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V. Sasidharan v. Peter And Karunakar And Others
Factual and Procedural Background
V. Sasidharan, the appellant, was employed as a clerk in a firm of lawyers (Respondent 1). His services were terminated on 3 February 1977. Challenging the termination, he filed an appeal before the Appellate Authority constituted under the Kerala Shops and Commercial Establishments Act, 1960 (“the Act”). The firm raised a preliminary objection that a lawyer’s office is not a “commercial establishment” under the Act. On 11 August 1977, the Appellate Authority upheld the objection and dismissed the appeal.
The appellant then moved the High Court of Kerala by way of a writ petition (O.P. No. 3380 of 1977-78), which a Single Judge dismissed. His Letters Patent Appeal (W.A. No. 11 of 1978) also failed on 26 July 1978. The present appeal, brought to the Supreme Court by special leave, challenges the Division Bench judgment of the Kerala High Court.
Legal Issues Presented
- Whether the office of an individual lawyer or a firm of lawyers constitutes a “commercial establishment” within the meaning of Section 2(4) of the Kerala Shops and Commercial Establishments Act, 1960.
Arguments of the Parties
Appellant’s Arguments
- A lawyer’s office should be treated as a “commercial establishment” because the persons employed there are “mainly engaged in office work,” bringing it within the second limb of Section 2(4) of the Act.
Respondents’ Arguments
- The Act contemplates entities engaged in trade, business, or similar commercial activity; a lawyer’s office is a professional workplace and therefore lies outside the statutory definition.
- The statutory scheme (working hours, opening and closing times, etc.) is ill-suited to legal offices, indicating legislative intent to exclude them.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bangalore Water-Supply & Sewerage Board v. R. Rajappa, (1978) 2 SCC 213 | Defined the term “industry” broadly to cover activities systematically undertaken for production/distribution of goods or rendering services with the help of employees. | Distinguished: the present issue concerns “commercial establishment,” not “industry”; therefore, the ratio was held inapplicable. |
| Federation of Indian Chambers of Commerce and Industry v. Union of India, (1975) 3 SCC 64 | Recognised that the Delhi statute’s definition of “commercial establishment” was wide enough to include even a registered society or charitable trust. | Cited to show that the Kerala definition is narrower; therefore, FICCI’s inclusion under a different statute does not control the present interpretation. |
Court's Reasoning and Analysis
1. The Court examined Section 2(4) of the Act, breaking it into five categories of “commercial establishment.” A lawyer’s office plainly does not fit within the categories of hotels, theatres, or government-notified establishments.
2. To fall under clauses (1) or (2), the office must first be an “establishment,” which in turn requires it to be a “shop” (Section 2(8) read with Section 2(15)). A “shop” is a place where trade or business is carried on or services are rendered to “customers.” Lawyers do not conduct trade or business, nor do they render services to “customers” in the commercial sense; hence their offices are not “shops.”
3. The appellant’s reliance on the phrase “administrative service in which persons employed are mainly engaged in office work” was rejected. A lawyer’s office is not an “administrative service,” and construing it so would do violence to the statutory language.
4. Applying the principle that words take colour from their context, the Court held that the Act targets establishments of a commercial or industrial character, not liberal professions.
5. The Court drew support from the Act’s substantive provisions on working hours, holidays, wages, and health measures, observing they were designed for commercial undertakings and would fit awkwardly with the functioning of legal offices.
6. Precedents cited by the appellant were distinguished: the Bangalore Water-Supply decision concerned “industry,” not “commercial establishment,” and the FICCI case turned on a broader statutory definition in another enactment.
7. Consequently, both the Single Judge and Division Bench decisions were affirmed.
Holding and Implications
APPEAL DISMISSED.
Immediate Effect: The appellant’s challenge fails; the termination dispute remains outside the jurisdiction of authorities under the Kerala Shops and Commercial Establishments Act because a lawyer’s office is not covered by the Act.
Broader Implications: The decision clarifies that legal offices in Kerala do not constitute “commercial establishments” under Section 2(4) of the 1960 Act, thereby excluding them from the Act’s regulatory framework. No new expansive precedent is set; the ruling is confined to interpreting the specific statutory language.
Y.V Chandrachud, C.J— The question which arises for consideration in this appeal is whether a firm of lawyers is a “commercial establishment” within the meaning of the Kerala Shops and Commercial Establishments Act, 1960 (referred to herein as “the Act”).
2. The appellant, V. Sasidharan, was working as a clerk in a firm of lawyers which is Respondent 1 to this appeal. Respondents 2, 3 and 4 are partners of the firm. The services of the appellant were terminated by the firm on February 3, 1977, whereupon he preferred an appeal to the Appellate Authority under the Act. A preliminary objection was raised in that appeal by the firm on the ground that it was not a commercial establishment. By a judgment dated August 11, 1977, the Appellate Authority upheld the preliminary objection and dismissed the appeal.
3. Being aggrieved by that judgment, the appellant filed a writ petition (OP No. 3380 of 1977-78) in the High Court of Kerala. A learned Single Judge of the High Court dismissed that writ petition, against which the appellant filed a letters patent appeal (WA No. 11 of 1978). That appeal was dismissed on July 26, 1978. This appeal by special leave is filed against the judgment of the Division Bench of the Kerala High Court.
4. The decision of the question whether Respondent 1 firm is a commercial establishment, must naturally depend upon the definition of that expression and the definitions of cognate expressions which are contained in the Act.
5. Section 2(4) of the Act defines “commercial establishment” as follows:
“‘Commercial establishment’ means a commercial or industrial or trading or banking or insurance establishment, an establishment or administrative service in which the persons employed are mainly engaged in office work, hotel, restaurant, or boarding or eating house, cafe or any other refreshment house, a theatre or any other place of public amusement or entertainment and includes such other establishment as the Government may, by notification in the Gazette declare to be a commercial establishment for the purposes of this Act, but does not include a factory to which all or any of the provisions of the Factories Act, 1948 (Central Act 63 of 1948) apply.”
6. Section 2(8) defines “establishment” to mean a shop or a commercial establishment. Section 2(15) defines “shop” as follows:
“‘Shop’ means any premises where any trade or business is carried on or where services are rendered to customers, and includes offices, store rooms, godowns or warehouses, whether in the same premises or otherwise, used in connection with such trade or business but does not include a commercial establishment or a shop attached to a factory where the persons employed in the shop are allowed the benefits provided for workers under the Factories Act, 1948 (Central Act 63 of 1948).”
It is on the basis of these definitions that we shall have to decide whether the
office of a lawyer or of a firm of lawyers is a commercial establishment within the meaning of the Act.
7. The definition contained in Section 2(4) may be simplified by restating it in separate clauses as follows: (1) Commercial Establishment means five different kinds of establishments: commercial, industrial, trading, banking or insurance; (2) Commercial Establishment means an establishment or administrative service in which the persons employed are mainly engaged in office work; (3) Commercial Establishment means a hotel, restaurant, boarding or eating house, a cafe or any other refreshment house; (4) Commercial Establishment means a theatre or any other place of public amusement or entertainment; and (5) Commercial Establishment includes such other establishment as the Government may, by notification in the Gazette, declare to be a commercial establishment for the purposes of the Act. Commercial Establishment does not include a factory to which any of the provisions of the Factories Act, 1948 apply.
8. A lawyer's office or the office of a firm of lawyers cannot obviously fall under clauses (3) and (4) above. Nor has the Government issued any notification as contemplated by Section 2(4). The question thus narrows itself into whether a lawyer's office falls under either of the first two clauses.
9. The expression ‘establishment’ is defined by Section 2(8) to mean a shop or a commercial establishment. Since by the definition contained in the first clause of Section 2(4), a commercial establishment means an establishment, a place of work cannot be regarded as a commercial establishment unless the activity is conducted in a ‘shop’ or in a commercial establishment which is really tautological. The definition of ‘shop’ which is contained in Section 2(15) shows that in order that an establishment can be regarded as a shop, it is necessary that some ‘trade’ or ‘business’ must be carried on there or some service must be rendered to ‘customers’. The expression ‘shop’ also includes offices, warehouses, store rooms or godowns which are used in connection with the trade or business. It does not require any strong argument to justify the conclusion that the office of a lawyer or of a firm of lawyers is not a ‘shop’ within the meaning of Section 2(15). Whatever may be the popular conception or misconception regarding the role of today's lawyers and the alleged narrowing of the gap between a profession on one hand and a trade or business on the other, it is trite that, traditionally, lawyers do not carry on a trade or business nor do they render services to ‘customers’. The context as well as the phraseology of the definition in Section 2(15) is inapposite in the case of a lawyer's office or the office of a firm of lawyers.
10. Learned counsel for the appellant argues that a lawyer's office is a commercial establishment because, persons who are employed in that office are mainly engaged in office work. This argument overlooks that, under the second clause of the definition in Section 2(4), “commercial establishment” means “an establishment or administrative service in which the persons employed are mainly engaged in office work”. Partly, we go back to the same question as to whether a lawyer's office is an ‘establishment’ within the meaning of the Act. The other aspect which this argument fails to take note of is that a lawyer's office is not an “administrative service”. It seems to us doing violence to the language of the second clause of Section 2(4) to hold that a lawyer's office is an “administrative service”. This argument has therefore to be rejected.
11. The proposition is well-established that words which occur in the same context must take their colour from each other. It is unrealistic to dissect the definition clause in Section 2(4) and to catch a word here or there in order to bring a lawyer's office within the four corners of the definition of “commercial establishment”. The various clauses of that definition would show that establishments, for apart from professional offices, were within the contemplation of the Legislature.
12. For these reasons, we are of the opinion that the office of a lawyer or of a firm of lawyers is not a “commercial establishment” within the meaning of the Act. This conclusion is strengthened by the other provisions of the Act. Chapter I-A of the Act provides for registration of establishments, Chapter II for hours of work. Chapter III for holidays and leave, Chapter IV for wages, Chapter V for employment of children and women and Chapter VI for health and safety measures. Section 6 of the Act provides that no employee in any establishment shall be required or allowed to work for more than eight hours on any day or for more than 48 hours in any week. Section 8 requires that, the period of work of an employee in an establishment for each day shall be so fixed that no period shall exceed four hours and that no such person shall work for more than four hours before he has had an interval for rest of at least one hour. Under Section 10, no establishment shall, on any day, be opened earlier than and closed later than such hours as may be fixed by the Government, provided that any customer who is being served or is waiting to be served in any establishment at the hour fixed for its closing may be served during a quarter of an hour immediately following such hour. These and other cognate provisions of the Act show that a lawyer's office cannot possibly be comprehended within the meaning of the expression “commercial establishment” as defined in Section 2(4) of the Act. We are quite solicitous about the welfare of those who work in the lawyers' offices. But, there are many other ways in which their welfare can be ensured. If the current trends are any indication and if old memories fail not, the earnings of lawyers' clerks cannot, in reality, bear reasonable comparison with the earnings of employees of commercial establishments, properly so called. They, undoubtedly, work hard but they do not go without their reward. They come early in the morning and go late at night, but that is implicit in the very nature of the duties which they are required to perform and the time they spend is not a profitless pastime.
13. An argument was strongly pressed upon us on the basis of the decision of this Court in Bangalore Water-Supply & Sewerage Board v.R. Rajappa (1978) 2 SCC 213, (1978) 3 SCR 207. The High Court has rightly observed that the question which arose in that case was entirely different, namely, the sweep of the meaning of the word “industry”. The ratio of that decision is that the term “industry” covers any activity which is systematically or habitually undertaken for the production or distribution of goods or for rendering material services to the community at large with the help of employees. The question which arises in this appeal is basically different, namely, whether a lawyer's office or the office of a firm of lawyers is a commercial establishment. Considerations which were germane to the determination of the question in the Bangalore Water Supply case (1978) 2 SCC 213, (1978) 3 SCR 207 are foreign to the decision of the question before us.
14. In Federation of Indian Chambers of Commerce and Industry case (1975) 3 SCC 64, (1974) 2 LLJ 271 the question was whether the Federation of Indian Chambers of Commerce and Industry is a commercial establishments within the meaning of the Delhi Shops and Commercial Establishments Act, 1954. This Court pointed out that the definition of “commercial establishment” in that Act is so wide that the activities of a registered society or a charitable trust would also fall within the purview of that definition.
15. The learned Single Judge and the Division Bench of the Kerala High Court have dealt with the questions arising in this appeal with care. We agree with their reasoning and hold that the office of a lawyer or of a firm of lawyers is not a “commercial establishment” within the meaning of Section 2(4) of the Act.
16. The Bar Council of Kerala and the Clerks Association of the Supreme Court Bar had intervened in this matter. We must express our thankfulness to them for the assistance rendered by them.
17. In the result, the appeal is dismissed but there will be no order as to costs.
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