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Guest (n/a)     18 November 2008

Commercial activity in residential premises

A doctor is staying on the ground floor of a society. The doctor, a general practitioner, runs a dispensary in one room, and has also put up a board for the practice. Is it permissible to run a commercial dispensary in a residential society without the society's permission? If no - what alternative is there to stop the doctor from running a commercial organisation in residential society? If yes, what additional charges can the society demand from the doctor?


Learning

 17 Replies

sudhir chaudhary (advocate)     19 November 2008

it depends upon the terms and conditions of the sale deed. However to restain a wrong an injunction may be sought from the competent court/


sudhir chaudhary

Manish Singh (Advocate)     19 November 2008

nor its wrong neither its unlawful. profesionals can carry on their profession in the 50% of the place of any building for their profession making it mandatory that the other 50% is used for residential purposes as held by the apex court.


but in your case you better look into the by-laws of the society whether it restricts a person to carry on any profession without due permission.

M. PIRAVI PERUMAL (Advocate & Consumer Rights)     19 November 2008

Manish ji can you give me the citation of the Apex Court.

prabodh kumar patel (advocate)     19 November 2008

I also need the citation.


Thanks 

Shree. ( Advocate.)     19 November 2008


Dear Diwakar Ji,


 Generally there is a difference between a business and profession. The activity of a doctor is a professional service. A doctor, if residing in the flat, is entitled to use a part of the premises for professional activities too.


 



Doctor cannot be levied  of extra charges, the same is included to the flat itself. The definition of the flat includes shops as well as residential flats. From my point of view, the society has no right to collect  additional charges, just because a doctor is using the flat for professional usage. 


Anyway wait for response from other members.


prof s c pratihar (medical practitioner &legal studies)     19 November 2008

a doctor can do his profession in any flat he is residing.a doctor can not run a medical shop neither he is allowed to practice  in a chamber provided by the shop owner.this is the guideline of --w. bengal clinical establishment act with its recent modification. here profession means a consultation chamber of professionals.

Manish Singh (Advocate)     21 November 2008

I apologise for providing wrong info at this platform since the case pertains to Delhi HC about Delhi Master Plan 2021 where the professionals can carry on professional activities upto 50% of their residential premises of the permitted Floor Area Ratio(FAR).  I am still looking for any judgment of the Apex  Court since this matter concerns to whole of India regarding right of professionals and there must be some guidelines about the professionals use of residential premises except the rules of local authorities.


 

MAYUR MISHRA (-)     25 September 2009

Dear Manish Ji,

I Agree with you that a professional should have a right to use the residential premises for his professional services also. I am also looking for any Apex Court Judgement regarding this. I was very happy when i read your first comment on this matter that there exists a Apex Court Judgement regarding this issue. Kindly reply if you get any Apex Court Judgement.

regards

MAYUR

rajendra b. popat (proprietor)     19 January 2010

Mumbai High Court
Equivalent citations: 2006 (1) MhLj 734
Bench: D Karnik
    Sunanda Janardan Rangnekar vs Rahul Apartment No. 11 Co-Operative Housing
Society Ltd. on 10/8/2005

JUDGMENT

   D.G. Karnik, J.

   1. By this petition, the petitioner challenges the judgment and order passed
by the Divisional Joint Registrar, Bombay on 7th December, 2004 dismissing the
revision.

   2. The respondent No. 1 is a co-operative housing society (for short 'the
society') having 29 members. There are 28 residential flats which are allotted
to 28 members and one shop is allotted to the petitioner. The area of the flats
varies between 479 sq.ft and 657 sq.ft. The area of the shop premises in
occupation of the petitioner is about 160 sq.ft. i.e. to say that the
petitioner's shop is smaller than the smallest flat in the building of the
respondent No. 1 society. It appears that the society recovers from the members
property tax, payable to the municipal authorities at the rate of Rs. 30.81 per
sq.ft per annum of the area of the flat/shop. In addition thereto, the Society
also levies and recovers from the members amount by way of society
charges/maintenance at a flat rate of Rs. 8,000/- per annum (Rs. 2,000/- per
quarter per flat). The society sought to recover from the petitioner society
charges/maintenance at the rate of Rs. 32,000/-per annum (Rs. 8,000/- per
quarter) for the shop occupied by him. According to the petitioner, this was
illegal inasmuch as while only Rs. 8,000/-per annum were charged to the members
occupying the residential flats Rs. 32,000/- per annum were sought to be
recovered from her by way of society charges/maintenance which was highly
discriminatory. As the petitioner's grievance was not addressed to she stopped
making payment to the society. The society thereafter made an application for
recovery of arrears of the dues with interest from the petitioner to the Asstt.
Registrar of Co-operative Societies under Section 101 of the Maharashtra Co-
operative Societies Act, 1961(for short 'the Act'). The petitioner opposed the
said application contending that the payment was withheld on account of
excessive demand. She also contended that was liable to pay to interest. On 23rd
December 2002, the Asstt. Registrar issued a certificate of recovery in favour
of the respondent No. 1 society in the amount claimed by it. Aggrieved
petitioner challenged the recovery certificate by filing a revision before the
Divisional Joint Registrar. By an order dated 7th December, 2004, the Divisional
Joint Registrar dismissed the revision application. That order is impugned in
this petition.

   3. Learned counsel for the petitioner submits that while the society was
issuing bills by way of society charges/maintenance charges at the rate of Rs.
8,000/- p.a. (Rs. 2,000/- per quarter) to each of the flat holder members, it
was wrongly issuing the bills in the sum of Rs. 32,000/- p.a. (Rs. 8,000/- per
quarter) to the petitioner in respect of the shop premises. She submits that no
additional service whatsoever was provided by the respondent No. 1 society to
the petitioner or to the shop allotted to the petitioner nor was any additional
amount spent for the maintenance of the shop and therefore the society was not
entitled to treat the petitioner differently from other members. Learned counsel
for the society submits that the sum of Rs. 32,000/- per annum consisted of two
parts viz. Rs. 16,000/- for society charges/maintenance charges and a sum of Rs.
16,000/- as non-occupation charges. As regards the charges for society
charges/maintenance charges, he submits that a resolution has been passed by the
general body of the society in its meeting dated 1st July, 2001 authorising the
society to levy society charges/maintenance charges in respect of the commercial
premises at twice the rate of charges for the residential premises and therefore
the society was entitled to recover Rs. 16,000/- per annum instead of Rs.
8,000/- p.a. in respect of shop premises occupied by the petitioner. As regards
the non-occupation charges of Rs. 16,000/- the counsel submits that the
petitioner was not personally occupying the shop but had let it out and
therefore the society was entitled to non-occupation charges under the bye laws
of the society.

   4. In view of the rival submissions of the parties, two points arise for my
consideration.

     i)Whether under the Act, Rules or bye-laws the society is entitled to
recover society charges/maintenance for commercial premises at twice the rate
charged for the residential premises?

     ii) Whether the society is entitled in law to recover non-occupation
charges as claimed by it?

   Regarding Point No. 1.

   5. Learned counsel for the petitioner submits that total number of members in
the society are 29 out of which 28 persons occupy the residential premises and
only the petitioner occupies one non residential unit. Therefore the residential
flat holders have a brute majority in the society and petitioner's lone voice is
not heard. Taking advantage of the brute majority the flat holders want to
subsidise the charges for the maintenance of their flats by recovering higher
maintenance charges from her - the holder of a commercial premises. The society
has no authority in law to treat the members differently and levy the charges
for the commercial premises at a rate twice the rate of the residential
premises. Though the area of the shop is much smaller than the area of the
smallest residential flat, the petitioner never objected for paying the society
charges/maintenance at the same rate as that of the residential flat-holders.
There should be equality in sharing of the burden of expenses for maintenance
and common expenses which are recovered by the society as service charges or
maintenance charges. They should be recovered equitably and equally from all the
members. In support of these submissions learned counsel for the petitioner
relies upon the decision of this Court in Venus Co-operative Housing Society
Ltd. v. Dr. J.Y. Detwani reported in 2004(5) Mh.L.J. 197 = 2003(3) All. M.R.
570.

   6. In case of Venus Co-operative Housing Society the flats of different
sizes, 284 small flats with two bedrooms and 39 large flats with four bedrooms.
The society passed a resolution levying the different maintenance charges as per
the area of the flats and issued a circular to that effect to members.
Disputants who were the holders of the larger flats challenged the circular as
also the resolution by filing a dispute under Section 91 of the Act before a co-
operative Court. The co-operative Court declared the resolution of the society
to be illegal and not binding on the disputants. The decision of the co-
operative Court was confirmed by the appellate tribunal. The order was impugned
by the society by way of a Writ Petition. This Court held that the resolution of
the society levying differential charges on the basis of the area of the flats
was arbitrary, unreasonable, without any rational and without any source of
power. It held that services of the society were enjoyed by all the members
equally and there was no reason for the society to make the large flat holders
pay more on the basis of the area of the flats. It held that though the
supremacy of the general body cannot be doubted, even the supreme general body
had to pass resolutions considering all facts and circumstances of the matter.
The general body cannot pass arbitrary and unreasonable resolutions merely
because it is supreme and it has a large majority in favour of any issue on the
agenda.

   7. In the present case the society is recovering differential amounts by way
of a property tax on the basis of the area of the flats at the rate of 30.81 per
sq. ft. per annum of the area. That has rightly not been challenged by the
petitioner, as the property tax payable to Municipal authority would obviously
vary according to the area of a flat. However, so far as the charges for the
society services or maintenance are concerned, no material was adduced before
the Asstt. Registrar to show that any additional services were provided to the
petitioner or any additional maintainence was incurred by the Society on account
of petitioner being a holder of commercial premises. In the affidavit in reply
filed in this Court also, it is not even be alleged that any additional services
are provided to the petitioner by reason of her being the holder of commercial
premises. In my view, the society was not entitled to levy society
charges/maintenance charges for commercial premises at twice the rate that of a
residential premises. I am in respectful agreement with the view expressed by
this Court in Venus Cooperative Housing Society v. J.Y. Detwani (supra) in this
respect.

   Regarding point No. 2.

   8. Learned counsel for the society submits that under bye-law No. 45 of the
bye-laws of the Society, a member is required to take previous permission of the
managing committee before letting out and giving or giving on leave and licence
basis or caretaker basis his premises or any part thereof. Clause (2) of bye-law
No. 45 provides that no member shall be permitted to sub-let or give on leave
and licence based or caretaker basis any part of the premises unless he makes an
application in the prescribed format and in the application gives an undertaking
that he would pay non-occupancy charges to the society at such rate as is
decided in the meeting of the general body of the society. He therefore submits
that the Society was entitled to levy non-occupancy charges of Rs. 16,000/- per
month as claimed by it.

   9. Learned counsel for the petitioner submits that in the bills issued by the
society, it has not claimed any non-occupancy charges but had claimed the entire
amount is claimed as society charges/maintenance charges and there is no basis
for the contention that Rs. 32,000/- were divided into two parts viz. Rs.
16,000/-as society charges and Rs. 16,000/- as non-occupancy charges. He further
challenges the validity of the bye-law and in any event submits that the charges
were not claimed on the basis of this bye-law. He further submits that in any
event as per the order dated 1st August, 2001, issued by the Government by
virtue the powers conferred on it under Section 79-A of the Act, the Government
has directed that the non-occupation charges cannot exceed 10% of the service
charges. The learned counsel, therefore, submits that the service charges could
not be 100% of the society charges and would have to be restricted to 10% of the
service charges/maintenance charges.

   10. I have perused the copy of the application made by the respondent No. 1
society to the Registrar for issuance of a certificate under Section 101 of the
Act. In the said application, the society has not claimed non-occupation charges
at all but has claimed the amount under two heads i.e. society maintenance
charges and service charges. Thus, the contention of the learned counsel for the
petitioner that Rs. 16,000/- per annum represent non-occupation charges is not
borne out from facts pleaded in the application. Assuming the bye-law No. 45 to
be valid it says that the society is required to fix the non-occupancy charges
in the meeting of the general body. There is no pleading and there is no
material on record to show that the general body meeting, the society had
resolved to levy any non-occupancy charges. The directions issued by the
Government under Section 79-A of the Act are binding on the society and their
validity is not challenged before me. Under the said directions non-occupation
charges cannot be levied at a rate more than 10% of the service charges. In law,
non-occupation charges would mean charges for not personally occupying the
premises i.e. either keeping the premises unused or locked or letting out or
giving on license the premises. In view of the Government order issued under
Section 79-A of the Act the non-occupation cannot exceed 10% of the maintenance
charges applicable to the concerned flat/unit. The society was therefore not
entitled to recover the charges as claimed by it in the recovery certificate.

   11. Neither of the authorities below appear to have applied their mind to
these aspects. In the circumstances, their adjudication has to be set aside and
is accordingly set aside and the matter is remanded back to the Asstt. Registrar
for deciding it afresh in the light of the observations made by this Court.

   12. Rule is made absolute to the extent mentioned above.

rajendra b. popat (proprietor)     24 January 2010

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 1256 OF 1992 Municipal Corporation of the ] City of Pune, a Body Corporated ] under the B.P.M.C. Act, and ] having its office at Main ] Building, Shivajinagar, Pune - 5]..Petitioner versus 1. Shri Bhagwan Ganesh Sabne aged about 74 years, Occ: Retired, residing at Shri Gajanan Prasad Co-operative Housing Society (Proposed) ] 111/8, Erandawana, Income Tax Lane, Pune - 411 004 ] 2. Mrs. Smita Sudhir Sabne aged about 36 years, ] Occ: Tax Consultant Residing at as above. ]..Respondents Mr. R. M. Pethe h/f. Mr. R. G. Ketkar for the Petitioner. Mr. S. Phatak h/f Mr. A. V. Anturkar, for the Respondents. CORAM : D. G. DESHPANDE, J. DATE : 12TH SEPTEMBER, 2006 ORAL JUDGMENT : Heard Advocate for the Petitioner and the Respondents. 1. Respondent No.1 is a Chartered Accountant. 2. He was served with a notice of payment of tax by the petitioner - Pune Municipal Corporation. He challenged the said notice by filing Appeal before the Court of Principal Judge, Small Causes Court, Pune, vide Municipal Appeal No. 72 of 1988. The Appeal was allowed and the assessment made by the Corporation was set aside. Against the said Order, the Petitioner filed Civil Appeal No. 829 of 1989 before the District Judge, Pune. The said Appeal was dismissed by the District Judge, Pune, vide Order dated 2.3.1991. Against the said order, the Pune Municipal Corporation - Petitioner, has filed this writ petition. 3. A short question is involved in this Petition and that is whether user of the premises by the Respondent No.1 for his profession of Chartered Accountant can make him liable to taxes which can be levied in respect of premises used for the purpose of trade and business. 4. Advocate for the petitioner tried to contend that admittedly the premises are not used by the Respondent No.1 for residence, he is carrying on his business and therefore he must pay the taxes leviable at premises used for business. My attention was drawn by the Advocate for the Petitioner to Proviso to Section 129 of Bombay Provincial Municipal Corporation Act, 1949 (hereinafter referred to as "the Act of 1949"). The Proviso reads as under: "Provided that the Corporation may, when fixing under section 99 or section 150 the rate at which general tax shall be levied for any official year or part of an official year, determine that the rate leviable in respect of buildings and lands or portions of buildings and lands in which any particular class of trade or business is carried on shall be higher than the rate fixed in respect of other buildings and lands or portions of buildings and lands by an amount not exceeding one-half of the rate so fixed." The Principal Judge, Small Causes Court, Pune, and thereafter the District Judge, Pune, negatived the contention of the Corporation holding that profession of Chartered Accountant is neither a trade nor a business. Advocate for the Respondents drew my attention to the judgment reported in Current Tax Reporter Volume 80 Phillipos & Company, Chartered Accountants & Ors. versus State. This is the Judgment of the Karnataka High Court, wherein it is held that Office of the Chartered Accountant or of a firm of a Chartered Accountant is not an establishment within the meaning of Section 2(i) of the Karnataka Shops and Commercial Establishments Act, 1961, it is neither a shop nor a commercial establishment. 5. It is true that in the aforesaid decision, the question of annual rating value is not involved. However, the fact remains that even the Karnataka High Court has not accepted the submission of the Corporation that office of the Chartered Accountant is a commercial establishment. The Proviso which is provided, reproduced above, makes a distinction about the use of the building for the purpose of trade or business. Advocate for the petitioner could not show me any provision of the said Act of 1949 wherein commercial premises have been defined. 6. Admittedly, Chartered Accountancy is a profession and it is not a business. The reasoning and logic given by the lower court and the lower appellate court, cannot be faulted with, and, therefore, there is no merit in this Petition, the same is dismissed. Rule is discharged accordingly. However, in the circumstances, there will be no order as to costs. (D.G. DESHPANDE, J. )

rajendra b. popat (proprietor)     24 January 2010

ITEM NO.30 & 31 COURT NO.1 SECTION PIL
SUPREME COURT OF INDIA
Record of Proceendings Writ Petition (Civil) No(s). 263 of 2006
DELHI PRADESH CITIZEN COUNCIL Petitioner(s)
VERSUS
UNION OF INDIA & ANR. Respondent(s)
(With appln(s) for stay and directions and impleadment and office report )
With Writ Petition (C) No.264 of 2006
(With appln. for stay and office report)
AND Writ Petition (C) No.266 of 2006 ((Item No.31)
(With appln. for intervention and office report)
Date: 10/08/2006 These Petitions were called on for hearing today
CORAM :
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE C.K. THAKKER
HON'BLE MR. JUSTICE P.K. BALASUBRAMANYAN
Mr. Ranjit Kumar, Sr.Adv. (A.C.)

For Petitioner(s)
1.       Mr.JasbirS.Malik,Adv.in WP 263/06
2.       Mr. S.K. Sabharwal,Adv.
3.       Mr.SatyaPrakash-in-person in WP 264/06
4.       Mr. R.L. Panjwani, Adv. in WP 266/06
5.       Mr. Deepak Vaswani, Adv.
6.       Mr. K.K. Pahuja, Adv.
7.       Mr. Mushtaq Ahmad, Adv.
8.       Mr. M.F.A. Shuttari, Adv.
For Applicant(s)
1.       Mr.SomvirSinghDeswal,Adv.in WP 263/06
2.       Mr. Shree Pal Singh, Adv.
3.       Mr.AnoopBambwani,Adv.in WP 266/06
4.       Ms. Madhumita Bhattacharjee, Adv.
5.       Mr. Avijit Bhattacharjee, Adv.
 
For Respondent(s)
1.       Union of India: Mr. G.E. Vahanvati, S.G.
2.       Mrs. Indira Jaisingh, Sr.Adv.
3.       Mr. Devadatt Kamat, Adv.
4.       Ms. Sandhya Goswami, Adv.
5.       Mr. V.K. Verma, Adv.
 
M.C.D.:
1.       Mr. Sanjiv Sen, Adv.
2.       Mr. Praveen Swarup, Adv.
DDA:
1.       Mr. V.B.Saharya, Adv.
UPON hearing counsel the Court made the following
ORDER
Considering the large scale violation of various laws, this Court by judgment dated 16th February, 2006, reported in M.C.Mehta Vs. Union of India [(2006 (3) SCC 399], issued various directions for taking immediate steps to seal residential premises being misused for commercial activities. A Monitoring Committee was constituted to ensure compliance of law and directions of this Court. The judgment, by way of illustration, highlighted various illegal and unauthorized users in many colonies despite the orders and directions made from time to time. After the judgment, in terms of directions contained therein, the sealing of the premises commenced. This led to some of the applicants' filing applications in this Court seeking time to stop the misuser on giving undertaking that the applicants on their own would stop the same by 30th June, 2006.
According to the report of the Monitoring Committee, 40,814 affidavits were filed stating therein that the misuser would be stopped by 30th June, 2006. Further, 5006 commercial establishments were sealed by the time the impugned legislation was enacted. In terms of orders dated 1st August, 2006, we have admitted the petitions and issued rule observing that serious challenge had been laid to the constitutional validity of Delhi Laws (Special Provision) Act, 2006.
We have heard learned Solicitor General, Mr.Ranjit Kumar, learned senior counsel as amicus and other counsel and Mr.Satya Prakash-in-person on the issue of grant of stay.
Mr.Jasbir Malik, learned counsel appearing for one of the petitioners, challenging the validity of the Act, contends that it is a unique statute which over-rules, annuls and sets aside the decision of this Court dated 16th February, 2006 and other orders passed thereafter in implementation of the directions contained in the main judgment dated 16th February, 2006. Our attention has been drawn by learned counsel to para 24 of the affidavit filed on behalf of the Government of India to demonstrate how the Government authorities, in particular Delhi Development Authority, were responsible for the mess that has been created. Para 24 shows that as per the norms under the Masterplan 1962, 75 District Centres should have come up against which only 9 were established, as against 300 Community Centres, only 35 came up. Likewise, as against 1250 local shopping centres under the norms of Masterplan 1962, 135 such centres were established and 435 convenient shopping centres were established as against 3000 which should have been set up. In the same context, learned counsel appearing for Mr.P.K.Dave, former Lt.Governor of Delhi, drew our attention to the Notification dated 20th may, 2006 issued by the Ministry of Urban Development in exercise of power under Section 3 and 5 of the Act directing in effect the local authority to de-seal the premises which have been sealed as directed by this Court and permitting those who had given undertaking to continue unauthorized misuser beyond 30th June, 2006. Directions 1 and 2 of the Notification dated 20th May, 2006 read as under:
1.       The premises sealed by any local authority in pursuance of a judgment, order or decree of any court after the 1st day of January, 2006, shall be eligible to be restored, for a period of one year, with effect from the 19th day of May, 2006, to the position as was obtaining as on 1st day of January, 2006.
2.       All commercial establishments which are required to cease carrying out commercial activities at their premises by the 30th day of June, 2006, may continue such activities at such premises, as they were being carried out on the 1st day of January, 2006 for a period of one year, with effect from 19th day of May, 2006."
It is vehemently contended that no law can permit or ask the instrumentalities of the State to disobey or disregard the directions of a court. The contention is that the aforesaid two directions have the effect of overruling the directions of this Court and asking the authorities to act contrary thereto.
Having heard learned counsel and examined the various facets of the problem, at this stage, we are not inclined to grant a complete stay of the impugned legislation though, prima facie, agreeing with the counsel for the petitioners, we are of the view that it is a unique statute. We are, however, of the view that partial stay deserves to be granted. Directions 1 and 2, as above reproduced, deserve to be stayed since these directions amount to overruling the orders and directions issued by this Court and acts consequent thereupon. This order of stay will mean that the properties which were sealed under the directions of this Court (5006 as per the report of the Monitoring Committee) shall have to be resealed. It will also mean revival of the undertakings given to cease the misuser by 30th June, 2006. Directions will have to be issued to them to now comply with the undertakings despite the fact that the time to comply stood expired on 30th June, 2006 but it is evident that they did not, in all probability, stop misuser by 30th June, 2006 in view of the impugned law and the notice dated 20th May, 2006.
Having considered the report of the Monitoring Committee, we extend the time to comply with the undertakings given in respect of 40,814 commercial establishments upto 15th September, 2006. Likewise, the premises which were de-sealed pursuant to the notice dated 20th may, 2006 shall have to be resealed with effect from 16th September, 2006 in case the misuser is not stopped by 15th September, 2006. The Monitoring Committee will examine these cases and ensure the compliance of the undertakings and directions in respect of sealing and file reports in this Court in terms of the directions already issued.
We direct the Monitoring Committee to examine broadly the roads and/or activities in respect whereof undertakings were given as also in respect of 5006 premises sealed so that we may consider issuing directions for stopping of misuser by others similarly placed to those who gave undertakings and to those whose premises already stood sealed before the enactment of the law in question. Learned Solicitor General, on taking instructions and having discussion with the officers, has filed a brief note on basis whereof we have heard him and other learned counsel. Considering that note, despite the impugned Act and the notices, we direct that following activities shall not be carried on in residential areas:
1.       Banquet halls.
2.       Any trade or activity involving any kind of obnoxious, hazardous, inflammable, non-compatible and polluting substance or process.
3.       Retail shops of the following kind:
a.       Pbuilding materials (timber, marble, iron and steel and sand), firewood, coal and any fire hazardous and other bulky materials;
b.       repair shops of automobiles repair and workshop, cycle rickshaw repair, tyre resoling and re-treading, and battery charging;
c.       Storage, godown and warehousing;
d.       Junk shop;
e.       Liquor shop;
f.        Printing, dyeing and varnishing.
Note:

(i) In (a) will not be included business of finished marble products where cutting and polishing activity of marble is not undertaken.

(ii) The repair shops and workshops in case of automobile and cycle rickshaws, would presently be not stopped on plots abutting mixed use streets of right of way of 30 m. or more.
4.       Retail shops on floors other than ground floor except (a) on streets of 24m right of way or more, (b) where it was permissible as per Master Plan 1962.
5. Professional activities will not be permissible except by Architects, Chartered Accountants, Doctors and Lawyers. Even by these professionals, professional activity will not be carried on in excess of 50% permissible coverage in residential premises and by anyone who is not a resident in such premises.
6.       Banks and Nursing Homes operating on plots of less than 200 sqm in the case of residential plotted development (160 sqm in villages, special areas and rehabilitation colonies) and more than 1000 sqm, except those operating on master Plan and Zonal Plan roads.
7.       Guest Houses operating on plots of less than 200 sqm in the case of residential plotted development (160 sqm in villages and rehabilitation colonies) and more than 1000 sqm, except those operating in special areas or on Master Plan and Zonal Plan roads.
8.       Pre-primary Schools, fitness centers and gyms operating on floors other than ground floor. The protection of the Act would not be available in respect of the following unauthorized development:
1.       Any construction that is over 15 m. in height in residential plotted development and regularized colonies;
2.       Any construction beyond Ground + 3 floors in residential plotted development and regularized colonies. Learned Solicitor General has made a statement that the aforesaid prohibition would be applicable to the entire Delhi irrespective of the widdth of the road. It seems that out of 2025 colonies, 28 colonies are placed in Category A and 51 in Category B. In the colonies of Category A and Category B, except professional activities as above-noted and subject to the stipulations noted, no other commercial activity would be permissible.
It further appears that there are 51 colonies in Category C and 244 in Category D. In respect of the colonies in Category C and D, for the present, what stated in the public notice dated 21st July, 2006, would be applicable and any user contrary thereto would be stopped with effect from 16th September, 2006. The Public Notice dated 21st July, 2006, as applicable to colonies falling in Category C and D reads as under:
"b. In colonies falling in Category C and D, subject to consultation of the RWA in residential plots facing streets/roads with a minimum 18 m ROW in regular residential plotted development, 13.5 m ROW in rehabilitation colonies and 9 m ROW in special area and urban villages."
In addition to these, aforesaid directions would also be applicable to colonies falling in Category C and D.
The aforesaid interim directions would operate till the decision of the Writ Petitions. We make it clear that any direct or indirect violation of these directions would entail consequences of disobedience of the directions of this Court. The Government of India may issue, within one week, requisite directive in exercise of power under Section 3(4) of the Act withdrawing the relief to the above- mentioned categories of the unauthorized development and, accordingly, amend the Notification dated 20th may, 2006, also keeping in view this order. Pleadings in the Writ Petitions may be completed within three months. The Monitoring Committee shall give its report in terms of the aforesaid directions within one month. To consider the report and for issue of further directions, list the matter in the second week of September, 2006. Application for intervention in W.P.(C) No.266/2006 is allowed.
(N. Annapurna) (V.P. Tyagi)
Court Master Court Master

 

rajendra b. popat (proprietor)     07 January 2011

Issue :

Whether dwelling unit can be used  for residence as well as for professional use ?

Reply :

Regulation 1 & 2  of Development control Regulation,1991

Definitions of Terms and Expressions under Development control Regulation,1991.-

(1)  General--In these Regulations, unless the context otherwise requires, the terms and expressions shall have the meaning indicated against each of them.

(2)  Meaning as in the Acts, Rules, etc.-

Terms and expressions not defined in these Regulations shall have the same meanings as in the Maharashtra Regional and Town Planning Act, 1966 (Mah. Act No. XXXVII of 1966) or the Mumbai Municipal Corporation Act, 1888 (Mumbai Act No. II of 1888) and the rules or bye-laws framed thereunder, as the case may be, unless the context otherwise requires.

Regulation 14 of Development control Regulation,1991

 Ancillary Uses Permitted :-  

The ancillary uses permitted in various use zones and the conditions governing the same shall be as given in Part-IV

Section 2(n) of Mumbai Municipal Corporation Act, 1888.

a person is deemed " to reside " in any dwelling which he sometimes uses or some portion of which he sometimes uses, though, perhaps, not uninterruptedly. as a sleeping apartment; and a person is not deemed to cease " to reside " in any such dwelling merely because he is absent from it, or has elsewhere another dwelling in which he resides, if there is the liberty of returning to it at any time and no abandonment of the intention of returning thereto;

The definition of the word “residence” is given in the Maharashtra Regional and Town Planning Act, 1966 Act,(MRTP) which means as under  :

Section 2(28) " Residence " includes the use for human habitation of any land or building, or part thereof including gardens, grounds, garages, stables and outhouses, if any; appertaining to such land or building;

Regulation 51(iv) of Development control Regulation,1991

 Professional offices and studies of a resident of the premises and incidental to such

residential use, or medical and dental practitioners dispensaries or clinics of a resident of the building with only out patient treatment facilities without any indoor work, each not occupying a floor area exceeding 30 sq.m. (but not exceeding 50% of the total area).

Opinion :

The definition of person “deemed to reside” or even “resident” or “reside” is not given in the Development Control Regulation of greater Mumbai of 1991.  

Vide Regulation 2(2) of  Development Control Regulation of greater Mumbai ,1991 Terms and expressions not defined in these Regulations shall have the same meanings as in the ;

(a)    Maharashtra Regional and Town Planning Act, 1966 (Mah. Act No. XXXVII of 1966)

                                                    or

(b)   The Mumbai Municipal Corporation Act, 1888 (Mumbai Act No. II of 1888) and the rules or bye-laws framed thereunder, as the case may be, unless the context otherwise requires.

The definition of the word “residence” is given in the Maharashtra Regional and Town Planning Act, 1966 Act,(MRTP) which means as under  :

Section 2(28) " Residence " includes the use for human habitation of any land or building, or part thereof including gardens, grounds, garages, stables and outhouses, if any; appertaining to such land or building;

The definition of the word “reside” is given in the BMC Act, which means as under :

a person is deemed  to “reside" in any dwelling which he sometimes uses or some portion of which he sometimes uses, though, perhaps, not uninterruptedly. as a sleeping apartment; and a person is not deemed to cease " to reside " in any such dwelling merely because he is absent from it, or has elsewhere another dwelling in which he resides, if there is the liberty of returning to it at any time and no abandonment of the intention of returning thereto;

Chartered Accountancy is neither commercial nor shop but  is profession as held by the Karnataka High Court and Bombay (Jurisdictional High Court) in following cases  :    

(a)   In view of Judgement of Phillipose & Co. v. the State of Karnataka, C.C. No. 21496 of 1987 under Karnataka Shops and Commercial Establishments Act, 1961 — office of the partnership firm of Chartered Accountants is not a commercial establishment as C.As. carry on profession like lawyers or doctors and do not carry on trade or business.

The judge observed : "A profession is a vocation or occupation requiring special usually advanced education and skill. The work and skill involved in a profession is predominantly mental or intellectual rather than physical or manual."

The chartered Accountant is profession and use can be incidental use when the same is used as dwelling House by the Chartered Accountant as the word reside means and includes right to use the premises. 

(b)   The Bombay high court has held that the office of a chartered accountant was not a "business and commercial'' establishment. A division bench of Justice S B Mhase and Justice S R Sathe struck down as "unconstitutional'' sections of the Bombay Shops and Establishment Act that included CAs within the definition of commercial establishments.

(c)    The Bombay high court in WRIT PETITION NO. 1256 OF 1992 has held that the Chartered Accountancy is a profession and it is not a business.   

Premises used for dwelling as well as for business office purposes then the dominant user still remains residential :

(a)    The  Bombay High Court in the case of Lakshman Sintre v. Balkrishna Shetye, BLR page 937 and B. R. Oswas v. Laxmibai, BLR page 214 it was decided that when residential premises are used for dwelling as well as for business office purposes so however that the dominant user still remains residential, it would not be in breach of the bye-laws and regulations of the society as there is no change of user involved.

(b)   The Hon. Supreme Court in the case of Delhi Pradesh Citizen council Vs. UOI & Ors. Vide Writ Petition (Civil)  No. 263 of 2006 vide para 5 which is in line with DC regulation of Greater Mumbai have held as under :

“Professional activities will not be permissible except by Architects, Chartered Accountants, Doctors and Lawyers. Even by these professionals, professional activity will not be carried on in excess of 50% permissible coverage in residential premises and by anyone who is not a resident (dwelling) in such premises”.

 

R.B.Popat.

 

rajendra b. popat (proprietor)     31 January 2011

Sajjan Raj Surana vs Jaipur Vidyut Nigam Ltd. & Its Aen on 18 December, 2001

Cites 13 docs - [View All]

The Electricity (Supply) Act, 1948

The Code Of Civil Procedure (Amendment) Act, 1956

Section 2(4) in The Electricity (Supply) Act, 1948

The Commercial Documents Evidence Act, 1939

V. Sasidharan vs Peter & Karunakar & Ors on 23 August, 1984

 

Rajasthan High Court

Top of Form

Bottom of Form

Bench: A Madan

Sajjan Raj Surana vs Jaipur Vidyut Nigam Ltd. & Its Aen on 18/12/2001

JUDGMENT

Arun Madan, J.

1. Shorn in details the facts giving rise to this second appeal are that Sajjan Raj Surana (Plaintiff appellant) instituted a civil suit for permanent injunction with the averments inter alia that he has been practising advocate not only in the subordinate Courts but also before this Court: he had taken electric connection from erstwhile Rajasthan State Electricity Board (RSEB) (now substituted as Jaipur Vidyut Vitran Nigam Ltd., Jaipur) bearing Account No. 28A/112-4 Zone III for his rented premises in a residential building known as Rahim Manzil, M.I. Road Jaipur, where his office-cum-chamber is established. His case in the plaint was that being an advocate by his profession he is not Indulged in any commercial activities to the suit premises but the defendant (RSEB) charged for electric connection to his chamber as a commercial establishment whereas at that time, domestic charges was 59p. as against commercial one at Rs. 1.05p. per unit.

2. In written statement, the defendant (RSEB) had a case that the suit premises has been situated in a Rahim Manzil which was in a commercial area, inasmuch as according to application dt. 26-6-1987 the plaintiff applied for electricity supply under a non-domestic service category, therefore, even he on demand also deposited Rs. 156/-on 19-8-1987 for release of such NDS electric connection and accordingly the plaintiff was being charged as a non-domestic service customer of the RSEB, which he continued to pay since first bill, November. 1987.

3. In replica the plaintiff averred that the portion of Rahim Manzil where his chamber is situated has been a residential area where many of people have been residing as tenants for their residences and no commercial activities have been performed not only by them but also by him, and that apart, Initial bill had been charged as a domestic customer but subsequently changed to commercial one without any prior notice or Intimation to him. and that being so, had been paying the electricity bills under protest.

4. Further in reply to the replica of the plaintiff, the defendant (RSEB) reiterated that right from the inception the electricity connection was applied for by the plaintiff, he did so for his office and not for domestic purpose inasmuch as the Rahim Manzil where the suit premises has been situated did consist of commercial establishments including that of the plaintiff, for which a list of such commercial establishments had also been appended to the reply by the defendant, and further that without any protest the plaintiff did deposit demand money for electricity connection as a non-domestic service customer. The defendant in reply to the replica denied the plaintiffs averment as to the bills having been deposited under protest right from the first bill.

5. On the basis of the pleadings of the parties, two issues including of relief were framed, namely whether advocate's chamber of the plaintiff situated in residential building Rahim Manzil (suit premises) could be termed as a commercial establishment and what is its effect? The plaintiff examined himself and produced three more witnesses in support of his case whereas the defendant (RSEB) examined six witnesses. After conclusion of the trial, the learned Additional Civil Judge (JD) No. 2, Jaipur City Jaipur by his Judgment and decree dt. 1-11-1995 decreed the plaintiffs suit issuing permanent injunction directing the defend-ant-RSEB to charge the plaintiff as a domestic customer on his electricity connection to the suit premises. Against it, the defendant (RSEB) preferred first appeal which came to be decided by the Additional District Judge No. 2, Jaipur City, Jaipur who by a judgment dt. 6-10-1997 dismissed the suit of the plaintiff. Hence this second appeal which was admitted on the following substantial questions of law as proposed by the plaintiff-appellant -

1) Whether advocate's chamber or office situated in a residential building which is not being used as commercial office can be termed as a commercial establishment and the commercial charges can be taken ?

2) Whether the practising advocate who is doing his profession as an advocate can be treated as carrying on commercial activities?

3) Where the finding of the first appellate Court is perverse by not discussing evidence and the statement of PW-4 Usman has been misread by the learned first appellate Court?

4) Whether for the purpose of Imposing domestic levy by the electricity Board as regards the consumption of electricity, is it necessary that the advocate's family should also live in the same premises and the chamber in which the Advocate's office is situated in the residential premises since the advocates are permitted to operate their chambers from their residence under the Rules?

5) Whether the residential premises of an advocate in which he is also having his Chamber for professional activity can be treated as a commercial establishment for levy of electricity duty by the electricity Board ?

6) What is the effect of non-discussion of the evidence adduced by the plaintiffs witnesses PW-1, PW-2. PW-3 and PW-4 in the present case and whether the first appellate Court is Justified to reverse the finding given by the trial Court ?

7) Whether in view of non-discussion of documentary evidence by the first appellate Court its finding can be treated as perverse ?

6. Though the defendant (respondent) upon service of the notice of this second appeal, submitted cross-objection but this Court by its order dt. 13-11-1998 holding the cross-objections as time-barred and not maintainable according to statutory provisions under Order 41, Rule 22, CPC.

7. A general notice was also published in the dally cause list notifying to the Members of the Bar interested to assist the Court on the significant questions of law having public importance as to whether the respondent (RSEB) is entitled to impose commercial tariff as regards the electricity consumed by the Members of the Bar in their premises where they have been carrying on activities of legal profession either at their own residential premises or separately in any other premises than residential.

8. During the pendency of suit as well as this second appeal, two notifications dt. 2-7-1985 and 19-7-2000 were issued. By notification dt. 19-7-2000 the RSEB (defendant) stood splitted into five limited compnaies viz. Vidyut Vltran Nigam Ltd. of Jaipur, Jodhpur, and Ajmer, so also (4) Rajasthan Rajya Vidyut Utpadan Nigam Ltd. and (5) Rajasthan Rajya Vidyut Prasaran Nigam Ltd. Therefore since the consumershlp of the plaintiff came into the jurisdiction of Jaipur Vidyut Vitran Nigam Ltd,, in this appeal, the RSEB was substituted by Jaipur Vidyut Vitran Nigam Ltd. (henceforth for brevity, referred to as JWNL or Nigam), Whereas by former notification dt. 2-7-1985 the members of the Bar carry-ing on professional activities either in their residential premises or chambers situated outside their residences in commercial complex, were Imposed with higher tariff even under the non-domestic service.

9. As has been pointed out by the learned members of the Bar who appeared pursuant to the General Notice in the daily cause list, this notification was challenged in D.B.Civ. Writ Petition No. 359/87 as according to this notification, "non-domestic establishments include offices of the Advocates." The Division Bench of this Court under an interim order directed as under :--

"After having heard learned counsel for the petitioner, it is hereby directed that respondents shall not charge non-domestic electricity charges for the electricity consumed by the advocates who have their offices in residential accommodation. Offices in the residential accommodation shall be treated as part of the residence. Respondents shall charge domestic charges and no further action shall be taken against members of the legal profession."

10. Here let me first have a resume of relevant provisions. The RSEB (defendant) had been constituted Under Section 5 of the Electricity (Supply) Act, 1948 and thereby was a body corporate, having perpetual succession and common seal with power to acquire and hold property both movable and immovable, and therefore, was entitled to sue and to be sued by its name.

11. Section 49 of the Electricity (Supply) Act. 1948 provides for sale of electricity by the Board to persons other than licensees upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs. When the plaintiff appellant applied for electricity supply to the RSEB, Tariffs for Supply of Electricity 1985 published by Notification dt. 2-7-1985 was in force. Its Sub-clause (10) of Clause 5 provides that for the purposes of application of these tariffs, "Consumers" have been categorised with respect to various categories of service provided in the Tariff structure, irrespective of the purpose for which or the system of supply or the voltage or connected load in which the energy is consumed. Thus a consumer having fallen in any one of the categories as per the service provided in the Tariff structure shall not be entitled to be charged at the rates mentioned in any other category of service, whatever may be the purpose of his consuming energy or the system of service or the voltage or the connected load of his consumption. Under Part 1 of the Tariff structure, the consumers have been categorised as (i) for Domestic Services, (ii) for Non-Domestic Services, (iii) for public street lighting, (iv) for agriculture service, (v) for small Industrial service, (vi) for medium industrial service, (vii) for bulk supply of mixed load, (viii) for large industrial load, and (ix) for temporary supply.

12. Tariff of 1981 provides that non-domestic supply include all categories which are not covered by other tariff schedule of Part 1 and included supply of energy for light, fans, heating and power, appliances in commercial and non-domestic establishments such as shops, business houses, places of public worship, hostels, stations, garages, auditoriums, cinemas and also such portions of residential premises used for the conduct of business or other activity of these commercial and non-domestic establishments.

13. Similarly, Tariff of 1985 relevant for the present appeal prescribed as under :--

I. Domestic Service (Schedule DS/LT-1)

(a) Applicability -- Available to residential consumers for bona fide domestic uses i.e. lights, fans, radios, televisions, heaters, cookers, refrigerators, including pumps, grinders and other domestic refrigerators. In the event of use of supply in whole or part for commercial or non-domestic purposes or any other purposes by such consumers, the Tariff Schedule NDS/LT-2 as hereinafter mentioned, shall be made applicable on entire consumption from the month in which such use is noticed by the Board, till a separate service connection is taken for non-domestic purpose or under the relevant tariff as per use of supply of the loads other than covered under domestic service. Re-sale or sub-metering to tenants and to other persons is strictly prohibited.

(b) System of supply : A.C. 50 cycles, single phase 220/250 volts or three phase 400/ 440 volts......

II. Non-Domestic Service (Schedule NDS.LT-2)

(a) Applicability : Non-domestic supply shall include all categories, which are not covered by other tariff schedules of Part-I as mentioned below : -- DS/LT-1, PSL/LT-3, AG/LT-4, SP/LT-5, MP/LT-6 and MD/ LT-7

and includes supply of energy for light, fans heating and power appliances in commercial and non-domestic establishments such as shops, business house, places of public worship, hostels, hotels, restaurants, petrol pumps, service stations, garages and auditoriums, cinemas, hospitals, nursing house, dispensaries and doctor's clinics, which are used for private gain, unrecognised educational institutions and telephone exchanges, etc. and also such portions of residential premises used for the conduct of business or any other activity of these commercial and non-domestic establishments including the offices of advocates."

14. As rightly contended at the Bar. the defendant (RSEB) did not include the offices of other professionals namely Chartered Accountants Tax Consultants. Architects / Chartered Engineers and Interior Decorators whereas the defendant made specific inclusion of offices of the Advocates prescribing it as non-domestic establishments so as to cover it under non-domestic service.

15. Even upon conversion of the RSEB into JVVNL, new Tariff for supply of elec-trictty-2001 has been enforced w.e.f. 1-4-2001. according to which under Clause (III) relating to General Conditions of Application, these tariff shall apply to and subject to provisions of the "General Conditions of Supply and Scale of Miscellaneous Charges relating to the Supply of Electricity" issued by the erstwhile Rajasthan State Electricity Board or any modifications thereof as are enforced from time to time and the rules and regulations made or any orders Issued thereunder or any subsequent amendments or modifications thereof so far as the same are applicable. Under sub Clause (6) to Clause (III) thereof, for the purpose of application of these tariff, consumers have been categorised with respect to the various categories of service provided n the "Tariff Structure".

16. Part I of tariff Structure deals with various service including relevant Domestic service and Non-domestic Service. For Domestic Service (Schedule DS/LT-1) under its clause of applicability it has been prescribed for being available to residential consumers for bona fide domestic uses i.e. lights, fans, radios, television, heaters, cookers, refrigerators including pumps, grinders and other domestic appliances. As per its Sub-clause (b) character of service means A.C, 50 cycles at supply voltage and under which also even for designed load or load requirement above 1500 KVA with 33 KV & above, consumer is prescribed as domestic service customer. Whereas for applicability of Non-domestic service (Schedule NDS/LT-2), it includes all categories which are not covered by other tariff schedules of Part I viz. DS/LT-4. PSL-3. AG/LT-4. SP/LT-5, MP/LT-6 & ML/LT-7 and includes supply of energy for light, fans, heating and power appliances in Commercial and non-domestic establishments as prescribed in erstwhile tariffs either of 1981 or 1985 or modified from time to time, including offices of the Advocates not situated at his residence. However, under Tariff-2001, it has further been provided that offices of the Advocates situated at his residence, without employing any person, shall be covered under Domestic Category. There has been no difference as regards character of service as contemplated for Domestic service consumer.

17. Upon careful and conjoint reading of aforesaid Tariffs of 1981 or 1985 or even 2001 it is crystal clear that there have been no difference as to the character of service or supply of energy as both the clauses of tariff prescribed for domestic or non-domestic service include supply of energy for light, fans, heating and power appliances in these twin services and only distinction made is to the premises where the supply of energy is provided, if it is residential with bona fide domestic uses then domestic service under the Tariffs will apply and in case it is used in Commercial & Non-domestic establishments which as per Clauses (II) of Non-domestic service include such as shops, business houses, places of public worship, hostels, hotels, restaurants, petrol pumps, service stations, garages, auditoriums, cinemas, hospitals, nursing homes, dispensaries and doctor's clinic and emphasis has been laid to the use for private gains, and advocates officers have been included if not situtated at their residence.

18. Even under Tariff 2001 further distinction has been made by envisaging that if advocates use their residence for office also without employing any person, he will be covered under Domestic service, otherwise he will be non-domestic service consumer. Such a distinction is again uncalled for and not sustainable in the eye of law and I find much substance in the contentions urged at the bar that if an advocate is having paucity or residential accommodation at the place of his residence either rented or owned then he will have certainly to take his office either on rent or owned at some other place than of his residence, but in that eventuality, as per Tariffs (supra) he will be covered for domestic service, and that apart, if his office is away from his residence, that would not be treated as a commercial establishment merely because of its being away from his residence. Moreover, advocate by his activity at the place of his chamber/office either at his residence or being not situated there but elsewhere cannot be regarded as commercial rather legal profession of an advocate at all times have been considered to be a profession and not like a trade or a business.

19. Profession as distinguished with 'commercial' means a person who enters into a profession Involving certain amount of skill as against commercial activity where it is more of a matter of things or business & trade activity. In profession it is purely use of skill activity. Two are distinct concepts in commercial activity-one works for gain of profit whereas in profession one works for his livelihood. (See L.M. Chitale v. Commissioner of Labour (AIR 1964 Madras 131),

20. Now let me lend support from dictum of law laid down in some of citations at the bar. I must express thankfulness to each of the learned members of Bar especially Sarva Shri P.C. Jain (President of High Court Bar Association, Jaipur Bench as he then was ), Virendra Dangi, R.K. Mathur (for Bar Council of Rajasthan), Amod Kasliwal, R.P. Singh. R.A. Katta, Jai Kumar Yadav, & MS Manjit Kaur for their assistance rendered during the course of hearing.

21. In M/s L.M. Chitale v. Commissioner of Labour (AIR 1964 Madras 1310) (supra) it was held as under -

"Office of a charter architect is not a "shop" within the meaning of Section 2(16) of the Madras Shops and Establishments Act. It is not a premises where any trade or business is carried on or where any services are rendered to customers. The fact that the office of a chartered architect has not been exempted while advocates chambers and doctor's consulting rooms have been exempted cannot be construed to mean that the office of a chartered architect is covered by the provision."

"Section 2 (16) defining a shop is restricted in its own scope. It clearly envisages and activity which as commonly understood is associated with the carrying on of trade or commerce and cannot take in establishments where professional services are rendered. The expression "services are rendered to customers" in the definition has to be construed as services rendered to customers in the carrying on of trade or business. A chartered architect carried on a learned profession and it is his special qualifications that are placed at the disposal of his clients. The code of professional conduct prescribed by the Royal Institute of British Architects indicates-that he is as much constrained in the performance of his functions as a lawyer or a solicitor is. The office of a charater architect does not therefore fall within the purview of "shop".

22. In Dr. DM Surti v. State of Gujarat AIR 1969 SC 63 the Apex Court held that private dispensary of a doctor is not a 'commercial establishment' within the meaning of the Bombay Shops and Establishments Act and the provisions of the Act do not apply to his dispensary. According to the Apex Court, the correct test of finding whether a professional activity falls within Section 2(4) of the Act is whether the activity is systematically and habitually undertaken of production or distribution of goods or for rendering material services to the community or any part of the community with the help of employees in the manner of a trade or business in such an undertaking. The Apex Court further held that a professional activity must be an activity carried on by an Individual by his personal skill and intelligence; and there is a fundamental distinction between a professional activity and commercial activity and unless the profession carried on by a person also partakes of the character of a commercial nature, he cannot fall within the ambit of "commercial establishment" as defined in Section 2(4) of the aforesaid Act. Ultimately the Apex Court held that the professional establishment of a doctor cannot come within the definition of commercial establishment under the said Act.

23. In V. Sasidharan v. Peter & Karunakar, AIR 1984 SC 1700 the question was whether the office of a lawyer is a commercial establishment or not and the Apex Court answered it by holding that the office of a lawyer or of a firm of lawyers is not a "commercial establishment" within the meaning of Section 2(4), Kerala Shops and Commercial Establishments Act. The Apex Court then observed that whatever may be the popular conception or misconception regarding the role of today's lawyers and the alleged narrowing of the gap between a profession on the one hand and a trade or business on the other, it is trite that traditionally, lawyers do not carry on a trade or business nor do they render services to customers; and the context as well as the pharseology of the definition in Section 2(15) is inapposite in the case of a lawyer's office or the office of a firm of lawyers.

24. While placing reliance upon the aforesaid decisions including V. Sasidharan v. Peter & Karunakar (supra), the Division Bench of the MP High Court in Shiv Narayan v. MP Electricity Board (AIR 1999 Madh. Pra. 246) observed as under :-- (at P. 253 of AIR)

"Their Lordships of Apex Court have categorically held that the officer of a lawyer is not a commercial establishment. This observation was with regard to Kerala Shops and Commercial Establishments Act; nonetheless, the fact remains that it has been held categorically without any manner of doubt that the profession of a lawyer is not a commercial activity and it is absolutely erroneous to cover it by a tariff which is essentially meant for commerical purposes. The heading of the 'tariff as pointed out above, is for the supply of the energy for the commercial purposes. Since the lawyer's profession is not a commercial activity, therefore tariff imposed by the MPEB to cover the office of a lawyer as commercial establishment is not a correct categorisation of the lawyer's profession."

25. Having benefitted by enlightenments derived from afore quoted citations it is trite that an individual for a professional has to apply his such skill as against commercial or business activity where the transaction is done with active co-operation of employer and his employees for sale of certain goods or with the profit motive. However for a profession, one works for livelihood and not for a profit motive only. Thus categorisation and inclusion of profession of a lawyer as a commercial establishment or non-domestic service by the defendant (RSEB) or the respondent (JVVNL) for the purposes of payment of electricity consumption at commercial rate or non-domestic service charges under its any of the Tariffs of 1981 or 1985 or 2001 is absolutely illegal, irrational and arbitrary and, therefore, it is ultra vires of Article 14 of the Constitution of India. Section 49 of the Electricity (Supply) Act clearly provides that there should be simplification and standardisation of methods and rates of charges for such supplies, and that in fixing the uniform tariff the Board shall have regard to the nature of supply and the purpose for which it is required. Even as per Section 49 (4) in fixing the tariff and terms & conditions for the supply of electricity the Board shall not show undue preference to any person.

26. Once even other professionals like Chartered Accountants. Tax Consultants. Architects, Chartered Engineers and Interior Decorators by their skilled art having acquired by dint of skill & study, are not included as commercial & non-domestic establishments for being covered under non-domestic service clause of any other tariffs of 1981 or 1985 or 2001 then in my considered opinion, specific inclusion only of the Advocates' offices in the Tariffs for non-domestic service clearly and legally smacks of unguided, unbriddled power of the defendant and is a glaring example of colourable exercise of power, inasmuch as there is no reasonable ground to include advocates' offices by treating as commercial and non-domestic establishments because non-domestic service is basically meant for commercial and not for professionals.

27. Thus viewed, in my considered opinion the practicing advocate or lawyer by his legal profession cannot be treated as carrying on commercial activity, irrespective of his chamber or office either established or situated in his own residence or in any residential building rented or owned by him either in commercial area or residential colony or any commercial complex, and thus, his such chamber or office cannot be termed as a commercial establishment, since the lawyers profession is not a commercial activity, and therefore tarrif imposed by the defendant RSEB (or 'JVVNL') under its any of tarrifs of 1981 or 1985 or 2001 to cover the lawyers/advocate's office /chamber as commercial establishment is not a correct categorisation and it is absolutely erroneous to cover it by a tarrif essentially meant for commercial purposes. Further for the purposes of imposing domestic tarrif of electric supply it is not necessary that advocates/lawyer's family should also live in the premises where his professional office /chamber is situated in any of residential house/area or commercial complex /campus /area of the local self Government body like JDA/UIT/Municipality.

28. Applying aforesaid dictum of law to the facts of the Instant case, and having given careful look at the Impugned findings arrived at by the First Appellate Court reversing decree of the trial Court. I find that the first appellate Court failed to discuss the evidence on record while dealing with issue No. 1. The plaintiffs evidence including of Mohd. Usman (PW4) in whose residential building Rahim Manzil, has been not only discussed but also properly appreciated by the trial Court but not by the first appellate Court. The trial Court rightly concluded, us I find from plaintiffs evidence, that Rahim Manzil building where plaintiffs professional office is situated being established by having taken on rent by him. Is totally residential campus because Mohd. Usman deposed that plaintiffs office is established inside residential accommodation. But this part of his evidence has not been taken into consideration nor his evidence has been discussed by the first appellate Court. Moreover, as has been discussed above, once it is settled that lawyer's profession is not a commercial activity, then tarrif imposed by the defendant (erstwhile RSEB of JVVNL) to cover the 'office of a lawyer & even the plaintiff as commercial establishment is not a correct categorisation of lawyer /advocate's office either at his residence or elsewhere.

29. Hence, in this view of the matter, the first appellate Court has committed error of law by not considering this significant aspect of settled law and erroneously held that the advocate/lawyer's chamber/office situated elsewhere is a commercial establishment, inasmuch as the defendant failed to prove and establish either in its pleading or evidence any of the situation showing the plaintiff being Indulged in any commercial activity at the suit premises where supply of electricity is provided or showing that the plaintiffs profession of practicing advocate involved any trade or business indulging in commercial activity, therefore, the impugned finding arrived at by the first appellate Court is absolutely perverse and further its finding without discussion of plaintiffs evidence including documentary is not sustainable in law and it was not justified to reverse trial Court's finding decreeing the plaintiffs suit in his favour.

30. As a result of aforesaid discussion, this second appeal succeds and is hereby allowed. The Impugned judgment & decree dt. 6-10-1997 of the ADJ No.2, Jaipur City is set aside and the judgment & decree of the trial Court is restored and affirmed. No order as to costs. The record be sent back forthwith.

rajendra b. popat (proprietor)     31 January 2011

Shiv Narayan And Anr. vs M.P. Electricity Board And Ors. on 6 May, 1999

Cites 33 docs - [View All]

The Income- Tax Act, 1995

The Commercial Documents Evidence Act, 1939

Section 10(3) in The Income- Tax Act, 1995

Section 2(15) in The Income- Tax Act, 1995

E. Ramakrishnan & Ors vs The State Of Kerala & Ors on 4 September, 1996

 

Madhya Pradesh High Court

Top of Form

Bottom of Form

Equivalent citations: AIR 1999 MP 246

Bench: A Mathur, D Misra

Shiv Narayan And Anr. vs M.P. Electricity Board And Ors. on 6/5/1999

JUDGMENT

A.K. Mathur, C.J.

1. The petitioners have by this petition raised a very interesting question whether the legal profession is a commercial activity or it is a trade or business. Before we attempt to answer this question, it would be relevant to dilate few facts.

Petitioner No. 2 G. D. Padrah is an Advocate and the petitioner No. 1 Shiv Narayan is landlord of the House No. 403 Gol Bazar, Jabalpur. Petitioner No. 2 G. D. Padrah, Advocate lives at first floor as a tenant. The petitioner No. 2 occupied the upper floor premises up to 1981 and was living in the said house and also maintained his office as an Advocate. Thereafter he shifted in his own house but maintained his office in the said tenanted premises. There is an electric service line in that house and it is in the name of the petitioner No. 1 and he is paying the domestic charges. On 17-1-1986, some officer of the MPEB (M.P. Electricity Board) inspected the service meter and served a notice to the petitioner No. 1 that he is using the service connection for commercial purposes instead of domestic purposes. Annexure B is the copy of notice. The petitioner No. 1 replied to the notice that he never used the premises for commercial purposes. However, the petitioner No. 2 has his office as an Advocate. The respondents did not consider the reply of the petitioner satisfactory and served upon him a notice of demand in the sum of Rs. 6065.28 p. along with the bill for May, 1980 to November, 1985 (Annex. E).

2. Then again, the respondent No. 2 served another notice of demand dated 4-11-1986 (Annex. F) for a sum of Rs. 2825.75 p. Again on 1-12-1986, a notice was issued to the petitioner No. 2 to make payment of the demand raised and that too was replied by him. Similar notices were again issued demanding the amount treating the premises in question to be commercial establishment. It is alleged that the Board has issued all these notices of demand on the basis of circular issued by the respondents Annex. K whereby they have laid down different tariff for domestic purposes and for commercial purposes. In this background, the petitioners have challenged the validity of the circular issued by the M.P. Electricity Board Annex. K classifying the office of the Advocate as a commercial establishment and also prayed that the demand notices issued vide Annexures F and J. may be quashed.

3. In order to appreciate the contents and the import of the circular issued by the M.P.E.B., it is necessary to refer to the same. Section 49 of the Electricity Supply Act, 1948 which enables the Electricity Board to issue a uniform tariff. Section 49 of the Act of 1948 reads as under :

"49. Provision for the sale of electricity by the Board to persons other than licensees.-- (1) Subject to the provisions of this Act and of regulations, if any made in this behalf, the Board may supply electricity to any person not being a licensee upon such terms and conditions as the Board thinks fit and may for the purposes of such supply frame uniform tariffs.

(2) In fixing the uniform tariffs, the Board shall have regard to all or many of the following factors, namely :--

(a) the nature of the supply and the purposes for which it is required;

(b) the co-ordinated development of the supply and distribution of electricity within the State in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by the licensee;

(c) the simplification and standardisation of methods and rates of charges for such supplies;

(d) the extension and cheaping of supplies of electricity to sparsely developed areas.

(3) Nothing in the foregoing provisions of this section shall derogate from the power of the Board, if it considers it necessary or expedient to fix different tariffs for the supply of electricity to any person not being a licensee, having regard to the geographical position of any area, the nature of the supply and purpose for which supply is required and any other relevant factors.

(4) In fixing the tariff and terms and conditions for the supply of electricity, the Board shall not show undue preference to any person."

In view of this, uniform tariff was issued from time to time and we are concerned with the tariff which has been issued by the M.P.E.B. by notification "Low Tension Tariffs" dated 30th January, 1982. This tariff classifies (A) for lights and fans, radios and power both for urban areas and rural areas and for domestic purposes and commercial purposes. M.P.E.B. issued a Circular with reference to earlier Circular dated 4-5-71 reclassifying L & F connections between domestic and commercial consumers providing guidelines indicating therein. Circular dated 21-7-71 reads as under :--

"MADHYA PRADESH ELECTRICITY

BOARD, RAMPUR

JABALPUR

No. 5/II/S/III/49-A

Dated 21-7-71

To,

All Divisional Engineers, M.P. Electricity Board Sub : Reclassification of L&F connection between domestic and commercial consumers.

1. Reference is invited to Circular No. 5/II/S/ III/49-A dated 4-5-71 in which instructions have been issued regarding connections.

2. Proper classification of domestic and commercial heat and small power, also the industrial power is necessary. Although at present the same tariff is applicable for the commercial and industrial power loads, proper classification of these loads is still very necessary from load survey and statistical point of view. It is desired that these loads be reclassified correctly on the basis of the guidelines indicated therein :--

(i) All power connections given for residential premises and used for domestic purposes may be classified as domestic small power; for this purpose the residential premises will include student hostels but will not include hostels, Dharamshalas, nursing homes and hospitals (please see para 2 of the Circular dated 4-5-71 referred to above).

(ii) Connections given for air conditioners, air-coolers, refrigerators, water-coolers, heaters, sterilizers, cooking ranges, water pump-sets, mixing and grinding equipments, wireless sets and battery chargers used in educational institutions, laboratories, hospitals, nursing homes, public parks, gardens, cinemas, dispensaries, restaurants, hotels, dharamsalas, guest and rest houses, offices, shops and other similar establishments shall be classified as "Commercial small power".

(iii) Premises other than those specified in (i) and (ii) foregoing fall under "Industrial premises" and all power loads inclusive of the type indicated in (ii) above installed in such industrial premises will be classified as "industrial" loads.

Urgent instructions may please be given to the distribution centres for proper reclassifications. It may, however, be noted that the foregoing instructions are for doing classification only and that the loads falling in groups (ii) and (iii) will be billed at the industrial tariff(s) as at present. However, if as a result of these instructions any charge (or correction) in application of the tariff(s) is required to be made the charge will apply for the future billing only but billing so far made will not be reopened. Cases may be referred to this office first before introducing the change in billing.

Secretary,

M. P. Electricity Board

Jabalpur."

The Board issued another Circular dated 8th July, 1975 classifying Commercial and Domestic Consumers. The Circular reads as under :--

Madhya Pradesh Electricity Board

Rampur : Jabalpur

No. 6/II/8/III/49-A/54/5404 dated 8th July, 1975

The Divisional Engineer,

M. P. Electricity Board,

Sub : Classification of Commercial and Domestic Power Consumers

Reference is invited to the Circular No. 5/II/S/ III/49-A dated 21-7-1971 wherein the categories of consumers which could be classified as 'Commercial' were indicated. Further to the classes of consumers mentioned therein the following consumers shall also be classified as 'Commercial' :--

(1) Clubs

(2) Petrol Pumps (with or without service stations)

(3) Shops (including chemists)

(4) Tailoring shops

(5) Carpenters and furniture makers

(6) Washing and Dyeing and/or Ironing

(7) Railway stations

(8) X-Ray Machines

(9) Printing Presses (irrespective of load and tariff)

(10) Sugarcane crushers (sugarcane juice)

(11) Mixies used for juice and lassy etc.

(12) Grinders for grinding masala (when used in a shop)

(13) Advertisement services

(14) Air Compressors for filling air in automobiles by cycle shops

(15) Public places like town halls, public halls, public libraries and reading rooms

(16) Places of public entertainment

(17) Typing institutes

(18) Single phase Toy-making industries

(19) Nickel Plating on small-scale

(20) Photographers

(21) Book-binders

(22) Private Medical Practitioners (Clinic or Consulting place)

2. Tariffs and other terms and conditions applicable for Commercial L & F consumers shall be applicable to the L & F connections in the premises of aforesaid categories of consumers.

3. Small power connections given to the aforesaid categories of consumers shall be governed with the conditions applicable to Commercial small power consumers and shall be billed at the L.T. Industrial tariff(s) as applicable now.

(S. C. Gupta)

Deputy Chief Engineer

(Commercial)

On 2nd April, 1976, the Board issued Circular revising tariff for supply of electricity. This Circular reads as under :--

MADHYA PRADESH ELECTRICITY

BOARD RAMPUR : JABALPUR

No. 5/GA/147/37/2358 Dated 2nd April, 1976 The Divisional Engineer, M. P. Electricity Board Sub :-- Revision of tariff for supply of electricity

Reference is invited to Circular No. 5/GA/ 147/98/1834 dated 11-3-1976 with which a copy of the notification No. 5/GAA47-B dated 11-3-1976 showing the revised tariff for supply of power to LTY consumers, was sent. As mentioned therein the revised rates shall come into force with effect from April, 1976 i.e. for electricity supplied in April, 1976 and billed in May, 1976. To make it more clear, the consumption of only such LT consumers for whom meter readings were taken after 15-4-1976 and shall be billed at the revised LT tariffs referred to above. It means that the consumption of such LT consumers in respect of whom readings were taken on or before 15-4-1976 shall be billed at the pre-revised tariffs.

2. In the case of consumers whose readings are taken once in two months, the consumption corresponding to readings taken on or before 15-4-1976 shall be charged at the pre-revised tariffs; half of the consumption corresponding to the readings taken during the period 15-4-1976 to 15-5-1976 shall be charged at the pre-revised tariff, while the other half shall be charged at the revised tariff and consumption corresponding to readings taken on or after 16-5-1976 shall be billed at the revised tariffs.

3. Domestic Light & Fan tariff as well as electricity duty for the consumers for whom meter-readings are taken once in two months shall be as under :

For billing once in two months :

Energy consumption Rate

First 100 units in two months 30paise/unit Over 1

There being no slab for domestic power, commercial, light and fan and commercial power tariff, these tariffs will not be affected in such cases where billing is done once in two months. Consumption slab for payment of electricity duty will stand modified as below : Energy consumption Rate of electricity duty

Up to 100 units 6.5 paise/unit

in two months

Next 200 units 7.0 paise/unit

in two months

Over 300 units 12.0 paise/unit

in two months

For any other categories, whenever there are slabs for payment of electricity duty and billing is done once in two months, the consumption for the purpose of electricity duty would stand modified in the aforesaid basis i.e. the quantum of consumption slabs where billing is to be once in two months; may also be made twice that of consumption per month for the purpose of tariff (including tariff minimum as well as for electricity duty calculations)

4. It would be observed that a separate tariff has now been prescribed for commercial power purposes. LT tariff (E) of the said notification shall be applicable for supply of electricity to Commercial and Non-domestic premises like shops, business houses, offices, educational institutions/buildings, hospitals, hotels, cinemas etc. The following consumers covered under the aforesaid categories shall be broadly classified as commercial :--

i) Clubs

ii) Shops including Chemists

iii) Carpenters and Furniture makers

iv) Railway stations

v) Mixies used for juice and lassy etc. in business establishments

vi) Projectors used for advertisement purposes

vii) Public places like Town-halls, Public-halls, Public-Library

viii) Nickel and other electro-plating on small scale, Paper cutting machines etc; when used by the book-binders

x) Printing presses

xi) Petrol pumps and service-stations

xii) Tailoring shops using electrically operated knitting and sewing machines

xiii) Washing and dyeing and/or ironing in shops

xiv) Sugarcane crushers for selling sugarcane juice in hotels/stalls

xv) Grinders for grinding masala when used in shops

xvi) Air Compressors for filling air in automobiles by shops

xvii) Cinema

xviii) Single-phase toy-making industries

xix) Air-conditioners and Coolers/heaters and refrigerators used in shops and offices and those used by private Medical offices and those used by private Medical Practitioners in Clinics or Consulting places

xx) Lifts and other power appliances in the shopping centres, business houses and offices

xxi) Machines and electrically operated equipments (except machines in Laboratories and workshops) in educational institutions/buildings

xxii) Machines and equipments other than X-Ray plants in hospitals/dispensaries

xxiii) Cooking ranges in hotels and other non-domestic installations.

5. No increase has been made in the tariff for supply of electricity to irrigation pumps at consumers. It means irrigation pump-set consumers who are being charged maintenance charge at Rs. 4/HP/month in accordance with the instructions contained in the last para of this office Circular No. 5/GA/144/39 dated 22-10-1974 shall continue to pay at the same rate till the expiry of their agreement period.

6. There are quite a large number of premises where supply is availed for residential/shops/ offices through common meter. As mentioned in this office Circular No. 5/GA/144/dated 28-1-1975, charging of consumption in such cases at higher tariff is in order as long as separate meters are not provided. However as per the instructions contained in the aforesaid circular, in case the consumers having common meters have domestic light & fan/power and commercial light & fan/ power apply for separate connections for Commercial L&F/power purposes, expeditious action should be taken by the field officers be given separate connections. It means, the request of such consumers should be given due priority and separate connections should be given as soon as formalities are completed by the consumers.

Secretary

M. P. Electrical Board

Jabalpur."

The Board further clarified the matter by issuing another notification Annexure K dated 30-11-1976 which reads as under :--

Madhya Pradesh Electricity Board

Rampur : Jabalpur

Jabalpur

No. 5/GA/44/126/23256/356 dated 30th November, 76

To,

The Divisional Engineer,

M. P. Electricity Board

Reference is invited to this office Circulars No. 5/121/5/111/49-A dated 21-7-1971 and 5/11/ 5111/49-A/54.4506 dated 8-7-1975 wherein the categories of consumers which could be classified as 'Commercial' were indicated points have been raised in regard to the tariff which shall be applied to the consumption in the house a part of which is used for professional purpose by Advocate, Doctors, etc.

The Board has considered the matter and has decided that the energy consumed in the residential premises of following persons, shall be treated as domestic purposes, even though these persons carry out some professional work in the residence.

(i) Advocate, Vakils.

(ii) Doctors.

(iii) Writers, poets and artists.

However, consumption in the premises which are away from the residential premises and are exclusively used for the professional purposes even by the Advocate, Vakils, Doctors, Writers, Poets and Artists and shall be billed at Board L.T. Tariff applicable.

Director, Commercial

M. P. Electricity Board

Jabalpur."

4. It is alleged that this notification has also been issued by the Electricity Board in exercise of powers under Section 49 of the Act. By virtue of this notification, the energy consumed in the residential premises of the Advocate shall be treated as domestic even though he carries out the professional work at his residence. However, the consumption of energy in the premises which are away from the residential premises and exclusively used for professional shall be billed at 'low tension tariff applicable for commercial purposes. This circular also covers Doctors, Writers, Poets, Artists. We need not examine the circular in respect of Doctors, Poets, Writers, Artists because we are only concerned with the Advocates. Therefore, the argument in the present case was only advanced with regard to Advocates i.e. the legal profession. Thus, we confine our enquiry on the validity of this notification qua Advocates and legal profession. The intention of this notification appears to be that the Board has classified the legal profession as a commercial profession and has only given relaxation to the Advocates who have their office in the residential premises, same is treated as domestic connection.

As against this, if an Advocate/Vakil has office away from his residence, that would be treated to be a commercial establishment. Whether such categorization of legal profession as commercial establishment is sustainable in law or not. Legal profession at all times has been considered to be a profession and it is not like a trade or a business. The expression "commercial" primarily deals with the trade and business whereas the art of advocacy is skilled art and one has to acquire it by dint of his skill and legal study. Therefore, to compare legal profession as a commercial profession, in our humble opinion is far from correct.

The word 'commercial' originates from the word 'commerce' which has been defined in Black's Law Dictionary -- Sixth Edition as under :

"Commerce. The exchange of goods, productions, or property of any kind, the buying, selling, and exchanging of articles. Anderson v. Humble Oil and Refining Co., 226 Ga 252, 174 SE 2d 415, 417. The transportation of persons and property by land, water and air. Union Pacific R. Co. v. State Tax Commissioner, 19 Utah 2d 236, 429 P. 2d 983, 984.

Intercourse by way of trade and traffic between different peoples or States and the citizens or inhabitants thereof, including only the purchase, sale, and exchange of commodities, but also the instrumentalities and agencies by which it is promoted and the means and appliances by which it is carried on, and transportation of persons as well as of goods, both by land and sea. Brennan v. Titusville, (1893) 153 US 289, 14 S Ct 829, 38 L Ed 719; Railroad Co. v. Fuller, (1872-73) 84 US (17 Wall) 568,21 L. ED. 710; Hoke v. United States, (1912) 227 US 308, 33 S Ct 281, 57 L Ed 523. Also interchange of ideas, sentiments, etc., as between man and man.

The term 'commerce' means trade, traffic, commerce, transportation, or communication among the several States, or between the District of Columbia or any Territory of the United States and any State or other Territory, or between any foreign country and any State, Territory, or the District of Columbia, or within the District of Columbia or any territory, or between points in the same State but through any other State or any Territory or the District of Columbia or any foreign country. National Labour Relations Act 2.....'

The word 'commercial' has been defined to mean :

"Commercial. Relates to or is connected with trade and traffic or commerce in general; is occu-pied with business and commerce. Anderson v. Humble Oil & Refining Co., 226 Ga 252, 174 SE 2d 415,

416. Generic term for most all aspects of buying and selling."

The expression 'commerce' or 'commercial' necessarily has a concept of a trading activity. Trading activity may involve any kind of activity, be it a transport or supply of goods. Generic term for most all aspects is buying and selling. But in legal profession, there is no such kind of buying or selling nor any trading of any kind whatsoever. Therefore, to compare legal profession with that of trade and business is far from correct approach and it will totally be misplaced.

5. Similarly, in The Law Lexicon 1997 Edition--by P. Ramanatha Aiyar, word 'commerce' has been defined as under :

Commerce. 'Commerce' is a term of the largest import. It comprehends intercourse for the purpose of trade in any and all its forms, including transportation, purchase, sale, and exchange of commodities between the citizens of one country and the citizens or subjects of other countries, and between the citizens of different provinces in the same State or country. Walton v. Missoury, (1874-76) 91 US 275; 23 L Ed 347.

Buying and selling together, exchange of merchandise especially on a large scale between different countries or districts; intercourse for the purpose of trade in any and all its forms (Section 2(13), Income-tax Act.

The word 'profession' has been defined in Black's Law Dictionary--Sixth Edition as under :

'Profession. A vocation or occupation requiring special, usually advanced education, knowl- edge, and skill; e.g. law or medical professions. Also refers to whole body of such profession.

The labour and skill involved in a profession in predominantly mental or intellectual, rather than physical or manual.

The term originally contemplated only theology, law and medicine, but as applications of science and learning are extended to other departments of affairs, other vocations also receive the name, which implies professed attainments in special knowledge as distinguished from mere skill.

Act of professing; a public declaration respecting something. Profession of faith in a religion."

The word 'profession' has also been defined in Law Lexicon which reads as under ;

Profession. A 'profession' involves the idea of an occupation requiring either purely intellectual skill or any manual skill, as in painting and sculpture or surgery, skill controlled by the intellectual skill of the operator, as distinguished from an occupation which is substantially the production or sale or arrangements for the production of sale of commodities. C.I.T. v. Manmohan Das, (1966) 59 ITR 699, 710 : (AIR 1966 SC 798), Income-tax Act, 1961, Section 28.

One definition of a profession is an employment, especially an employment requiring a learned education, as those of law and physic (Worcest Dict.). In the Century Dictionary the definition of profession is given, among others, as a vocation in which a professional knowledge of some department of science or learning is used by its practical application to the affairs of others, either in advising, guiding, or teaching them, or in serving, their interest or welfare in the practice of an art founded on it.

The word implies professional attainment in special knowledge as distinguished from mere skill; a practical dealing with affairs as distinguished from mere study or investigation; and an application of such knowledge to uses for others as a vocation as distinguished from its pursuits for its own purposes.

The term is applied to an occupation or calling which requires learned and special preparation in the acquirement of scientific knowledge and skill.

1. The occupation which one professes to be skilled in and to follow; any calling or occupation by which a person habitually earns his living (Section 2(36), Income-tax Act and Section 150, Indian Evidence Act); 2. Section 7, North Eastern Hill University Act.

An activity to be a profession must be one carried on by an individual by his personal skill, intelligence and an individual by his personal skill, intelligence and dependent on individual characteristics. Sakharam Narayan Kherdekar v. City of Nagpur Corporation, AIR 1964 Bom 200, 210 (Bombay Shops and Establishments Act (79 of 1948, Section 2(4)).

The multifarious functions call for theexercise of integrity, intelligence and personal skill by the Chartered Accountant in the service of his client and so the preamble of the Chartered Accountant Act, 1949 describes the avocation of a Chartered Accountant as a profession. N. E. Merchant v. State, AIR 1968 Bom 283, 287. Bombay Shops and Commercial Establishments Act (76 of 1048).

A profession or occupation is carried on for the purpose of earning a livelihood and a profit motive does not underlie such carrying of profession or occupation. L. M. Chitale v. Commissioner of Labour, AIR 1964 Mad 131, 133 (Constitution of India, Article 19(6)).

Profession as distinguished with 'commercial' means a person who enters into a profession, it involves certain amount of skill as against commercial activity where it is more of a matter of things or business activity. In profession, kit is purely use of skill activity. Therefore* two are distinct concepts in commercial activity -- one works for gain or profit and as against this, in profession, one works for his livelihood.

6. In this connection, our attention was invited to a decision in the case of V. Sasidharan v. Peter and Karunakar, AIR 1984 SC 1700. In this case, question arose whether the office of a lawyer is a commercial establishment or not and the Apex Court answered this question in negative. It was observed that the office of a lawyer or of firm of lawyers is not commercial establishment within the meaning of the Act. It was observed (Para 9) :

".....It does not require any strong argument to justify the conclusion that the office of alawyer or a firm of lawyers is not a 'shop' within the meaning of Section 2(15). Whatever may be the popular conception or misconception regarding the role of today's lawyers and the alleged narrowing of the gap between a profession on one hand and a trade or business on the other, it is trite that, traditionally, lawyers do not carry on a trade or business nor do they render services to 'customers' . The context as well as the phraseology of the definition in Section 2(15) is inapposite in the case of a lawyer's office or the office of a firm of lawyers."

Their Lordships of Apex Court have categorically held that the office of a lawyer is not a commercial establishment. This observation was with regard to Kerala Shops and Commercial Establishments Act; nonetheless, the fact remains that it has been held categorically without any manner of doubt that the profession of a lawyer is not a commercial activity and it is absolutely erroneous to cover it by a tariff which is essentially meant for commercial purposes. The heading of the 'tariff', as pointed out above, is for the supply of the energy for the commercial purposes. Since the lawyer's profession is not a commercial activity, therefore, tariff imposed by the MPEB to cover the office of a lawyer as commercial establishment is not a correct categorisation of the lawyer's profession.

Our attention was also invited to the case of Narendra v. State of Maharashtra, 1986 Lab IC 318 (Bom) -- a decision of Bombay High Court. Therein also, the Division Bench while dealing with the amendment in the Maharashtra Act of 1977 by which the establishment of legal practitioner was" categorised as a commercial establishment, their Lordships struck down the enactment and observed that :--

"..... We are, however, of the view that the amendment, so far as it relates to the establishment of legal practitioner, is liable to be struck down as it herds together commercial establishments with the establishment of a legal practitioner, which herding together is irrational and arbitrary....."

In this connection, our attention was also invited to a decision of House of Lords in (1949) 1 All ER 1026, Stuchbery & Sons v. General Accident, Fire and Life Assurance Corporation, Ltd., wherein also question arose with regard to the goodwill under the Landlord and Tenant Act, 1927. In this case, the tenant was a solicitors' firm and was also acting as an agent for Insurance Company. Hence, question was whether the so- licitors carried on a trade or business, and their Lordships held thus :

"(i) the carrying on of a solicitor's business was not the carrying on of a 'trade or business' within the meaning of Sections 4(1) and 17(1).

(ii) If it was shown that a trade or business in the statutory sense was carried on the premises in addition to a profession, the only relevant goodwill for the purpose of the Act was that referable to the activities of the trade business to the exclusion of goodwill, if any, attributable to a profession.

(iii) There being no evidence of any goodwill exclusively attaching to their trade or business activities, the tenants' claim failed."

In this connection, Lord Geene M.R. observed that :--

".....I should think it would require a very bold man to say that a solicitors' practice is to be put into the 'trade or business' class and excluded from the professional class....."

He further observed as under :

"..... I have no difficulty in coming to the conclusion that the carrying on of this solicitors' business is not the carrying on of a trade or business within the meaning of that phrase in this Act of Parliament."

Their Lordships were very clear that the legal profession does not fall in the category of a trade or business; it is a profession which can only be practised by those who possess necessary and requisite skill in the subject which distinguishes it from any trading or business activity.

7. As against this, our attention was invited to a decision of this Court in the case of Taramal v. Laxman Sewak Surey, 1971 MPLJ 888. This was a case of Single Bench under the M.P. Accommodation Control Act, 1961 and in that context, His Lordship observed that profession of a lawyer is a business within the meaning of 'business' defined under the aforesaid Act. But that decision given by learned Single Bench is a judgment in per-curiam, because of the decision given by Apex Court in the case of V. Sasidharan (AIR 1984 SC 1700) (supra).

8. Learned Counsel also placed reliance on the Apex Court decision in the case of S. Mohan Lal v. P. Kondiah, AIR 1979 SC 1132, which is a case under the A.P. Buildings (Lease, Rent and Evic- tion) Control Act, 1960. In this case, their" Lordships gave an extended meaning to Section 10(3)(a)(iii) and observed :

"..... In our view the expression business occurring in Section 10(3)(a)(iii) is used in a wide sense so as to include the practice of the profession of an Advocate."

This observation was made in context of the expression 'business' used in the aforesaid section. However, in subsequent decision referred to above in the case of V. Sasidharan (AIR 1984 SC 1700) (supra), where their Lordships have categorically held that legal profession is not a business or commercial activity.

Our attention was also drawn on a decision in the case of L. M. Chitale v. Labour Commissioner, AIR 1964 Mad 131, which was a case under the Madras Shops and Establishments Act and it was held that office of Chartered Architect is not a shop and not a premises where any trade or business is carried on or where services are rendered to customers. It was observed :

"..... It cannot therefore be said that the carrying on of a profession is the same thing as the carrying on of a trade or business. A fundamental difference between a profession and a trade or business, seems to be implicit in the reference to 'profession, occupation, trade or business' in Article 19. It is normally understood that trade or business is carried on with a profit motive. But though a 'profession' or an 'occupation' is carried on for the purpose of earning a livelihood, it cannot be said that a profit motive underlies the carrying on of those activities."

9, In another case of Bombay High Court in the case of N. E. Merchant v. State, AIR 1968 Bom 283, question was whether the office of a Chartered Accountant with article clerks and one salaried ordinary clerk can be brought under the definition of 'commercial establishment' under the provisions of Bombay Shops and Commercial Establishments Act. It was observed :

"One of the important elements to be considered when the question whether a man is exercising a profession is to see whether he is a member of an organised professional body with a recognised standard or ability enforced before he can enter it and a recognised standard of conduct enforced while he is practising it. A Chartered Accountant is approached by his client for advice and guidance in his problems with regard to trade, business or industry, and it is expected that the Chartered Accountant, to the best of his ability would be in a position to help him in his difficulties and not betray the confidence that is placed in him. This is one of the elements which should be sought when considering whether a particular person is practising a profession or is merely doing a business."

In this connection, their Lordships quoted from a English decision given in the case of Currie v. Inland Revenue Commissioner, (1921) 2 KB 332.

10. Our attention was also invited to the decision of Apex Court in the case of Dr. D. M. Surti v. State of Gujarat, AIR 1969 SC 63, where the question arose whether the private dispensary of a Doctor is a commercial establishment or not. Their Lordships observed thus (Para 7) :

"A professional activity must be an activity carried on by an individual by his personal skill and intelligence. There is a fundamental distinction, therefore, between a professional activity and an activity of a commercial character and unless the profession carried on by a person also partakes of the character of a commercial nature, he cannot fall within the ambit of Section 2(1) of the Act."

Therefore, Doctor's dispensary run by virtue of his professional skill and intelligence cannot fall within the meaning of commercial activity so as to cover by the provisions of Bombay Shops and Establishments Act.

11. A survey of the aforesaid cases would show that there is always distinction between professional activity and business or commercial activity. Their Lordships have kept this distinction clearly in view and observed that in a case of professional activity, an individual has to apply his professional skill as against commercial or business activity where the transaction is done with the active cooperation of employer and his employees for sale of certain goods or with the profit motive. In case of profession, one works for livelihood and not only for a profit motive. In the present case, the M.P.E.B. has categorised as a commercial activity and under that heading, they have included lawyers and vakils meaning thereby that the MPEB has categorised the profession of a lawyer or a vakil as a commercial activity. This, in our opinion, is absolutely illegal, irrational and arbitrary; therefore, it is ultra vires of Article 14 of the Constitution of India. This arbitrary classification of putting the lawyers under the head of 'commercial activity' deserves to be struck down asviolativeof Article 14 of the Constitution of India.

12. Shri Jaiswal, learned Counsel for the Board has submitted that the M.P.E.B. has a right to lay down a tariff for various activities and it can classify item-wise also. So far as competence of the Board for lying down tariff for different professions is concerned, nobody disputes the authority of the Board; but to call the legal profession as a commercial activity is totally alien to the profession and this classification of covering the legal profession in a commercial activity is totally bereft of any legal sanction and is per se arbitrary and irrational.

13. As a result of above discussion, we hold that the circular dated 30-11-1976 Annexure K which classifies Advocate and Vakil under the heading of 'commercial' and provides for payment of consumption of energy as commercial is struck down. The writ petition is accordingly allowed and the bills issued by the M.P. Electricity Board charging the petitioner at commercial rate for consumption of power is quashed. It would, however, be open for the Electricity Board to charge the petitioner with the domestic tariff in accordance with law.


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