Dining space in office not a ‘trade’ activity, says HC

The Bombay high court recently held that a dining area in office premises, installed with vending machines and other appliances, does not amount to carrying out “trade” as contemplated under the Mumbai Municipal Corporation (MMC) Act, 1888.

MUMBAI: The Bombay high court recently held that a dining area in office premises, installed with vending machines and other appliances, does not amount to carrying out “trade” as contemplated under the Mumbai Municipal Corporation (MMC) Act, 1888.

(Shutterstock)

The case dates back to June 27, 2024, when an inspection was carried out by the Brihanmumbai Municipal Corporation (BMC) in the premises of M/s. Bob Capital Markets Ltd. Pursuant to the inspection report, it was found that the company was running an “eating house canteen” in its premises without a licence. The canteen had two microwaves, tea/coffee vending machine, induction, refrigerators, and tables for service purposes, in the designated area.

Noting that the licence was not produced, the BMC alleged that the company was carrying on trade in the premises and directed it to stop the service immediately, failing which it would take necessary action as per the provisions of the MMC Act, 1888.

Taking cognisance of the issue, the magistrate court on September 23, 2024, issued the process under the provisions of the MMC Act. Aggrieved by this, the company approached the Bombay high court, challenging the order under provisions of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).

The company clarified that the “eating house canteen” is a designated dining area for the employees to consume food during their meal breaks. It further stated that the arrangement of the microwaves, vending machines, refrigerators and the tables were made for the employees as a goodwill gesture, for them to heat the food and avail tea/coffee.

It further stated that the appliances are for self-service purposes, utilised by the employees and such is neither sold nor purchased by any person. “The concerned officer failed to consider and understand the difference between a dining area and a canteen,” the company said. Highlighting that the meaning of “Eating House” refers to activities for monetary benefit, the company stressed that the place provided is merely a dining area with absolutely zero trade.

On the other hand, BMC pointed out a circular dated August 13, 2001, which lists vending machines as “licensable” under the MMC Act. The civic body further highlighted a list of minor and major trades under the Public Health department, which termed the tea vending machines as “catering establishments” falling under trade requiring a licence.

After hearing both the sides, the single-judge bench of justice Madhav Jamdar quashed the criminal complaint filed by the BMC, stating that there is no material on record to show that any “trade” is being conducted in the premises, which is the main requirement for attracting punishment under the MMC Act.

The bench observed that providing a separate dining area for the employees and arranging such appliances for their convenience does not amount to carrying out trade or commercial activity. Citing the definition of “eating house” under the MMC Act, the court stated that no element of “profit” was present in the case. Therefore, it quashed the process ordered by the magistrate court, holding that it passed without any basis and is without any material on record concerning ingredients of provision.