CHIEF COMMISSIONER, DELHI AND ORS. versus FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY, NEW DELHI & ORS.

Citation: [1975] 1 S.C.R. 348 · Decided: 30-04-1974 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Appeal(s) allowed

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Judgment (excerpt)

348 
CHIEF COMMISSIONER, DELHI AND ORS. 
v. 
FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND 
INDUSTRY, NEW DELHI & ORS. 
April 30, 1974 
[Y. V. CHANDRACHUD, P. K, GOSWAMI AND R. S. SARKARIA, JJ.] 
Delhi Shops and Establishments Act, (7 of 1954), s. 2(5) mid (21)-
'Sliop' and 'Co1n1nercial esrablishment' scope of. 
The respondent was required by the Chief Inspector of Shops and Es-
tablishments to register its 'e·stablishment• under the Delhi Shops and Estab-
lishments Act, 1954. The respondent contended that it was not an 'establish-
ment' which is defined in s. 2(9)' as meaning ·a shop or a c-omn1ercial estab-
lishment'_ and did not comply with the direction. 
Proceedings for prosecu-
tion of its Secretary were instituted, where-upon the respondent filed a peti-
tion in the High Court for quashing the order of the appellant and for direct-
ing the Magistrate not to proceed with the complaint. 
Before the High Court 
the appellant contended that the respondent was a 'co1nn1ercial establishment' 
because, the activity of the respondent amounted to a 'profession', and alter-
natively, that the case f·~ll within the latter part of the definition of 'com1nercial 
cst4blishment' in s. 2(5), inasmuch a<; its activities were connected with trade 
and business generally, but, it was not urged that the activity of the n~spon­
dcnt an1ounted to carrying on ar.y 'business or trade' in its pren1iscs. 
'I he writ petition was allowed by the High Court, holding that premises 
of the respondent were not a 'commercial establishment'. 
Jn appeal to this 
Court it was. contended that the_ activities of the respondent an1ounted .to a 
'trade or business', that therefore it was a 'commercial es1ablishment' and 
that the matter 
\Vas 
(:overed 
by 
l\,Ja11agen1ent of the Federation o.f Indian 
Cha111bers of Co111111erce and lnd11str)' v. Sri R. K. Mittal [1972] 2 S.C.R. 353 . 
. Allowing the appeal. 
HELD :-( 1) It is not proper to shut out the contentions of the appellant 
now' raised about the activity of the respondent being a 'trade or business' 
merely on the ground that the point was not properly put before the High 
Court. 
The question is only one of drawing a correct inference about the 
point in issue from the material already on record and will not require any 
additional material for decision. 
[354E-F] 
A 
B 
c 
D 
( 2) A place, in order to fall within the definition of 'commercial estab-
lishment' must, in the first instance, be 'premises'. and secondly, should be 
F 
premises wherein, (a) any trade, business or profession is carried on, or (b) 
any work in connection \vith or incidental or ancillary thereto is carried on. 
[353C-Dl 
(3) The registered office of the respondent is 'premises'. 
[353D] 
( 4) All the activities of the respondent are business activities and are 
carried on systematically. 
Though the profit made by it is ploughed back for 
ils purposes as set out in its Memorandum of Association and is nor distri-
buted among its members. T'heref-i;>re, the decision in }vfittal's case [1972] 
2 S.C.R. 353 that the activity of the respondent is in the nature of 'business 
or trade' is correct and that case does not require reconsideration. [356A-E. 
3570-E] 
(5) A· systematic activity can be a business activity even if no dividends 
are declared or profits shrtred. [356F-GJ 
G 
Jn the niatter of Incorporated Council of Law Repurting for England and 
Wales [1889] 2 Q.B.D. 279, applied. 
H 
(6) The pren1ises of th~ re·spondent, !herefore, are a 'comn1crciaf e~tablish-
ment. [357E] 
• 
A 
B 
CHIEF COMMR. DELHI v. FICCI 
(Sar~aria, J.) 
349 
(7) For the application of the Act to the respondent it is immaterial 
V<hether its activities bring its premises within the ambit of a 'shop' or 'rom-
mercial establishment' within the meaning of the Act. 
In Mittal's case it 
was held that the activities of the respondent are also in the nature of mate-
rial services within the wider definition of 'industry' and, any premises where 
services are rendered to customers fall within the definition of a 'shop'. 
l356E-Fl 
CIVIL APPELLATE JURISDICTION: Civil Appeal 
No. 
1604 of 
1%7. 
From the judgmeut and order dated the 8th February, 1967 of the 
Delhi High Court in Civil Writ No. 531-D of 1964. 
P.P. Rao and R. N. Sachthey, for the appelrants. 
c 
G. P. Pai, P. C. Bhartari and 0. C. Mathur, for respondents nos. 
D 
1 & 2. 
The Judgment of the Court was delivered by-
SARKARIA J. 
Whether the Federatiou of Indian Chambers 
of 
Comme

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