1 (CRWP1961/2010) IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO.1961 OF 2010 Bharat Petroleum Corporation Ltd. & Anr. .... Petitioners. V/s State of Maharasthra & Anr. ..... Respondents. ---- Mr. J.P. Cama, Senior Counsel along with Mr R.S. Pai i/b M/s Sanjay Udeshi & Co. for the Petitioners. Mr. Rajesh More, APP for the State. Mr. Suresh Pakale along with Mr. Sandeep Patil i/b Mr. V.K. Khatu & N.A. Shaikh for Respondent No.2. ---- CORAM: V. M. KANADE, J. DATE : 13th August, 2010 P.C.: 1. Rule. Rule is made returnable forthwith. Respondents waive service. By consent of the parties Petition is taken up for final hearing. 2 (CRWP1961/2010) 2. Heard Mr. J.P. Cama, the learned Senior Counsel appearing on behalf of the Petitioners, Mr. Suresh Pakale, the learned Counsel appearing on behalf of Respondent No.2 and the learned APP appearing on behalf of the State. 3. By this Petition which is filed under Article 227 of the Constitution of India and under section 482 of the Criminal Procedure Code, the Petitioners are challenging the order dated 1/2/2010 passed by the learned Metropolitan Magistrate, 41st Court, Shindewadi, Dadar, Mumbai as also the order of issuance of process dated 26/3/2010 on a complaint filed by Mumbai Municipal Corporation against the Petitioners herein for the offence punishable under section 394(1) of the Mumbai Municipal Corporation Act, 1888 [For short “MMC Act”] read with section 471 of the Mumbai Municipal Corporation (Amendment) Act, 1962. 4. Brief facts are as under:- 5. Petitioner No.1 is a Public Limited Government Company registered under the Companies Act, 1956 and is engaged in the business of refining of crude oil and marketing / retailing of petrol, diesel, LPG, aviation fuel, etc. It is a Government of India Undertaking and is declared as a public utility service under the Industrial Disputes Act, 1947. One of the installations of the Petitioners is situated at Sewri, Fort Road, Mumbai and the Petitioner No.2 is the Installation 3 (CRWP1961/2010) Manager of Petitioner No.1. Petitioner No.1 – Company is required to provide a canteen exclusively for its employees in accordance with the standards prescribed under the Factory Rules, 1963. It is the case of the Petitioners that some time in April 2009, the Inspector of the Public Health Department, Mumbai Municipal Corporation, visited Sewri Installation and advised them to obtain the eating-house license in respect of the canteen maintained by the Factory. Accordingly, an application was made by the Petitioners dated 24/11/2009 for license for eating-house at Sewri Installation under section 394 of the MMC Act and, thereafter, a complaint was filed by the Respondent No.2 - MMC in the Court of the Metropolitan Magistrate, 41st Court, Shindewadi, Dadar, Mumbai and the learned Magistrate was pleased to issue process by an order dated 01/02/2010. Petitioners, therefore, have filed this Petition challenging the order of issuance of process. Affidavit in reply has been filed by the Medical Officer of Health, F-South Ward, Municipal Corporation of Greater Bombay. 6. Mr. J.P. Cama, the learned Senior Counsel appearing on behalf of the Petitioners invited my attention to the definition of the term “eating-house” and provisions of section 394 and more particularly section 394(1)(e)(i) of the MMC Act. He also invited my attention to Schedule-M, Part- IV of the MMC Act. He submitted that if the said provisions are taken into consideration, the canteen run by the Management for the benefit of its workers would not fall 4 (CRWP1961/2010) within the purview of definition of “eating-house”. He, therefore, submitted that it was not necessary for Petitioner No.1 to obtain license under the said provisions. He further submitted that in view of the definition of “eating-house”, only those premises in which public are admitted and where food is supplied for consumption for profit or gain, such premises would fall within the definition of the term “eating- house” He submitted that, in the present case, premises was used as canteen and was managed by the Petitioner No. 1 and it was required to be maintained in view of mandatory provisions of section 46 of the Factories Act. It is, therefore, submitted that the canteen maintained under section 46(1) of the Factories Act was neither a trade nor process or operation connected with trade. He further submitted that in view of other provisions of the Factories Act, a canteen has to be run on no profit basis and substantial subsidy was given by the employer. It is further submitted that, therefore, canteen could not be termed as a catering establishment since there was no sale of food stuff in the canteen which was run on no profit basis. It is, therefore, submitted that the complaint and the impugned order of issuance of process was illegal and contrary to law. He further submitted without prejudice to the said submissions that no averments were made in the complaint regarding role of Petitioner No.2. Further, there was no averment that he was in charge of or in control of the management of the canteen or Factory and, as such, the complaint filed against him was liable to be set aside. In support of the said 5 (CRWP1961/2010) submissions he relied upon the judgments of the learned Single Judge of this Court in Hotel Mazdoor Sabha and another vs. N.J. Alvares and another1, Balkrishna Karkera vs. K.J. Mishra and another2 and the Division Bench Judgment of this Court in Sohrab Vakil (Lt. Col.) and another vs. B.G. Pimple and another3 and lastly upon the judgment of the learned Single Judge of this Court in M/s Tops Security Ltd. & Anr. vs. S.P. Apsingekar dated 3rd May 2010 in Criminal Writ Petition No.1773 of 2009. Mr. Cama, the learned Senior Counsel, also submitted that Petitioner No.1 had obtained license under section 390 of the MMC Act and, therefore, having obtained license under section 390 of the MMC Act it was not necessary to obtain license under section 394. He also invited my attention to section 392 of the MMC Act in support of his submissions. 7. Mr. Pakale, the learned Counsel appearing on behalf of Respondent No.2 submitted that the provisions of Factories Act, 1948 and MMC Act operate in different fields and, therefore, merely because the Petitioners had obtained license under the Factories Act, that would not absolve them from requirement of obtaining license for eating-house under section 394 of the MMC Act. It is then submitted that definition of “eating-house” is applied to the canteen which was run by the Petitioner Corporation. It is firstly submitted that term “public” is wide enough to include workers and 1 AIR 1965 Bombay 13 2 AIR 1979 Bombay 198 3 1992 Mh.L.J. 1498 6 (CRWP1961/2010) therefore the word “public” included any class of public or community. It is submitted that the dictionary meaning of the word “community” is very wide and, therefore, it is submitted that the workers, employees and the Officers of the Petitioner Corporation would also fall within the definition of the term “community”. Secondly, it is submitted that meaning of the word “trade” was any occupation, employment or activity, business etc. It is submitted that, under the Factories Act, though the employer is expected to run a canteen on no profit no loss basis, he is not entitled to fix the price of the food stuffs which is sold in the canteen and, therefore, though the employer is not expected to earn any profit, he definitely stands to gain by providing facilities to the workers. It is thirdly submitted that, in any case, the canteen would fall within the definition of “catering establishment” since the employer used the facilities for providing food to its workers. Reliance was placed on the judgment in Balkrishna Karkera vs. K.J. Mishra and another1 8. I have heard both the Counsel at length. In my view, there is much substance in the submission made by Mr. Cama, the learned Senior Counsel appearing on behalf of the Petitioner that if the owner of an industrial establishment is conducting a staff canteen on his own he is not required to obtain a license under the said provision. 1 AIR 1979 Bombay 198 7 (CRWP1961/2010) 9. In order to appreciate the rival contentions, it would be necessary to examine the relevant provisions of the MMC Act. Section 3(ff) defines the term “eating-house” as under:- “3(ff) “eating-house” means any premises to which the Public are admitted and where any kind of food is prepared or supplied for consumption on the premises for the profit or gain of any person owning or having an interest in or managing such premises;” Section 394 prescribes that certain trades, processes and operations cannot be carried out without license and provides the said trades, processes and operations in Parts I to IV of Schedule-M. In the present case the relevant provision is section 394(1)(e) which reads as under:- “394. Certain articles [or animals] not to be kept, and certain trades, processes and operations not to be carried on, without a licence; and things liable to be seized, destroyed, etc., to prevent danger or nuisance.-(1) Except under and in accordance with the terms and conditions of the licence granted by the Commissioner, no person shall- 8 (CRWP1961/2010) (a) ............ (b) ............ (c) ............ (d) ............ (e) carry on or allow or suffer to be carried on, in or upon any premises; (i) any of the trades specified in Part IV of Schedule M, or any process or operation connected with any such trade; (ii) any trade, process or operation, which, in the opinion of the Commissioner, is dangerous to life, health or property, or likely to create a nuisance either from its nature or by reason of the manner in which, or the conditions under which, the same is, or is proposed to be carried on;” In clause (e) sub-clause (i) of Section 394(1) trades and processes are prescribed as specified in Part IV of Schedule M. Part IV of Schedule M also, therefore, will have to be taken into consideration since it is referred to in Section 9 (CRWP1961/2010) 394(1)(e)(i) of the MMC Act and the said Part IV of Schedule M reads as under:- SCHEDULE M (See section 394) Part IV Baking Bhelpuri, Preparation or sale of Bleaching cloth or yarn, Keeping charcoal, coal, or coke shop Keeping cold storages. Casting Metal, Keeping Chemist and Druggist Shop Dyeing of cloth, yarn or leather. Grinding or pounding of chillies or masala or (otherwise than by hand grinding). Keeping a flour mill Keeping a laundry shop. Keeping of an eating house or catering establishment. Using or allowing to be used a premises for the preparation of eatables for the purpose of trade and for the profit or gain of any person owing or having an interest in or managing such premises.” 10. It is a well settled position in law that while interpreting any section, provision, rule, regulation in any 10 (CRWP1961/2010) Act or Rules, whenever there is no ambiguity in the said provision, the plain grammatical meaning has to be given to the said provision. In the present case, the controversy which has arisen is, whether the canteen which is run by the employer in his establishment would fall within the definition of “eating-house” as defined in section 3(ff) of the MMC Act and would, therefore fall under Part IV of Schedule M of the said Act. From the perusal of the definition of eating-house reproduced hereinabove, for any premises to be termed as “eating-house”, following requirements are to be fulfilled viz. (i) any kind of food is prepared or supplied for consumption in the said premises. (ii) public are admitted to the said premises and (iii) the said activity of preparing and supplying food for consumption should be carried out for profit or gain. Part IV of Schedule M gives list of trade or processes or operations connected with traders and along- with eating-house, there is also a reference to catering establishment. Though, “eating-house” is defined under section 3(ff), “catering establishment” has not been defined anywhere in the Act. 11. On the one hand, it has been argued that the establishment of the Petitioner is not an eating-house or catering establishment, firstly because public are not admitted to the said premises and it is only meant for workmen and officials working in the establishment. Secondly, the food which is prepared and supplied for consumption is for the benefit of their own establishment 11 (CRWP1961/2010) and it is not done for any profit or gain but in view of statutory requirement of maintaining canteen as laid down under the Factories Act and, therefore, the Petitioners’ establishment need not obtain license under section 394 of the MMC Act. On the other hand, it has been urged that the term “public” includes community or various types of communities and, therefore, the workers and officials working in the establishment would be a community and, therefore, though the canteen is run on no profit no loss basis, the employer is profited or gained by catering these services to the workers and, alternatively, it has been urged that, in any case, it would definitely fall within the definition of “catering establishment”. In this context, therefore, it will be profitable to see how these provisions and relevant terms have been interpreted by the Apex Court and this Court. 12. The Division Bench of this Court had an occasion to interpret the provisions of section 394(1)(e)(i) in Sohram Vakil (Lt. Col.) and another vs. B.G. Pimple and another1. In the said case, Sports Club which carried on an activity of promoting Yachting was prosecuted since it did not have the requisite license for providing food in the said Club to its members. In the said case, reliance was placed on the judgment of the Apex Court in M/s Northern India Caterers (India) vs. Ltd. Governor of Delhi2 The Division Bench observed that the Dining was maintained as facility to the members-participants in Yachting and, therefore, in that 1 1992 Mh.L.J. 1498 2 AIR 1978 SC 1591 12 (CRWP1961/2010) sense, it could not be treated as an eating-house carried out by way of trade and further held that a Dinning Room is domestic arrangement only for the members of the Club. It would be relevant to refer to the observations made by the Division Bench in para 4 of the said judgment in Sohrab Vakil (supra). Para 4 of the said judgment reads as under:- “4. The predominant activity of the Club is to promote and to provide facilities to the members for a sporting activity known as Yachting. To carry out this activity successfully, the Club has incidentally provided the Dinning Room. It is exclusively meant for the members and is also managed by the members. As such, they serve themselves. As required by defining clause (ff) of section 3 of the Act, it does not cater the needs of any outsider or members of the public. Apparently, Dining Room is a domestic device of the Club, which is incidental to principal activity of sport. The Supreme Court in The Secretary, Madras Gymkhana Club Employees’ Union vs. The Management of the Gymkhana, AIR 1968 SC 554 held that - “the club was only a member’s club 13 (CRWP1961/2010) and a member’s self-serving institution and not an industry. No doubt the material needs or wants of a section of the community were catered for but that was not enough as it was not done as part of trade or business or as an undertaking analogous to trade or business.” The Dining Room is maintained as facility to the members-participants in Yachting. It could not be in that sense an eating house carried by way of trade which is considered to be unimpeachable character envisaged under the relevant provisions referred to hereinbefore. Since the Dinning Room is a domestic arrangement only for members of the Club, purport of maintaining any hygienic standard, etc cannot be solicited. Activity of Dinning Room does not represent any characteristic of trade, including profit motivation. Obtaining licence by or for such Dining Room cannot rationally be insisted. We, therefore, hold that the activity known as ‘Dining Room’ of the petitioner Club does not attract, in any 14 (CRWP1961/2010) manner, clause (e) of sub-section (1) of section 394 of the Act. As such, the petitioner-Club is not liable to obtain the licence required for eating house under the relevant provisions.” (Emphasis supplied) The Division Bench of this Court, therefore, while interpreting the aforesaid provisions has clearly observed that the Dinning Room in a Club was a domestic arrangement only for members of the Club and, therefore, could not be terms as trade. In Hotel Mazdoor Sabha and another vs. N.J. Alvares and another1, a Petition was filed under Article 226 of the Constitution of India by Petitioners – Trade Union registered under the Indian Trade Unions Act claiming to have a large number of employees of hotels; residential hotels, restaurants or eating-house as its members and in order to safeguard its activity had asked for writ of mandamus from the Court, directing that the provisions of Bombay Shops and Establishment Act should be applied to (i) Central Railway Staff Canteen, Victoria Terminus, Bombay-1, (ii) Bombay Police Canteen at Crawford Market (Police Headquarters) and (iii) Government Law College Canteen, Churchgate, Bombay-1. Though the issue raised in the said Petition was, 1 AIR 1965 Bombay 13 15 (CRWP1961/2010) whether the provisions of the Bombay Shops and Establishments Act, 1948 could be made applicable to the said canteen, while deciding this issue the Court had an occasion to consider the meaning of “restaurant” or “eating-house” defined in the said Act and also to consider the meaning of the term “public” within the meaning of section 2(25) of the said Act. The learned Single Judge in the said judgment has observed in paragraphs 8, 10 & 12 as under:- “(8) The first thing that strikes as important in regard to the true construction of sub-sec. (25) of S. 2 of the Act is that it was not intended that all premises where business of the supply of meals or refreshments is carried on were meant to be included in the phrase “restaurant or eating house”. If that was the intention of the Legislature, it was entirely unnecessary to include in sub-section the phrase “the public or a class of the public”. The sub-section cannot be read to mean that “restaurant or eating house” means “any premises in which is carried on wholly or principally the business of the supply of meals or refreshments for consumption on the premises”. The 16 (CRWP1961/2010) question that at once arises is as to what premises in which business of supply of meals or refreshment for consumption on the premises is carried on were intended to be excluded from being “Restaurant or eating house” within the meaning of sub-sec. (25) of S. 2 by including in that sub-section the phrase “the public or a class of the public”. I asked Mr. Nargolkar as to what is the line that he indicates could be drawn for excluding certain restaurants and eating houses from the application of sub-sec. (25) by reason of the use therein of the phrase “the public or a class of the public”. He has found it very difficult and failed to answer the question.” “(10) It is clear that premises where supply of meals or refreshments for consumption on the premises is made, but the supply is not for carrying on business, can never be held to be “restaurant or eating house” within the meaning of sub-sec. (25) of Sec. 2 of the Act. The carrying on of the business of supply of meals or refreshments is 17 (CRWP1961/2010) the first essential of the premises being “restaurant or eating house” under this sub-section. In the result, staff canteens where an employer makes arrangements for supply of meals or refreshments without intending to carry on business thereof cannot be held to be “restaurant or eating house” within the meaning of the Act. It is also obvious that the premises where the employer makes arrangements for supply of meals or refreshments neither for the general public not for any one other than its own employees, were not meant to be “restaurant or eating house” within the meaning of the Act. The obvious intention of the Act was to make provisions for regulating conditions of work and employment in restaurants and eating houses, the owners whereof carried on wholly or principally the business of supply of meals or refreshments. These restaurants and eating houses were meant to be establishments which openly invited the public or a class of the public for the purposes of carrying on the business that is mentioned in 18 (CRWP1961/2010) sub-sec. (25). If the Railway administration made arrangements for running its own staff canteen for Railway servants, it is difficult to say that the Railway administration carried on a business of supply of meals or refreshments. Similarly, if the Government Law College made arrangements for the supply of meals or refreshments to law students, it is difficult to say that the canteen run at the Government Law College is run for the business of supply of meals or refreshments. Similarly, if the Department of police ran a canteen at the Police Headquarters for supply of meals or refreshments, it is difficult to find that the Department carried on the business of supply of meals or refreshments. It appears to me that wherever an employer makes merely arrangements for supply of meals or refreshments to its employees and does not carry on wholly or principally the business of supply of meals or refreshments, the premises would not be “restaurant or eating house” within the meaning of the Act. The provisions 19 (CRWP1961/2010) of the Act would not be applicable to such establishments.” “(12) It appears that the Courts have found it difficult to arrive at correct interpretation of the phrase “a class of Public”. It is, however, clear that for finding out whether a certain group of people can be described as “a class of the public”, two ingredients must be considered; (i) The group of persons must possess certain degree of numerical importance and must be a substantial body of the public. The persons constituting this body must have a common attribute or characteristic. “A class of the public” is to be distinguished from a mere group of persons. (2) The group of persons claiming to be “a class of the public” must not for its classification as such depend on any relationship with a third party.” Similarly, another learned Single Judge of this Court in Balkrishna Karkera vs. K.J. Mishra and another1 also had an occasion to consider the definition of the expression “eating- 1 AIR 1979 Bombay 198 20 (CRWP1961/2010) house” or “catering establishment” in Schedule M of the BMC Act. In the said case, Petitioner has filed a Revision Petition challenging his conviction by the learned Metropolitan Magistrate, 29th Court, Dadar, Bombay under section 394(1)(e)(i) read with section 471 of the BMC Act. In that case, accused No.1 was the Personnel Officer of Messrs Indian Tools Manufacturers which had its factory at Sion. The accused No.2 was caterer running a canteen by an agreement dated 16/03/1974. Accused No.2 agreed to operate canteen in the factory premises of the said Company at Sion. Prosecution was launched against them since they did not have the requisite license under section 394(1)(e)(i). The learned Magistrate acquitted the Personnel Officer of the Company, the accused No.1. He, however, convicted accused No.2 who was a caterer running the canteen. The learned Single Judge held that the canteen would not be termed as an eating-house. He, however, held that so far as the caterer is concerned, it could be said that the canteen clearly falls within the expression “catering establishment” occurring in the relevant entry in Part IV of Schedule M. The learned Single Judge, however, clearly made distinction between the caterer and the