COMMON ORDER (Per Dr. G. YETHIRAJULU, J.) C.M.A. No. 447/2006 was preferred against the decree and order in O.P. No. 20/2000, dated December 30, 2005, on the file of the Principal senior Civil Judge, Visakhapatnam. O.P. No. 20/2000 was filed by the petitioner under Section 75 of the Employees State Insurance Act to declare the petitioner club from the exemption of the Employees State Insurance Act similar to the exemption given to other clubs in the State of Andhra Pradesh; to declare the show-cause notice dated June 8, 2000 issued by the third respondent-Employees State Insurance Corporation, as illegal, arbitrary and without jurisdiction and to declare the observations of the Insurance Inspector in the report dated March 31,2000 as illegal and void and without jurisdiction, but the Court, after considering the oral and documentary evidence adduced by both parties, held that the petitioner club comes within the purview of ESI Act and that the observations of the Insurance Inspector made in the report are valid and the demand by the Corporation to make contributions of its employees by its club is legal and valid. Being aggrieved by the said order, C.M.A. No.447/2006 has been preferred. 2. The application was filed by the petitioner under Section 75 of the Employees State Insurance Act with the following averments in brief: The petitioner is a club established in the year 1883, which was registered under Section 25 of the Indian Companies Act. It is a members club and not a proprietary club. The object of the club is to provide a venue for sports and games and facilities for recreation and entertainment. The petitioner is maintaining tennis court, squash, swimming pool and also billiards, table tennis and other indoor games. The petitioner club is also arranging some cultural programmes and other parties and runs a catering department, which provides food and refreshments generally and also dinners and parties on special occasions. These activities are restricted to its members only and outsiders have no access to the amenities. None of the provisions of the Factories Act or ESI Act are applicable to the petitioner club. There is no manufacturing process being carried out in the premises. It is having a kitchen rendering service to its members. These activities are restricted to its members only and outsiders have no access to the amenities. None of the provisions of the Factories Act or ESI Act are applicable to the petitioner club. There is no manufacturing process being carried out in the premises. It is having a kitchen rendering service to its members. Though power is being used in the kitchen for operating refrigerators, coolers etc., still it cannot be said to be a factory within the meaning of Section 2(12) of the ESI Act. The second respondent-Employees State Insurance Corporation issued a notice on February 1, 1989 under Section 45-A of the ESI Act that the petitioner club is an establishment covered under the ESI Act and directed it to pay contribution of Rs. 23,925/- from April, 1988 to September 1988 with interest at Rs. 689/-. Notices were also issued for the period from January, 1987 to February, 1988. The notice issued by the respondent directing the club to pay the contribution is illegal, void and without jurisdiction. As against the said notice, the petitioner club preferred revision before the High Court. The High Court dismissed the application. Subsequently, on August 19, 1999, , the second respondent issued a demand notice demanding to pay a sum of Rs. 35,035/- and interest from January, 1987 to June, 1999 to a tune of Rs. 41,431/- totalling Rs. 76,736/-. On February 16, 2000, the respondents officers served another notice along with recovery notice dated August 26, 1999 for recovery of the amount. The petitioner thereafter moved an application before the High Court challenging the notice. The said application was dismissed. The respondents recovered the amount from the petitioner's bank without the knowledge of the petitioner. The clubs in AP were given exemption by the respondents, which are running on very parallel to the petitioner club. When the above clubs are exempted from the purview of the Act, the petitioner's club shall also be exempted. Therefore, the notices issued are not legal and valid, hence the petition. 3. The first respondent filed a written statement contending that there are no valid and justifiable reasons to grant the prayer to the petitioner. The petitioner did not comply with the notices issued by the respondent and therefore the recovery notices were issued by the Recovery Officer. Therefore, the notices issued are not legal and valid, hence the petition. 3. The first respondent filed a written statement contending that there are no valid and justifiable reasons to grant the prayer to the petitioner. The petitioner did not comply with the notices issued by the respondent and therefore the recovery notices were issued by the Recovery Officer. The Inspector of the respondent Corporation visited the establishment of the petitioner on March 28, 2000 and inspected the record for the period from March 1, 1988 to February 29,2000 which worked out the details of contribution due from the petitioner from March, 1988 to February, 2000 at Rs. 5,78,884/-. The respondent made a claim in Form C-18 on May 22, 2000 demanding the said amount with interest. The respondent issued another recovery certificate in Form C-19 dated June 27, 2000 demanding Rs. 9,63,229/- with interest up to May 31,20002 and also omitted wages of Rs. 50,641/-. A show-cause notice was issued on June 5, 2000 calling upon the petitioner to pay the said amounts. As per the report of the Inspector more than 20 persons were employed for wages in the kitchen and one electrical grinder besides deep freeze, bottle coolers, ice cream deep freezers etc., are being run with the aid of power in the manufacturing process. In Hyderabad Race Club case the High Court delivered judgment on September 4, 1996 that the provisions of ESI Act are applicable to the club, so also the Country Club and Jubilee Hills Club, which are also covered under ESI Act. As such, the coverage of petitioner-club under Section 2(12) of the Act is valid, therefore, the petition is liable to be dismissed. 4. The petitioner in support of his contentions examined P.W.1 and marked Exhibits A-1 to A-8. The respondents examined R.W.1 and marked Exhibits B-1 to B-13. 5. The lower Court, after considering the oral and documentary evidence, observed that the petitioner club is not only entertaining the members by various games, but it is also doing share business for acquiring the property to the club and developing the properties of the club. The club is also not a self-service club to claim any exemption from the purview of the Act. Therefore, the petitioner-club comes within the purview of the Act. The club is also not a self-service club to claim any exemption from the purview of the Act. Therefore, the petitioner-club comes within the purview of the Act. The lower Court further observed that a notice issued by the Corporation I demanding contribution from the employees of petitioner's club is valid and is in accordance with the provisions of ESI Act. The Court further held that the petitioner's club comes within the purview of ESI Act and the demand made by the Corporation to make contribution of its employees by the club is legal and valid. 6. In the light of the contentions by both parties and observations of the lower Court the point for consideration is Whether the petitioner club comes within the definition of Establishment under ESI Act? and Whether the petitioner club is liable for contribution of the Employees as prescribed under the Act? 7. The learned counsel for the petitioner submitted that the petitioner will not come within the definition of industry, as there is no manufacturing process and it will also not come within the definition of establishment, as the 25 petitioner club was engaging workers to help the members and as the petitioner club is not profit making organization, the question of attracting the provisions of the ESI Act does not arise. 8. The learned counsel for the respondent submitted that the petitioner club comes within the definition under Section 1(4) and Section 2(12) of the ESI Act. The notice issued by the Corporation under Section 45-A of the Act is not challenged. The recovery proceedings started by way of issuing demand notice were being challenged. Therefore, when the initial order remained unchallenged, the petitioner is not entitled to challenge the execution of the order. 9. The learned counsel for the petitioner further contended that even if it is taken into consideration that some workmen were engaged, they were engaged on contract basis as watchmen and other jobs, therefore, they cannot be treated as workmen of the petitioner club. 10. The learned counsel for the respondents cited the following judgments in support of his contention that the club comes within the purview of the ESI Act: In Country Club, Begumpet, Hyderabad v. Employees Insurance Court-cum-Chairman, this Court gave a judgment on October 15,2001 in C.M.A. Nos. 1105 and 1097/2000 by holding that the Country Club comes within the definition of ESI Act. 1105 and 1097/2000 by holding that the Country Club comes within the definition of ESI Act. The detailed judgment has been given by this Court in the above judgment in support of its decision that the Country Club comes within the purview of ESI Act. In Bangalore Turf Club Limited v. Regl. Dir., ESIC, 2003-I-LLJ-73 (Kant), the Karnataka High Court held as follows at p. 73 (head note): "The appellant-Turf Club was aggrieved by an order of the EI Court which held the appellant was a "shop" within the meaning of the notification of the Employees' State Insurance Act, 1948. The High Court dismissed the appeal, confirming the order under appeal. It observed after referring to 2 Sections 1(5) and 2(12) of the Act, and decisions, that the appellant-club carried on activities which were in no way different from those involving sale of services to the members of the club and even to the general 3 public in one form or other. It was therefore reasonable to say that it was a shop within, the meaning of the ESI Act and the notification issued thereunder." In Saraswath Films v. Regional Director, ESI Corporation, Tirchur, 2002-III-LLJ-169 (SC) the Supreme Court held that the Security Guards in cinema hall although employed through another agency held to be employees within the meaning of Section 2(9) of the Employees State Insurance Act, 1948. 11. The above decisions clearly indicate that employees of the club come within the purview of ESI Act and even if the contention of the petitioner is accepted that some workmen were engaged as watchman and other jobs on contract basis, they will come within the purview of ESI Act. It is also to be noticed that the order of the Authorities under Section 45-A of the Act also remained unchallenged. 12. In the light of the above circumstances, I am convinced that the petitioner club comes within the purview of the ESI Act. The Lower Court rightly came to a conclusion that the petitioner club comes within the purview of ESI Act. After going through the impugned orders, I do not find any illegality or infirmity in the orders passed by the lower Court. 13. C.M.A.s., are accordingly dismissed.