Can Residential Premises be used for Professional Purposes?

By Tarun Ghia, Chartered Accountant
1. Can a residential property by used for professional purposes or business office purposes ?
A. 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 member 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 practice 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 Establishments 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 individual 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 definition 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 Respondent 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 partnership 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 qualifications he requires special skill, learning and experience in the discharge of his duties.
A profession 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.”


  • OFFHAND (To share own independent thoughts, for the ‘common good’)
    Though not so stated, there can be no doubt or denying that the observations / view points of the writer brought to bear/ aired are based on, as a professional, his own study and personal, independent understanding of, among others, the “bye-laws”, the last one referred being of 2001 .
    Be that as it could not have been expected to be otherwise, it may be noted that, the latest Model Bye-Laws brought in, in 2013, though, as understood, stalled for the time being/ and yet to be given effect, would ostensibly have every relevance. Hence, it might be worthwhile making an insightful study. That should help in an incisive understanding and getting a true grip of what is in store, if and when, the 2013 Bye-laws are announced and made effective. Even so, in one’s mind, there is a very vital and predominant doubt of all, of a grievous nature, having quite possibly far reaching repercussions and consequences, impinging the common interests of one and all concerned. That, in short, is , – as to what extent/ which of the new provisions, if at all, sought to be brought in, could/ are intended to be applicable / adoted and followed retroactively; so as to impact, adversely or otherwise, the functioning/conduct of the affairs of the extant housing societies already registered and in place. As this is a very intricate aspect, seemingly riddled with potentials for controversies galore, one strongly feels that the State government/its concerned authorities ought to , if not already done, even now/beforehand, mindfully consider and as far as feasible, make the ‘intention’ clear on the indicated and other related worrisome aspects.
    KEY NOTE: On a tentative perusal of the new Bye-laws (2013), as is noted, there are quite many of its contents, which warrant a deep study/application of mind by one and all concerned . Apart from the governmental experts, the advising experts at large, in the interests of selves or own clientele, need to do so and come out with a comprehensive unbiased/impartial opinion /viewpoints; also share with the rest openly, the earliest, the better.
    (Left open/ Welcome to ‘EDIT’ the foregoing, with a public -centric outlook, as earnestly expected)

  • what type of commercial activities are permitted in a residential premises? Can beauty parlour activity be permitted to be carried out from residence? any conditions need to be followed? can managing committee issue legal notice for the closure of such beauty parlour or any other business activity?

    • I want to start a General store for Grocery items, bakery items and consmetics & Cold drinks in my residential area at Ground floor… can I start this business under the ruling of Supereme court to start 25 type of business in the residencial area… if so.. than please inform me about the decision of the Supereme court vide appeal No. and Decision date..?

      • It all depends on the rules of Local Self Government and which state you are. For any thing which requires fire, you have to have permissions.

  • Whether taking/conducting Yoga classes in residential independent house in Jaipur(Raj.) is commercial activity even some charges are levied/charged for the Yoga classes. If any permission is required from the Nagar Nigam or other authority to take Yoga Classes in Jaipur.

  • Dear Admin,

    We live in a Housing Society in Ahmedabad. My sister in law runs a beauty parlor at home on the 3rd floor of the building. Primarily, the property is being used for residential purpose at all times but my sister in law has some three to four lady customers in a day.

    Is this allowed? Does this violate any of the Housing Society LAws? In short, is my sister in law doing anything illegal by running a beauty parlor at her home? If it not illegal, can the neighbors in the society threaten us in any way?

    Please write back. I shall be very grateful to you.

  • i have a boutique in my bungalow in one room not more than 10 percent premises using society has opposed to do not work in resident area what to do give me suggestions in my society pain guestcarexallowed then my neigbour both have not a problem

  • Hi
    i have done my BAMS
    i am practising as an ayurveda consultant in my residential flat and has small panchkarma set up to give result fast to patients..
    so just want to know that its all legal only..
    My flat is at 13th floor and m practisng frm 2 yrs..

    plz reply..

  • I m a dentist , using my flat for practice at pune, maharashtra.According to pune municipal Corporation dr, lawyers, architect, tax consultants are allowed to practice in residencial premise,
    My society chairperson held a urgent meeting after reading some article in TOI about Supreme courts judgment
    Now they are questioned me in writing that to whom i approched n took permission yo start my practice ?
    What should i do?
    In the same premise with different wing one more dentist is practicing, that society hasnt took any objection. Where the entrance, club house, play area, garden, activity places are comman for both the wings of the same building

    Is it compulsory to obtsin the permission from any authority before starting up the clinic activities? What are the recent judgement(s) of Supreme court about this, please guide

  • Dear admin
    In my personal house(not flat)i want to start manfacturing of musical instrument and wholesell is in residential area.can i do this

  • So apparently running doctors Clinic in residential property is allowed by law. Question is can property tax demanded by corporation will be residential or commercial rate… I recently got Pune corporation notice to pay by commercial rate. Pl guide urgently…

  • Can I run school in residential area.

  • Sir,

    You had explained about using own flat/house for professional work.

    But is commercial events (2-3 days long) allowed in residential apartments using common areas including visitor’s parking space (in Bangalore)?
    In our case association is allowing such events and a trouble due to sound pollution, safety issues, trouble due to traffic diversion & blocked visitor’s parking. Please help with this information.

    – Venu Madhavan

  • Rajendra G Dhaga

    I have rented my resideential bungalow where tenant is staying with family and partially using for private tuitions.Can society object by calling it the commercial use ?

  • Can partial dual use of Residential bungalow by a tenant, staying with family, for tuition classes, be obected as commercial activity,?

  • Sir,I have a flat on 1st floor in residential socy on main linking road,Bandra (W).I want to letout it to some professionals, for office use,sas it is not suitable for residential,as there is no parking,no ground and much sound pollution but being on prime location it is suitable for professionals.But socy objects for this. The flat is vacant since long and I’m in need of fund, I am 73,Sir pl suggest.Can I let it out for office use ,Can this can be converted for semi commercial use from BMC ?
    Waiting for your early response.thanks

  • We are a CHS and want your opinion. The Hon. SC has passed an order in March 2016, that conducting Couching classes in the Society is illegal. How far we can take action against couching classes and running of Nursery school in residential housing society. Your early reply will be immensely appreciated. Thanks.
    Pankaj Mehta-Chairman.

  • I have 500 squire yards place in residential zone.can i construct office purpose.can u please guide me.waht is process.

  • Can one conduct business/profession in a rented flat in HSG?

  • C. V. S. Panicker

    In our Housing Society, one residential flat at ground floor is attached with a room as shop, which is not using as a shop, but using as residential room only. Whether the society can charge maintenance for the shop separately if the said room is not using for commercial purpose, but using only for residential purpose. Please comment.
    Yours sincerly,
    C. V. S. Panicker

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