Case: M/s. Cochin Shipping co Vs. E.S.I. Corporation

3. The Appellant is a company incorporated under the Companies Act. It has its registered office at Jew Town in Mattancherry. It is engaged in the business of clearing and forwarding at the Port of Cochin situated in Willingdon Island. It is authorised to transact its business at the Cochin Custom House under the terms of Section 202 of the Sea Customs Act read with the Rules made thereunder and a licence was issued under the said provisions.4. The appellant received a notice dated 3.1.75 enclosing certain notification whereby the Employees State Insurance Act (hereinafter referred to as the Act) was extended to certain classes of establishments specified in the Schedule wherein 20 or more person are employees or were employed during that period. The appellant replied that it did not fall under the purview of the said notification. Therefore, the appellant was not liable to comply with any of the provisions of the Act.Another letter dated 8.9.75 was received by the appellant calling it upon to furnish certain details. This was replied to by a letter dated 20.9.75 whereunder the details were furnished. Thereafter a notice dated 7.11.75 with which were enclosed certain printed forms, was received by the appellant. The appellant replied on 18.11.75 denying liability to pay any contribution under the Act. The stand of the appellant was that the company does not come within the notification dated 18.9.74 as the appellant was not a shop and was carrying on business of clearing and forwarding at the Cochin Port. In reply to the said letter the appellant received a letter dated 9.12.75 stating that he received a letter dated 9.12.75 stating that the Insurance Inspector who visited the appellant found 20 persons employed in the shop. It was functioning as shipping, clearing and forwarding agents. The appellant served the customers. Therefore, it was a shop within the dictionary meaning of the terms and called upon the appellant to submit the returns.5. Contending that the appellant does not render any service to customers at its office, it was merely carrying on clearing and forwarding business by processing the documents at Custom House, no service being rendered at the appellants office establishment, it was urged that it could not be called a shop within the dictionary meaning. An application was moved under Section 75 of the Act before the Employees Insurance Court, Calicut to decide the dispute and to hold that the appellant was not a shop within the purview of the Act and, therefore, the Act itself was inapplicable.6. Objections were preferred on behalf of the Regional Director, Employees State Corporation that in view of the notification dated 18.9.74 supplemented by the other notifications dated 2.12.74 and 22.3.75, the appellants business would fall within the ambit of the said notifications. The Government of Kerala issued those notifications with the view to extend benefits to the employees working in other sections of organised labour such as shops and establishments.7. The Employees Insurance Court by a judgment dated 29.1.77 in E.I.C. No. 1/76 held that the appellant would be covered with effect from six months after 21.12.74. In the result, the appellant was brought within the notification. Against this order, M.F.A.No. 75 of 1977 was preferred to the High court of Kerala. A Division Bench by its judgment dated 25.6.79, following its earlier judgment held that the term "shop" as understood in the scheme of the Act is not merely a place where the business of purchase and sale takes place but it is a place where there is commercial activity arising from customer service. In that sense, the establishment of the appellant has to be understood to fall within the purview of the term "shop". Accordingly the appeal was dismissed. Hence,the civil appeals, leave having been granted by an order dated 3.11.80.

Court's reasoning:
22. In this case, the argument advanced on behalf of the appellant is slightly different, namely, other kinds of establishments which can easily fall within the definition of "shop" have been enumerated. Hence, a specific enumeration, so as to include the appellants business activity, is to be insisted upon. In our considered view, this argument cannot be accepted. First of all, merely because other establishments which are akin to shop are enumerated, it does not, in any manner, oblige us to give a narrow meaning to the word "shop" nor does it any way dilute the meaning of "shop". As rightly contended by the learned counsel for the respondent, the object is to envelop as many establishments as possible without leaving any room for doubt. That is precisely what the notification intends to do.23. The appellant is carrying on stevedoring, clearing and forwarding operations, Clearing the documents, even it be in the custom house, is necessary for the export or import of goods. These services form pat of the carriers job. It cannot be gainsaid that the appellant is rendering service to cater the needs of exporters and importers and others who want to carry the goods further. Therefore, it is a shop carrying on a systematic economic or a commercial activity. This would be enough to bring the appellant without specifically enumerating the specific activities carried on by the appellant. Merely because shop has been enumerated along with other similar establishment we do not think any further specific enumeration is necessary to cover the appellant. Thus we reject the contentions raised on behalf of thelearned counsel for the respondent has, in support of his stand, placed reliance on several decisions of this Court and the High Courts in which the notification in identical terms has been construed in the way as is suggested on behalf of the Corporation. Although Mr. Bobde, learned counsel for thehas advanced an argumentwhich on the face of it, appears to be attractive, I think that in view of the consistent interpretation of the notification which has been followed in the country, the question should not be reopened for fresh consideration. Accordingly, I agree that all these appeals should be dismissed but without costs.