Amendment status not verified — confirm the current text below against the official source.
Added by Hr. Govt. Noti. No. 1/32/83-1-Lab, dated 28.2.97. 6 THE PUNJAB SHOPS AND COMMERCIAL ESTABLISHMENT ACT, 1958 COMMENTARY Commercial Establishment and Shop-Common and not Common features of: One element is common to both the expressions 'Shop' and 'Commercial establishment', namely, that there have to be premises wherein, in the case of a commercial establishment any business, trade or profession is carried on for profit and in the case of a shop where any trade or business is carried on or where services are rendered to customers. The carrying on of trade or business or profession necessarily has to have a close and intimate connection with the premises. The other requirement is that what should be carried on in those premises is trade or business or rendering of services to customers in the case of a shop, and in the case of a commercial establishment a trade or business or profession has to be carried on for profit. If the element, of rendering service is eliminated, the remaining to elements that is carrying on of trade or business are common both to a shop as well as to a commercial establishment. But a shop according to the definition does not include a commercial establishment. Therefore, the same premises cannot be at the same time a shop as well as a commercial establishment. [Ram Chander Baru Ram Vs. The State of Punjab AIR 1963 Punjab 148 (F.B.)]. Shop & Commercial Establishment - Distinction thereof: Any premises used under this Act must be construed as any specific or defined premises. It must be a place either open or built upon and in the procession and occupation of the person throughout the day and night, but not for few hours in a day for this purpose of carrying on his trade or business or rendering service to his customers. If any good are prepared or manufacturing in a premises, but actually they are sold outside the premises and no services are rendered to the customers or it is not used in any way connected with such trade or business, such premises cannot be hold to be a "Shop" under the Shops and Commercial Establishment Act. The work of repairing watches of customers for remuneration conducted systematically is a business or trade and not a profession and the premises in the occupation of the repairer wherein the work is carried or would be a shop under the Act [Khanmohd Vs. The State of A.P. (1973-Lab IC 239) (AP)] Likewise financial institution rendering service to its customers by advancing money to purchase motor vehicles in hire purchase bases, falls within the meaning of words 'Shop'. [1981 (2) Lab IC-108 (Madras) N.O.C.] Commercial Establishment-Integrated trade or business activity must take place : C. It will be seen from the definition of the phrase 'Commercial establishment’ in Sec. 2 (iv) that an integrated trade or business activity must take place at the given premises for profit. Activities though connected with trade or business in premises in an isolated form like the activity of a business traveler would not make the same a commercial establishment. Similarly, the residence of a businessman will not become a commercial establishment merely because he is thinking out schemes and making plans to either evolve new business or to enlarge the existing one. No one can deny that it is business activity. To put it shortly, only those premises can be said to be a commercial establishment where two minds meet to strike a business deal for profit. It is hardly material by what means they meet. Any trade or business requires two or more 7 THE PUNJAB SHOPS AND COMMERCIAL ESTABLISHMENT ACT, 1958 individuals dealing with one another and if such dealing does take place in any given premises, or is intended to take place therein, they can be said to a commercial establishment but not otherwise. The purpose of the meeting of the two minds has to be for profit, though the profit may not be the necessary result. [Ram Chander Baru Ram Vs. The State of Punjab AIR 1963 Punjab 148 (F.B.)]. Business and profession-Distinction thereof: A business must be distinguished from a profession. In the former, the very object and motive is only to earn profit, where as in the case of a profession, although a professional earns some money and carries it on as a means of livelihood, it can by no stretch of reasoning be called a trade or business. [Khan Mohamad Vs. State of AP (1973 Lab. IC 239)]. A legal practitioner who attends his establishment for a period of one and a half days each week cannot but be said to be a restriction which is not reasonable nor in public interest. The legal profession as such cannot be equated at par with any other shop or establishment under the Shop Act because of embargo, the legal practitioner will not have his chamber opened for any purpose but so ever for one and a half days in a week. Even for exercise of his intellectual skill. Hence inclusion of establishment of legal practitioners within the definition of commercial establishment is violative of Article 19(1) (g) of Constitution of India. [Dipti Kumar Basu & others Vs. Chief Inspector of (Shops & Establishment) and others 1986 Lab IC 1718 (Cal.)]. Likewise, the inclusion of the establishment of legal practitioners in definition of commercial establishment, does not answer the text of business and the inclusion would be violative of Article 14 of the Constitution of India and also on the ground of business. [Narendera K. Chand Fuladi & others V/s. State of Maharashtra 1986 Lab IC 318 (Bom.)]. It has also been laid down by the Hon'ble Punjab & Haryana High Court that doctor's clinics are not termed as commercial establishment. [Kuldeep Singh Gill Vs. State of Punjab & others 1989 (2) CIR-87 (P&H)]. Work incidental or ancillary to any business or trade is a commercial activities, but activities of State Marketing Board or its constituent Market Committee would not be incidental or ancillary to any business. Hence State Marketing Board or its constituent Committee are not commercial establishment. [Bihar State Marketing Board Vs. The Chief Inspecting Officer, Bihar and others (1985) Lab IC-1820 (Patna)]. Distinction between Charitable Institution & Commercial Establish- ment :- A club, which does not carry out any commercial activity but confines its activity for rendering service or entertainment to its members only, cannot be said to be an commercial establishment within the meaning of the professions of the Act, [Management of Tata Iron & Steel Ltd. Chief Inspecting Officer, Govt. of Bihar & others (1997 LLR 816 (Patna)] but in the club's property including its premises are let out on hire regularly to the members of the public or if its restaurant is also made open to the general public or activity of the club are such so as to enable it to make regular income by dealing with the out sides, in such a case the club may be said to be engaged in commercial activities. [Beldih Club, Jamshedpur Vs. The Presiding Officer, La- bour Court Jamshedpur & others 1991 (1) Patna Law Journal Reports 811 (Patna) (D.B.)]. The test charitable purpose in satisfied by the proof of any of the three conditions, namely, relief of the poor, education or medical relief. [P.C. Raja Ratnama Institution Vs. M/s Municipal Corp. of Delhi and others 1990 AIR 816 (S.C.)]. There 8 THE PUNJAB SHOPS AND COMMERCIAL ESTABLISHMENT ACT, 1958 cannot be any doubt whatsoever that where business activities or trade activities are being carried out, profit motive is not a relevant factor for the purpose of consideration as to whether the same comes within the purview of the word 'Industry' or establishment or not. [Beldih Club, Jamshedpur Vs. The Presiding Officer, Labour Court Jamshedpur & others 1991 (1) Patna Law Journal Reports 811 (Patna) (D.B.)]. It has been laid down by the apex court that if payment is made in the shape of fee by way of voluntary contribution, the purpose would be still remain to be charitable one. [P.C. Raja Ratnama Institution Vs. M/s Municipal Corp. of Delhi and others 1990 AIR 816 (S.C.)]. If the same is paid under compulsion than it cannot be said that the hospital is run for charitable object and since the object is not charitable, it cannot be said that the hospital is exempted from the provisions of the Act. [Management of Tata Iron & Steel Ltd. Chief Inspecting Officer, Govt. of Bihar & others (1997 LLR 816 (Patna)] But a public charitable trust established to provides scholarship to the ladies and also to provide books etc. to them and further to provide means to the widows, helpless ladies and orphans etc. is not doing any commercial activity, but is established for charitable purposes and if for the purpose of carrying out the object of the Trust certain properties of the Trust are sold by it then those activities of selling its own land etc. do not fall within the definition of a commercial establishment. For treating an activity, a commercial activity, there must be some investment of capital and there activities must be run with the risk of profit or loss and only in that circumstances the activities can be said to be commercial in nature. Trust is not being used for commercial purposes and the activities of trust cannot be said to be commercial activities, the office of trust does not fall within definition of shop or a commercial establishment under the Act and therefore the provisions of the Act are not applicable to it and the authorities under the Act has no jurisdiction to entertain and decide dispute regarding reinstatement made by it by the Chokidars of the trust. [M/s Rajmata B.S.K. Junagarh Vs. State of Rajasthan 1994- Lab IC 1877 (Raj.)]. Likewise the main objects of Pinjrapole Sanstha is to take care and maintain sick and lame cattle and has other objects also such as raising of cattle, improving the breed, carrying of cattle which come to the Pinjrapole so they can be of use to others, to run a dairy farms in order to supply good milk and ghee in the interest of public to do agricultural operations, to grow grass to cut it or have it cut and to buy or sell the same or stare it and the Sanstha had lot of land and had rental and other income and also agriculture income, hence the Pinjrapole Sanstha is a commercial establishment and liable to pay minimum wages to its workers. [Ahmedabad Pinjrapole Sanstha Vs. Misc. Majdur Sabha and others 1987 Lab IC 577 (Gujrat)]. (v) “day” means the period of twenty-four hours beginning at mid night: Provided that in the case of any employee whose hours of work extend beyond midnight, day means the period of twenty-four hours beginning from the time when such employment commences; (vi) “employee” means a person wholly or principally employed in, or in connection with an establishment, where working on permanent, periodical, contract or piece rate wages or on commission basis even though he receives no reward for his 9 THE PUNJAB SHOPS AND COMMERCIAL ESTABLISHMENT ACT, 1958 labour but does not include a member of the employer’s family; (vii) “employer” means a person having charge of or owning or having ultimate control over the affairs of an establishment an includes member of the family of an employer, a manager, agent or other person acting in the general managment or control of the stablishment; (viii) “establishment” means a shop or a commercial establishment; (ix) “factory” has the meaning assigned to it in the Factory Act, 1948; (x) “family” in relation to an employer, means - (i) spouse, (ii) children and step children; and (iii) parents, sisters and brothers if residing with and wholly dependent upon him; (xi) “festival” means any festival which Government may notification declare to be a festival or the purpose of this Act; (xii) “Government” menas the Punjab Government; (xiii) “hours of the work or working hours” means the time during which the person employed are at the disposal of the employer exclusive of an interval allowed for rest and means; (xiv) “inspector” means an inspector appointed under this Act; (xv) “leave” means leave provided for in section 14; (xvi) “manager” in relation to an establishment where five or more persons are employed or an establishment or whose owner does not ordinarily carry on the business personally, means a person declared as such by the prescribed manner; (xvii) ”night” means a period of at least twelve consecutive hours which shall include the interval between 8 p.m. and 6 a.m. 1[(xviii) “opened” in relation to a shop or commercial establishment whose enterance is the only enterance to the residence, means opened for the service of any customers or for any buisness connected with the establishment.] (xix) “opening hour” means the hour at which an establishment opens.