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TMI Blog1974 (4) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian business in matters of inland and foreign trade, transport, industry and manufactures, finance and all other economic subjects and to encourage Indian banking, shipping and insurance. (b) To encourage friendly feeling and unanimity among business community and association on all subjects connected with the common good of Indian business. (c) To secure organised action on all subjects mentioned above. (d) To collect and disseminate statistical and other information and to make effort for the spread of commercial and economic knowledge. (e) To take all steps by lawful means which may be necessary for promoting supporting or opposing legislation or other action affecting the aforesaid economic interests and in general to take the initiative to assist and promote trade commerce and industry. (f) To provide for arbitration in respect of disputes arising in the course of trade, industry or transport or other business matters, and to secure the services of expert technical and other men to that end if necessary or desirable. (g) To conduct, undertake the conduct of and participate in national and international exhibitions. (h) To set up museums or show-rooms, to exhibit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under the Act. The Federation failed to comply with the direction and contended that it was not an "establishment" as defined in Section 2(9) of the Act. This contention did not find favour with the Chief Inspector who, in consequence, made a complaint under the Act for prosecution of the Secretary of the Federation (Respondent 2 herein) under the appropriate penal provisions of the Act in the Court of the Magistrate, 1st Class, Parliament Street, New Delhi. The Federation then moved the High Court under Article 226 of the Constitution for bringing up and quashing the order, dated February 4, 1964 passed by the Chief Inspector (Appellant 2). They further prayed for a writ of Prohibition directing the Magistrate not to proceed with the complaint. 5. Before the High Court, the contention of the Federation was that the premises in which the registered office of the Federation is located is not a "commercial establishment" within the meaning of Section 2(5) of the Act which, in consequence had no application. 6. From the side of the present appellant, at first, a half-hearted attempt was made to show that the Federation is carrying on a profession as it is &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uot;establishment" and "shop" given in Sub-sections (5), (9) and (27) of Section 2 are material for our purpose. They read : "Commercial establishment" means any premises wherein any trade, business or profession or any work in connection with, or incidental or ancillary thereto is carried on and includes a society registered under the Societies Registration Act, 1860, and charitable or other trust, whether registered or not which carries on any business, trade or profession or work in connection with or incidental or ancillary thereto, journalistic and printing establishments, quarries and mines not governed by the Mines Act 1952, educational or other institutions run for private gain and premises in which business of banking, insurance, stocks and shares, brokerage or produce exchange is carried on, but does not include a shop or a factory registered under the Factories Act, 1948, or theatres, cinemas, restaurants, eating houses residential hotels, clubs or other places of public amusement or entertainment. "Establishment" means a shop, a commercial establishment, residential hotel, restaurant, eating house, theatre or other places of public a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... added that a half-hearted argument was advanced that its activity was a 'profession' and that, too, was soon given up. In these circumstances, it is submitted, the appellants should not be allowed to commit a volte-face and take up in this Court a stand which was either not taken or was given up in the High Court. In the alternative, learned Counsel contends that even if this plea is allowed to be raised, then also the primary activity of the Federation cannot, by any stretch of reasoning, be called a 'trade, business of profession' within the definition of "commercial establishment" given in the Act. According to Counsel, the activity of the Federation is one of general utility; the only source of its income is from subscriptions. The occasional exhibitions or museums organised by it are activities which are only incidental of ancillary to the primary charitable object of the Federation. No dividends are declared, no profits are shared or divided among the individual members, and no goods are sold or exchanged. In support of his contentions, learned Counsel has referred to Commissioner of Income-tax v. Andhra Chamber of Commerce: [1965]55ITR722(SC) . 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of workmen. 18. It will be seen that "any business, trade" is an element common to the definitions of "commercial establishment" and "industry" given in the respective statutes. That was why the question, whether the activity of the Federation is a business or trade activity, was directly and substantially in issue in R.K. Mittal's case. Therein, the Memorandum of Association, Articles of Association and the other material placed before the court were closely examined. The entire case law was surveyed. The contentions now canvassed were also raised and considered in that case. Jagnmohan Reddy J. speaking for the Court, posed the question for decision thus : In our view the linch-pin of the definition of industry' is to ascertain the systematic activity which the organization is discharging namely, whether it partakes the nature of a business or trade; or is an undertaking or manufacture or calling of employers. (emphasis added) 19. The answer given to this question has been correctly summed up in the head-note of the Report, as under: The above being the position in law the mere fact that the appellant Federation had charitable aims and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the concerned authorities the specific difficulties experienced by the trade in the day today business and endeavours to attain for the traders and industrialists those material advantages by unified action which they may not be able to achieve in their individual capacity. It helps businessmen and industrialists by securing for them the services of expert technical men (vide Clauses (f) and (k) of the Memorandum of Association). It undertakes regular publication of periodicals, bulletins. Reviews etc. for the benefit of businessmen, big or small and whether or not they are members of the federation. These publications are available on payment of subscription or price even to individual businessmen or traders who are not members of the Federation. All these are business activities are carried on systematically. We therefore do not think that R.K. Mittal's case (supra) was incorrectly decided and needs reconsideration. 23. It is true that in R.K. Mittal's case (supra) it was held that these activities of the Federation are also in the nature of material services within the wider definition of 'industry'. Though the rendering of services is not specifically mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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