Small Business Activity in Society, Legal or Illegal? Know the Law, Act, Section, Judgment and interpretation of Top Lawyer | Advocate Paresh M Modi

Small Business Activity in Society, Legal or Illegal? Know the Law, Act, Section, Judgment and interpretation of Top Lawyer | Advocate Paresh M Modi

If a flat member in a Housing Society or Housing Service Society uses their flat for commercial activities such as tuition classes, gruh udyog (home business), ironing (pressing clothes), or sewing work, which increases lift usage or puts extra load on society infrastructure, the situation can lead to legal, practical, and regulatory concerns.

Here’s a detailed breakdown of legal implications, applicable laws, remedies, and court judgments:

1. Legal Framework Applicable

a. Cooperative Societies Act / Rules

• Gujarat Co-operative Societies Act, 1961 and the rules thereunder govern housing societies in Gujarat.
• Society by-laws usually define:
  • Permitted use of flats (residential only).
  • Consequences of unauthorized commercial use.
  • Powers of the managing committee to restrict activities causing nuisance or extra burden.

b. Gujarat Ownership Flats Act, 1973 (also known as Gujarat Apartment Ownership Act)

• Allows flat owners to own a separate unit with common amenities and outlines rights and duties.
• Common areas (like lifts) are co-owned and can’t be misused or overused by one member disproportionately.

c. Municipal Laws (e.g., Ahmedabad Municipal Corporation Rules)

• Zoning regulations may prohibit commercial use of residential premises.
• Running a commercial activity may require a Shop & Establishment License.

2. When Can Society Take Action?

• If:
  • The activity is commercial in nature and violates society by-laws.
  • The lift or common infrastructure is overused, causing wear and tear or maintenance burden.
  • Neighbours raise complaints due to nuisance, noise, or disturbance.
• The Society can issue a notice to stop or regulate such activity.

3. Key Judgments & Case Laws

a. Bombay High Court – Mohinder Singh v. Housing Society (2011)

• Running tuition from a flat was deemed not a violation, unless it caused nuisance or infrastructure overuse.
• Interpretation: Minor or professional use is allowed unless it burdens society.

b. Kamal Mehta v. Housing Society (Mumbai Tribunal)

• Repeated use of lift for business-related movement (e.g., tailoring goods, clients) allowed the society to:
  • Levy higher maintenance.
  • Issue restraining directions.

c. Rajinder Nagar Co-operative Housing Society Ltd. v. Lt. Governor

• Activities beyond residential use can be prohibited by society if not specifically permitted in by-laws.

4. Remedies & Solutions

For Society:

• Issue a written warning citing violation of by-laws.
• Call a General Body Meeting (GBM) and pass a resolution.
• Levy extra maintenance charges or non-occupancy charges, as per by-laws.
• If continued, issue a legal notice or file a complaint with the Registrar of Co-operative Societies.
• Can also move civil court or cooperative court for injunction.

For Member (Flat Owner):

• If the activity is home-based, minimal, and not causing nuisance, the member can:
  • Justify under Article 19(1)(g) – Right to carry on occupation.
  • Argue that it’s a residential-compatible profession (like tuition).
• Apply for society’s prior written consent if required.
• Agree to pay higher lift charges or usage charges if society demands reasonably.

5. Practical Solutions

• Introduce a Lift Usage Policy – more usage = higher charges.
• Pass by-laws or resolutions to restrict:
  • Commercial use beyond certain hours.
  • Movement of outsiders for business purposes.
• Encourage flat owners to disclose such activities for transparency.

Conclusion

If activities like tuition or gruh udyog are causing extra lift usage or inconvenience, society has the right to regulate, restrict, or impose additional charges under its by-laws, Cooperative Societies Act, and municipal zoning rules. However, small-scale professions (like home tuitions or stitching) may not be entirely illegal, especially if they don’t cause nuisance.