IN THE HIGH COURT OF KERALA AT ERNAKULAM
Ins.APP.No. 39 of 2005()
1. EMPLOYEES STATE INSURANCE CORPORATION,
... Petitioner
Vs
1. CITY CENTRE BUILDERS AND DEVELOPERS,
... Respondent
For Petitioner :SMT.T.D.RAJALAKSHMY, SC, ESI CORPN.
For Respondent :SRI.DENIZEN KOMATH
The Hon'ble MR. Justice M.N.KRISHNAN
Dated :14/11/2008
O R D E R
M.N.KRISHNAN, J
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INAP No.39 OF 2005
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Dated this the 14th day of November 2008
JUDGMENT
This appeal is preferred against the order of the Employees’ Insurance
Court, Palakkad in I.C.No.84 of 2002. The point that arose for
consideration was whether the applicant before the said court was an
establishment coming under the provisions of Section 1(5) of the ESI Act
and the relevant notification thereunder. It is contended by the applicant
before the court below that various portions of the building along with
undivided shares of the landed property have been assigned to different
persons and it will not come under the scope of Section 1(5) of the Act. On
the other hand, the contention of the Corporation is that there are 7
labourers, 11 cleaners, 7 security guards and therefore it will come under
Section 1(5). It has to be stated that by a notification dated 27.5.1976, the
Government of Kerala has extended the ESI Act to the classes of
establishment and areas as specified in the schedule. From the description
of the establishment attached to the schedule, learned counsel for the
Corporation would contend that paragraph 3(iii) shops will take in this and
INAP 39/2005 -:2:-
as the number of employees exceeds 20 it is liable to be covered under the
ESI Act. Shop means any premises where any trade or business is carried on
or where services are rendered to customers and includes offices, store
rooms, go-downs or warehouses were in the same premises or otherwise
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 to the benefits provided under the Factories Act. Now what is the
scope of the work done by the so called employees are (1) the builder has
constructed so many rooms and flats and it is either occupied for personal
purpose or commercial purpose as owners of undivided share or on a lease
basis by so many persons. There is common area available and it belongs to
all and the upkeep and maintenance of that area is looked after by the
person, who has constructed the building. There is also an office in the very
same building. In other words, there are occupants who have got absolute
right. There are occupants who are lessees and admittedly the applicant-
establishment cannot have any control over their occupation or business.
Just because all of them have decided together and thereafter engaged
persons for sweeping and cleaning of the entire premises for which also the
payment is not made by one individual but it is collected proportionally and
handed over to the employees. So what is really done is the upkeep,
INAP 39/2005 -:3:-
maintenance and safety of the building. I feel when such is the work
entrusted and done collectively by a group of persons, who have no
common interest other than for the purpose of upkeep and security of the
building one cannot call them as an employer under whom all of these
buildings will come and thereby attract the definition of a shop. It has also
to be stated that shop in the ordinary parlance means any trade or business.
The word ‘customer’ as per the Dictionary meaning is only a person who
buys goods or services from a shop or business.
So from these discussions I hold it cannot be correct to give an
interpretation that these type of services rendered amounts to the activities
of a shop as defined under the Shops and Commercial Establishment Act
and so I decline to interfere with the decision rendered by the E.I.Court.
Therefore the appeal fails and the same is dismissed.
M.N.KRISHNAN, JUDGE
Cdp/-