESI Act, the Supreme Court ruled last week in two cases: Bangalore Turf Club vs. ESI and Sri Visalam Chit Funds Ltd vs. ESI. A three-judge bench was dealing with two conflicting streams of judgments of the court on the applicability of the law to the horse racing clubs in different cities. The court gave a liberal interpretation of the word 'shop', not defined in the law. It rejected the argument of the clubs and the chit fund firms that the meaning of shop should be given the traditional meaning.
In the chit fund case, it was argued that there was no buying or selling in its offices and it was a matter of contract. Therefore, it was not running shops. The court rejected this contention and asserted that the activities of chit funds would fall within the meaning of shops.
Source: Business Standard. Attached: Copy of Supreme Court order dated 31.7.2014
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