2013 (11) TMI 1817 - SC - Indian Laws

Application for grant of licence Under Section 394 of the Act for the eating house - catering services - gas installations - grant of trade licence will be considered subject to fulfillment of conditions - Expression eating house and catering establishment - HELD THAT - A cursory reading of the definition of the expression eating house may support the conclusion of the High Court because general public is not allowed entry in the premises of the club and in the first blush it appears that food is not supplied for consumption on the premises for profit or gain. However if we apply purposive interpretation then it becomes clear that the catering department of the club which prepares and serves/supplies food to members of the club is covered by the definition of the expression eating house . It cannot be denied that members of club also fall within the ambit of the term public . No doubt the primary activity of the club is to provide sporting facilities to the members but the supply of food is an integral part of such activity and the catering department of the club satisfies an essential component of the facilities provided by the club. One can take judicial notice of the fact that many members who avail sporting facilities remain on the premises for a very long period. Therefore the articles of food become integral part of their activities. Not only this many join the club in the name of availing sporting facilities only for the purpose of spending their time in leisure and for enjoying the facilities provided by the Catering Department of the club. Thus even though profit may not be the motto of catering facilities provided by Respondent No. 1 it certainly gains by these facilities. The concept of earning profits is not a necessary appurtenant of the expression business and looked at from this point of view a place used for the business of sale of any article of food or drink does not cease to be so merely because it is not being conducted with a view to earn profits. Anyway the definition contained in the rules and by-laws of the Borough Municipality is an inclusive definition. After saying that a catering establishment means any place used for the business of sale of any article of food or drink for consumption it further goes on to say that it includes a hotel or an eating house etc. and in the same Supreme Court decision to which a reference has already been made it has been pointed out that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense. Where the Courts are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation. Therefore having regard to the inclusive definition in this case it is clear that the definition of catering establishment does mean and include a cooperative canteen conducted without any motive of earning profits. Thus we hold that the Bombay High Court was not right in relieving the Respondents of the obligation to take licence Under Section 394(1)(e) of the Act. Appeal is allowed

Summary

Issues Involved:
1. Whether Respondent No. 1 is obliged to take a license under Section 394(1)(e) read with Part IV of Schedule 'M' of the Mumbai Municipal Corporation Act, 1888 for the catering services provided to its members and their guests.

Detailed Analysis:

1. Obligation to Obtain a License:

The primary issue in this appeal was whether the club (Respondent No. 1) was required to obtain a license for its catering services under Section 394(1)(e) of the Mumbai Municipal Corporation Act, 1888. The Act mandates that certain trades, including keeping an eating house or catering establishment, cannot be carried out without a license. The court analyzed whether the club's catering services fell under the definition of an "eating house," which is defined as premises where the public is admitted and food is prepared or supplied for consumption for profit or gain.

The court concluded that the catering services provided by the club are indeed covered under the definition of an "eating house." Although the services were primarily for members and not the general public, the court emphasized that members of the club could be considered part of the public, and the club gained benefits from these services, even if not directly for profit. The court rejected the High Court's view that the catering services were merely ancillary to the club's primary sporting activities, stating that the supply of food is an integral part of the club's activities.

2. Interpretation of 'Gain' and 'Catering Establishment':

The court delved into the interpretation of "gain" and "catering establishment." It clarified that "gain" is not limited to pecuniary profit but includes any advantage or benefit acquired. The court also highlighted that the term "catering establishment" has a broader scope than "eating house" and can include services not open to the general public. Citing previous judgments, the court emphasized that the absence of a profit motive does not exclude an establishment from being a catering establishment.

3. Public Health and Safety Considerations:

The judgment underscored the importance of maintaining public hygiene, health, and safety, which are the objectives of the licensing requirements under the Act. The court noted that the conditions imposed by the municipal authorities, such as maintaining ventilation, fire safety, and sanitation, are crucial for ensuring the safety of people consuming food on the premises. The court also referred to international standards and the Food Safety and Standards Act, 2006, which reinforce the need for regulatory mechanisms to ensure food safety.

4. Conclusion and Directions:

The Supreme Court set aside the Bombay High Court's order, holding that the club is obliged to obtain a license under Section 394(1)(e) of the Act. The court directed the Respondents to apply for the necessary license and comply with the conditions within a specified timeframe. It also allowed the municipal authorities to initiate penalty proceedings for the club's failure to obtain the license earlier. The judgment emphasized the broader interpretation of regulatory provisions to ensure public safety and compliance with statutory requirements.