K. Padmanabhan Nair, J.@mdashThe Appellant, a private limited company, owns and runs a water theme park in the name and style ''Silver Storm Amusement Parks (P) Ltd.'' at Vettilappara in Pariyaram Village of Chalakudy Taluk. According to the Appellant park provides facilities for water sports and amusement in a landscaped area. On 19-4-2002 an Insurance Inspector of Respondent inspected the establishment of Appellant. Based oh the request made by the Appellant and also on the report of the Inspector Respondent held that the establishment of Appellant is a ''shop'' within the meaning of the Employees'' State Insurance Act (for short ''the ESI Act'') and hence Appellant is liable to pay contribution. Challenging that order Appellant filed a petition u/s 75 of the ESI Act as I.C. No. 56/2002 before the Insurance Court, Palakkad. It was averred that Inspector procured a letter from Appellant and brought the park under coverage w.e.f. 1-1-2001, It was contended that the establishment is not coverable as there was no notification issued u/s 1(5) of the ESI Act bringing water theme parks under the provisions of the Act. It was also contended that the employees working in the establishment never exceed 16. The Respondent contended that on the date of inspection 17 persons employed by the Appellant and 12 persons belonging to outside agencies were also working. The E.I. Court rejected the contentions raised by Appellant and held that water theme park will come under the definition of ''shop''. It was further held that Appellant was employing more than 20 workers and hence fee establishment is one coverable under the Act Challenging that order this appeal is filed by employer.
2. The first question arising for consideration is whether an amusement park can be considered as a ''shop'' for the purpose of Section 1(5) of the ESI Act.
3. The learned Counsel appearing for the Appellant has strenuously argued before me that the word ''shop'' is not defined in the ESI Act. It is argued that in exercise of the powers conferred u/s 1(5) of the ESI Act the State Government had issued a notification on 27-5-1976 and in that notification also word ''shop'' is not defined. It is argued that the State Government has not issued any notification u/s 1(5) of the ESI Act making the provisions of the Act applicable to a water theme park and by no stretch of imagination a water theme park can be termed as a ''shop''. It is argued that though the word shop is not defined in the ESI Act Section 2(15) of the Kerala Shops and Commercial Establishments Act, 1960 defines a ''shop''. It is argued that Section 2(15) of the State Act specifically exclude ''commercial establishments'' from the definition of shop and Section 2(4) defines ''commercial establishments''. It is argued that a reading of fee definition of ''commercial establishments'' will show that an amusement park is a ''commercial establishment'' and same cannot be treated as a ''shop'' for the purpose of ESI Act.
4. The Appellant company owns a water theme park in name and style of ''Silver Storm Amusement Park (P) Ltd.'' situated at Vettilappara in Pariyaram Village of Chalakkudy Taluk. It is situated very near to Athirappilly-Vazhachal water falls. In the application filed u/s 75 of the ESI Act the Appellant had admitted feat the said park is a landscaped area wherein certain facilities for water sports and amusements are provided for. On the side of Appellant its General Manager filed an affidavit on 8-12-2003. In the affidavit it was stated that the water theme park is constructed in a landscaped area having an extent of 8 acres. It was also stated that inside the park facilities for different types of water sports and amusements are provided. It was further stated that fee Appellant is not selling anything and the Appellant is collecting only an entry fee to enter into fee park. It was also stated that no work of commercial nature is carried out in fee park and at no point of time there were more than 20 persons are employed in fee park.
5. Learned Counsel appearing for fee Respondent Corporation has argued that Appellant fee Appellant had made provisions for different kinds of water sports and amusements and each item of water sports is called as a ''ride'' and except a few rides a person who enter into the park after purchasing entry ticket will have to again purchase ticket for entering into fee rides. It is argued feat many of the rides are being operated by motors using power. It is also argued that a water theme park is using thousands'' of litres of water every day and water is being purified using power. It is argued feat water from the river is being pumped into different rides using motors and again pumped out from fee tanks for purification. It is argued that all these motors work wife fee aid of power. It is contended feat in certain rides waves are being artificially created to amuse fee customers using motors. It is argued feat pumping of water and creating waves or whirlpools inside fee water tanks wife the aid of power are manufacturing processes and evidence in this case will show feat 20 or more persons were working in the park.
6. It is admitted that the Appellant is making provisions for water sports and amusements and a person can enter into fee park only after purchasing a ticket. The Appellant had not adduced any evidence regarding fee actual working of fee water theme park. The learned Counsel appearing for the Appellant has argued feat there is absolutely no evidence to show that it had employed 20 or more persons. It is argued that the Respondent initiated action against the Appellant on the basis of a letter forcibly obtained from the Appellant by the Inspector.
7. The first question arising for consideration is whether a water theme park can be considered as a ''shop'' for the purpose of ESI Act. The Insurance Court took a view that in view of the request of the Appellant contained in Ext. B-2 letter it cannot be heard to contend that its establishment is not coverable. I make it clear that I am not placing any reliance on Ext. B-2 to decide whether the establishment of the Appellant is a shop.
8. The State Government has issued SRO No. 559/1976 dated 27-5-1976 making the provisions of ESI Act applicable to certain establishments. The third item is ''shops''. According to the Respondent Corporation an amusement park will come within the meaning of ''shops''. Learned Counsel appearing for the Appellant has argued that neither the ESI Act nor the notification defines the word'' shop''. It is argued that a water theme park will not come within the definition of shop. Much reliance is placed to the definition given in the Kerala Shops and Commercial Establishments Act. Section 2(15) of the Kerala Shops and Commercial Establishments Act defines the word ''shop'' which reads as follows:
(15) ''Shop'' means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, store rooms, godowns or warehouses, whether in the same premises or otherwise, used in connection with such trade or business but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop are allowed the benefits provided for workers under the Factories Act, 1948 (Central Act 63 of 1948)
Section 2(4) of the Koala Shops and Commercial Establishments Act, 1960 defines the word ''commercial establishment'' which reads as follows:
(4) ''commercial establishment'' means a commercial or industrial or trading or banking or insurance establishment, an establishment or administrative service in which the persons employed are mainly engaged in office work, hotel, restaurant, boarding or eating house, cafe or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such other establishments as the Government may, by notification in the Gazette, declare to be a commercial establishment for the purpose of this Act, but does not include a factory to which all or any of the provisions of the Factories Act, 1948 (Central Act 63 of 1948) apply;
9. According to the Appellant since the word ''shop'' is not defined in the ESI Act the meaning given to that word in Kerala Shops and Commercial Establishments Act, 1960 must be accepted. There is no merit in that argument. In Kirloskar Consultants Ltd. v. Employees State Insurance Corporation (2001) 1 S.C.C. 57 the employer had raised the very same argument before the Supreme Court. Apex Court considered that contention and held as follows:
This Court in Sasidharan''s case was concerned with the interpretation of the Kerala Shops and Commercial Establishments Act, 1960, wherein Section 2(4) defines ''commercial establishment'' and Section 2(15) defines ''shop''. In that case, therefore, this Court had to find out whether the activities carried on in a lawyer''s office fall within the definitions in Sections 2(4) and 2(15) of the said Act Thus, this Court was not concerned with the meaning attributed to a shop arising in the ESI Act. It was held that lawyers do not carry on trade or business nor render service to customers but carry on a profession and therefore cannot fall within the scope of that Act.
So the matter is no longer res integra. The definition given to the word ''shop'' in the Kerala Shops and Commercial Establishments Act, I960 cannot be taken as a guideline to find out the meaning of the word ''shop'' given in the ESI Act-On the other hand a reading of Sub-sections (4) and (15) of Section 2 of the Kerala Shops and Commercial Establishments Act would indicate that but for the specific exclusion of the word ''commercial establishments'' water theme park will also come within the meaning of the word ''shop'' in that Act also.
10. It is true that the ESI Act does not define the word ''shop''. In
In Collins English Dictionary the meaning of the word ''shop'' is given thus: '' (i) a place esp. a small building for the retail sale of goods and services and (ii) a place for the performance of a specified type of work; workshop''. It is obvious from the above meaning that a place where services are sold on retail basis is also a shop. It is not disputed that the Petitioner has been making available on payment of the stipulated price the services of the members of the group of musicians employed by it on wages.
The matter again came up for consideration by the Supreme Court in
Thus the benefits conferred by the Act cover a large area of employees than what the Factories Act and the akin legislations intended. The conclusion is inescapable that it is a welfare legislation. The endeavour of the Court should be to place a liberal construction so as to promote its objects to which a reference has been made.
After elaborate survey of fee definitions and also considering the very same notification it was held as follows:
Wharton''s Law Lexicon 14th Ed Page 929:
''Shop, a place where things are kept for sale, usually in small quantities, to the actual consumers. By Shops Act, 1912, Section 19, ''shop'' includes any premises where any ''retail trade or business'' is carried on; ''retail trade or business'' includes the business of a barber or hairdresser, but not the sale of programme, etc., at places of amusement.'' Words and Phrases Legally Defined 2nd Ed. 73:
''Shop'' includes dwelling-house and ware house, or other place of business, or place where business is transacted.
''Shop'' includes any premises, and any vehicle, stall or place other than premises, on or in which any retail trade or business is carried on.
The Apex Court reiterated the principle laid down in Hindu Jea Band''s case (supra) and also the principle laid down in M/s International Ore and Fertilizers (India) Pvt. Ltd. v. Employees State Insurance Corporation. In M/s International Ore''s case (supra) the Apex Court held as follows:
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 stultified.
In M/s Cochin Shipping Co.''s case (supra) the Apex Court found that the Appellant was carrying on stevedoring, clearing and forwarding operations and, therefore, it is a shop carrying on a systematic economic or a commercial activity and hence liable to be covered. In Cricket Club of India Ltd. and Ors. v. ESIC and Anr. 1993 (1) L.L.J. 642 it was held that cricket club is an establishment coverable under the Act. In
There is no doubt at all that the said Act is beneficent legislation. If, therefore, it is reasonably possible so to construe the word ''shop'' as to include the activity of an advertising agency within it, that construction must be preferred.
The Apex Court took note of the fact that the word ''shop'' must be given an expanded meaning on account of the earlier judgments of the Supreme Court. In
''The Employees'' State Insurance Act, 1948 is a beneficial piece of legislation intended to provide benefits to employees in case of sickness, maternity, employment injury and for certain other matters in relation thereto. It is enacted with a view to ensuring social welfare and for providing safe insurance cover to employees who were likely to suffer from various physical illnesses during the course of their employment. Such a beneficial piece of legislation has to be construed in its correct perspective so as to fructify the legislative intention underlying its enactment When two views are possible on its applicability to agiven set of employees, that view which furthers the legislative intention should be preferred to the one which would frustrate it.
In Southern Agencies v. A.P. Employees'' State Insurance Corpn. (2001) 1 S.C.C. 411 the Apex Court considered whether the administrative office of partnership firm controlling and supervising the sales taking place in different branches will come within the meaning of the word ''shop''. It was held that since the nature of the activities carried on by the Appellant is commercial or economical and would amount to parting with such services for a price through its different outlets it will come within the definition of the expression ''shop''. In Kirloskar Consultants Ltd.''s case (supra) the Supreme Court considered whether a premises where consultancy services are provided to customers in respect of industrial, technical and management activities and preparation of project reports by engaging the services of architects, engineers and other experts will come within the definition of ''shop''. It was held as follows:
The business carried on by the Appellant is of consultancy services to its customers in respect of industrial, technical, marketing and management activities and preparation of project reports by engaging the services of architects, engineers and the experts. In substance, the nature of activities carried on by the Appellant is commercial or economical and would amount to parting with the same at a price, Hence the High Court rightly held that premises where consultancy-service is provided is also at ''shop''.
The Karnataka High Court in an unreported decision--Bangalore Turf Club Ltd. v. Regional Director, ESI Corporation MFA No. 3699/1998 (decided on 4-9-2002)- held that Bangalore Turf Club is an establishment coverable under the provisions of the ESI Act In
11. A reading of the principles laid down in various decisions referred to above shows that the word ''shop'' used in ESI Act must be given a wider meaning since it is a beneficial piece of legislation intended to provide benefits to employees. In the affidavit filed for and on behalf of the Appellant it is admitted that for altering inside the water theme park a person had to purchase ticket. So for enjoyment of various sports and amusements every customer will have to pay money. So far as the Appellant is concerned it is nothing but a business activity. The only conclusion possible from the proved facts is that the activities carried on in a water theme park are nothing but commercial, business or technical and they are being parted with for a price. So the finding of the Employees Insurance Court that an amusement park is a shop is correct and does not call for any interference. I confirm that finding.
12. The learned Counsel appearing for the Respondent Corporation has argued that establishment run by the Appellant is factory wherein manufacturing process is being carried on with the aid of power. It is argued that huge quantity of water is required for running a water theme park. It is argued that this park is located near a river and the water required for the use of the park is being pumped using electric motors. It is also argued that the water stored in tanks is to be disinfected and purified daily for that process also water is being pumped using electric motors. Section 2(12) of the ESI Act defines ''factory''. It reads as follows:
(12) ''factory'' means any premises including the precincts thereof.
(a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or
(b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed.
Section 2(14AA) of the ESI Act defines ''manufacturing process''. It reads as follows:
2. In this Act, unless there is anything repugnant in the subject or context,- (14AA) ''manufacturing process'' shall have the meaning assigned to it in the Factories Act, 1948 (63of 1948).
Section 2(k) of the Factories Act reads as follows:
Section 2. Interpretation.- In this Act, unless there is anything repugnant in the subject or context,
(k) ''manufacturing process'' means and process for.
(i) making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal, or
(ii) pumping oil, water, sewage or any other substance, or;
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A Division Bench of this Court in an unreported decision rendered in E.S.I. Corporation v. M/s Cheeran and Co. MFA No. 796/2000 (decided on 11-9-2006) has held that pumping of petrol is a manufacturing process. According to Respondent in a water theme park there is pumping of huge quantity of water with the aid of power which is a manufacturing process. Hence it is ''factory'' within the meaning of Section 2(12) of the ESI Act. It is also argued that even according to the Appellant more than 10 personsare employed in the premises. If there is evidence to show in any water theme park pumping of water is carried on with the aid of power, it will come within the definition of factory. There is indisputable evidence to show that more than 10 employees were working in the establishment as on the date of inspection. But the difficulty in this case is that before the Insurance Court the Respondent had no case that premises of the Appellant is a ''factory'' but on the other hand die specific case was that it is a ''shop''. Neither the Appellant nor the Respondent had adduced any evidence to prove that there is pumping of water. So I do not think it is just and proper to dispose of the appeal on the ground that Appellant''s establishment is a ''factory''.
13. The learned Counsel appearing for the Appellant has argued that even if it is found that the water theme park is a shop that alone is not sufficient to hold that it is coverable. It is argued that the Insurance Court decided the question of coverability solely based on a letter forcibly obtained from the Manager. I have already found that a water theme park is a shop. So the next question arising for consideration is whether 20 or more persons are employed in the shop. Ext. B-1 is the report of the Inspector. Ext. B-1 report shows that as on 19-4-2002 in addition to 17 persons employed by the Appellant 12 persons deployed by three agencies were working in the establishment Ext. B-2 letter written by the Managing Director contains their details. It shows that M/s Uma Enterprises, Emakulam, a house keeping agency, had supplied four employees. All the four were covered employees. M/s Trigger Security and Man Power Consultancy and M/s Force Seven Security and Investigation had supplied four persons each who were working as security guards and life guards. There is nothing on record to show that those security guards or life guards were already covered. The Counsel for the Appellant has argued that the Appellant had instructed the out sourcing agencies to cover the employees deployed by them as can be seen from Ext. B-2 itself and it is not necessary to cover those employees again. Admittedly as on 19-4-2002 those employees were not covered employees. In Saraswath Films v. Regional Director, E.S.I. Corporation 2003 (1) KLT 886 the Apex Court has held that security guards supplied by the agency and engaged in the premises of the employer are also coverable if they discharged the duty which work is directly and intrinsically part of the establishment. The learned Counsel for the Appellant has argued that Ext. B-2 letter itself will show that the persons deployed by M/s Trigger Security and Man Power Consultancy and M/s Force Seven Security and Investigation are not discharging any duty which is directly and intrinsically part of the work of the establishment. It is argued that the Appellant may be given an opportunity to prove that the work done by those employees is not directly and intrinsically part of the work of the establishment.
14. The learned Counsel for the Appellant has argued that even if it is found that 20 or more persons are employed for wages the same alone is not sufficient to cover the establishment. It is argued that it must be proved that they are employees within 2(9) of the ESI Act getting wages prescribed therein. It is also argued that while counting the number of employees the employees supplied by the agencies already covered shall not be taken into account. The learned Counsel relied on a decision reported in E.S.I. Corpn. v. M/s M.M. Suri and Associates (P) Ltd. AIR 1999 S.C. 803 in support of that argument. The decision cited is not an authority to hold that while counting the number of employees the covered employees supplied by the agency shall not be taken into account.
15. In E.S.I. Corporation v. Hotel Amred 1998 (1) KLT 786 a Division Bench of this Court has held that the employer has to lead evidence first. It was held as follows:
The person who comes to the Court with a grievance has a duty to establish his case by leading evidence, oral and documentary and substantiate his claim. The basic principle has been set out in S. 102 of the Evidence Act.
16. A Division Bench of this Court in an unreported decision M/s Consolidated Veneers v. Regional Director M.F.A. No. 814/1999 (decided on 26-6-2005) has held that even if the contractors'' employees are covered their number also to be taken into account for calculating the total number of workers in the establishment. Insurance Court has relied on Ext. B-2 to hold that as on 19-4-2002 there were 29 persons working in the establishment Considering the entire facts and circumstances of the case I am of the view that an opportunity can be given to the Appellant to explain the admission contained in Ext. B-2 letter and also to prove the actual number of employees who will come within Section 2(9) of the ESI Act. For that purpose the case has to go back. Since I am remitting the case it is only just and proper to give an opportunity to both sides to adduce evidence regarding the actual working of the water theme park. It is open to the Respondent to adduce evidence to prove that there is pumping of water in the establishment and hence it is a'' factory'' wherein manufacturing process with the aid of power is going on also.
17. In the result, the appeal is allowed in part. The case is remanded for the purpose of deciding whether any manufacturing process with the aid of power is going on in the establishment and whether any of the employees working there is to be excluded. The Insurance Court is directed to take back I.C. No. 56/2002 and dispose of the same afresh in accordance with law. It is open to both sides to amend their pleading and adduce further evidence if so advised. The parties shall appear before the Court below on 5-7-2007. No costs. I.A. No. 3025/2004 will stand dismissed.
*A reproduction from ILR (Kerala Series).
