| The respondent was required by the Chief Inspector of Shops and Establishments to register its establishment ' under the Delhi Shops and Establishments Act, 1954. |
| The respondent contended that it was not an 'establishment ' which is defined in section 2(9) as meaning 'a shop or a commercial estab lishment ' and did not comply with the direction. |
| Proceedings for prosecution of its Secretary were instituted, where upon the respondent filed a petition in the High Court for quashing the order of the appellant and for directing the Magistrate not to proceed with the complaint. |
| Before the High Court the appellant contended that the respondent was a 'commercial establishment ' because, the activity of the respondent amounted to a 'Profession ', and alternatively, that the case fell within the latter part of the definition of 'commercial establishment ' in section 2(5), inasmuch as its activities were connected with trade and business generally, but, it was not urged that the activity of the respondent amounted to carrying on any 'business or trade ' in its premises. |
| The writ petition was allowed by the High Court, holding that premises of the respondent were not a 'commercial establishment '. |
| In appeal to this Court it was contended that the activities of the respondent amounted to a 'trade or business ', that therefore it was a 'commercial establishment ' and that the matter was covered by Management of the Federation of Indian Chambers of Commerce and Industry vs Sri R. K. Mittal [1972] 2 S.C.R. 353. |
| Allowing the appeal. |
| HELD : (1) It is not proper to shut out the contentions of the appellant now raised about the activity of the respondent being a 'trade or business ' merely on the ground that the point was not properly put before the High Court. |
| The question is only one of drawing a correct inference about the point in issue from the material already on record and will not require any additional material for decision. |
| [354E F] (2)A place, in order to fall within the definition of 'commercial establishment ' must, in the first instance, be 'premises '. |
| and secondly, should be premises wherein, (a) any trade, business or profession is carried on, or (b) any work in connection with or incidental or ancillary thereto is carried on. |
| [353C D] (3) The registered office of the respondent is 'premises '. |
| [353D] (4) All the activities of the respondent are business activities and are carried on systematically. |
| Though the profit made by it is ploughed back for its purposes as set out in its Memorandum of Association and is not distributed among its members. |
| Therefore, the decision in Mittal 's case [1972] 2 S.C.R. 353 that the activity of the respondent is in the nature of 'business or trade ' is correct and that case does not require reconsideration. |
| [356A E. 357D E] (5)A systematic activity can be a business activity even if no dividends are declared or profits shared. |
| [356F G] In the matter of Incorporated Council of Law Reporting for England and Wales , applied. |
| (6)The premises of the respondent, therefore, are a 'commercial establishment. |
| [357E] 349 (7)For the application of the Act to the respondent it is immaterial whether its activities bring its premises within the ambit of a 'shop ' or 'commercial establishment, within the meaning of the Act. |
| In Mittal 's case it was held that the activities of the respondent are also in the nature of material services within the wider definition of 'industry ' and, any premises where services are rendered to customers fall within the definition of a 'shop. |
| [356E F] |
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