Bombay HC Confirms that the Cooperative Housing Society is not subject to industrial or commercial labour law obligations.
Ex-Manager of the Petitioner Cooperative Housing Sciety filed proceedings under Section 33C(2) of the Industrial Disputes Act for payment of dues and gratuity.
HELD that the activity of business or trade is essential for an entity to qualify as an industry to maintain the proceedings.
A cooperative housing society which merely manages the building and is formed for collective ownership of land and building, does not carry on any trade or business and would not qualify as an industry.
In the affidavit in reply the respondent produced the documents including photographs of antennas and Club House on Terrace. In that context, it was HELD that mere installation of telecommunication antennas by the Petitioner-Society for reducing monthly maintenance charges of its members cannot be treated as a systematic activity for treating it as an ‘industry’. Similar is the position in respect of club house of the Petitioner-Society. It is not the contention of the Petitioner that membership in the club house is allowed for outsiders. Club house is being operated for personal use of the members and merely because operation of the club house involves incurring of large-scale expenditure, it would still not mean a systematic commercial activity for treating the same as an ‘industry’.
There can be no doubt that a residence or house is not an ‘establishment’ within the meaning of Section 2(4) of the Maharashtra Shops Act. If employees are engaged to look after maintenance of a residential bungalow, the said bungalow will not be an establishment within the meaning of Section 2(4) of the Maharashtra Shops Act. This is because activity of owner of that bungalow, who resides therein, in engaging employees/workers to look after the bungalow has no connection with any commerce, trade, business or profession. If a singular bungalow is not an establishment, whether multiple bungalows, managed through a collective body like a co-operative society, would become an establishment within the meaning of Section 2(4) of the Maharashtra Shops Act? The answer, to my mind, appears to be in the negative. Similarly, when a residential flat in a building is not an ‘establishment’ within the meaning of Section 2(4) of the Maharashtra Shops Act, an entity formed by all the residents for collective management of their houses would also not be an establishment within the meaning of Section 2(4) of the Maharashtra Shops Act. Merely because house owners come together and decide to manage their houses and building collectively and for that purpose, employ workers/employees, association of house owners would not be an ‘establishment’ within the meaning of Section 2(4) of the Maharashtra Shops Act. Thus, the Payment of Gratuity Act is not applicable
Judgment dated 5.1.2026 of the High Court of Bombay in Writ Petition No.3908 of 025 of Apsara Cooperative Housing Society Ltd Vs. Vijay Shankar Singh with connected writ petition.
