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Indian Case Summary

Cricket Club Of India Ltd vs The Bombay Labour Union & Another on 7 August, 1968 – Case Summary

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In the case of the Cricket Club of India Ltd. vs The Bombay Labour Union & Another on 7 August 1968, the Supreme Court of India was tasked with determining whether the Cricket Club of India Ltd. (the Club) could be classified as an ‘industry’ under the Industrial Disputes Act, 1947. This classification was crucial as it determined the applicability of the Act’s provisions to the Club and its employees.

Facts of the Case

The Club, a member’s club incorporated as a company under the Indian Companies Act, was primarily organized to encourage and promote various sports, particularly cricket. It maintained facilities for various indoor and outdoor games, a swimming pool, and residential accommodations for its members. The Club also had a catering department that provided food and refreshments for its members and arranged dinners and parties on special occasions. The Club owned immovable properties worth about Rs. 67 lakhs, which generated an annual income of around Rs. 4 lakhs. The Club also hosted cricket matches and tournaments, including Test Matches, where tickets were sold to the public.

A dispute arose between the Club and its employees regarding various demands such as classification of employees, dearness allowance, leave facilities, payment for overtime, permanency, shift allowance, etc. The Club objected to the reference of this dispute to the Industrial Tribunal, Maharashtra, under section 10(2) of the Industrial Disputes Act, arguing that it was not an ‘industry’ and thus, the Act’s provisions were not applicable to it.

Issues and Court’s Observations

The primary issue before the court was whether the Club could be classified as an ‘industry’ under the Industrial Disputes Act, 1947. The Club argued that its primary objective was to promote sports and games, and its activities did not constitute an undertaking in the nature of a trade or business.

The court observed that the Club’s activities, including the promotion of sports and games, the provision of residential accommodations, and catering services, were primarily for its members and not in the nature of a trade or business. The court also noted that the income generated from the Club’s immovable properties did not accrue with the aid and cooperation of the employees. The court further observed that the Club’s activities, including the holding of cricket test matches, were in the nature of promoting the game of cricket and not a systematic activity for profit-making.

The court also took into account the fact that the Club was incorporated as a company but did not operate like an ordinary company. It had no shareholders, no dividends were declared, and no distribution of profits took place. The membership was not transferable like the right of shareholders, and there was provision for expulsion of a member under certain circumstances.

Conclusion

The Supreme Court held that the Club was not an ‘industry’ under the Industrial Disputes Act, 1947. The court concluded that the Club was a group of members organized with the primary objective of encouraging and promoting sports and games. The activities of the Club, including the promotion of sports and games, the provision of residential accommodations, and catering services, were not in the nature of a trade or business. Therefore, the provisions of the Act were not applicable to the Club, and the reference under section 10(2) of the Act was not competent. The court set aside the order of the Industrial Tribunal holding that the Club was an ‘industry’.