Can residential flat in housing society be used as office?
By Legal Cell
USER of Residential premises for professionals purposes : Relevant Bye-Laws :
Under Bye-Law No.78(d) of the model bye-laws of 1984 and Bye-law no.76(a) of the new model bye-laws of 1984 and Bye-law No. 76(a) of the new model bye-laws of 2001 no mem- ber of the Society should use the flat deemed to have been allotted to him for a purpose other than for the one for which it has been allotted.
Entire flat can be used for professionals and part of the flat can be used for business offices :
In general a misconception is prevailing in the housing societies in Mumbai that a residential flat can be used only partly for professional office or is also misconceived that a residential flat cannot be used for business office at all. CRUZ of the judgements on user of residential flats is that even if the entire flat is used by a professional person for the practice of his profession, there is no change of user to a commercial one and there cannot be a prohibition for the same. If the flat is partly used for business office, then also if the dominant user is residential, there is no violation of the provisions relating to the change of user.
Distinction between business and profession :
The constitution of India while ensuring under Article 19(1)(g) to all citizens the right to prac- tice any trade, business or profession has maintained a clear distinction between carrying on a trade or business as against practicing a profession. The reason underlying the distinction is that unlike in a trade or business, a profession is practiced without any underlying profit motive. What a practicing professional renders to his client is his services essentially based on his qualification, personal skill and intellectual capacity.
All the learned professions have certain common characteristic like statutory recognition of the profession and adoption by the members a self contained code of conduct with statutory checks and boundaries to ensure professional integrity and character alongwith competence of the members of the profession so as to inspire confidence of the people in the profession.
The Supreme Court also has in several judgements maintained the above cited distinction between a trade and business on one hand and the practice of profession on the other hand.
The legality of user of premises is governed by the local laws applicable in various states in respect of Shops and Establishments Act, 1948.
Case law on firm of lawyers :
In V.Sasidharan V/s Peter and Karunakar (1984) 65 FJR 374 (SC), the question for decision before the Supreme Court was whether the office of a lawyer or of a firm of lawyers is or is not a commercial establishment within the meaning of the Kerala Shops and Commercial Es- tablishments Act (34 of 1960). The SC held that it does not require any strong argument to justify the conclusion that the office of a lawyer or a firm of lawyers is not a “shop” within the meaning of section 2(15).”
The Supreme Court has also, in several judgements reiterated this fundamental distinction.
In National union of Commercial Employees V/s Industrial Tribunal (1962) 22 FJR 25, the Court held that a firm of solicitors was not an “industry” within the meaning of section 2(j) of the Industrial Disputes Act and that the services rendered by the firm were only in the indi- vidual capacity of the partners and very much dependent on their professional equipment knowledge and efficiency.
Case law on private dispensary :
In yet another case of Dr. Devendra M. Surbi V/s. State of Gujarat (AIR 1969 SC 63 6T), the Supreme Court had occassion to examine the definition of “Commercial Establishment” in section 2(4) of the Bombay Shops and Establishments Act, 1948 and construing the word “Profession” appearing in association with the words “Business and Trade” in the said sub section, held that a private dispensary of a medical practitioner did not come within the defi- nition of “Commercial Establishment”.In Dev Brat Sharma V/s. Dr. Jagjit Mehta C.A. No. 4216 of 1988, the Supreme Court held that the user of residential premises under tenancy for the purpose of the doctor’s clinic did not tantamount to change of user.
West Bengal Govt. tried amendment of Shop and Establishments Act :
The same conclusion was reached by the Calcutta High Court in Dilip Kumar V/s. Chief Inspector (Shops and Establishments) (1986) 69 FJR 100 (Cal). In this case, the question for consideration was whether the inclusion amounted to an unreasonable restriction violative of article 19(1)(g) of the Constitution.
Yoga Classes :
In the case of Pant Nagar Anandlok CHS LTD. it was decided that carrying out activities like conducting yoga classes in a residential flat does not constitute breach of bye-laws of a Co- op. Housing Society.
The dispute in question had been field by the Pant Nagar Anandlok Co-op. Hsg. Soc. Ltd. against one of its members and his wife, seeking a declaration that the yoga activities of the member were violative of the bye-laws and were illegal. Further the society claimed in the dispute that this member herself or through her agents or servants be permanently restrained by an order or injunction from, in any manner conducting the yoga classes.It was stated in the complaint that the society received complaints from its members that because of the yoga classes, there was a lot of harrassment to the neighbours, the members of the society and to the public at large. The society particularly referred to the fact that fashionable ladies and girls and hippy type persons visited the society’s premises, who spoke loudly that caused a lot of annoyance. The sandals, chappals and shoes in the passage cause obstruction for use thereof by the members of the society.The ailing persons, who could benefit from yoga were sometimes referred to her by doctors. On an average in a day, 30 to 40 persons used to attend the yoga classes which she taught between 7.30 am to 7.30 pm.
The Judge referred to some rulings which were as follows:
Lakshman Sintre V/s. Balkrishna K. Shetye, B.L.R. page 937; B.R. Oswas V/s. Lakshmibai
B.L.R. page 214; University of Delhi and others (AIR 1963 S.C. page 1873); K. K. Karunanidhi and others (AIR 1073 Madras page 443) Appellate Court; Sant Ram V/s Rajinderlal and others, Supreme Court (1979); V Sasidharam V/s. Peter (AIR 1984 SC page 1700).
Drawing analogy from these verdicts, the Judge, in the case in question, decided that there was no breach of bye-laws or regulations of the society. The Court also directed the Respon- dent Society to pay Rs. 100/- as costs of the appeal to the appellant.
Office of Chartered Accountant :
Phillipos & Co. Vs. The State of Karnataka C.C. No. 21496 of 1987 :
Case under Karnataka Shops and Commercial Establishment Act, 1961 – office of the part- nership firm of chartered accountants not a commercial establishment as C.As. carry on profession like lawyers or a doctor and do not carry on trade business.
Observations :“A reading of the provisions of the Chartered Accountants Act 1949 and the Regulations would make it amply clear that a chartered accountant in practice has manifold functions and duties to be observed by him and that apart for possessing required qualifica- tions he requires special skill, learning and experience in the discharge of his duties.A pro- fession is a vocation or occupation requiring special usually advanced education and skill. The work and skill involved in a profession is predominantly mental or intellectual rather than physical or manual.”