S.B. Sinha, J.
1. In these two writ applications, a common question of law which arises for consideration is as to whether the petitioner club is a 'shop' or 'establishment' within the meaning of the provisions of Bihar Shops and Establishments Act, 1953 (hereinafter referred for the sake of brevity as 'the Act').
2. In the writ applications, the petitioner has sought for issuance of a writ of certiorari for quashing of the order passed by the respondent No. 1, dated 15-4-1981, whereby and where under the said learned court rejected the application filed on behalf of the petitioner to recall his earlier order dated 9-12-1980 in B. S. and E. Cases Nos. 27 and 30 of 1976 allowing the petition of the concerned workman.
3. The aforementioned cases under the said Act arose out of complaint petitions filed before the respondent No. 1 by the respondent No. 2 of the writ petition against termination of services in terms of Section 26 of the said Act and by a judgment dated 9-12-1980 and dated 15-4-1981 their applications were allowed.
4. Before the court below the petitioner took an objection that the petitions under the said Act by the respondent No. 1 were not maintainable as the petitioner club does not come within the purview of the said Act and which matter had been pending in this Court in C.W.J.C. No. 655 of 1978 (R). Despite an application for stay of the aforementioned cases, the respondent No. 1 Proceeded to dispose of the said cases. There after, an application for recall in of the said orders were filed but, as mentioned hereinbefore, the same was dismissed.
5. Before proceeding with the case, further, it may be mentioned that the petitioner hag earlier approached this Court contending inter alias therein that the petitioner-club does not come within the purview of the said Act, but the said petition was dismissed by a judgment of this Court dated 14th May, 1986.
6. In these writ applications, the petitioners have, inter alias, stated as follows:
(a) The petitioner is a club which has been established at Jamshedpur with the following objectives:
(i) To form an association of ladies and gentlemen in a Social Club.
(ii) To maintain a Club and reading room, library, swimming pool and to provide facilities foot the members for playing tens billiard, badminton, ping-pong, cards and other outdoors and indoors games in the club.
(iii) To organize social and other entertainments and generally to promote cultural activities and to undertake such activities which are in keeping with the objectives of the club.
(b) It is stated that the club has restricted its use to its members only and subscription rates vary from membership to membership depending upon the nature thereof. It is further stated that there are various activities for the club where for separate rules and byelaws have been Framed such as bye-laws for reading room, card room, lending library biliard etc.
(c) It is further state that the club is exclusively used by those who are admitted to the club as a member and the affairs of the club are to be controlled and managed by a Committee elected at the Annual General Meeting. It is further stated that there is no provision for reception of guests and for member desirous of dweeling and sleeping in the club premises. There is no guest room or even a bed in the club. It is further stated that, however, snacks are provided exclusively to the members and a bar is not meant for use of the General said catering of snacks, refreshment and drinks was to assists the members in carrying out their cultural activities sports etc. It has further been the stated that no sales tax is payable' in respect of the supply of food and snacks to its members. It is further alleged that on 30-4-1976, the Joint Commissioner, Labour, Department intimated to the petitioner that in view of the definition of 'residential hotel' under Section 2(12) read with Section 2(6) of the Bihar Shops and Establishments Act. The provisions thereof apply to the petitioner club also.
(d) It is further stated that the Assistant Labour Commissioner intimated the petitioner that in view of the provisions contained in item No. 9 of the Schedule made under Section 4(2) of the Act are applicable in relation to the petitioner-club.
7. When these applications were placed before me for hearing, noticing a conflict in the decisions of this Court in the case Beldih Club, Jamdespur v. Presiding Officer, Labour Court and United Club, Jamshedpur v. Joint Commissioner, Bihar, reported in 1986 BLT (Rep) 96 and 1986 BLT (Rep) 92 respectively, on the one hand, and the decision of this Court in Bihar State Marketing Board and the Chief Inspecting Officer reported in 1985 Labour and Industrial Cases page 1820 and further in view of my not being able to prescribe to the views of the Humble Judges in the case of Beldih Club as also United Club, (supra), these cases were referred for hearing before a Division Bench.
8. Before us, it has been accepted by all parties that the petitioner club is not a "shop' within the meaning of Section 2(16) of the said Act.
9. The only question, therefore, which arises for consideration is as to whether the petitioner-club comes within the purview of "Establishment" as defined in Section 2(6) of the said Act.
10. Mr. K.D. Chatterjee, learned Counsel appearing on behalf of the petitioner submitted that the decisions of this Court in Beldih Club case (supra) and United Club case (supra) require reconsideration. According to the learned Counsel the activities of the club, for the reasons stated in the writ petitions do not come within the preview of the definition of 'Establishment'.
11. In the case of United Club (supra), S. All Ahmad, J. held that a club comes within the purview of the word 'Establishment' inter alia on the ground that it answers the description of a 'restaurant' as defined in Section 2(13) thereof. The learned Judges however in that decision failed to notice the crucial words contained therein viz. "the premises in which is carried on wholly or principally principally the business of the supply of meal or refreshments".
The aforementioned words must be given its full play. It is nobody's case nor could it. be in view of the nature of activities of the petitioner-club that it has been carrying on business wholly or principally for supply of meal or refreshment.
12. In the case of United Club (supra), S. Roy, J. took notice of the decision of S. A.M. Ahmad, J. and held that the said Act being a beneficial legislation, it must be given a liberal construction.
13. It was further held therein that systematic activities have been carried out in the club in question and the members visit the premises of the said club for the purpose of their entertainment and thus the same come within the purview of 'establishment' under the said Act. It was further held that the members of the said club being members of the public, services rendered to term would be services rendered to a section of the public. The learned Judge further held that a club is an establishment inter alia on the ground that in the schedule appended to the Act, exemption from certain provisions of the Act have been given to the clubs in terms of Section 4(2) of the Act.
Although the Schedule in a part of the Act but there can not be any doubt whatsoever that only because clubs have been granted exemption from the application of certain provisions of the Act, it would be an 'establishment' although it otherwise does not answer the description of establishment as defined in Section 2(6) of the Act, more so in view of the fact that a club comes within the definition of 'Residential Hotel'. In view of assertions made is the petition that there is no provision for reception of guest and for members desirous of dwelling or sleeping in the club premises, which have not been controverted, there is absolutely no doubt whatsoever that the petitioner-club does not answer the description of a residential hotel as contained in Section 2(13) of the said Act.
Reference in this connection may be made to Mahabir Flour Mills v. Commissioner of Commercial Taxes reported in 1987 Bihar Law Times Page
In this situation the only consideration upon which the petitioner-club can be said to be an establishment is if in its premises any trade, business or profession is carried on.
For considering as to whether the petitioner club is an establishment, the word 'profession' occurring in the interpretation clause must be excluded.
In Regional Director v. Ram Ramanaya Metal Industries the Supreme Court, although held that a beneficent legislation should receive liberal construction but thereby the statute should not be permitted to travel beyond the scheme and extend the scope of the statute on the pretest of extending the statutory benefit to those who are not covered by the scheme.
14. S. Roy, J, In his judgment further held that the club may be a 'shop' but with utmost respect to the learned judge the said view does not appear to be correct as an interpretation clause cannot be read in that manner.
An extended meaning given to a word, although may be given its full play, but the same cannot be further extended unless the conclusion arrived in this regard is inevitable.
15. Mr. S.B Gadodia, learned Government Advocate, on the other hands submitted that the said Act having been enacted in order to provide for the regulation and condition of work and employment in shops and other establishments the same must be held to have been enacted in terms of entries No. 22, 23 and 24 of List III of the 7th Schedule of the Constitution, and in that view of the matter, it being a legislation aimed at welfare of the employees, must receive a liberal construction.
According to the learned Counsel, the activities of a club systematic activities for the purpose of rendering services to the members or their guests, and in view of the fact that the said services are being rendered through the employees employed in the club, it matters not, whether the club is being run and or managed with a benefit motive or not.
16. Learned counsel contends that rendering of services by the club to its own members will be an activity, which brings it within the purview of the definition of 'Establishment'.
17. In this connection, the learned Counsel has placed a strong reliance upon a recent decision of this Court rendered by B.P. Singh, J. in the case of the Managing Committee, East India Section v. Presiding Officer, Labour Court, reported in 1989 BLT (Rep) page-1 and a decision of the Supreme Court in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa .
18. I he learned Counsel, has drawn our particular attention to paragraphs 37 46, 53 and 137 to 147 and 161 of the decision of the Supreme Court in the Bangalore Water Supply and Sewerage's case and submitted on the basis thereof that the club which employed a large number of workmen for rendering services to its members, irrespective at the fact as to whether there is a profit motive or not, comes within the purview of definition of an industry within the meaning of Section 2(j) of the Industrial Disputes Act, 1947, and therefore, applying the same principles a club must also he held to be an establishment with in the meaning of the provision of the said Act.
19. Learned counsel, with regard to the scope and object of the said Act, further relied upon a Division Bench decision of this Court in the case of Jugal Kishore Bhadani v. Labour Commissioner, and a Full Bench decision of this Court in the case of Managi
Director, Indian Oil Corporation Ltd. v. C.D. Singh, reported in 1972 BLJR 308.
20. The said Act was enacted to provide for the regulations of condition of work is employment in shops and other establishment and for certain other purposes.
21. As the nomenclature of the Acts suggests that the provisions thereof are applicable only in relation to 'shop' or an 'establishment' as defined in Section 2(16) and Section 2(6) of the said Act.
22. As noticed hereinbefore, in has been admitted by the counsel appearing for the parties that the petitioner-club does not come within the purview of the definition of shop.
Section 2(6) of the said Act reads as follows "Establishment" means an establishment which carries on any business, trade or profession or any work in connection with, or incidental or ancillary to, any business, trade or profession and includes-
(i) administrative or clerical service appertaining to such establishment:
(ii) a shop, restaurant, residential hotel, theatre or any place of public amusement or entertainment; and
(iii) such other establishment as the State Government may, by notification, declare to be an establishment to which the' Act applies:
but does not include a 'motor transport undertaking' as defined in Clause (g) of Section 2 of the Motor Transport Workers Act, 1961 (27 of
23. From a bare perusal of the said definition, it is evident that it uses the word 'means' as also 'includes' and then the definition "establishment" is therefore, exhaustive. It can be seen in the case of Dilworth v. Commissioner of Stamps reported in 1899 RC 99 and Jagir Singh v. State of Bihar and Mahalaxmi Oil Mills v. State of Andra Pradesh .
24. The words "residential hotel" and "restaurant" have been defined in Section 2(12) and Section 2(13) of the said Act, respectively.
25. From the scheme of the Act, it appears that it embraces within its fold not only such shops and establishment, wherein employees are hired for remunerations but also the establishment and shops and other retailed trade or business which are run and managed by the owner thereof or the family of the employers reference in this connection may also be made to Khan Mohammed v. State of Andhra Pradesh reported in 1973 Labour and Industrial Cases page 298.
26. The word 'employer' has been defined in Section 2(5) of the Act, which reads as follows:
Employer" means a person who owns or exercises ultimate control over the affairs of an establishment, and includes a manager, agent or any other person in the immediate charge of the general management or control of such establishment.
27. Family in relation to an employer has been defined in Section 2(7) of the Act to mean husband or wife, child or children, father or mother, brother or sister, brother's son, sister's son, daughter's son and son's son of such employer/ living with him and dependent on him.
28. From the definition of the word "employer" as also the word "establishment", it is evident that the provisions of the said Act are meant to apply to all establishment irrespective of the fact as to whether an employee has been employed therein for the purpose of carrying out trade, business or profession or not.
29. It is evident from the fact that in terms of Sub-section (2) of Section 4 of the said Act, exemptions, inter alias, have been granted from all provisions except Sections 6, 7, 8 and (12)(1) and Chapters 6 and 7 of the Act to establishments in which members of employers' family are employed such as private clinics pathological or radiological laboratories or x-ray clinics of doctors which are not run on commercial basis and in which only members of the employers" family are employed or in which only such Government's servants are employed, who are being allowed to practice during off hours.
30. In terms of Section 6 of the Act, an establishment is required to be registered and renewed in the prescribed manner, Section 7 of the said Act provides for opening and closing hours of establishment. Section 8 provides for prohibition of sales before opening and after closing hours, which includes hawkers hawking on footpath and at the market places.
31. Section 33 of the said Act provides for maintenance of registers and records by every employer and the same also casts a duty upon them to produce the same before the inspecting officers. Section 32 provides for imposition of a penalty upon any person who causes obstruction to an inspecting officer in his exercise of any power or fails without sufficient cause to comply with any lawful direction made by an Inspecting Officer.
32. Section 34 of the said Acts provides for imposition of penalty upon any employer who contravenes any provisions of the Act or Rules framed there under for which no other penalty is provided for the offence under the said Act.
33. Section 37-A of the said Act raises a presumption that whenever an establishment is found open, it shall be presumed that it is open for the service of customers or for the business, trade or profession normally carried on in the establishment.
34. Rule 29 of the Bihar Shops and Establishments Rules 1955 enjoins a duty upon the employer to maintain an inspection officers' Visit and Inspection Book.
35. Chapter VI of the said Rules, inter alia, provides the manner in which the notices shall be displayed relating extract of a copy of the said Act and the Rules as the Inspecting Officer may direct (Rule 31); manner in which notices should be exhibited (Rule 32); entries in registers, records and notices (Rule 33).
36. Rules 36-A and 36-B provide for cleanliness and ventilation in the following terms:
Cleanliness.-(1)(a) In every establishment all inside walls of the room and all the ceilings of such rooms whether such walls or ceilings be plastered or not and all the passages and staircases shall be lime washed or colour-washed at intervals of not more than twelve months dating from the time when they were last lime-washed or colors-cashed and shall be maintained in clean state.
(b) All beams, rafters, window-frames and other wood-work with the exception of floats shall be either lime-washed, color-washed at intervals of not more than twelve months, dating from the time when they were last lime-washed or colour-washed or shall be printed of varnished at intervals of not more than seven years dating from the time when they were last painted or varnished and shall be maintained in a clean state.
(2) Rubbish, filth, or debris shall not be allowed to accumulate or to remain on any part of the establish for more than 24 hours and shall be disposed within the said period. All filth and other decomposing matters shall be kept in covered receptacles.
(3) The establishment and the compound surrounding shall be maintained in a strictly sanitary and clean condition. The floor shall be swept or otherwise cleaned at least once daily, and the ceiling, shall be dusted at least once a month.
In every establishment arrangement for ventilation openings shall be provided and the opening shall be such as to admit of a continued supply of fresh air.
37. Rules 42 and 43 provide for filing of annual and quarterly returns respectively.
38. From & perusal of Form I, prescribed in terms of Rule 3 of the said Rules, it appears that types of establishment which are required to be mentioned therein are: (a) shops, (b) restaurant or eating house, (c) residential hotel, (d) theatre or any other place of public amusement.
39. Column 5 of the said form requires an applicant to state as to whether the establishment is registered under the Bihar Sales Tax Act, 1947. Column 6 of the said form requires the number of persons proposed to be employed on any day during the calendar year, which includes the number of employers' family.
40. It is true that other provisions of the said Act principally refer to matters relating to welfare of employees including conditions of work, employers liability etc. It further provides for settlement of disputes by a labour court as is evident from Sections 26 and 28 of the said Act.
41. There cannot be any doubt that the said Act has been enacted in terms of Entries No. 22, 23 and 24 of the List III (concurrent list) of the 7th Schedule of the Constitution of India.
42. However, in view of the fact that the said Act applies also to shops and establishments in which no employee is to be employed and which is run or managed even by the owner thereof or by the members of his family and includes a hawker hawking on a footpath or in a market place and further in view of the fact that the definition of 'employer' does not necessarily mean a person who has hired the services of another person on remuneration or for wages but also includes & person who takes services from the members of the family as defined in the said Act, and as well as in view of the fact that in terms-there of an employer is required to comply with certain statutory provisions as enumerated hereinbefore, in my opinion, the said Act must also be held to have been enacted for regulation of trade and commerce as envisaged under Entry No. 26 of List II (State list) of the 7th Schedule of the Constitution of India.
43. There is absolutely an doubt that the provisions of Industrial Disputes Act, 1947 and the Shops and Establishments Act enacted by different State Legislatures, unless repugnant to each other may stand together and may be held to be applicable in respect of a particular establishment under the said Act.
43. An employee, who is governed by the provisions of said Act is also entitled to the benefit of various Labour Welfare Legislation like Payment of Bonus Act or Chapter V-A of the Industrial Disputes Act.
Reference in this connection may be made in the case of The Krishna Dist. Co-operative Marketing Society Ltd., Vijayawada v. N.V. Purnachandra Rao and Ors. and in the case of Ram Kumar Mishra v. State of Bihar and Ors. .
44. Even in terms of the provision of the said Act, the beneficent legislations covering employees like Workmen's Compensation Act are automatically made applicable to a shop or an establishment.
45. It is, therefore, clear that in view of the peculiar situations arising in this case, the question which will have to be posed an answer is as to whether the provision of the said Act apply only to an organization which has a commercial activity or not.
46. The provision of similar Act in some States has been made applicable only to a commercial establishment whereas in some States the same has been made applicable to an establishment'.
47. Regard, thus, being had to the nature of the definition of establishment as contained in Section 2(6) of the said Act, it is to be taken into consideration as to whether the provisions of the Act apply only to an establishment having a commercial activity or not.
48. As noticed hereinbefore, the definition of 'establishment' is in two parts. By the first part, an establishment has been defined to mean, an establishment which carries on any business, trade or profession or any work in connection with or incidental to or ancillary to any business, trade or profession; and in term of the second part thereof it include such establishments or services which have been brought within the purview of the extended meaning of the word 'establishment', namely, a shop, restaurant, residential hotel, eating house, theatre or any place of public amusement or entertainment.
49. As noticed hereinbefore, the United Club'% case (supra) S. Ali Ahmad, J. has proceeded to hold that the club will be an establishment because it answers the definition of the word 'restaurant', whereas in Beldih Club's (supra) S. Roy, J. has proceeded to hold that as the club carries on a systematic activity, it will be an establishment within the first part of the definition thereof.
50. In the instant case, therefore, another question, which arises for consideration, is whether the word 'business' should be given a wider meaning than the word 'trade'.
51. In this case, we are not concerned with the word 'profession' in the definition of the word 'establishment'. If, we are correct in our view that the said Act had been enacted not only in terms of Item Nos. 22, 23 and 24 of the List III of the 7th Schedule appended to the Constitution, but also under Entry No. 26 of List II of the 7th Schedule thereof, there cannot be any doubt that the word 'business' has to be read as synonymous to trade. The word 'business' has been used differently in different contents.
52. In the case of The Management of Safdar Jung Hospital, New Delhi v. Kuldip Singh Sethi , it has been held that although business is a word of wide import but in the collocation of the terms and their definition these terms have a definite economic content to a particular type and on lac authorities of the Supreme Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services.
53. In the case of Krishan Kumar Narulla v. State of Jammu and Kashmir , the Supreme Court held that the word "business" is ordinarily more comprehensive than the word "trade", but is used as synonymous with the other. The Supreme Court in the context of Article 301 of the Constitution, held that the word 'trade' is synonymous to the word 'business'. [See in -State of Bombay v. R.M.D. Chamarbaugwala ; and State of Bihar v. Dasuka ].
54. Thus, loosely speaking, activity which is res extra commercial cannot be held to be a 'business' in the context of a statute like Bihar Shops and Establishments Act. There cannot be any doubt whatsoever that where business activities or trade activities are being carried out, profit motive is not a relevant factor for the purpose of consideration as to whether the same comes within the purview of the word 'industry' or 'establishment' or not.
55. In this connection reference may be made in the case of Dr. D. M. Murti v. State of Gujarat and in the case of Chief Commissioner, Delhi and Ors. v. Federation of India Chambers of Commerce and Industry, New Delhi and Ors. . In this context, the activities of the club have, to be judged.
56. In Bangalore Water Supply and Sewerage Board's case (supra), clubs have been held to be industries for the simple reason that therein services are rendered in a systematic manner through employment of labour.
57. The word 'industry' has been defined in Section 2(j) of the Industrial Disputes Act, 1947 which was as follows:
Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service employment, handicraft, or industrial occupation or avocation of workmen.
58. From a plain reading of the aforementioned provision, there cannot be any doubt that the word 'industry' as defined in Section 2(j) of the Industrial Disputes Act is of much more wider amplitude than the word 'establishment'.
59. In terms of the aforementioned definition, any systematic activity carried out by employment of workman even to render services to some person or to fulfill) some persons' wants or wishes may bring the activity within the purview of the word 'industry'.
60. However, the definition of an establishment or a commercial establishment under the Shops and Establishments Act of different State stand completely on a different footing. In terms of the definition of the word establishment' as contained in Section 2(6) of the said Act, a systematic activity for rendering services by an organisation by itself, may not be an establishment unless a business, trade or profession is carried on therein.
61. It may be mentioned here that in some of the States the word 'profession' has not been included in the definition of commercial establishment. The Supreme Court, in the case of V. Sasidharan v. Peter & Karunkar , while construing the word "Shops of Commercial Establishment" in Kerala Shops and Commercial Shops Establishment Act, 1960, held as follows:
An argument was strongly pressed upon us on the basis of the decision of this Court in Bangalore Water Supply and Sewage Board v. A. Rajappa . The High Court has rightly observed that the question which arose in that case was entirely different, namely, the sweep of the meaning of the word 'industry'. The ration of that decision is that the term 'industry' covers any activity, which is systematically or habitually undertaken for the production or distribution of goods or for rendering material services to the community at large with the help of employees. The question, which arises in this appeal, is basically different, namely, whether a lawyer's office or the office of a firm of lawyers is a commercial establishment. Considerations, which were germane to the determination of the question in the Bangalore Water Supply case, are foreign to the decision of the question before us. In Indian Chambers of Commerce and Industry case the
question was whether the Federation of Indian Chambers of Commerce and Industry is a commercial establishment within the meaning of the Delhi Shops and Commercial Establishment Act, 1954. This Court pointed out that the deflation of 'commercial establishment' in that Act is so wide that the activities of a registered society or a charitable trust would also fall within the purview of that definition.
62. From a plain reading of Section 2(6) of the said Act, it is evident that the definition of the word "establishment" is not so wide, so as to bring it within its purview, an activity which is not a commercial one.
63. Reference in this connection may be made in the case of Binay Kumar Gupta v. Assistant Labour Commissioner, reported in 1981 LIC 1433, wherein a maternity home established and run by a doctor, has been held to be not an establishment.
64. Similarly, in the case of Dr. Devendra M. Surti v. State of Gujarat , the Supreme Court has again held as to what would be a commercial establishment and in that case held that a dispensary of a doctor is not an establishment.
65. In 1975 Labour and Industrial Cases page 1134 (National Institute of Engineer Society v. Labour Inspector), it has been held that a hostel attached to an educational institution working on a no profit or loss basis, is not an establishment. In 1963 vol II LLJ 747 (L.M. Chewy and Sons v. Commissioner of Labor), it has been held that office of a chartered accountant is not an establishment.
66. In Chairman, Governing Body, S.H.V.M. Polytechnic v. Government of A.P. and Ors., reported in 1989 (2) LLJ 95, it has been held that an educational institution is not a commercial establishment. In Bihar State Marketing Board v. The Chief Inspecting Officer, reported in 985 LTC 1920, it has been held that the Bihar State Marketing Board under the Bihar Agricultural Produce Marketing Act does not come within the purview of the provisions of Bihar Shops and Establishments Act, as it does not have any commercial activity.
67. It is, therefore, clear that a club ipso facto does not come within the purview of the definition of an "establishment". However, a nomenclature by itself is not decisive, there may be a club which carries on a commercial activity and there may be a club which does not carry on any commercial activity by rendering service to its members. A club may be an industry, but thereby it does not necessarily mean that it would also be an establishment. For the purpose of construing the word 'establishment, it must be held that the activities of such establishments must be carried out in a premises where a business, trade or profession is carried out any activity, it is, therefore, clear that a business activity or a trade activity or a professional activity only would come within the sweep of the aforementioned provision.
68. It is now a well-known principle of construction of statutes that where a literal meaning is possible, recourse of any other canon of interpretation should not be taken recourse to Reference in this connection may be made in the case of S. Shivananda v. Karnataka State Road Transport Corporation and Ors. in the case of The Commissioner of Wealth-tax v. Smt. Hushmatunnisa Begum reported in AIR 1989 SC 1024.
69. The courts in India and England have all along been pointing out that the legislature should be precise and careful in its choice of language in a definition section, but at times, as in this case the definition section itself requires in the interpretation. The Supreme Court in Bangalore Water Supply and Sewerage Board's, case (supra) observed that the definition of 'Industry' in Industrial Disputes Act, 1947, is so ambiguous that it "had defined analysis. Instead of promoting precision and rounding of blurred edges, it has achieved the apposite".
70. In L.M. Kadichauma v. Don Marts, reported in AIR 1939 Privy Council at page 65 held as follows:
A phrase having been introduced and then defined the definition prima facie must entirely determines application of the phrase defined to the general purpose of the enactment.
Reference in this connection may also be made to Walker v. Leeds City Council, reported in 1976 (3) All ER 709 to 713.
71. Lord Denning in Hotel and Catering Industry Training Board v. Automobile Proprietary Ltd. (1968) 3 All ER held as follows:
It is true that 'industry' is defined but a definition is not to be read in isolation. It must be read in the context of the phrase which it defines, realising that the function of a definition is to give precision and certainty to a word or phrase which would otherwise be vague and uncertain but not to contradict it or supplant it altogether." The said decision has been affirmed in appeal in 1969 Vol. II, AER 582; "In that case it was held by the Court of appeal that a members' club is not engaged as an industry or commerce. The aforesaid decision in Automobile Proprietary case (supra) has been quoted with an approval and followed by the Supreme Court in bangalore Water Supply and Sewage Board's case (supra). But the said decision has not been considered by the Supreme Court in the aforementioned case for the purpose of consideration as to whether a club run by its members is engaged in industry or commerce or not.
72. If a club primarily engages itself in trade, the same cannot be called a club. In this connection reference may be made to the definition of club as mentioned in Halsbury Laws of England4th End. Vol. 6, Article 201 which is in the following terms:
A club, except a proprietary club or an investment club may be defined as a society of persons associated together, not for the purpose of trade, but for social reasons, the promotion of politics, sport, art, science or literature, or for any other lawful purpose, but trading activity will not destroy the nature of a club if they are merely incidental to the club's purposes.
(Italicized is mine)
73. From the aforementioned definition of club it is evident that a club can be formed for social reasons, for promotion of politics, sport, arts, science or literature but for not for the purpose of trade. Reference in this connection may also be made to the Automobile Proprietary Ltd. v. Brown Valuation Officer) reported in 1955 Vol. II, All ER 214.
74 However, for the purpose of income tax and the other trading activities a club may not destroy its nature if the same which is merely incidental to the activities of club. It is, therefore, evident that if the dominant intention of a club is trade or business the same looses its character of a club unless a contrary intention arises from the provisions of any statute.
75 A club, thus, which does not carry out any commercial activity but confines its activity for rendering service or entertainment to its members only, in my opinion cannot be said to be an 'establishment' within the meaning of the provisions of the said Act.
However, the matter may be different where it undertakes a commercial activity that means an activity not with its own members but with outsiders.
76. It is not possible for this Court to state exhaustively as to what could constitute a commercial activity but it may be stated by way of an example that if the club's property including its premises are let out on hire regularly to the members of the public or if, its restaurant is also made open to the general public or if activity of the club are such so as to enable it to make regular income by dealing with the outsiders. In such case the club may be said to be engaged in commercial activities.
77. It appears that the petitioner's club is an unincorporated members' club and is governed by its own byelaws.
78. In Harbors Laws of England, 4th End., Vol. 6 page 205 unincorporated members' club has been defined thus:
An unincorporated members' club is a society of persons each of whom contributes to the funds out of which the expenses of conducting the society and paid. The contribution is generally made by means of entrance fee or subscription, or both. The society is not a partnership, because the members are not associated with a view to profit, nor for the same reason, is it an association requiring registration as a company. It is not recognized as having any legal existence apart from the members of which it is composed.
Subject to any rule to the contrary, the property and funds of the club belong to the members for the time being jointly in equal shares ; and if provisions are supplied to a member, at a given price, this does not constitute a sale, but is in effect a release by the other members or their interest in the goods supplied. The transaction is not of a commercial nature and consequently is not controlled by the provisions of the Trade Description Act, 1968, the peculiar nature of the transaction is of particular significance in relating to the supply of intoxicating liquor.
The entire management of the club and its property is in the hands of the member, the business of the club is either conducted by them jointly in general meeting, or, as is usually the case, delegated by them to committees in accordance with the rule.
79. In this case, however, there is no evidence on record as to whether the activities of the club are of a commercial nature or not which may bring it within the purview of the word 'trade" or 'business' occur in Section 2(6) of the said Act.
80. An noticed hereinbefore, commercial activity of a club must mean dealing with the third parties or outsiders but not with their own members or the guests of the members; unless such activity with the members is held to be a camouflage.
81. Before parting with the case the decision rendered by B.P. Singh, J. in the Managing Committee, East India Section of Seventh Day Advanlists and Anr. v. Presiding Officer, Labor Court, Ranchi, reported in 1989 BLT page 1 may be noticed. In that case the Court was concerned with a case where the petitioner thereto had regularly been carrying out a commercial activity by collecting tuition fees from its students. This Court in the said decision arrived at the finding that the said institution is and establishment' in the facts and circumstances of that case.
In fact, while deciding the said case the Court was aware of the situation that the school in question was being run with an economic object in view which would be evident from the following observation:
In my view, therefore, where any activity of a commercial nature of any activity which partakes of trade business or profession is undertaken by an 'establishment' and in its functioning such an establishment employed person to perform designated duties for wages, the provision of the Act clearly apply to such establishment unless there is an exceptional case where the activity carried on by the establishment has not even a semblance of trading activity or an activity connected with business or profession.
Repelling the contention that the said school was not being run on a profit motive, this Court had also observed as follows:
The Handbook further provides regarding travel allowance, personal expenses, conditions of house occupancy, Provident fund, medical expenses etc. I am not concerned in the instant case with the question whether the guidelines Contained in that Employee Handbook can be enforced in a court of law. The Handbook, however, does establish this fact that the institution is managed and run in the same fashion as any normal trading or business establishment.
(Italicized is mine for emphasis).
This Court, thus, held that in those facts and circumstances the institution was an 'establishment' within the meaning of the said Act, taking into consideration the decision of the Supreme Court in Dr. Surti'a case and also in view of the Labor Court having appreciated the evidence on record and arrived at the same conclusion, and the Court did pot find any reason to take a different view in the matter.
82. The decision of B.P. Singh, J. therefore, docs not in any way militate against the submissions of the petitioner nor does it support the contention of the learned Counsel appearing on behalf of the respondent.
83. Further in this case, as noticed hereinbefore, the parties have not led any evidence with regard to fact as to whether the petitioner-club is engaged in any commercial activity or not. in this view of the matter, in my view, the parties should be given an opportunity to lead further evidence on the aforementioned issue.
84. In the result, these writ applications are allowed. The impugned order dated 15-4-1981, as contained in Annexure 5, to the writ application is quashed and the cases are remitted to Respondent No. 1 for a fresh decision in accordance with law. With the aforesaid observations and directions these writ applications are allowed. But in the facts and circumstances of the case, there shall be no order as to costs.
B.P. Singh, J.
85. I agree.