M/S. KIRLOSKAR CONSULTANTS LTD. versus EMPLOYEES STATE INSURANCE CORPORATION

Citation: [2000] SUPP. 4 S.C.R. 591 · Decided: 14-11-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Dismissed

Judgment (excerpt)

M/S. KIRLOSKAR CONSULTANTS LTD. 
v. 
EMPLOYEES' STATE INSURANCE CORPORATION 
NOVEMBER 14, 2000 
[S. RAJENDRA BABU AND S.N. VARIAVA, JJ.] 
Employees' State Insurance Act, 1948-Expression 'Shop'-Meaning 
of-Appellant providing under one roof the services of several professionals 
A 
B 
on different fields-Guidance and advice to companies, corporations, boards C 
and local authorities on how best to manage their business for optimum 
utilisation of plant, machinery and other infrastructure-ES/ Corporation 
communicating to the appellant that it was covered under the provisions of 
the Employees' State Insurance Act being a 'shop'-Tenability of-Held, as 
the nature of activities carried on by the appellant viz. providing consultancy 
services to its customers, is commercial or economical, the same being offered D 
for a price, the appellant's premises could reasonably be said to be a shop--
The appellant was, thus, covered by the Employees' State Insurance Act-
Section 75-Bombay Shops and Establishments Act, 1948.;• 
The appellant was registered as 'a commercial establishment' under 
the provisions of the Bombay Shops and Establishments Act, 1948. It provided E 
under one roof, the services of serval different professionals like Engineers, 
Architects, Financial Consultants and Management Consultants, guidance and 
advice to other companies, corporations, boards and even local authorities on 
how best to manage their business for optimum utilisation of plant, machinery 
and other infrastructure. A letter was sent by the respondent corporation to F 
the appellant stating that it was covered under the provisions of the Employees' 
State Insurance Act, 1948. The appellant .started remitting contribution in 
respect of its employees as per the provisions of the Act. Thereafter, it filed 
an application under Section 75 of the Employees' State Insurance Act 1948 
before the ESI Court for a declaration that the provisions of the said Act would 
not be applicable to it. The E.S.I Court held that the appellant was not covered G 
by the Act. 
Against the Order of the ESI Court, the respondent filed an appeal in 
the High Court which was allowed. Hence this appeal. 
On behalf of the appellant , it was contended that the appellant's business H 
591 
592 
SUPREME COURT REPORTS (2000) SUPP. 4 S.C.R. 
A premises cannot be a shop on the analogy that a lawyer's office where advice 
is given by lawyers is not a 'shop' as held by this Court for purposes of Kera la 
Shops and Commercial Establishments Act, 1960; that a place of work cannot 
be regarded as a 'shop' unless the activity conducted is in a 'Shop' ; the 
expression 'shop' means a premises which is used in connection with the 
B trade or business but not when professional service is rendered; that the 
appellant does not carry on any trade or business and appellant's 
establishment cannot be a 'shop'. 
On behalf of the respondent, it was contended that the expression 'shop' 
having been given expanded meaning for purposes of the ESI Act whereunder 
C the expression 'shop' is not defined, the matter is no longer res integra, that 
whenever an establishment carries on activities in the nature of a trade or 
commerce, it must be held that such premises is a 'shop' ; that the nature of 
the activities carried on by the appellant cannot fall outside the scope of the 
expression 'shop' as understood by this Court in several decisfons. 
D 
Dismissing the appeal, the Court 
HELD: 1. 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 other experts. In substance, the nature 
E of activities carried on by the appellant is commercial or economical and would 
amount to parting with the same at a price. The appellant's premises, thus, 
could reasonably be said to be a shop. (595-F-G) 
E.S.I. Corpn. v. R.K. Swamy and Ors., (1994) l SCC 445, relied on. 
F 
V. Sasidharan v. Mis Peter And Karunakar & Ors., [ 1984) 4 SCC 230, 
G 
distinguished. 
HinduJea Bandv. Regional Director, ESIC. (1987) 2SCC101; Cochin 
Shipping Co. v. ES! Corpn., (1992) 4 SCC 245 and International Ore and 
Fertilizers (India) Pvt. Ltd. v. ES! Corporation, (1987) 4 SCC 203, referred 
to. 
Dattatraya Advertising Co. Ltd v. £.S./. Corpn., ( 1956) LLN 346, cited. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4668 of 1995. 
H 
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