Cricket Club of India v. Bombay Labour Union

Introduction 

In the case of Cricket Club of India Ltd. v. The Bombay Labour Union & Another (1969 AIR 276), the Supreme Court addressed the critical question of whether a members’ club organized primarily for promoting sports and games constitutes an “industry” under Section 2(j) of the Industrial Disputes Act, 1947. The dispute originated when the Deputy Commissioner of Labour, Bombay, referred various demands of the Club’s workmen for adjudication by the Industrial Tribunal, Maharashtra. The Cricket Club of India, which was incorporated as a company but functioned as a members’ club with about 4,800 members and 397 employees, challenged the reference on the ground that it was not an “industry” and therefore outside the purview of the Industrial Disputes Act. The case is significant as it clarifies the principles for determining when recreational clubs fall within the definition of “industry,” with the Supreme Court building upon its earlier decision in The Secretary, Madras Gymkhana Club Employees’ Union v. The Management of the Gymkhana Club.

Facts of the case 

The case involved a labor dispute between the Cricket Club of India Ltd. (CCI) and its workmen. The Deputy Commissioner of Labour, Bombay, had referred the dispute to the Industrial Tribunal under section 10(2) of the Industrial Disputes Act, 1947. The dispute concerned various demands made by the workmen regarding classification, dearness allowance, leave facilities, overtime payment, permanency, and shift allowance.

The CCI raised a preliminary objection that it was not an “industry” as defined under section 2(j) of the Industrial Disputes Act, and therefore the provisions of the Act were inapplicable to it. The Industrial Tribunal rejected this objection, holding that the CCI fell within the definition of “industry.”

The CCI was a members’ club incorporated as a company under the Indian Companies Act, with about 4,800 members and 397 employees. Its primary objects were to encourage and promote sports (particularly cricket), provide venues for sports and recreation, and offer facilities for its members.

The club owned immovable properties valued at about Rs. 67 lakhs, generating an annual income of around Rs. 4 lakhs. It maintained residential facilities (48 flats and 40 rooms) exclusively for members, ran a catering department with an annual turnover of about Rs. 10 lakhs, and operated a cricket stadium where test matches were held.

The Supreme Court ultimately allowed the appeal, holding that the CCI was not an “industry” within the meaning of section 2(j) of the Industrial Disputes Act, and set aside the order of the Industrial Tribunal.

Arguments by the parties 

Arguments by the Cricket Club of India (Appellant)

1. The Cricket Club of India is a members’ club, not a proprietary club, organized primarily to encourage and promote sports and games.

2. There are fundamental similarities between Cricket Club of India and Madras Gymkhana Club (which the Supreme Court had previously ruled was not an “industry”):

   – Both are members’ clubs with similar primary objectives

   – Both provide venues for sports and facilities for recreation and entertainment of members

   – Both have similar management structures through committees elected by members

   – Neither distributes profits to members

3. The club’s residential facilities are strictly for members and cannot be compared to a commercial hotel.

4. The catering services are provided exclusively to members, with guests only able to access them through members.

5. The stalls opened during tournaments are only operated twice a year at concessional rates, and are not a systematic business activity.

6. Functions and parties hosted at the club are arranged at the request of members, not outsiders. The club maintains contractual relationships only with members, not outside organizations.

7. The Cricket Stadium and ticket sales for matches serve the club’s primary purpose of promoting cricket, rather than being commercial activities.

8. Though incorporated as a limited company, the club differs fundamentally from commercial companies: it has no shareholders, declares no dividends, distributes no profits, and has non-transferable membership.

Arguments by the Bombay Labour Union (Respondent)

1. The Cricket Club’s objects as stated in its Memorandum of Association include commercial activities beyond the scope of a purely social or recreational club.

2. The club has substantial investments in immovable properties (valued at about Rs. 67 lakhs) from which it earns significant income (about Rs. 4 lakhs annually).

3. The club operates residential facilities (48 flats and 40 rooms) with compulsory boarding, similar to a hotel operation.

4. The club’s catering department has a substantial annual turnover of approximately Rs. 10 lakhs.

5. The club sells food and drinks to non-members at stalls during tournaments.

6. The club hosts large functions for outside organizations (like bank jubilee celebrations), indicating systematic commercial arrangements.

7. The club derives substantial income (approximately Rs. 2 lakhs per event) from Test Match ticket sales and has agreements with outside organizations for stadium seating.

8. As an incorporated company, the club is legally distinct from its members, making its transactions with members commercial in nature.

Judgment of the case 

The Supreme Court of India ruled in favor of the Cricket Club of India Ltd., determining that it did not qualify as an “industry” under the Industrial Disputes Act of 1947. The Court found that the Club was primarily organized to encourage and promote sports and games, especially cricket, and functioned as a members’ self-serving institution rather than a commercial enterprise. Despite having activities that generated income (such as letting buildings for rent, providing residential accommodation, catering, and hosting cricket matches), these were incidental to its primary purpose and not systematic business undertakings. The Court emphasized that the Club’s services were mainly for its members, not the general public, and that its incorporation as a limited company did not change its essential nature. This judgment followed the precedent set in The Secretary, Madras Gymkhana Club Employees’ Union v. The Management of the Gymkhana Club case.