P.B. NAYAK & ORS. versus MANAGING DIRECTOR, BHILAI STEEL PLANT & ORS.

Citation: [2021] 10 S.C.R. 432 · Decided: 26-10-2021 · Supreme Court of India · Bench: K.M. JOSEPH · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 10 S.C.R.
[2021] 10 S.C.R. 432
432
P.B. NAYAK & ORS.
v.
MANAGING DIRECTOR, BHILAI STEEL PLANT & ORS.
(Civil Appeal No. 4613 of 2013)
OCTOBER 26, 2021
[K. M. JOSEPH AND
PAMIDIGHANTAM SRI NARASIMHA, JJ.]
Madhya Pradesh Shops and Establishment Act, 1958: s.3(1)(j)
– Applicability of the Act to respondent-club in view of exemption
under s.3(1)(j) – Among the establishments, to which the Act does
not apply, s.3(1)(j), provides for a club not being a residential club
– The words ‘residential club’ is found in the definition of the word
‘residential hotel’ – A residential hotel is defined as any premises,
where lodging or board and lodging is provided – The service of
lodging or board and lodging must be for payment – The said services
may be provided to travellers and other members or class of members
of the public – Thus, the recipients of the services are to be the
travellers or members of the public or a class of members of the
public – As per the Bye-laws of the respondent-club, only the Officers
of Bhilai Steel Plant, MECON, HSCL, BRP and SAIL are eligible to
be members of respondent-club on payment of prescribed fee – The
club premises are described as private premises – There is a
governing body which manages the affairs of the club – Entry is
restricted to the members, families of members and such other persons
as are authorised by the governing body – No outsider could come
to the club for taking tea, liquor or eating samosa but he can come
as a guest of the member – Bye-laws contemplate providing of
facilities of indoor/outdoor games, library and reading room – The
members and their families are to be provided facilities for their
cultural and intellectual advancement – The members of the club
and their guests and family members cannot be described as the
‘public’ – Thus, respondent club cannot be characterized as premises
which was ‘wholly or principally’ used for the business of supply of
meals and refreshment to the public – Respondent-club is, therefore,
not a residential club and is exempted from the Act.
Madhya Pradesh shops and Establishment Act, 1958: s.(22),
2(23) – Residential hotel – Restaurant and eating house – A perusal
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of s.2(22) of the Act reveal, the distinguishing feature, which is an
indispensable requirement, to make any premises, a residential hotel,
is that lodging must be provided – It may be lodging and board or it
may be lodging alone – This meaning does justice to the word
‘residential’ which qualifies hotel – In other words, there may be
hotels which do not provide lodging – Such hotels may fall under
s.2(23) – What is meant to be conveyed by the word ‘residential
hotel’ is the element of service of lodging, being present which is
provided in the hotel – It is in the company of such words, defining
residential hotels that the word ‘residential club’ is ‘included’.
Dismissing the appeal, the Court
HELD: 1.1 A club consists of its members. It is essentially
a voluntary association. It has its bye-laws. The bye-laws would,
undoubtedly, constitute the contract, binding its members. There
would be a Governing Body or Managing Committee to manage
its affairs. The 1958 Act recites that the Law-Giver enacted it to
regulate the conditions of work and employment in shops,
commercial establishments, residential hotels, restaurants, eating
houses, theatres, other places of public amusement or
entertainment and other establishments. Section 3 of the Act
provides that nothing in the Act will apply to certain persons and
establishments. Among the establishments, to which the Act does
not apply, Section 3(j), provides for a club not being a residential
club. The words ‘residential hotel’ and ‘restaurant or eating house’
have been defined to mean the premises where the activities, as
defined, are carried out. Section 2(24) defines the word ‘shop’
again as the premises, where, goods or services are rendered.
The definition of the word ‘establishment’ as far as residential
hotel, restaurant or eating house and a shop, is with reference to
the premises and the activities, which are carried out therein. In
Section 2(4), ‘commercial establishment’ is defined as an
establishment, which carries on any business, trade or profession,
or any work in connection with any business, trade or profession,
inter alia, and includes a society under the Madhya Pradesh
Societies Registration Act and a charitable or other trust and
certain other establishme

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