Case: Employees State Insurance Corporation Vs. Hyderabad Race Club

These two appeals arise out of a common judgment of the High Court of Judicature, Andhra Pradesh at Hyderabad made in a statutory appeal filed under Section 83(2) of the Employees State Insurance Act (the Act). The appellant-Hyderabad Race Club (the Club) in C.A. No. 4687/99 is aggrieved by the finding of the High Court whereby the appellant was held to be an establishment for the purpose of the Act whereas its contention before the authorities below including the High Court was that it was not in establishment covered by the Act.

Court's reasoning:
4. Having heard the learned counsel for the parties and perused the various judgments on this question that the contention of the appellant Club cannot be accepted. It is suffice to say that in view of the judgment of this Court in the case of M/s. Cochin Shipping Company vs. E.S.I. Corporation (1992 (4) SCC 245 ) and Employees State Insurance Corporation vs. R.K. Swamy & others (1994 (1) SCC 445 ), it is quite clear that the institution like the appellant Club comes within the purview of the Act, hence, we find no difficulty in accepting the finding of the High Court in this regard, therefore, this contention of the appellant-Club in C.A. No. 4687/99 has to beSince it is found on record that inspite of the opportunity being granted to the appellant club, no material was produced or evidence led to prove what exactly was the number of workmen in the club who are entitled to the benefit of the Act. Per contra, the authorities below including the High Court has relied on the report of the Inspector who made a spot inspection and submitted a report to the authorities which has gone unchallenged. Therefore this factual finding also cannot be disturbed in this appeal.It is true as contended by the learned counsel on behalf of the Corporation that once a court of law declared the applicability of a statute the said declaration in the ordinary course should apply from the date the law in question was brought into force, but there could be exception to this principle depending upon the facts of the case. It is undisputed that till the judgment of this Court in the case of M/s. Hindu Jea Band, Jaipur vs. Regional Director, Employees State Insurance Corporation, Jaipur (AIR 1987 SC 1166 ) the law in regard to the institutions like a Club coming within the purview of the definition of establishment for the purpose of the Act was nebulous. It was so understood even by the Corporation itself which is evident from the fact that the action against the appellant for non-compliance of its liability was not taken for nearly 15 years until the visit of the Inspector of the Corporation on 17.6.1990. In that background even the Corporation was not very certain whether the word establishment used in the concerned notification of 26.3.1975 included a Club. Therefore, in our opinion, the High Court was justified in coming to the conclusion to call upon the Club to make contribution for a period between 1975 to 1986 would be somewhat unreasonable. Thus in the peculiar facts of this case, we are in agreement with the finding of the High Court that the demand under the Act as against this Club can be enforced only from the year 1987 onwards.