Full Judgment Text
2026:BHC-OS:41
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3908 OF 2025
Apsara Co-operative Housing Society
Ltd. ...Petitioner
V/s.
Vijay Shankar Singh ...Respondent
WITH
WRIT PETITION NO.4146 OF 2025
Apsara Co-operative Housing Society
Ltd. ...Petitioner
V/s.
Vijay Shankar Singh ...Respondent
______________
Mr. Mahesh Shukla with Mr. Udaybhan Tiwari i/b. Mr. Niraj Prajapati
for the Petitioner.
Mr. Ashish G. Nagwekar for the Respondent.
______________
CORAM: SANDEEP V. MARNE, J.
JUDGMENT RESERVED ON: 22 DECEMBER 2025.
JUDGMENT PRONOUNCED ON: 05 JANUARY 2026.
JUDGMENT:
1) Rule. Rule made returnable forthwith. Respondent has
appeared and has filed Affidavits-in Reply. He waives service of Rule.
With the consent of the learned counsel appearing for parties, the
Petitions are taken up for hearing and disposal.
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SSUES FOR ETERMINATION
I D
2) Whether a housing society formed by flat owners for
collective management of the building is an ‘industry’ for
maintainability of proceedings before Labour Court under the
Industrial Disputes Act, 1947 or an ‘establishment’ for maintainability
of proceedings before the Controlling Authority under the Payment of
Gratuity Act, 1971 are the issues which this Court is tasked upon to
determine in these Petitions.
3) Petitioner is a cooperative housing society and questions
maintainability of proceedings filed by its ex-Manager for payment of
dues under Section 33-C(2) of the Industrial Disputes Act, 1947 (the ID
Act) and for payment of gratuity under the Payment of Gratuity Act,
1971 (the PG Act). According to the Petitioner it is neither an
‘industry’ within the meaning of Section 2(j) of the ID Act nor an
‘establishment’ within the meaning of Section 2(4) of the Maharashtra
Shops and Establishments (Regulation of Employment and Conditions
of Service) Act, 2017 (the Maharashtra Shops Act). According to the
Petitioner, the Labour Court and Controlling Authority do not have
jurisdiction to entertain any proceedings against the Petitioner. With
this grievance, the present Petitions are filed.
HE HALLENGE
T C
4) These two Petitions challenge the orders dated 17 January
th
2024 passed by the Presiding Officer, 10 Labour Court, Mumbai, who
is also Controlling Authority under the PG Act. Writ Petition No.3908
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of 2025 challenges order passed on Application at Exh. C-4 filed by
Petitioner in Application (IDA) No.111 of 2023, by which the Labour
Court has rejected its prayer for dismissal of the proceedings filed
under Section 33-C(2) of the ID Act. In Writ Petition No.4146 of 2025,
Petitioner has challenged order dated 17 January 2024 passed by the
Controlling Authority under the PG Act rejecting its application below
Exh. C-4 seeking dismissal of Application (PGA) No.186 of 2023 filed
by the Respondent for payment of gratuity.
F ACTS
5) Petitioner is a cooperative housing society registered
under the provisions of Maharashtra Co-operative Societies Act, 1960
(MCS Act). The Respondent was working with the Petitioner as a
Building Manager, who was appointed vide letter of appointment
dated 5 August 2013. His services have been terminated by the
Petitioner-Society vide letter dated 15 October 2022. The Respondent
submitted Application in Form I claiming gratuity of Rs.4,67,308/- on
17 May 2023. He filed Application (PGA) No.186 of 2023 before the
Controlling Authority seeking payment of gratuity of Rs.4,67,308/-
together with interest. The Respondent also filed Application (IDA)
th
No.111 of 2023 before 10 Labour Court under the provisions of
Section 33-C(2) of the ID Act claiming total amount of Rs.3,87,000/-
being bonus and leave wages for the years 2020-21, 2021-22 and 2022-
23.
6) Upon receipt of notice in both the Applications, the
Petitioner appeared before the Labour Court, which also functions as
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the Controlling Authority under the PG Act. The Petitioner filed
written statements in both the Applications. Additionally, Petitioner
also filed applications seeking dismissal of both the proceedings on the
ground that the provisions of the ID Act and PG Act do not apply to it.
By order dated 17 January 2024, the Labour Court has rejected the
Application at Exhibit C-4 filed in Application (IDA) No.111 of 2023,
which is subject matter of challenge in Writ Petition No.3908 of 2025.
By another order passed on 17 January 2024 on Application at Exh. C-
4, the Controlling Authority has rejected the application seeking
dismissal of Application (PGA) No.186 of 2023, which is the subject
matter of challenge in Writ Petition No.4146 of 2025.
UBMISSIONS
S
7) Mr. Shukla, the learned counsel appearing for the
Petitioner would submit that a cooperative housing society is
repeatedly held to be not an industry in several judicial
pronouncements of the Apex Court and of this Court. He would
submit that the Petitioner-Society is formed only for the purpose of
managing the building occupied by its members. It does not carry out
any systematic commercial activity. That mere presence of club house
or telecommunication antennas is not a reason for holding that the
Petitioner carries out any systematic activity satisfying the tests laid
down by the Apex Court in Bangalore Water Supply and Sewerage
1
Board V/s. A. Rajappa and Ors. He would submit that in Mgt. Of
Som Vihar Apartment Owners Housing Maintenance Society Limited
2
V/s.Workmen c/o. Indian Engineering and General Mazdoor , an
1
1978(ii) SCC Page 213
2
(2002) 9 SCC 652
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association or society of apartment owners employing persons for
rendering personal services to its members is held to be not an industry
under Section 2(j) of the ID Act. That this Court in Dalamal House
3
Commercial Complex CHS and Ors. V/s. Shri S.R. Tiwari and Ors.
has also held that a cooperative housing society is not an industry.
That order passed by this Court in Dalamal House (supra) is affirmed
by the Apex Court by dismissal of the SLP. He also relies on judgment
of this Court in Arihant Siddhi Co-op. Housing Society Ltd. V/s.
4
Pushpa Vishnu More & Ors. , in which it is held that a society is not an
industry. In support of contention that a cooperative housing society is
not an industry, he also relies on judgment of this Court in Shantivan-
II Co-op. Housing Society V/s. Manjula Govind Mahida (Smt.) and
5
Another . He also relies on judgment of this Court in the Bhartiya
Friends Co-op. Housing Society Ltd. V/s. Bombay Labour Union &
6
Ors.
8) So far as Application filed by the Respondent for payment
of gratuity is concerned, Mr. Shukla would submit that a co-operative
housing society is not an ‘establishment’ within the meaning of Section
2(4) of the Maharashtra Shops and Establishment (Regulation of
Employment and Conditions of Service) Act, 2017 (Maharashtra
Shops Act). He relies on judgment of this Court in Kiran Industrial
Premises Co-op. Society Ltd., Mumbai V/s. Janata Kamgar Union,
7
Mumbai and Others.
3
Writ Petition No.1858 of 2018 decided on 17 July 2018
4
2018 SCC OnLine Bom 21459
5
2018 SCC Online Bom 21462.
6
Writ Petition No.1001 of 1997, decided on 28 March 2005.
7
2001 (4 ) Mh.L.J. 665.
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9) Mr. Shukla would accordingly submit that the Labour
Court and the Controlling Authority have erroneously rejected
Petitioner’s applications seeking dismissal of both the proceedings filed
by the Respondent. He would accordingly pray for setting aside the
impugned orders and for dismissal of the Applications filed under
Section 33-C(2) of the ID Act and the Application under the PG Act.
Mr. Shukla also submits that the Respondent was paid amount of
Rs.5,00,000/- at the time of his cessation of services towards bonus and
that no further payment under any head is payable to him.
10) Mr. Nagwekar the learned counsel appearing for the
Respondent opposes the Petitions submitting that Petitioner-Society
fulfills all the tests for being treated as an industry. That apart from
managing the personal affairs of its members, Petitioner carries out
specific commercial activity. That it has a full-fledged club house. That
it is also engaged in commercial activity of letting out of its space for
installation of telecommunication towers. Mr. Nagwekar submits that
it is too early at this stage to decide the status of the Petitioner as an
industry. That the Respondent must be given an opportunity to lead
evidence and only evidence will bear out the exact nature of activity
undertaken by the Respondent. He would therefore submit that the
Labour Court and the Controlling Authority have rightly rejected the
applications preferred by the Petitioner.
11) Mr. Nagwekar would submit that the Respondent was in
direct employment with Petitioner-Society and has been
unceremoniously terminated without paying gratuity and without
paying his legal dues. That he has invoked the jurisdiction of Labour
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Court and Controlling Authority, which would adjudicate his claims
on merits. That even security guards and other housekeeping staff
engaged through contractor are paid all benefits such as bonus,
gratuity, etc. and despite being direct employee of the Petitioner-
Society, the Respondent has been denied similar treatment.
12) Mr. Nagwekar would submit that for payment of gratuity
under the PG Act, it is not necessary to prove that the Petitioner is an
industry. That PG Act applies to every establishment, which employs
more than 10 employees. He would submit that the Respondent would
also prove status of the Petitioner as ‘industry’ within the meaning of
Section 2(j) of the ID Act and ‘establishment’ within the meaning of
Section 2(4) of the Maharashtra Shops Act. He prays for an
opportunity to lead evidence by seeking dismissal of the Petitions.
R EASONS A ND A NALYSIS
13) The Respondent was a Building Manager employed with
the Petitioner-Society, who was appointed vide letter of appointment
dated 5 August 2013. His services have been terminated by letter dated
15 October 2022. It appears that prior to his termination, the
Respondent was drawing monthly salary of Rs.90,000/-. It is the case
of Petitioner that Respondent was paid amount of Rs.5,00,000/- at the
time of his termination towards bonus and that no further payment
under any head is payable to him.
14) Respondent has not challenged his termination. He
instead believed that he was not paid bonus and leave wages for three
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years by the Petitioner-Society. He was advised to invoke jurisdiction
of Labour Court under Section 33-C(2) of ID Act, which empowers the
Labour Court to compute and direct payment of monies due to the
workman. Section 33-C(2) of the ID Act provides thus:
33-C. Recovery of money due from an employer.—
(1)
(2) Where any workman is entitled to receive from the employer any money
or any benefit which is capable of being computed in terms of money and if
any question arises as to the amount of money due or as to the amount at
which such benefit should be computed, then the question may, subject to
any rules that may be made under this Act, be decided by such Labour
Court as may be specified in this behalf by the appropriate
Government; within a period not exceeding three months:
Provided that where the presiding officer of a Labour Court considers it
necessary or expedient so to do, he may, for reasons to be recorded in
writing, extend such period by such further period as he may think fit.
15) Respondent has filed Application (IDA) No.111 of 2023
under Section 33-C(2) of ID Act for recovery of amount of
Rs.3,87,000/-, bifurcation of which is as under:-
Bonus for the year 2020-2021 – Rs.90,000/-
Bonus for the year 2021-2022 – Rs.90,000/-
Bonus for the year 2022-2023 – Rs.52,000/-
Leave Wages for the year 2020-2021- Rs.60,000/-
Leave Wages for the year 2021-2022- Rs.60,000/-
Leave Wages for the year 2022-2023- Rs.35,000/-
Total - Rs.3,87,000/-.
16) Simultaneously, the Respondent has also filed Application
(PGA) No.186 of 2023 seeking gratuity of Rs.4,67,308/- on the
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strength of 9 years of services with the Petitioner-Society. Filing of
Applications under Section 33-C(2) of the ID Act envisages that the
Respondent is a workman within the meaning of Section 2(s) and
Petitioner is an industry within the meaning of Section 2(j) of the ID
Act. Similarly, Respondent’s prayer for payment of gratuity is premised
on assumption that the PG Act applies to the Petitioner society.
17) The Petitioner is a cooperative housing society registered
under the MCS Act. It is formed by the owners of flats in the building
for its collective management. It believes that provisions of the ID Act
and PG Act are not applicable in respect of its employees and
accordingly the Petitioner sought dismissal of both the Applications
filed by the Respondent.
W HETHER A C OOPERATIVE H OUSING S OCIETY IS AN ‘I NDUSTRY ’
18) I first proceed to decide the issue of maintainability of
Application (IDA) No.111 of 2023 filed under Section 33-C(2) of the
ID Act. For invoking the provisions of Section 33-C(2), it becomes
incumbent for the Respondent to prove that he is a ‘workman’ under
Section 2(s) and that the Petitioner is an ‘industry’ within the meaning
of Section 2(j) of the ID Act. Section 2(j) of the ID Act defines the term
‘industry’ as under:-
2 Definitions
(j) “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;
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19) Thus the activity of business or trade is essential for an
entity to qualify as an industry. In Bangalore Water Supply and
Sewerage Board (supra) the Constitution Bench has laid down various
tests for determination of status of different types of entities. So far as
cooperative societies are concerned, the Apex Court has held that
generally they do not fall outside the definition of the term ‘industry’
under Section 2(j) of the ID Act. It is held that cooperatives such as
credit societies, marketing cooperatives, producers’ or consumers’
societies, etc are industries. It is held in para 126 thus:
126. Cooperative societies ordinarily cannot, we feel, fall outside Section
2(j). After all, the society, a legal person, is the employer. The members
and/or others are employees and the activity partakes of the nature of trade.
Merely because co-operative enterprises deserve State encouragement the
definition cannot be distorted. Even if the society is worked by the members
only, the entity (save where they are few and self-serving) is an industry
because the member-workers are paid wages and there can be disputes
about rates and different scales of wages among the categories i.e. workers
and workers or between workers and employer. These societies — credit
societies, marketing cooperatives, producers' or consumers' societies or apex
societies — are industries.
Thus, merely because an activity is carried out by a cooperative
society, the same would not fall outside definition of the term
‘industry’, especially when the activity partakes character of trade.
However, this would apply only when a cooperative society carries out
some form of trade like a cooperative sugar factory or a cooperative
bank or cooperative credit society, etc. These types of entities
ultimately carry out a systematic commercial activity and merely
because the business is owned by multiple persons as members of the
cooperative society, the same would not be a reason for not treating its
activity as industry. However, whether this would apply to a
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cooperative housing society which does not carry out any trade? The
answer, to my mind, appears to be in the negative. Carrying on some
form of trade or business is essential for a cooperative society to
partake character of an industry. A cooperative housing society which
merely manages the building and is formed for collective ownership of
land and building, does not carry on any trade or business and would
not qualify as an industry.
20) To decide the issue, the purpose for which cooperative
housing societies and associations of apartments are formed needs to
be appreciated. In urban areas where multi storied buildings
comprising of numerous flats are constructed, the developer/promoter
sells only the flats to the purchasers. The common areas and amenity
spaces of the building are to be used commonly by all the flat owners.
Once all the flats in the building are sold, ownership in the land and the
building is required to be conveyed by the developer/promoter to the
collective body of flat purchasers. In Maharashtra the activities of
construction, sale, management and transfer of flats used to be
governed by the Maharashtra Ownership Flats (Regulation of the
promotion of construction, sale, management and transfer) Act, 1963
(MOFA), which is now replaced by Real Estate (Regulation and
Development) Act 2016 (RERA), which is a Central Legislation.
Under both the enactments, it is incumbent for promoter/developer to
transfer the title in the land and the building in favour of collective
body of flat purchasers, which can be a cooperative society, association
of apartments or a company. Thus one of the objectives behind
formation of such collective body like a society is to secure title in the
land and building, which is collectively owned by all the flat
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purchasers. Once such collective body like a society is formed, it also
looks after maintenance of the building. Thus the collective body of flat
purchasers is not formed with the objective of carrying on any trade or
business.
21) With the rise of construction of apartments in urban areas
in India, professional management of the buildings became imminent.
Gone are the days where smaller buildings were used to be managed
through a watchman or caretaker or a security guard. Today’s modern
commercial and housing complexes require efficient management in
various areas such as maintaining cleanliness, garbage collection, lift
operations, parking management, electricity/plumbing maintenance,
club house maintenance, managing sporting activities, etc. All these
facilities are provided in a building for personal use by members. Since
members find it difficult to themselves maintain these facilities, various
personnel are required to be employed to look after and maintain those
facilities. It therefore cannot be contended that the activity of
maintaining those facilities is a commercial activity. Usually a
cooperative housing society or co-operative commercial premises
society do not have income generation sources and are largely
dependent on monthly contribution by members. However, few
buildings do have some commercial exploitation opportunities such as
renting out some of the premises in the building for putting up
hoardings or for telecommunication towers, etc. Though some income
may be generated through these activities, it does not mean that the
activity of earning remuneration through such exploitation acquires a
characteristic of a systematic trading or commercial activity for such
society. Such activities help reduce monthly contributions by the
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members and are not aimed at or performed with the objective of
running a systematic trade or business activity as an industry.
Therefore, merely because the Petitioner has installed
telecommunication towers on its building or because it earns some
income through such installation, the same would not ipso facto
convert activity of the society into a systematic commercial activity
constituting an industry.
22) It is another thing if a co-operative housing society or
association of apartments is found to be engaged in any systematic
commercial activity such as running of a store /restaurant or running a
club house for outsiders, operating banquet hall for commercial
exploitation by outsiders, etc. and if any employees are appointed to
exclusively look after those commercial activities. In such a case, if it is
proved that the employees look after the commercial activities
undertaken by the society, such activity may come in the definition of
the term ‘industry’. However mere employment of employees by co-
operative housing society or association of apartments for offering
services to the members would not bring activities of such society into
the definition of the term ‘industry’ within the meaning of Section 2(j)
of the ID Act.
23) The issue of status of a cooperative society or an
association of apartments as ‘industry’ fell for consideration before the
Apex Court in Mgt. of Som Vihar Apartment Owners Housing
Maintenance Society Limited (supra). The Apex Court held in
paragraph 7 as under:-
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7. Indeed this Court in Rajappa’s case (supra) noticed the
distinction between such classes of workmen as domestic servants
who render personal service to their masters from those covered
by the definition 2(J) of the Industrial Disputes Act. It is made
clear if literally interpreted these words are of very wide amplitude
and it cannot be suggested that in its sweep it is intended to
include service however rendered in whatsoever capacity and for
whatsoever reason. In that context it was said that it should not be
understood that all services and callings would come within the
purview of the definition; service rendered by a domestic servant
purely in a personal or domestic matter or even in a casual way
would fall outside the definition. That is how this Court dealt with
this aspect of the matter. The whole purpose of the Industrial
Disputes Act is to focus on resolution of industrial disputes and
the regulation will not meddle with every little carpenter or a
blacksmith, a cobbler or a cycle repairer who come outside the
idea of industry and industrial dispute. This rationale which
applies all along the line to small professions like that of domestic
servants would apply to those who are engaged by a group of flat
owners for rendering personal services even if that group is not
amorphous but crystalised into an Association or a society. The
decision in Rajappa’s case if correctly understood is not an
authority for the proposition that domestic servants are also to be
treated to be workmen even when they carry on work in respect of
one or many masters. It is clear when personal services are
rendered to the members of a society and that society is
constituted only for the purposes of those members to engage the
services of such employees, we do not think its activity should be
treated as an industry nor are they workmen. In this view of the
matter so far as the appellant is concerned it must be held not to
be "industry". Therefore, the award made by the Tribunal cannot
be sustained. The same shall stand set aside.
(emphasis added)
Thus, in Mgt. of Som Vihar Apartment Owners Housing Maintenance
Society Limited the Apex Court has held that when personal services
are rendered to the members of the Society and where the Society is
constituted only for the purposes of those members, the Society cannot
be treated as industry nor employees can be treated as workmen.
24) The issue of co-operative society of residential flats or
commercial premises not being an industry has also been repeatedly
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decided by this Court. It would be apposite to make a quick reference
to those judgments. In the Bhartiya Friends Co-op. Housing Society
Ltd. (supra) learned Single Judge of this Court referred to the judgment
in Som Vihar (supra) and held in paragraph 3 as under:-
3. This issue is no longer res integra. In the case of Management of
SOM Vihar Apartment Owners Housing Maintenance Society Ltd.
v/s. Workmen C/o. Indian Engineering and General Mazdoor, 2001
LLR 599,2001 LLR 599,2001 LLR 599, the Apex Court after
considering the judgment in the case of Bangalore Water Supply
(supra), Kamani Properties Ltd. v/s State of West Bengal & Ors.,
AIR 1990 SC 2047AIR 1990 SC 2047AIR 1990 SC 2047 and T.K.
Ramesan v/s. A.O. Thomas, Secretary, Maintenance Committee,
1995 Lab.I.C. 8131995 Lab.I.C. 8131995 Lab.I.C. 813 held that a
housing society does not fall within the purview of the term
‘industry’ as defined under section 2(j) of the Industrial Disputes Act.
Under section 3(7) of the MRTU & PULP Act, ‘industry’ has been
defined in relation to which the Central Act, that is, the Industrial
Disputes Act applies, as one which is defined under clause (j) of
section 2 of the Central Act. Since a cooperative society is not an
industry within the meaning of section 2(j) of the Industrial Disputes
Act, the provisions of the MRTU & PULP Act cannot apply to the
Petitioner-Society.
25) In Arihant Siddhi Co-op. Housing Society Ltd. (supra) the
learned Single Judge of this Court has held in paragraph 4 as under:-
4. This Court, in its judgment in the case of M/s. Shantivan-II
Co. Op. Hsg. Society vs. Smt. Manjula Govind Mahida1 has
considered whether a cooperative housing society can be termed as
an industry within the meaning of Section 2(j) of the Industrial
Disputes Act merely because it carries on some commercial activity,
not as its predominant activity, but as an adjunct to its main activity.
This Court has held that such society is not an industry. In a case like
this, that is to say, where there is a complex of activities, some of
which may qualify the undertaking as an industry and some would
not, what one has to consider is the predominant nature of services or
activities. If the predominant nature is to render services to its own
members and the other activities are merely an adjunct, by the true
test laid down in the case of Bangalore Water Supply and Sewerage
Board vs. A. Rajappa2, the undertaking is not an industry.
(emphasis added)
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26) Lastly, in Dalamal House Commercial Complex CHS and
Ors. (supra) the learned Single Judge of this Court has held in
paragraphs 3 and 4 as under:-
3. This court in M/s ShantivanII Cooperative Housing Society Vs.
Smt. Manjula Govind Mahida, has considered a similar controversy.
The cooperative society in that case was alleged to be carrying on
commercial activities through licensing of its terrace for erection of
mobile towers. This court relying on the test laid down in Banglore
Water Supply and Sewerage Board Vs. A. Rajappa and ors. held that
if predominant nature of services undertaken by the cooperative
society was to render services to its own members and the purported
commercial activities were a mere adjunct to these services, the
society could not be termed an industry. This Court in M/s
ShantivanII Cooperative Housing society observed that the case of
Somvihar Apartment Owners Housing Maintenance Society limited
Vs. Workmen c/o Indian Engineering and General Mazdoor, on
which reliance was placed by the complainants and the ratio of which
was applied by the Industrial Court, has no application to such case.
4. Accordingly, the impugned order of Industrial Court suffers from a
serious error of jurisdiction. Rule is accordingly made absolute and
the petition is allowed. The complaint before the Industrial Court is
quashed and set aside. No order as to costs. Though the petition is
disposed of on the basis of law declared by this court, it is expected
that the parties nevertheless would try and sit together and sort out the
dispute of wages amicably.
The Special Leave Petition preferred challenging the judgment in
Dalamal House Commercial Complex CHS (supra) has been dismissed
by the Supreme Court by order dated 12 July 2021.
27) It is thus a settled position that a cooperative society does
not fit into the definition of the term ‘industry’. I am therefore of the
view that the Petitioner cannot be treated as an ‘industry’ within the
meaning of Section 2(j) of the ID Act in view of the settled law
discussed above.
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28) The Labour Court has egregiously erred in dismissing
Petitioner’s application filed in Application (IDA) No.111 of 2023
holding that the Respondent needs to be given an opportunity to lead
evidence. Even if the Respondent leads evidence, he would still not be
able to demonstrate that the Petitioner-Society runs any activity akin to
an industry. Affidavit-in-reply filed in Writ Petition No.3908 of 2025
refers to following documents:-
A. Account Statement of the Opponent for Aug & September 2018
(Receipt & Payments) - pages 1 to 3. Hereto annexed and marked
exhibit 'A' is a copy of statement of account.
B. Balance Sheet till 31-3-2021 & 31-3- 2023 pages 4 & 5. Hereto
annexed and marked exhibit 'B' is a copy of Balance Sheet.
C. Statement of Income of the Applicant provided by the Society -
page 6. Hereto annexed and marked exhibit 'C' is a copy of
Statement of Income of the Applicant provided by the Society.
D. Form 16-A till 31-3-2023 - pages 7 to 9 Hereto annexed and
marked exhibit 'D' is a copy of Form 16-A.
E. Vodafone Antenna photograph taken by the Applicant on 15-
10-2022 - page Hereto annexed and marked exhibit 'E' is a copy of
Vodafone Antenna photograph.
F. Airtel Antenna photograph taken by the Applicant on 15-10-
2022 - page 11. Hereto annexed and marked exhibit F is a copy of
Airtel Antenna photograph.
G. Tata Antenna photograph taken by the Applicant on 15-10-
2022 - page 12. Hereto annexed and marked exhibit 'G' is a copy of
Tata Antenna photograph.
H. Club House on Terrace photographs taken by the Applicant on
15-10-2022- page 13 to 17. Hereto annexed and marked exhibit 'H'
is a copy of Club House on Terrace photographs.
29) Mere installation of telecommunication antennas by the
Petitioner-Society for reducing monthly maintenance charges of its
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members cannot be treated as a systematic activity for treating it as an
‘industry’. Similar is the position in respect of club house of the
Petitioner-Society. It is not the contention of the Petitioner that
membership in the club house is allowed for outsiders. Club house is
being operated for personal use of the members and merely because
operation of the club house involves incurring of large-scale
expenditure, it would still not mean a systematic commercial activity
for treating the same as an ‘industry’.
30) In my view therefore, the Labour Court has erred in
dismissing the Application (IDA) No.111 of 2023 filed by the
Petitioner.
HETHER A OOPERATIVE OUSING OCIETY IS AN
W C H S
‘E STABLISHMENT ’ FOR APPLICATION OF PG A CT ?
31) So far as the Respondent’s claim for payment of gratuity is
concerned, the PG Act applies to the following entities under sub-
section (3) of Section 1 of the PG Act:-
1. Short title, extent, application and commencement
xxx
(3) It shall apply to—
(a) every factory, mine, oilfield, plantation, port and railway
company;
(b) every shop or establishment within the meaning of any
law for the time being in force in relation to shops and
establishments in a State, in which ten or more persons
are employed, or were employed, on any day of the
preceding twelve months;
(c) such other establishments or class of establishments, in
which ten or more employees are employed, or were
employed, on any day of the preceding twelve months, as
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the Central Government may, by notification, specify in
this behalf.
(3A) A shop or establishment to which this Act has become
applicable shall continue to be governed by this Act
notwithstanding that the number of persons employed therein at
any time after it has become so applicable falls below ten.
(emphasis added)
32) Section 2(f) of the PG Act defines the term ‘employer’ as
under:-
2. Definitions.—In this Act, unless the context otherwise requires,
—
xxx
(f) “employer” means, in relation to any establishment, factory,
mine, oilfield, plantation, port, railway company or shop—
(i) belonging to, or under the control of, the Central
Government or a State Government, a person or
authority appointed by the appropriate Government for
the supervision and control of employees, or where no
person or authority has been so appointed, the head of the
Ministry or the Department concerned,
(ii) belonging to, or under the control of, any local authority,
the person appointed by such authority for the
supervision and control of employees or where no person
has been so appointed, the chief executive officer of the
local authority,
(iii) in any other case, the person, who, or the authority
which, has the ultimate control over the affairs of the
establishment, factory, mine, oilfield, plantation, port,
railway company or shop, and where the said affairs are
entrusted to any other person, whether called a manager,
managing director or by any other name, such person;
(emphasis added)
33) Thus, every ‘establishment’ within the meaning of law
enacted by the State Government is governed by the provisions of the
PG Act subject to employment of 10 or more persons. In State of
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Maharashtra shops and establishments are governed by provisions of
the Maharashtra Shops Act.
34) Under Section 2(4) of the Maharashtra Shops Act, the
term ‘establishment’ has been defined as under:-
2. Definition.— In this Act, unless the context otherwise requires,
—
xxx
(4) “establishment” means an establishment which carries on, any
business, trade, manufacture or any journalistic or printing work,
or business of banking, insurance, stocks and shares, brokerage or
produce exchange or profession or any work in connection with,
or incidental or ancillary to, any business, trade or profession or
manufacture; and includes establishment of any medical
practitioner (including hospital, dispensary, clinic, polyclinic,
maternity home and such others), architect, engineer, accountant,
tax consultant or any other technical or professional consultant;
and also includes a society registered under the Societies
Registration Act, 1860 (21 of 1860), and a charitable or other trust,
whether registered or not, which carries on, whether for purposes
of gain or not, any business, trade or profession or work in
connection with or incidental or ancillary thereto; and includes
shop, residential hotel, restaurant, eating house, theatre or other
place of public amusement or entertainment; to whom the
provisions of the Factories Act, 1948 (63 of 1948), does not apply;
and includes such other establishment as the State Government
may, by notification in the Official Gazette, declare to be an
establishment for the purposes of this Act;
(emphasis added)
Thus, Section 2(4) of the Maharashtra Shops Act includes every
establishment carrying on the business, trade, manufacture or other
enumerated activities and includes even a society registered under the
provisions of Societies Registration Act, 1860 or a charitable or other
trust. Mr. Shukla has contended that Section 2(4) of the Maharashtra
Shops Act thus consciously excluded a cooperative society registered
under the MCS Act, 1960. However, that alone cannot be a factor for
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inferring that the Legislature has intended to exclude every cooperative
society from application of provisions of PG Act. To illustrate, a
cooperative bank or cooperative sugar factory or cooperative credit
society would be governed by the provisions of the PG Act
notwithstanding the fact that they are registered under the provisions of
MCS Act. This is because those societies carry on commerce, trade or
business.
35) On perusal of definition of the term ‘establishment’ under
Section 2(4) of the Maharashtra Shops Act, it is seen that the
establishments covered under the definition are usually engaged in
some sort of commercial activities. The term ‘establishment’ defined
under Section 2(4) of the Maharashtra Shops Act essentially refers to
entities engaged in some of sort of commercial activities. Carrying on
some form of business, trade, manufacture or any journalistic or
printing work, or business of banking, insurance, stocks and shares,
brokerage or produce, exchange or profession is essential for coverage
of an entity in the definition of the term ‘establishment’. Section 2(4) of
the Maharashtra Shops Act does not bring within its net any entity,
which does not carry out a commercial, business or trade activity. To
illustrate, while bringing in its net a charitable or other trusts, Section
2(4) of the Maharashtra Shops Act adds the caveat of carrying on
business, trade or profession. Thus, a charitable trust, which does not
carry on any business, trade or profession or any work in connection
with or incidental or ancillary thereto would not be covered by the
definition of the term ‘establishment’. Thus, the activity of business,
trade or commerce is essential for coverage of any entity in the
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definition of the term ‘establishment’ under the Maharashtra Shops
Act.
36) There is also another angle from which the issue of
coverage of cooperative housing societies or associations of apartments
in definition of the term ‘establishment’ can be considered. There can
be no doubt that a residence or house is not an ‘establishment’ within
the meaning of Section 2(4) of the Maharashtra Shops Act. If
employees are engaged to look after maintenance of a residential
bungalow, the said bungalow will not be an establishment within the
meaning of Section 2(4) of the Maharashtra Shops Act. This is because
activity of owner of that bungalow, who resides therein, in engaging
employees/workers to look after the bungalow has no connection with
any commerce, trade, business or profession. If a singular bungalow is
not an establishment, whether multiple bungalows, managed through a
collective body like a co-operative society, would become an
establishment within the meaning of Section 2(4) of the Maharashtra
Shops Act? The answer, to my mind, appears to be in the negative.
Similarly, when a residential flat in a building is not an ‘establishment’
within the meaning of Section 2(4) of the Maharashtra Shops Act, an
entity formed by all the residents for collective management of their
houses would also not be an establishment within the meaning of
Section 2(4) of the Maharashtra Shops Act. Merely because house
owners come together and decide to manage their houses and building
collectively and for that purpose, employ workers/employees,
association of house owners would not be an ‘establishment’ within the
meaning of Section 2(4) of the Maharashtra Shops Act. In my view,
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therefore, provisions of PG Act would not apply to co-operative society
or co-operative commercial premises/ societies.
37) The issue as to whether a cooperative society is covered
by the definition of the term ‘establishment’ attracted attention of this
Court in Kiran Industrial Premises Co-op. Society Ltd. (supra). The
issue before the learned Single Judge of this Court was about
application of provisions of Minimum Wages Act, 1948 and of
Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act, 1972 (MRTU & PULP Act) to a cooperative
society of industrial premises. Petitioner therein was a registered co-
operative society under the MCS Act and had employed four persons
as watchmen. The society had 200 members as owners of industrial
units/ galas. The Society had several commercial premises in which
commercial and trading activities were undertaken by owners of the
units. On behalf of the watchmen, the union filed complaint of unfair
labour practice under Section 28 of the MRTU & PULP Act
complaining about non-payment of wages prescribed under the
Minimum Wages Act. Item 17 of the Part I of the Schedule to the
Minimum Wages Act covers/includes employment in any shop or
commercial establishment. In the light of entry No.17 in Part-I of the
Schedule, this Court examined definition of the term ‘commercial
establishment’ under the then Bombay Shops and Establishments Act,
1948. This Court held in paragraphs 2 and 3 as under:-
2. We have to bear in mind that the petitioner society is a separate
independent and distinct entity and a legal and juristic personality
independent of its members who are the share holders of the
society owning the premises in their own right. The business, trade
or commercial activities of the members cannot be mixed up with
the activities of the society and by no stretch of imagination can it
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be said that the society is also carrying on the business, trade or
commercial activities because its members are engaged in such
activities, besides, it is neither pleaded nor proved, nor is there even
a shred of evidence or material on record to conclude or even to
infer that the society is engaged in any business, trade or
commercial activities. The workmen have not led any evidence to
prove that commercial activities were carried on by the society.
There is a statement made in their evidence about the activities in
the premises of the members but nothing about the society's
activities. On the contrary the society's secretary has clearly stated
that the society's work is of maintaining the society. Even in his
cross-examination not even a whisper of activities of the society is
put to him. No doubt a few questions were put to him about the
commercial activities in the galas or the premises of the society
owned by the members. The entire building is of industrial galas
but that does not make the society itself a commercial
establishment carrying on any trade, business or any commercial
activities. It is clear that the society is a collective person of the
members, who have organised themselves to maintain the society
and to carry on its affairs in accordance with the bye-laws, rules
and the Act. It is a distinct legal entity from the members. It
collects the maintenance charges, service charges, property and
water charges payable to the municipal corporation. It acts as a
statutory agent to collectively represent the members. It looks after
the maintenance of the building and renders services such as
collecting the prescribed charges from the individual members and
disburse or spend them in accordance with law for repairs, water
charges, property taxes, payment of wages etc. and keeps proper
accounts and get the accounts approved annually in its general
meeting. There is no evidence or material to conclude or to infer
what other activities are engaged in by the society. There is no
pleading or proof to say that the society itself is carrying on the
trade, business or a commercial activity such as sale or purchase of
the premises or any goods or merchandise and it earns any income
therefrom.
3. Let us now analyse the legal provisions. The claim of the
employees for minimum wages is under the Minimum Wages Act.
Item 17 of the Part 1 of the Schedule reads as under :-
"17 :- Employment in any shop or commercial establishment
(not being an employment in any bank or an employment
which is included) under any of the other entries in this
Schedule.
Explanation.- For the purpose of this entry, the expressions,
"Shop" and "Commercial Establishment" shall have the
meaning respectively assigned to them in the Bombay Shops
and Establishments Act, 1948."
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The employees are claiming wages as prescribed for the
commercial establishment under the Act and alleged failure to be
an unfair labour practice under Item 9 of Schedule IV of the
M.R.T.U. & P.U.L.P. Act. The term "commercial establishment"
has been defined under the Bombay Shops and Establishments Act
in Section 2(4) which reads as under :-
'Commercial establishment' means an establishment which
carried on, any business, trade or profession or any work in
connection with, or incidental or ancillary to any business,
trade or profession (and includes establishment of any legal
practitioner, medical practitioner, architect, engineer,
accountant, tax consultant or any other technical or
professional consultant and also includes) a society registered
under the Societies Registration Act, 1860 [XXI of 1860) and
a charitable or other trust, whether registered or not, which
carries on (whether for purposes of gain or not) any business,
trade or profession or work in connection with or incidental
or ancillary thereto but does not include a factory, shop,
residential hotel, restaurant, eating house, theatre or other
place of public amusement or entertainment."
The concept of "commerce" or "commercial" is well known and
has been the subject matter of umpteen number of Judicial
decisions and I need not dwell on that point. In my opinion based
on the facts of the present case, the society cannot be said to be
engaged in any commercial venture or a business, trade or
profession. There is no investment of capital nor is there any
motive for profit or gain. Its a simple activity confined to the
maintenance of the premises and payment of different statutory
dues to the prescribed authorities and to employ the services of
some persons to carry out such activities. There is no commercial
aim or purpose to engage in the activities of the society. It is
possible that out of its total receipts from the members, the society
might have excess amount over its expenditure but that is not the
test to hold that these activities are commercial in nature to dub
the society as a commercial establishment. There is neither an
object of profit nor a risk of making loss in the maintenance
activities of the society. I, therefore, hold that the petitioner society
is neither "a commercial establishment" nor "an industry" to attract
the provisions of the Minimum Wages Act, 1948. ...
(emphasis added)
38) Thus, in Kiran Industrial Premises Co-op. Society Ltd,
this Court drew a distinction between commercial activity carried out
by members in premises of the society and the activity of the society
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itself in managing the premises. The issue involved in the present case
appears to be squarely covered by the judgment of this Court in Kiran
Industrial Premises Co-op. Society Ltd. The Maharashtra Shops Act
has replaced the Bombay Shops and Establishments Act, 1948. The
term ‘commercial establishment’ appearing in Section 2(4) of the
Bombay Act (Act of 1948) is now replaced by the term ‘establishment’
under Section 2(4) of the Maharashtra Shops Act. However, both
under the definition of the term ‘commercial establishment’ under the
Act of 1948 and ‘establishment’ under the Maharashtra Shops Act, the
essential requirement is that the entity must carry on some trade,
commerce or business. A cooperative housing society or an association
of apartments formed for the purpose of collective management of
affairs of the building cannot be said to be engaged in a business, trade
or commerce. It is only those societies or associations which carry out
some form of trade, business or commerce which would be covered by
definition of the term ‘establishment’ under the Maharashtra Shops Act
and would be liable to pay gratuity if 10 or more employees are
employed. In the present case, Petitioner society does not carry out any
trade or business.
39) The contention of Respondent that the employees of
contractors engaged by the Petitioner society like security guards,
housekeeping staff, etc. receive all statutory benefits and that the
Manager directly engaged by it must also receive all the statutory
benefits. The contention may appear to be attractive, but is misplaced.
The contractors engaged by the society work for different entities.
Those contractors are in the business of providing the workforce to
various entities. They carry on systematic activity of trade or business
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like an industry. They are also covered by definition of the term
‘establishment’ under the Maharashtra Shops Act. Therefore their
employees are paid the statutory dues, including gratuity. Merely
because such contract workers are deployed by the contractor to work
for Petitioner society, the same would not convert Petitioner into an
industry or establishment when it does not carry on any trade,
commerce or business activity.
40) In my view therefore, Petitioner society cannot be treated
as an ‘establishment’ within the meaning of the Maharashtra Shops
Act and consequently the provisions of PG Act would not apply to the
Petitioner society. The Controlling Authority has thus erred in rejecting
Petitioner’s Application seeking dismissal of Application (PGA)
No.186 of 2023.
C ONCLUSIONS
41) Conspectus of the above discussion is that the Petitioner-
Society is neither an ‘industry’ within the meaning of Section 2(j) of the
ID Act nor an ‘establishment’ within the meaning of Section 2(4) of the
Maharashtra Shops Act, making the provisions of the PG Act
inapplicable to it. Therefore, the proceedings filed by the Respondent
under Section 33-C(2) of the ID Act and under the PG Act before the
Labour Court and the Controlling Authority respectively are not
maintainable and liable to be dismissed.
O RDER
42) Petitions accordingly succeed and I proceed to pass the
following order:-
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(i) Order dated 17 January 2024 passed on Application
at Exh. C-4 filed in Application (IDA) No.111 of
2023 is set aside and consequently, Application
(IDA) No.111 of 2023 is dismissed.
(ii) Order dated 17 January 2024 passed on Application
at Exh. C-4 in Application (PGA) No.186 of 2023 is
set aside and consequently Application (PGA)
No.186 of 2023 is dismissed.
43) Writ Petitions are allowed in above terms and disposed of.
Rule is made absolute in both the Petitions. Considering the facts and
circumstances of the case there shall be no orders as to costs.
[SANDEEP V. MARNE, J.]
Signed by: Megha S. Parab
Designation: PA To Honourable Judge
Date: 05/01/2026 20:46:10
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.3908 OF 2025
Apsara Co-operative Housing Society
Ltd. ...Petitioner
V/s.
Vijay Shankar Singh ...Respondent
WITH
WRIT PETITION NO.4146 OF 2025
Apsara Co-operative Housing Society
Ltd. ...Petitioner
V/s.
Vijay Shankar Singh ...Respondent
______________
Mr. Mahesh Shukla with Mr. Udaybhan Tiwari i/b. Mr. Niraj Prajapati
for the Petitioner.
Mr. Ashish G. Nagwekar for the Respondent.
______________
CORAM: SANDEEP V. MARNE, J.
JUDGMENT RESERVED ON: 22 DECEMBER 2025.
JUDGMENT PRONOUNCED ON: 05 JANUARY 2026.
JUDGMENT:
1) Rule. Rule made returnable forthwith. Respondent has
appeared and has filed Affidavits-in Reply. He waives service of Rule.
With the consent of the learned counsel appearing for parties, the
Petitions are taken up for hearing and disposal.
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SSUES FOR ETERMINATION
I D
2) Whether a housing society formed by flat owners for
collective management of the building is an ‘industry’ for
maintainability of proceedings before Labour Court under the
Industrial Disputes Act, 1947 or an ‘establishment’ for maintainability
of proceedings before the Controlling Authority under the Payment of
Gratuity Act, 1971 are the issues which this Court is tasked upon to
determine in these Petitions.
3) Petitioner is a cooperative housing society and questions
maintainability of proceedings filed by its ex-Manager for payment of
dues under Section 33-C(2) of the Industrial Disputes Act, 1947 (the ID
Act) and for payment of gratuity under the Payment of Gratuity Act,
1971 (the PG Act). According to the Petitioner it is neither an
‘industry’ within the meaning of Section 2(j) of the ID Act nor an
‘establishment’ within the meaning of Section 2(4) of the Maharashtra
Shops and Establishments (Regulation of Employment and Conditions
of Service) Act, 2017 (the Maharashtra Shops Act). According to the
Petitioner, the Labour Court and Controlling Authority do not have
jurisdiction to entertain any proceedings against the Petitioner. With
this grievance, the present Petitions are filed.
HE HALLENGE
T C
4) These two Petitions challenge the orders dated 17 January
th
2024 passed by the Presiding Officer, 10 Labour Court, Mumbai, who
is also Controlling Authority under the PG Act. Writ Petition No.3908
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of 2025 challenges order passed on Application at Exh. C-4 filed by
Petitioner in Application (IDA) No.111 of 2023, by which the Labour
Court has rejected its prayer for dismissal of the proceedings filed
under Section 33-C(2) of the ID Act. In Writ Petition No.4146 of 2025,
Petitioner has challenged order dated 17 January 2024 passed by the
Controlling Authority under the PG Act rejecting its application below
Exh. C-4 seeking dismissal of Application (PGA) No.186 of 2023 filed
by the Respondent for payment of gratuity.
F ACTS
5) Petitioner is a cooperative housing society registered
under the provisions of Maharashtra Co-operative Societies Act, 1960
(MCS Act). The Respondent was working with the Petitioner as a
Building Manager, who was appointed vide letter of appointment
dated 5 August 2013. His services have been terminated by the
Petitioner-Society vide letter dated 15 October 2022. The Respondent
submitted Application in Form I claiming gratuity of Rs.4,67,308/- on
17 May 2023. He filed Application (PGA) No.186 of 2023 before the
Controlling Authority seeking payment of gratuity of Rs.4,67,308/-
together with interest. The Respondent also filed Application (IDA)
th
No.111 of 2023 before 10 Labour Court under the provisions of
Section 33-C(2) of the ID Act claiming total amount of Rs.3,87,000/-
being bonus and leave wages for the years 2020-21, 2021-22 and 2022-
23.
6) Upon receipt of notice in both the Applications, the
Petitioner appeared before the Labour Court, which also functions as
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the Controlling Authority under the PG Act. The Petitioner filed
written statements in both the Applications. Additionally, Petitioner
also filed applications seeking dismissal of both the proceedings on the
ground that the provisions of the ID Act and PG Act do not apply to it.
By order dated 17 January 2024, the Labour Court has rejected the
Application at Exhibit C-4 filed in Application (IDA) No.111 of 2023,
which is subject matter of challenge in Writ Petition No.3908 of 2025.
By another order passed on 17 January 2024 on Application at Exh. C-
4, the Controlling Authority has rejected the application seeking
dismissal of Application (PGA) No.186 of 2023, which is the subject
matter of challenge in Writ Petition No.4146 of 2025.
UBMISSIONS
S
7) Mr. Shukla, the learned counsel appearing for the
Petitioner would submit that a cooperative housing society is
repeatedly held to be not an industry in several judicial
pronouncements of the Apex Court and of this Court. He would
submit that the Petitioner-Society is formed only for the purpose of
managing the building occupied by its members. It does not carry out
any systematic commercial activity. That mere presence of club house
or telecommunication antennas is not a reason for holding that the
Petitioner carries out any systematic activity satisfying the tests laid
down by the Apex Court in Bangalore Water Supply and Sewerage
1
Board V/s. A. Rajappa and Ors. He would submit that in Mgt. Of
Som Vihar Apartment Owners Housing Maintenance Society Limited
2
V/s.Workmen c/o. Indian Engineering and General Mazdoor , an
1
1978(ii) SCC Page 213
2
(2002) 9 SCC 652
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association or society of apartment owners employing persons for
rendering personal services to its members is held to be not an industry
under Section 2(j) of the ID Act. That this Court in Dalamal House
3
Commercial Complex CHS and Ors. V/s. Shri S.R. Tiwari and Ors.
has also held that a cooperative housing society is not an industry.
That order passed by this Court in Dalamal House (supra) is affirmed
by the Apex Court by dismissal of the SLP. He also relies on judgment
of this Court in Arihant Siddhi Co-op. Housing Society Ltd. V/s.
4
Pushpa Vishnu More & Ors. , in which it is held that a society is not an
industry. In support of contention that a cooperative housing society is
not an industry, he also relies on judgment of this Court in Shantivan-
II Co-op. Housing Society V/s. Manjula Govind Mahida (Smt.) and
5
Another . He also relies on judgment of this Court in the Bhartiya
Friends Co-op. Housing Society Ltd. V/s. Bombay Labour Union &
6
Ors.
8) So far as Application filed by the Respondent for payment
of gratuity is concerned, Mr. Shukla would submit that a co-operative
housing society is not an ‘establishment’ within the meaning of Section
2(4) of the Maharashtra Shops and Establishment (Regulation of
Employment and Conditions of Service) Act, 2017 (Maharashtra
Shops Act). He relies on judgment of this Court in Kiran Industrial
Premises Co-op. Society Ltd., Mumbai V/s. Janata Kamgar Union,
7
Mumbai and Others.
3
Writ Petition No.1858 of 2018 decided on 17 July 2018
4
2018 SCC OnLine Bom 21459
5
2018 SCC Online Bom 21462.
6
Writ Petition No.1001 of 1997, decided on 28 March 2005.
7
2001 (4 ) Mh.L.J. 665.
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9) Mr. Shukla would accordingly submit that the Labour
Court and the Controlling Authority have erroneously rejected
Petitioner’s applications seeking dismissal of both the proceedings filed
by the Respondent. He would accordingly pray for setting aside the
impugned orders and for dismissal of the Applications filed under
Section 33-C(2) of the ID Act and the Application under the PG Act.
Mr. Shukla also submits that the Respondent was paid amount of
Rs.5,00,000/- at the time of his cessation of services towards bonus and
that no further payment under any head is payable to him.
10) Mr. Nagwekar the learned counsel appearing for the
Respondent opposes the Petitions submitting that Petitioner-Society
fulfills all the tests for being treated as an industry. That apart from
managing the personal affairs of its members, Petitioner carries out
specific commercial activity. That it has a full-fledged club house. That
it is also engaged in commercial activity of letting out of its space for
installation of telecommunication towers. Mr. Nagwekar submits that
it is too early at this stage to decide the status of the Petitioner as an
industry. That the Respondent must be given an opportunity to lead
evidence and only evidence will bear out the exact nature of activity
undertaken by the Respondent. He would therefore submit that the
Labour Court and the Controlling Authority have rightly rejected the
applications preferred by the Petitioner.
11) Mr. Nagwekar would submit that the Respondent was in
direct employment with Petitioner-Society and has been
unceremoniously terminated without paying gratuity and without
paying his legal dues. That he has invoked the jurisdiction of Labour
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Court and Controlling Authority, which would adjudicate his claims
on merits. That even security guards and other housekeeping staff
engaged through contractor are paid all benefits such as bonus,
gratuity, etc. and despite being direct employee of the Petitioner-
Society, the Respondent has been denied similar treatment.
12) Mr. Nagwekar would submit that for payment of gratuity
under the PG Act, it is not necessary to prove that the Petitioner is an
industry. That PG Act applies to every establishment, which employs
more than 10 employees. He would submit that the Respondent would
also prove status of the Petitioner as ‘industry’ within the meaning of
Section 2(j) of the ID Act and ‘establishment’ within the meaning of
Section 2(4) of the Maharashtra Shops Act. He prays for an
opportunity to lead evidence by seeking dismissal of the Petitions.
R EASONS A ND A NALYSIS
13) The Respondent was a Building Manager employed with
the Petitioner-Society, who was appointed vide letter of appointment
dated 5 August 2013. His services have been terminated by letter dated
15 October 2022. It appears that prior to his termination, the
Respondent was drawing monthly salary of Rs.90,000/-. It is the case
of Petitioner that Respondent was paid amount of Rs.5,00,000/- at the
time of his termination towards bonus and that no further payment
under any head is payable to him.
14) Respondent has not challenged his termination. He
instead believed that he was not paid bonus and leave wages for three
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years by the Petitioner-Society. He was advised to invoke jurisdiction
of Labour Court under Section 33-C(2) of ID Act, which empowers the
Labour Court to compute and direct payment of monies due to the
workman. Section 33-C(2) of the ID Act provides thus:
33-C. Recovery of money due from an employer.—
(1)
(2) Where any workman is entitled to receive from the employer any money
or any benefit which is capable of being computed in terms of money and if
any question arises as to the amount of money due or as to the amount at
which such benefit should be computed, then the question may, subject to
any rules that may be made under this Act, be decided by such Labour
Court as may be specified in this behalf by the appropriate
Government; within a period not exceeding three months:
Provided that where the presiding officer of a Labour Court considers it
necessary or expedient so to do, he may, for reasons to be recorded in
writing, extend such period by such further period as he may think fit.
15) Respondent has filed Application (IDA) No.111 of 2023
under Section 33-C(2) of ID Act for recovery of amount of
Rs.3,87,000/-, bifurcation of which is as under:-
Bonus for the year 2020-2021 – Rs.90,000/-
Bonus for the year 2021-2022 – Rs.90,000/-
Bonus for the year 2022-2023 – Rs.52,000/-
Leave Wages for the year 2020-2021- Rs.60,000/-
Leave Wages for the year 2021-2022- Rs.60,000/-
Leave Wages for the year 2022-2023- Rs.35,000/-
Total - Rs.3,87,000/-.
16) Simultaneously, the Respondent has also filed Application
(PGA) No.186 of 2023 seeking gratuity of Rs.4,67,308/- on the
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strength of 9 years of services with the Petitioner-Society. Filing of
Applications under Section 33-C(2) of the ID Act envisages that the
Respondent is a workman within the meaning of Section 2(s) and
Petitioner is an industry within the meaning of Section 2(j) of the ID
Act. Similarly, Respondent’s prayer for payment of gratuity is premised
on assumption that the PG Act applies to the Petitioner society.
17) The Petitioner is a cooperative housing society registered
under the MCS Act. It is formed by the owners of flats in the building
for its collective management. It believes that provisions of the ID Act
and PG Act are not applicable in respect of its employees and
accordingly the Petitioner sought dismissal of both the Applications
filed by the Respondent.
W HETHER A C OOPERATIVE H OUSING S OCIETY IS AN ‘I NDUSTRY ’
18) I first proceed to decide the issue of maintainability of
Application (IDA) No.111 of 2023 filed under Section 33-C(2) of the
ID Act. For invoking the provisions of Section 33-C(2), it becomes
incumbent for the Respondent to prove that he is a ‘workman’ under
Section 2(s) and that the Petitioner is an ‘industry’ within the meaning
of Section 2(j) of the ID Act. Section 2(j) of the ID Act defines the term
‘industry’ as under:-
2 Definitions
(j) “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;
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19) Thus the activity of business or trade is essential for an
entity to qualify as an industry. In Bangalore Water Supply and
Sewerage Board (supra) the Constitution Bench has laid down various
tests for determination of status of different types of entities. So far as
cooperative societies are concerned, the Apex Court has held that
generally they do not fall outside the definition of the term ‘industry’
under Section 2(j) of the ID Act. It is held that cooperatives such as
credit societies, marketing cooperatives, producers’ or consumers’
societies, etc are industries. It is held in para 126 thus:
126. Cooperative societies ordinarily cannot, we feel, fall outside Section
2(j). After all, the society, a legal person, is the employer. The members
and/or others are employees and the activity partakes of the nature of trade.
Merely because co-operative enterprises deserve State encouragement the
definition cannot be distorted. Even if the society is worked by the members
only, the entity (save where they are few and self-serving) is an industry
because the member-workers are paid wages and there can be disputes
about rates and different scales of wages among the categories i.e. workers
and workers or between workers and employer. These societies — credit
societies, marketing cooperatives, producers' or consumers' societies or apex
societies — are industries.
Thus, merely because an activity is carried out by a cooperative
society, the same would not fall outside definition of the term
‘industry’, especially when the activity partakes character of trade.
However, this would apply only when a cooperative society carries out
some form of trade like a cooperative sugar factory or a cooperative
bank or cooperative credit society, etc. These types of entities
ultimately carry out a systematic commercial activity and merely
because the business is owned by multiple persons as members of the
cooperative society, the same would not be a reason for not treating its
activity as industry. However, whether this would apply to a
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cooperative housing society which does not carry out any trade? The
answer, to my mind, appears to be in the negative. Carrying on some
form of trade or business is essential for a cooperative society to
partake character of an industry. A cooperative housing society which
merely manages the building and is formed for collective ownership of
land and building, does not carry on any trade or business and would
not qualify as an industry.
20) To decide the issue, the purpose for which cooperative
housing societies and associations of apartments are formed needs to
be appreciated. In urban areas where multi storied buildings
comprising of numerous flats are constructed, the developer/promoter
sells only the flats to the purchasers. The common areas and amenity
spaces of the building are to be used commonly by all the flat owners.
Once all the flats in the building are sold, ownership in the land and the
building is required to be conveyed by the developer/promoter to the
collective body of flat purchasers. In Maharashtra the activities of
construction, sale, management and transfer of flats used to be
governed by the Maharashtra Ownership Flats (Regulation of the
promotion of construction, sale, management and transfer) Act, 1963
(MOFA), which is now replaced by Real Estate (Regulation and
Development) Act 2016 (RERA), which is a Central Legislation.
Under both the enactments, it is incumbent for promoter/developer to
transfer the title in the land and the building in favour of collective
body of flat purchasers, which can be a cooperative society, association
of apartments or a company. Thus one of the objectives behind
formation of such collective body like a society is to secure title in the
land and building, which is collectively owned by all the flat
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purchasers. Once such collective body like a society is formed, it also
looks after maintenance of the building. Thus the collective body of flat
purchasers is not formed with the objective of carrying on any trade or
business.
21) With the rise of construction of apartments in urban areas
in India, professional management of the buildings became imminent.
Gone are the days where smaller buildings were used to be managed
through a watchman or caretaker or a security guard. Today’s modern
commercial and housing complexes require efficient management in
various areas such as maintaining cleanliness, garbage collection, lift
operations, parking management, electricity/plumbing maintenance,
club house maintenance, managing sporting activities, etc. All these
facilities are provided in a building for personal use by members. Since
members find it difficult to themselves maintain these facilities, various
personnel are required to be employed to look after and maintain those
facilities. It therefore cannot be contended that the activity of
maintaining those facilities is a commercial activity. Usually a
cooperative housing society or co-operative commercial premises
society do not have income generation sources and are largely
dependent on monthly contribution by members. However, few
buildings do have some commercial exploitation opportunities such as
renting out some of the premises in the building for putting up
hoardings or for telecommunication towers, etc. Though some income
may be generated through these activities, it does not mean that the
activity of earning remuneration through such exploitation acquires a
characteristic of a systematic trading or commercial activity for such
society. Such activities help reduce monthly contributions by the
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members and are not aimed at or performed with the objective of
running a systematic trade or business activity as an industry.
Therefore, merely because the Petitioner has installed
telecommunication towers on its building or because it earns some
income through such installation, the same would not ipso facto
convert activity of the society into a systematic commercial activity
constituting an industry.
22) It is another thing if a co-operative housing society or
association of apartments is found to be engaged in any systematic
commercial activity such as running of a store /restaurant or running a
club house for outsiders, operating banquet hall for commercial
exploitation by outsiders, etc. and if any employees are appointed to
exclusively look after those commercial activities. In such a case, if it is
proved that the employees look after the commercial activities
undertaken by the society, such activity may come in the definition of
the term ‘industry’. However mere employment of employees by co-
operative housing society or association of apartments for offering
services to the members would not bring activities of such society into
the definition of the term ‘industry’ within the meaning of Section 2(j)
of the ID Act.
23) The issue of status of a cooperative society or an
association of apartments as ‘industry’ fell for consideration before the
Apex Court in Mgt. of Som Vihar Apartment Owners Housing
Maintenance Society Limited (supra). The Apex Court held in
paragraph 7 as under:-
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7. Indeed this Court in Rajappa’s case (supra) noticed the
distinction between such classes of workmen as domestic servants
who render personal service to their masters from those covered
by the definition 2(J) of the Industrial Disputes Act. It is made
clear if literally interpreted these words are of very wide amplitude
and it cannot be suggested that in its sweep it is intended to
include service however rendered in whatsoever capacity and for
whatsoever reason. In that context it was said that it should not be
understood that all services and callings would come within the
purview of the definition; service rendered by a domestic servant
purely in a personal or domestic matter or even in a casual way
would fall outside the definition. That is how this Court dealt with
this aspect of the matter. The whole purpose of the Industrial
Disputes Act is to focus on resolution of industrial disputes and
the regulation will not meddle with every little carpenter or a
blacksmith, a cobbler or a cycle repairer who come outside the
idea of industry and industrial dispute. This rationale which
applies all along the line to small professions like that of domestic
servants would apply to those who are engaged by a group of flat
owners for rendering personal services even if that group is not
amorphous but crystalised into an Association or a society. The
decision in Rajappa’s case if correctly understood is not an
authority for the proposition that domestic servants are also to be
treated to be workmen even when they carry on work in respect of
one or many masters. It is clear when personal services are
rendered to the members of a society and that society is
constituted only for the purposes of those members to engage the
services of such employees, we do not think its activity should be
treated as an industry nor are they workmen. In this view of the
matter so far as the appellant is concerned it must be held not to
be "industry". Therefore, the award made by the Tribunal cannot
be sustained. The same shall stand set aside.
(emphasis added)
Thus, in Mgt. of Som Vihar Apartment Owners Housing Maintenance
Society Limited the Apex Court has held that when personal services
are rendered to the members of the Society and where the Society is
constituted only for the purposes of those members, the Society cannot
be treated as industry nor employees can be treated as workmen.
24) The issue of co-operative society of residential flats or
commercial premises not being an industry has also been repeatedly
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decided by this Court. It would be apposite to make a quick reference
to those judgments. In the Bhartiya Friends Co-op. Housing Society
Ltd. (supra) learned Single Judge of this Court referred to the judgment
in Som Vihar (supra) and held in paragraph 3 as under:-
3. This issue is no longer res integra. In the case of Management of
SOM Vihar Apartment Owners Housing Maintenance Society Ltd.
v/s. Workmen C/o. Indian Engineering and General Mazdoor, 2001
LLR 599,2001 LLR 599,2001 LLR 599, the Apex Court after
considering the judgment in the case of Bangalore Water Supply
(supra), Kamani Properties Ltd. v/s State of West Bengal & Ors.,
AIR 1990 SC 2047AIR 1990 SC 2047AIR 1990 SC 2047 and T.K.
Ramesan v/s. A.O. Thomas, Secretary, Maintenance Committee,
1995 Lab.I.C. 8131995 Lab.I.C. 8131995 Lab.I.C. 813 held that a
housing society does not fall within the purview of the term
‘industry’ as defined under section 2(j) of the Industrial Disputes Act.
Under section 3(7) of the MRTU & PULP Act, ‘industry’ has been
defined in relation to which the Central Act, that is, the Industrial
Disputes Act applies, as one which is defined under clause (j) of
section 2 of the Central Act. Since a cooperative society is not an
industry within the meaning of section 2(j) of the Industrial Disputes
Act, the provisions of the MRTU & PULP Act cannot apply to the
Petitioner-Society.
25) In Arihant Siddhi Co-op. Housing Society Ltd. (supra) the
learned Single Judge of this Court has held in paragraph 4 as under:-
4. This Court, in its judgment in the case of M/s. Shantivan-II
Co. Op. Hsg. Society vs. Smt. Manjula Govind Mahida1 has
considered whether a cooperative housing society can be termed as
an industry within the meaning of Section 2(j) of the Industrial
Disputes Act merely because it carries on some commercial activity,
not as its predominant activity, but as an adjunct to its main activity.
This Court has held that such society is not an industry. In a case like
this, that is to say, where there is a complex of activities, some of
which may qualify the undertaking as an industry and some would
not, what one has to consider is the predominant nature of services or
activities. If the predominant nature is to render services to its own
members and the other activities are merely an adjunct, by the true
test laid down in the case of Bangalore Water Supply and Sewerage
Board vs. A. Rajappa2, the undertaking is not an industry.
(emphasis added)
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26) Lastly, in Dalamal House Commercial Complex CHS and
Ors. (supra) the learned Single Judge of this Court has held in
paragraphs 3 and 4 as under:-
3. This court in M/s ShantivanII Cooperative Housing Society Vs.
Smt. Manjula Govind Mahida, has considered a similar controversy.
The cooperative society in that case was alleged to be carrying on
commercial activities through licensing of its terrace for erection of
mobile towers. This court relying on the test laid down in Banglore
Water Supply and Sewerage Board Vs. A. Rajappa and ors. held that
if predominant nature of services undertaken by the cooperative
society was to render services to its own members and the purported
commercial activities were a mere adjunct to these services, the
society could not be termed an industry. This Court in M/s
ShantivanII Cooperative Housing society observed that the case of
Somvihar Apartment Owners Housing Maintenance Society limited
Vs. Workmen c/o Indian Engineering and General Mazdoor, on
which reliance was placed by the complainants and the ratio of which
was applied by the Industrial Court, has no application to such case.
4. Accordingly, the impugned order of Industrial Court suffers from a
serious error of jurisdiction. Rule is accordingly made absolute and
the petition is allowed. The complaint before the Industrial Court is
quashed and set aside. No order as to costs. Though the petition is
disposed of on the basis of law declared by this court, it is expected
that the parties nevertheless would try and sit together and sort out the
dispute of wages amicably.
The Special Leave Petition preferred challenging the judgment in
Dalamal House Commercial Complex CHS (supra) has been dismissed
by the Supreme Court by order dated 12 July 2021.
27) It is thus a settled position that a cooperative society does
not fit into the definition of the term ‘industry’. I am therefore of the
view that the Petitioner cannot be treated as an ‘industry’ within the
meaning of Section 2(j) of the ID Act in view of the settled law
discussed above.
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28) The Labour Court has egregiously erred in dismissing
Petitioner’s application filed in Application (IDA) No.111 of 2023
holding that the Respondent needs to be given an opportunity to lead
evidence. Even if the Respondent leads evidence, he would still not be
able to demonstrate that the Petitioner-Society runs any activity akin to
an industry. Affidavit-in-reply filed in Writ Petition No.3908 of 2025
refers to following documents:-
A. Account Statement of the Opponent for Aug & September 2018
(Receipt & Payments) - pages 1 to 3. Hereto annexed and marked
exhibit 'A' is a copy of statement of account.
B. Balance Sheet till 31-3-2021 & 31-3- 2023 pages 4 & 5. Hereto
annexed and marked exhibit 'B' is a copy of Balance Sheet.
C. Statement of Income of the Applicant provided by the Society -
page 6. Hereto annexed and marked exhibit 'C' is a copy of
Statement of Income of the Applicant provided by the Society.
D. Form 16-A till 31-3-2023 - pages 7 to 9 Hereto annexed and
marked exhibit 'D' is a copy of Form 16-A.
E. Vodafone Antenna photograph taken by the Applicant on 15-
10-2022 - page Hereto annexed and marked exhibit 'E' is a copy of
Vodafone Antenna photograph.
F. Airtel Antenna photograph taken by the Applicant on 15-10-
2022 - page 11. Hereto annexed and marked exhibit F is a copy of
Airtel Antenna photograph.
G. Tata Antenna photograph taken by the Applicant on 15-10-
2022 - page 12. Hereto annexed and marked exhibit 'G' is a copy of
Tata Antenna photograph.
H. Club House on Terrace photographs taken by the Applicant on
15-10-2022- page 13 to 17. Hereto annexed and marked exhibit 'H'
is a copy of Club House on Terrace photographs.
29) Mere installation of telecommunication antennas by the
Petitioner-Society for reducing monthly maintenance charges of its
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members cannot be treated as a systematic activity for treating it as an
‘industry’. Similar is the position in respect of club house of the
Petitioner-Society. It is not the contention of the Petitioner that
membership in the club house is allowed for outsiders. Club house is
being operated for personal use of the members and merely because
operation of the club house involves incurring of large-scale
expenditure, it would still not mean a systematic commercial activity
for treating the same as an ‘industry’.
30) In my view therefore, the Labour Court has erred in
dismissing the Application (IDA) No.111 of 2023 filed by the
Petitioner.
HETHER A OOPERATIVE OUSING OCIETY IS AN
W C H S
‘E STABLISHMENT ’ FOR APPLICATION OF PG A CT ?
31) So far as the Respondent’s claim for payment of gratuity is
concerned, the PG Act applies to the following entities under sub-
section (3) of Section 1 of the PG Act:-
1. Short title, extent, application and commencement
xxx
(3) It shall apply to—
(a) every factory, mine, oilfield, plantation, port and railway
company;
(b) every shop or establishment within the meaning of any
law for the time being in force in relation to shops and
establishments in a State, in which ten or more persons
are employed, or were employed, on any day of the
preceding twelve months;
(c) such other establishments or class of establishments, in
which ten or more employees are employed, or were
employed, on any day of the preceding twelve months, as
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the Central Government may, by notification, specify in
this behalf.
(3A) A shop or establishment to which this Act has become
applicable shall continue to be governed by this Act
notwithstanding that the number of persons employed therein at
any time after it has become so applicable falls below ten.
(emphasis added)
32) Section 2(f) of the PG Act defines the term ‘employer’ as
under:-
2. Definitions.—In this Act, unless the context otherwise requires,
—
xxx
(f) “employer” means, in relation to any establishment, factory,
mine, oilfield, plantation, port, railway company or shop—
(i) belonging to, or under the control of, the Central
Government or a State Government, a person or
authority appointed by the appropriate Government for
the supervision and control of employees, or where no
person or authority has been so appointed, the head of the
Ministry or the Department concerned,
(ii) belonging to, or under the control of, any local authority,
the person appointed by such authority for the
supervision and control of employees or where no person
has been so appointed, the chief executive officer of the
local authority,
(iii) in any other case, the person, who, or the authority
which, has the ultimate control over the affairs of the
establishment, factory, mine, oilfield, plantation, port,
railway company or shop, and where the said affairs are
entrusted to any other person, whether called a manager,
managing director or by any other name, such person;
(emphasis added)
33) Thus, every ‘establishment’ within the meaning of law
enacted by the State Government is governed by the provisions of the
PG Act subject to employment of 10 or more persons. In State of
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Maharashtra shops and establishments are governed by provisions of
the Maharashtra Shops Act.
34) Under Section 2(4) of the Maharashtra Shops Act, the
term ‘establishment’ has been defined as under:-
2. Definition.— In this Act, unless the context otherwise requires,
—
xxx
(4) “establishment” means an establishment which carries on, any
business, trade, manufacture or any journalistic or printing work,
or business of banking, insurance, stocks and shares, brokerage or
produce exchange or profession or any work in connection with,
or incidental or ancillary to, any business, trade or profession or
manufacture; and includes establishment of any medical
practitioner (including hospital, dispensary, clinic, polyclinic,
maternity home and such others), architect, engineer, accountant,
tax consultant or any other technical or professional consultant;
and also includes a society registered under the Societies
Registration Act, 1860 (21 of 1860), and a charitable or other trust,
whether registered or not, which carries on, whether for purposes
of gain or not, any business, trade or profession or work in
connection with or incidental or ancillary thereto; and includes
shop, residential hotel, restaurant, eating house, theatre or other
place of public amusement or entertainment; to whom the
provisions of the Factories Act, 1948 (63 of 1948), does not apply;
and includes such other establishment as the State Government
may, by notification in the Official Gazette, declare to be an
establishment for the purposes of this Act;
(emphasis added)
Thus, Section 2(4) of the Maharashtra Shops Act includes every
establishment carrying on the business, trade, manufacture or other
enumerated activities and includes even a society registered under the
provisions of Societies Registration Act, 1860 or a charitable or other
trust. Mr. Shukla has contended that Section 2(4) of the Maharashtra
Shops Act thus consciously excluded a cooperative society registered
under the MCS Act, 1960. However, that alone cannot be a factor for
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inferring that the Legislature has intended to exclude every cooperative
society from application of provisions of PG Act. To illustrate, a
cooperative bank or cooperative sugar factory or cooperative credit
society would be governed by the provisions of the PG Act
notwithstanding the fact that they are registered under the provisions of
MCS Act. This is because those societies carry on commerce, trade or
business.
35) On perusal of definition of the term ‘establishment’ under
Section 2(4) of the Maharashtra Shops Act, it is seen that the
establishments covered under the definition are usually engaged in
some sort of commercial activities. The term ‘establishment’ defined
under Section 2(4) of the Maharashtra Shops Act essentially refers to
entities engaged in some of sort of commercial activities. Carrying on
some form of business, trade, manufacture or any journalistic or
printing work, or business of banking, insurance, stocks and shares,
brokerage or produce, exchange or profession is essential for coverage
of an entity in the definition of the term ‘establishment’. Section 2(4) of
the Maharashtra Shops Act does not bring within its net any entity,
which does not carry out a commercial, business or trade activity. To
illustrate, while bringing in its net a charitable or other trusts, Section
2(4) of the Maharashtra Shops Act adds the caveat of carrying on
business, trade or profession. Thus, a charitable trust, which does not
carry on any business, trade or profession or any work in connection
with or incidental or ancillary thereto would not be covered by the
definition of the term ‘establishment’. Thus, the activity of business,
trade or commerce is essential for coverage of any entity in the
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definition of the term ‘establishment’ under the Maharashtra Shops
Act.
36) There is also another angle from which the issue of
coverage of cooperative housing societies or associations of apartments
in definition of the term ‘establishment’ can be considered. There can
be no doubt that a residence or house is not an ‘establishment’ within
the meaning of Section 2(4) of the Maharashtra Shops Act. If
employees are engaged to look after maintenance of a residential
bungalow, the said bungalow will not be an establishment within the
meaning of Section 2(4) of the Maharashtra Shops Act. This is because
activity of owner of that bungalow, who resides therein, in engaging
employees/workers to look after the bungalow has no connection with
any commerce, trade, business or profession. If a singular bungalow is
not an establishment, whether multiple bungalows, managed through a
collective body like a co-operative society, would become an
establishment within the meaning of Section 2(4) of the Maharashtra
Shops Act? The answer, to my mind, appears to be in the negative.
Similarly, when a residential flat in a building is not an ‘establishment’
within the meaning of Section 2(4) of the Maharashtra Shops Act, an
entity formed by all the residents for collective management of their
houses would also not be an establishment within the meaning of
Section 2(4) of the Maharashtra Shops Act. Merely because house
owners come together and decide to manage their houses and building
collectively and for that purpose, employ workers/employees,
association of house owners would not be an ‘establishment’ within the
meaning of Section 2(4) of the Maharashtra Shops Act. In my view,
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therefore, provisions of PG Act would not apply to co-operative society
or co-operative commercial premises/ societies.
37) The issue as to whether a cooperative society is covered
by the definition of the term ‘establishment’ attracted attention of this
Court in Kiran Industrial Premises Co-op. Society Ltd. (supra). The
issue before the learned Single Judge of this Court was about
application of provisions of Minimum Wages Act, 1948 and of
Maharashtra Recognition of Trade Unions and Prevention of Unfair
Labour Practices Act, 1972 (MRTU & PULP Act) to a cooperative
society of industrial premises. Petitioner therein was a registered co-
operative society under the MCS Act and had employed four persons
as watchmen. The society had 200 members as owners of industrial
units/ galas. The Society had several commercial premises in which
commercial and trading activities were undertaken by owners of the
units. On behalf of the watchmen, the union filed complaint of unfair
labour practice under Section 28 of the MRTU & PULP Act
complaining about non-payment of wages prescribed under the
Minimum Wages Act. Item 17 of the Part I of the Schedule to the
Minimum Wages Act covers/includes employment in any shop or
commercial establishment. In the light of entry No.17 in Part-I of the
Schedule, this Court examined definition of the term ‘commercial
establishment’ under the then Bombay Shops and Establishments Act,
1948. This Court held in paragraphs 2 and 3 as under:-
2. We have to bear in mind that the petitioner society is a separate
independent and distinct entity and a legal and juristic personality
independent of its members who are the share holders of the
society owning the premises in their own right. The business, trade
or commercial activities of the members cannot be mixed up with
the activities of the society and by no stretch of imagination can it
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be said that the society is also carrying on the business, trade or
commercial activities because its members are engaged in such
activities, besides, it is neither pleaded nor proved, nor is there even
a shred of evidence or material on record to conclude or even to
infer that the society is engaged in any business, trade or
commercial activities. The workmen have not led any evidence to
prove that commercial activities were carried on by the society.
There is a statement made in their evidence about the activities in
the premises of the members but nothing about the society's
activities. On the contrary the society's secretary has clearly stated
that the society's work is of maintaining the society. Even in his
cross-examination not even a whisper of activities of the society is
put to him. No doubt a few questions were put to him about the
commercial activities in the galas or the premises of the society
owned by the members. The entire building is of industrial galas
but that does not make the society itself a commercial
establishment carrying on any trade, business or any commercial
activities. It is clear that the society is a collective person of the
members, who have organised themselves to maintain the society
and to carry on its affairs in accordance with the bye-laws, rules
and the Act. It is a distinct legal entity from the members. It
collects the maintenance charges, service charges, property and
water charges payable to the municipal corporation. It acts as a
statutory agent to collectively represent the members. It looks after
the maintenance of the building and renders services such as
collecting the prescribed charges from the individual members and
disburse or spend them in accordance with law for repairs, water
charges, property taxes, payment of wages etc. and keeps proper
accounts and get the accounts approved annually in its general
meeting. There is no evidence or material to conclude or to infer
what other activities are engaged in by the society. There is no
pleading or proof to say that the society itself is carrying on the
trade, business or a commercial activity such as sale or purchase of
the premises or any goods or merchandise and it earns any income
therefrom.
3. Let us now analyse the legal provisions. The claim of the
employees for minimum wages is under the Minimum Wages Act.
Item 17 of the Part 1 of the Schedule reads as under :-
"17 :- Employment in any shop or commercial establishment
(not being an employment in any bank or an employment
which is included) under any of the other entries in this
Schedule.
Explanation.- For the purpose of this entry, the expressions,
"Shop" and "Commercial Establishment" shall have the
meaning respectively assigned to them in the Bombay Shops
and Establishments Act, 1948."
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The employees are claiming wages as prescribed for the
commercial establishment under the Act and alleged failure to be
an unfair labour practice under Item 9 of Schedule IV of the
M.R.T.U. & P.U.L.P. Act. The term "commercial establishment"
has been defined under the Bombay Shops and Establishments Act
in Section 2(4) which reads as under :-
'Commercial establishment' means an establishment which
carried on, any business, trade or profession or any work in
connection with, or incidental or ancillary to any business,
trade or profession (and includes establishment of any legal
practitioner, medical practitioner, architect, engineer,
accountant, tax consultant or any other technical or
professional consultant and also includes) a society registered
under the Societies Registration Act, 1860 [XXI of 1860) and
a charitable or other trust, whether registered or not, which
carries on (whether for purposes of gain or not) any business,
trade or profession or work in connection with or incidental
or ancillary thereto but does not include a factory, shop,
residential hotel, restaurant, eating house, theatre or other
place of public amusement or entertainment."
The concept of "commerce" or "commercial" is well known and
has been the subject matter of umpteen number of Judicial
decisions and I need not dwell on that point. In my opinion based
on the facts of the present case, the society cannot be said to be
engaged in any commercial venture or a business, trade or
profession. There is no investment of capital nor is there any
motive for profit or gain. Its a simple activity confined to the
maintenance of the premises and payment of different statutory
dues to the prescribed authorities and to employ the services of
some persons to carry out such activities. There is no commercial
aim or purpose to engage in the activities of the society. It is
possible that out of its total receipts from the members, the society
might have excess amount over its expenditure but that is not the
test to hold that these activities are commercial in nature to dub
the society as a commercial establishment. There is neither an
object of profit nor a risk of making loss in the maintenance
activities of the society. I, therefore, hold that the petitioner society
is neither "a commercial establishment" nor "an industry" to attract
the provisions of the Minimum Wages Act, 1948. ...
(emphasis added)
38) Thus, in Kiran Industrial Premises Co-op. Society Ltd,
this Court drew a distinction between commercial activity carried out
by members in premises of the society and the activity of the society
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itself in managing the premises. The issue involved in the present case
appears to be squarely covered by the judgment of this Court in Kiran
Industrial Premises Co-op. Society Ltd. The Maharashtra Shops Act
has replaced the Bombay Shops and Establishments Act, 1948. The
term ‘commercial establishment’ appearing in Section 2(4) of the
Bombay Act (Act of 1948) is now replaced by the term ‘establishment’
under Section 2(4) of the Maharashtra Shops Act. However, both
under the definition of the term ‘commercial establishment’ under the
Act of 1948 and ‘establishment’ under the Maharashtra Shops Act, the
essential requirement is that the entity must carry on some trade,
commerce or business. A cooperative housing society or an association
of apartments formed for the purpose of collective management of
affairs of the building cannot be said to be engaged in a business, trade
or commerce. It is only those societies or associations which carry out
some form of trade, business or commerce which would be covered by
definition of the term ‘establishment’ under the Maharashtra Shops Act
and would be liable to pay gratuity if 10 or more employees are
employed. In the present case, Petitioner society does not carry out any
trade or business.
39) The contention of Respondent that the employees of
contractors engaged by the Petitioner society like security guards,
housekeeping staff, etc. receive all statutory benefits and that the
Manager directly engaged by it must also receive all the statutory
benefits. The contention may appear to be attractive, but is misplaced.
The contractors engaged by the society work for different entities.
Those contractors are in the business of providing the workforce to
various entities. They carry on systematic activity of trade or business
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like an industry. They are also covered by definition of the term
‘establishment’ under the Maharashtra Shops Act. Therefore their
employees are paid the statutory dues, including gratuity. Merely
because such contract workers are deployed by the contractor to work
for Petitioner society, the same would not convert Petitioner into an
industry or establishment when it does not carry on any trade,
commerce or business activity.
40) In my view therefore, Petitioner society cannot be treated
as an ‘establishment’ within the meaning of the Maharashtra Shops
Act and consequently the provisions of PG Act would not apply to the
Petitioner society. The Controlling Authority has thus erred in rejecting
Petitioner’s Application seeking dismissal of Application (PGA)
No.186 of 2023.
C ONCLUSIONS
41) Conspectus of the above discussion is that the Petitioner-
Society is neither an ‘industry’ within the meaning of Section 2(j) of the
ID Act nor an ‘establishment’ within the meaning of Section 2(4) of the
Maharashtra Shops Act, making the provisions of the PG Act
inapplicable to it. Therefore, the proceedings filed by the Respondent
under Section 33-C(2) of the ID Act and under the PG Act before the
Labour Court and the Controlling Authority respectively are not
maintainable and liable to be dismissed.
O RDER
42) Petitions accordingly succeed and I proceed to pass the
following order:-
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(i) Order dated 17 January 2024 passed on Application
at Exh. C-4 filed in Application (IDA) No.111 of
2023 is set aside and consequently, Application
(IDA) No.111 of 2023 is dismissed.
(ii) Order dated 17 January 2024 passed on Application
at Exh. C-4 in Application (PGA) No.186 of 2023 is
set aside and consequently Application (PGA)
No.186 of 2023 is dismissed.
43) Writ Petitions are allowed in above terms and disposed of.
Rule is made absolute in both the Petitions. Considering the facts and
circumstances of the case there shall be no orders as to costs.
[SANDEEP V. MARNE, J.]
Signed by: Megha S. Parab
Designation: PA To Honourable Judge
Date: 05/01/2026 20:46:10
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