M/s. Chennai Corporate Club P. Ltd. v. The Health Officer, Corporation of Chennai & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 18.7.2012CORAM:THE HON'BLE MR. JUSTICE R. SUDHAKARW.P.No. 5251 of 2010 ........M/s. Chennai Corporate Club P. Ltd.,rep. By its Chairman,S. Murugesan,having its registered Club P. Ltd.,No.3 Anna Salai, City Centre Plaza, Vth Floor,Chennai.2. .... PetitionerVs.1.The Health Officer, Corporation of Chennai,Rippon Buildings,Chennai.3.2. The Asst. Health Officer,O/o the Health Officer,Zone VI, Corporation of Chennai,Rippon Buildings,Chennai.3. ... RespondentsPetition filed under Article 226 of the Constitution of India toissue a Writ of Ceritorari calling for the records in connectionwith the order dated 8.3.2010 made in No.27011, originated from thefile of the first respondent, signed by the second respondent and toquash the same.For Petitioner : Mr. B. Kumar, Sr.Counsel for Mr. R. LoganathanFor Respondents : Mr. V. Bharathidasan https://hcservices.ecourts.gov.in/hcservices/ ORDERThis writ petition is filed to issue a Writ of Ceritoraricalling for the records in connection with the order dated 8.3.2010made in No.27011, originated from the file of the first respondent,signed by the second respondent and to quash the same.2. The petitioner is a private limited companyincorporated under the Companies Act 1956 and runs the club by nameChennai Corporate Club and admits members on certain terms andconditions. The club is promoted for the benefit of the members,their family and guests of the members as and when they are invited.The club provides the following among other facilities i.e., Inhouse,Indoor games, Outdoor games, Swimming, Physical Fitness Centre,Tennis Court, Recreation Centres, etc. It has many branches and runsa resort as well. The relevant Rules and Regulations/bye-laws of theclub is as follows: 1. Club Timings:1.1. The club will remain open from 7 am. to 10.30p.m. on all days. 1.2. On special occasions, the club will remainopen till 12.00 midnight. There will be no Kitchenservice before 11.00 am and after the closing hoursprescribed for the day. 4. Catering Timings:4.1 The Kitchen will be open for service duringthe following hours.All days vegetarian/ non vegetarian; 11.00am to10.30pm.7. Late Hours:7.1 No members or his guest shall remainwithin the Club premises after 11.30 except on notifiedspecial nights. 9. General:-9.1 Members are requested to surrender theirclub membership card at the front office/reception whenthey are entering in the club. 9.2 The Front office Executive will give aService card after collecting the membership card fromthe members. 9.3 If the member is occupied with morethan guests, then they have to get a prior permissionfrom the administrative office. Without the management'spermission, they will not be allowed to enter the club. 9.4 Liquor will be served only in the Barand in the area mentioned thereof. No liquor will beserved at any place deemed right by the member. https://hcservices.ecourts.gov.in/hcservices/ Members' co-operation is solicited in this regard. 9.5 Outside Food and beverage items are notallowed in The Club. Food or Beverages brought fromoutside are not permitted for consumption in the cluband other premises.9.6 Do not litter the club premises. LitterBins are provided and member's are requested to put thelitter inside the same. 9.7 The club is not to be used for anyimmoral or unlawful activities. If found guilty, theclub membership will be withdrawn and the member will beasked to vacate the club premises immediately. 10. Guest Policy:-10.1. Guests must be accompanied by theeligible member club. 10.6 Persons, who are not members of theclub shall not be brought into the club as guests ofmembers for more that 36 days in year. The term'persons' shall mean to include any male person ofmember family above the above of 25 years and marrieddaughters.10.9. No member shall be entitled to bringmore than 5 guests, at a time, twice a month. More that5 guests will be charged party rates @ Rs.200) Besidesguest charge. 15. Dependent (relative) Members:15.1 Dependent relative shall mean a member'swife. Son below 25 years of age and unmarrieddaughters, who are dependent of such member. No otherrelative shall be considered to be a dependent person. 15.2.Dependent children shall not introduceguests/visitors to the Club. 20. Food from outside:-20.1. Members shall not bring inside the Clubany items of food whatsoever to be consumed in the clubpremises.23. Party Guidelines:23.1. Members intending to hold parties arerequired to submit in writing the order form that isavailable with the Catering Manager/ Supervisor alongwith 75% of the anticipated charges as advanced. "(emphasis supplied.)3. The club was incorporated on 10.7.2000. The petitioner-club is an assessee under the Service Tax and covered under theEmployees State Insurance Act. They also hold a Certificate ofRegistration under the C.S.T. Act. The petitioner club is regularlypaying income-tax, professional tax. The petitioner-club contributesto the Labour Welfare Board. While so, on 8.3.2010, the HealthOfficer, Corporation of Chennai, issued a notice stating that the https://hcservices.ecourts.gov.in/hcservices/ club is running the eating house without a license being issued inthis regard in contravention of Section 279 of the Chennai CityMunicipal Corporation Act, 1919 (Tamil Nadu Act IV of 1919) (hereinafter referred to as 'The Act). The petitioner was called upon toapply for the license by paying the required fees, failing which,action will be taken under Section 379A of the Act. In response tothe same, the petitioner submitted a detailed reply on 9.3.2010. Ithas been specifically pointed out to the authorities that the club isnot running any eating house as defined under Section 279 of the Actand therefore, there is no requirement of obtaining license.4. The main contention of the petitioner and the learnedSenior Counsel appearing for the petitioner, is that the petitionerclub does not fall within the definition of lodging house. ChapterXII of the Act provides for license in respect of a lodging house andSection 279 of the Act, deals with the license with regard to lodginghouse and it reads as follows:" 279. Prohibition in respect of lodging houses .-(1) No person shall without or otherwise than inconformity with the terms of a license granted by theCommissioner in this behalf, keep any lodging house,eating-house, tea-shop, coffee-house, cafe, restaurant,refreshment room, or any place, where the public areadmitted for repose or for consumption of any food ordrink or any place where food is sold or prepared forsale:(Provided that no such licence shall be required fora lodging house as defined in the (Tamil Nadu) PublicHealth Act, 1939, if the keeper thereof been registeredunder that Act.)Explanation: - " Lodging house" means a hotel,boarding house, choultry or rest-house other than achoultry or rest-house maintained by the Government or alocal authority, unlicensed emigration depot or any placewhere casual visitors are received and provided withsleeping accommodation with or without food on paymentbut does not include a students' hostel under public orrecognized control.(2) The commissioner may, at any time, cancel orsuspend any licence granted under sub-section (1) if heis of opinion that the premises covered thereby are notkept in conformity with the conditions of such licence orwith the provisions of any bye-law made under Section 349relating to such premises whether or not the licensee isprosecuted under this Act."5. According to the petitioner, the terms, lodging house,eating house, tea shop, coffee house, cafe, restaurant, refreshment https://hcservices.ecourts.gov.in/hcservices/ room or any place where the public are admitted for repose or forconsumption of food or drinks, will not take within its ambit, aclub, which is run exclusively by the members for the benefit of themembers of the club exclusively. It does not fall in any of thecategories mentioned in Section 279 of the Act. It is not open topublic since access is restricted only to members. It does not sellfood to the public.6. The learned Senior Counsel referred to various clausesin the bye-laws of the Club to state that the club is run exclusivelyfor the benefit of the members and does not cater to public needeither for repose or for consumption of food or drinks. It is not aplace where a food is sold or prepared for sale to the public. Thevarious conditions imposed in running the club, which has beenextracted above, clearly provides that only members of the club areentitled to enjoy the benefits and it does not provide the facilityto the public. The guests even if admitted, are not allowed to payfor the food. It is charged on the member who invites the guest athis cost.7. The explanation to Section 279 of the Act states thatthe lodging house means a hotel, Boarding house, choultry or resthouse other than the choultry or rest house maintained by theGovernment or a local authority, unlicensed emigration depot or anyplace where casual visitors are received and provided sleepingaccommodation with or without food on payment. 8. In this case, neither in the Section 279 of the Actor in the explanation, there is reference to a club. It istherefore, contended that by the language of section 279 of the Act,a lodging house does not include a club and that is a differententity by itself. The various conditions imposed in the bye-laws ofthe club and the manner in which the club functions will clearly goto show that it does not fall within the definition of lodging houseor under any other category mentioned in Section 279 of the Act. 9. According to the learned Senior Counsel, the petitionerclub is not intended to admit any public for repose or forconsumption of food or drinks. On this premise, he contended thatthe notice calling upon the petitioner-club to take a license interms of Section 279 of the Act is bad. He also relied upon thedecision in The Corporation of Madras by its Commissioner – Vs.Mr.A.D. Charles, the present President and member of GeneralCommittee of the Madras Club reported in (1952, 2 MLJ 247) whereSection 279 of the Act was considered by this Court and this Courtupheld the order of the City Civil Court, which held that a Clubwould not fall within the ambit of Section 279 of the Act andtherefore, it need not to take a license. 10. Sri. Bharathidasan, learned counsel for the https://hcservices.ecourts.gov.in/hcservices/ respondents, on the other hand contended that if the club sells foodor allows the club premises to be used for commercial exploitationlike Marriage reception, Fashion show, Trade fair, etc., where publicis inducted, then it will come within the definition of Section 279of the Act and therefore, there is a requirement of taking license.He pointed out that in Section 279 of the Act, it is specificallystated that the need to take license will apply to any place wherefood is prepared and sold in respect of the various categoriesmentioned in Section 279 of the Act. He further contended that sincefood and beverages are sold to the members and there is an element ofsale and hence, the license becomes a necessity. He stated thatwhere club premises is let out for Exhibition, Trade fair, etc. foodis also sold to the public and therefore, Section 279 of the Act willbe attracted.11. The point in issue is wether a club requires a licencein terms of Section 279 of the Act. Having considered the rivalcontentions, this Court is of the view that the provisions of Section279 of the Act mandates a license for the purpose of running lodginghouse, eating house, tea shop, coffee house, restaurant, refreshmentrooms or any places where public are admitted for repose or forconsumption of food and drinks will not preclude a club. A reading ofthe explanation lodging house clarifies that by no stretch ofimagination, a club, which is run by the members for their ownbenefits, would come under the definition of a lodging house. Themembers are governed by the terms and conditions of by-laws of theclub, which has been highlighted above and it clearly provides thatthere will be no sale of food to the public nor food can be broughtfrom outside into the club. Insofar as guests are concerned, it isfor the members to pay for the guests and there will be no paymentmade by any guest. Furthermore, the various clauses of the bye-lawsclearly provides that the club is run exclusively for the benefit ofthe members and it is not open for the public for repose orconsumption of food and drinks. 12. The words, lodging house, eating house, tea shop,coffee house, restaurant, refreshment rooms should be read to meansimilar establishments where public are admitted as a matter ofright. A club on the other hand, restricts entry to public and thereis no interaction with the public. The explanation to Section 279 ofthe Act fortifies the views that the lodging house mentioned inSection 279 of the Act cannot apply to a club. The nature of anarrangement between the members of a club, is like a close knitfamily and all activities are restricted to the members and theirfamily. As has been held in the decision cited above, i.e. TheCorporation of Madras by its Commissioner – Vs. Mr.A.D. Charles, thepresent President and member of General Committee of the Madras Clubreported in (1952, 2 MLJ 247), the omission of a club from Section279 of the Act is conscious omission by the legislation. The relevantportion in the above said decision is as follows: https://hcservices.ecourts.gov.in/hcservices/ "In appeal I am of the opinion that this Madras clubdoes not fall within the ambit of Section 279, MadrasCity Municipal Act for the following three good reasons.First of all, the section meticulously describes thetypes of places which are hit at by the section. ThoughClubs constitute a well known and distinct category ofinstitutions, they are not mentioned as one of thesetypes governed by this Section 279. The Legislaturecannot be credited with such a blissful ignorance as toignore these Clubs if it had really intended to make themcome within the meaning of Section 279. On the other handit seems plain as pointed out by the learned City CivilJudge that had the Legislature intended so, it would haveadded "clubs" to many other names of places found inSection 279(1) and that it seemed plain that thelegislature did not consider that clubs stood in need ofthe inspection, supervision and services, on the part ofthe Corporation, which the issue of a licence underSection 279 involves and entails. Secondly, this MadrasClub cannot be brought within the meaning of the firsttype of institutions viz, lodging house or eating house.The terms "lodging house" and "eating house" normallyconnote places to which the members of the public have aright of admission and in which they have no interestotherwise than as mere lodgers or boarders. I havealready described the bye-laws and amenities provided bythis Club and it would be outrageous to describe thisMadras club as only a variety of lodging house or eatinghouse. Therefore, the learned City Civil Judge haspointed out that the matter did not require an elaboratediscussion though in fact he has discussed the Englishcases on this subject which support his conclusion. Butreally speaking the discussion of these English cases isnot very relevant except to throw additional light onthis matter because we are guided by the language ofSection 279 and as I have just now mentioned by nostretch of imagination the Madras club can be describedeither as a lodging house or a eating house. Therefore,we have to find whether this club would come within thesecond category of institutions viz, any place where thepublic are admitted for repose. The rules of the Madrasclub excluding all excepting the members of the Clubwould show that this Club could not be an institutionwhere the public can go and have repose. The thirdcategory of institution mentioned in Section 279 is aplace where food is sold or prepared for sale. No doubtif the expressions are construed by themselves, they canbe stretched to fanciful lengths and will take in tomention one illustration even Vaishnavite temples. On theother hand we must remember that the constructions that https://hcservices.ecourts.gov.in/hcservices/ should be placed on this third category must be 'ejusdemgeneris' to be of the same variety as the other twocategories enumerated above. In order to support thisconclusion that it was a place where food was sold orprepared for sale, the argument which was advanced in thelower court was that the tax officers are assessing theMadras Club to sales-tax. But this argument does not nowsupport the position taken by the Corporation in view ofthe recent decision of Mack J. in --'Cosmopolitan ClubMadras v. Deputy Commercial Tax Officer [(1952) I M.L.J.401.], wherein my learned brother held that the levy ofsales tax has no scope."13. The argument of Sri.Bharathidasan, learned counsel forthe respondents that in certain clubs, the club premises are allowedto be used for commercial exploitation like Marriage reception, Tradefair, Exhibition, etc., where public is inducted and therefore, itwill come within the definition of a lodging house, has some force.However, it will not apply insofar as the club which is runexclusively for its members. Section 279 of the Act will apply to theplace where food is prepared and sold even if it is not a lodginghouse, eating house restaurant or refreshment room. In the presenttrend, such a place where food is prepared and sold are called asfast food restaurants. That is not a case here. In the case onclubs, the preparation and sale of food to the members is not abusiness venture but a facility for the benefit of the members. It isstated that the income that is derived out of supplying food ispooled back into the club. There is no element of profit to the clubor to any individual or persons.14. In this case, since the bye-laws of the club clearlyprohibits entry of public for eating and for drinking and since thereis no sale of food of drinks for public, but reserved exclusively forthe members of the club, it will not fall within the definition oflodging house. 15. If the club, however, provides the premises of the clubfor marriage, exhibition, fair, or social function etc., where thepublic are allowed entry on payment and if food is sold to public,then the respondents-authorities would be justified in invoking theprovisions of Section 279 of the Act. 16. So long as the club does not provide the facility asdescribed under Section 279 of the Act to public and it is being runexclusively to members, Section 279 of the Act will have noapplication and accordingly the notice issued by the respondentscorporation is illegal and without jurisdiction and accordingly, thesame is liable to be set aside. https://hcservices.ecourts.gov.in/hcservices/

17. The writ petition is allowed and the impugned noticeis set aside. Consequently, M.P.No. 1 of 2010 is closed. No costs. sd/-Assistant RegistrarTrue Copy/-Sub Assistant Registrarra/rsbTo1. The Health Officer, Corporation of Chennai,Rippon Buildings,Chennai.3.2. The Asst. Health Officer,O/o the Health Officer,Zone VI, Corporation of Chennai,Rippon Buildings,Chennai.3. +1 CC to Mr. R. Loganathan, Advocate sr 41836+1 CC to Mr.V. Bharathidasan, Advocate SR 42120WP No. 5251/2010SKD-COKV – 30/08/2012