Commercial establishment test applied to a federation whose systematic member services and trade activities brought it within the Shops Act.

The federation's premises were held to be a commercial establishment under Section 2(5) of the Delhi Shops and Establishments Act, 1954 because the actual activities carried on there amounted to business and allied operations. A registered society or charitable body is not excluded where its functions include systematic services for members and traders, such as arbitration support, trade assistance, publications, exhibitions, and paid or subscription-based services. The absence of profit distribution did not negate the commercial character of the activities, as surplus being ploughed back was not decisive. The earlier view treating the federation as engaged in business activity was followed, and the objection to the Act's applicability failed.

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Issues: Whether the respondent federation's premises were a "commercial establishment" under Section 2(5) of the Delhi Shops and Establishments Act, 1954.

Analysis: The definition of "commercial establishment" covers premises where any trade, business or profession is carried on, as well as work connected with or incidental or ancillary thereto. A registered society or charitable body is not excluded if its actual activities amount to business, trade or profession. The federation's objects and activities showed systematic operations for the benefit of members and other traders and businessmen, including arbitration facilities, assistance in trade matters, publication of periodicals and bulletins, organization of exhibitions, and provision of services for payment or subscription. The fact that surplus income was ploughed back and not distributed as profit did not prevent the activity from being commercial. The earlier decision holding the federation to be engaged in business activity was followed and not treated as wrongly decided.

Conclusion: The respondent federation's premises were a commercial establishment within Section 2(5) of the Delhi Shops and Establishments Act, 1954, and the objection to the Act's applicability failed.

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