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Cooking food in club is ‘manufacturing’

There is no distinction between a hotel and an elite club when it comes to contribution to the Employees State Insurance fund, the Supreme Court stated while dismissing the appeal of Delhi Gymkhana Club Ltd last week. The court rejected the argument of the club that it was not “manufacturing” food in its kitchen and therefore the club was not a factory covered by the ESI law. “Kitchen is an integral part of the club which caters to the needs of its members on payment, thereby making the club fall within the definition of factory,” the Supreme Court emphasised, agreeing with ESI Corporation. The high court had already dismissed the club’s petition. The appeal was dismissed with the searing remarks that the welfare law was not followed by the elite club and “it is very unfortunate that it has not paid ESI contribution for more than three decades.”

 Article referred: http://www.business-standard.com/article/opinion/protection-for-sick-units-from-creditors-114110200712_1.html

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