K. Rama Bhat Vs Bengaluru Electricity Supply Company Ltd. (Karnataka High Court)
Advocate’s Office Cannot Be Treated as Commercial Establishment for Electricity Tariff: Karnataka High Court
Facts & Issue:
The petitioners challenged an order passed by BESCOM reclassifying an electricity connection sanctioned under domestic tariff (LT-1) to commercial tariff on the ground that the premises were being used as an advocate’s office. The central issue before the Karnataka High Court was whether the office of a lawyer can be treated as a commercial establishment for the purpose of levying commercial electricity tariff.
Arguments on Behalf of the Petitioners (Advocate):
The petitioners contended that the legal profession is neither a trade nor a business and therefore cannot be equated with commercial activity. Merely because an advocate uses part of a residential premises for professional work, the electricity connection cannot be reclassified as commercial.
Strong reliance was placed on the Supreme Court judgment in V. Sasidharan v. Peter & Karunakar, wherein it was categorically held that the office of a lawyer or a firm of lawyers does not constitute a commercial establishment. It was further argued that advocacy is a regulated, ethical, and intellectual profession governed by the Advocates Act, 1961, and advocates act as officers of the Court discharging a public function.
The petitioners also relied on earlier Karnataka High Court decisions, including A.V. Gangadharappa v. BESCOM, where it was held that professional offices of advocates and chartered accountants cannot be subjected to commercial electricity tariff. The demand raised by BESCOM was therefore arbitrary, illegal, and contrary to settled law.
Arguments on Behalf of the Respondents (BESCOM):
BESCOM argued that during inspection it was found that the premises were being used as an advocate’s office and not purely for residential purposes. According to the respondents, such usage amounted to misuse of tariff (MOT), justifying reclassification from domestic to commercial tariff.
It was contended that since professional services were being rendered from the premises and clients were visiting the office, the activity had commercial characteristics and therefore attracted commercial tariff as per the electricity supply regulations.
Findings & Decision of the High Court:
The High Court rejected the stand of BESCOM and accepted the contentions of the petitioners. The Court held that the defining feature of a commercial establishment is profit-oriented business or trade, which is entirely absent in the legal profession. The practice of law is an intellectual and ethical pursuit involving personal skill and fiduciary duty, not a commercial enterprise.
The Court reiterated that fees earned by advocates are honorarium for professional services and not profits from commerce. An advocate’s office neither involves sale of goods nor systematic commercial activity. Relying on V. Sasidharan and consistent judicial precedents, the Court concluded that an advocate’s office cannot be brought within the scope of a commercial establishment for electricity tariff purposes.
Accordingly, the impugned order reclassifying the connection was set aside, BESCOM was directed to continue levying domestic tariff (LT-1), and refund of the excess amount collected was ordered.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioners are before this Court seeking for the following prayers:
“i) To issue writ in the nature of certiorari or any other appropriate writ, order or direction and thereby to set aside the Order No.AEE(V)/C2 SD/2024-25/3122/23 dated 30.09.2024 issued by 2nd Respondent as per Annexure-A and
ii) To grant such other and further relief so as to cost of proceedings throughout in the interest of justice.”
2. Petitioner No.1 is an advocate and a tenant in respect of first floor of property bearing No.19, South End Road, Sheshadripuram, Bengaluru. The said premises is connected with an electricity meter sanctioned under residential tariff LT1, with sanctioned load of 2 KW + 0 HP vide RR No.C2EH 16190, Khatha No.1451453000. The petitioners contend that they have been regularly paying the electricity charges to respondent No.2 and that no arrears are due.
3. It is stated that respondent No.2 inspected the premises and reported that although the supply meter was functioning properly, petitioner No.1 was using the premises as an advocate’s office, and therefore, the power supply was liable to be charged under the commercial tariff, treating it as a case of misuse of tariff (MOT).
4. The petitioners submitted a detailed representation objecting to such classification. However, without considering their reply, respondent No.2 passed the impugned order dated 31.09.2024, reclassifying the connection under commercial tariff and demanding Rs.16,367.70/-, after adjusting the amount already paid under residential tariff.
5. Learned counsel for the petitioners contends that the use of premises by an advocate for professional purposes does not amount to a commercial activity, and the connection sanctioned for domestic purposes cannot be reclassified. Reliance is placed upon the decision of the Apex Court in the case of V. Sasidharan Vs. Peter and Karunakar and others1 (V. Sasidharan) to contend that the profession of law is not a business or trade within the meaning of the term ‘commercial establishment’. Reliance is also placed upon the decision of the Co-Ordinate Bench of this Court in the case of A.V. Gangadharappa Vs. Bangalore Electricity Supply Company Ltd., and others2 (A.V. Gangadharappa), wherein this Court, considering the decision of the Apex Court in the case of V. Sasidharan and the decision of this Court in the case of M/s. Singhvi Dev and Unni Charters Accountants Vs. The Regional Director, ESI Corporation and others3 (M/s. Singhvi Dev), held that similar to the profession of Chartered Accountants, the legal profession is not a business or trade within the meaning of the term ‘profession’ and the impugned orders of the respondents therein i.e., electricity supply board was set aside.
6. Per contra, learned counsel for the respondents submits that the inspection report revealed the use of the premises as a lawyer’s office and therefore, charging under the commercial tariff was justified.
7. Upon considerations of rival submissions, the question that arises for determination is:
“Whether the office of a lawyer or the firm of lawyers can be treated as a ‘commercial establishment’ for the purpose of levying a commercial tariff by the respondent-authority?”
8. The profession of an advocate, by its very nature, cannot be brought within the sweep of the expression, ‘commercial establishment’. The distinguishing feature of a commercial establishment is that it is an enterprise organized for profit through the systematic production, distribution, or sale of goods or services. In contrast, the practice of law is an intellectual and ethical profession, governed by the Advocates Act, 1961, controlled by statutory and disciplinary mechanisms.
9. The essence of advocacy lies in rendering personal and professional service based on legal skill and integrity, not in conducting a business venture. The fees earned by an advocate are honorarium for professional service rendered and not profits derived from commerce or trade. An advocate discharges a public function as an officer of the Court, assisting in the administration of justice. The professional relationship between advocate and client is fiduciary and not commercial. The office of an advocate is not an establishment employing labour or material for gain, the clerks or assistants, who work therein, aid the advocate in preparation of briefs and procedural compliance, and their work is purely auxiliary to the advocate’s personal service. There is neither commercial inventory, nor saleable product, nor entrepreneurial profit motive. The purpose of welfare or regulatory enactments such as the Karnataka Shops and Commercial Establishments Act, 1961, (‘Commercial Establishments Act, 1961’ for short) or tariff classification issued by the Electricity Supply Authorities, is to govern entities engaged in commerce or trade. Extending such classification to the legal profession would be incongruous and inconsistent with the constitutional and ethical character. Hence, an advocate’s office cannot be regarded as a ‘Commercial establishment’ for the purpose of applying commercial electricity tariff.
10. The Apex Court in the case of V. Sasidharan (supra), has categorically held that the office of lawyer or of a firm of lawyers is not a ‘commercial establishment’ within the meaning of the Commercial Establishment Act, 1961. The Apex Court has held as under:
“For these reasons, we are of the opinion that the office of a lawyer or of a firm of lawyers is not a ‘commercial establishment’ within the meaning of the Act. This conclusion is strengthened by the other provisions of the Act. Chapter I-A of the Act provides for registration of establishments, Chapter II for hours of work. Chapter III for holidays and leave, Chapter IV for wages, Chapter V for employment of children and women and Chapter VI for health and safety measures. Section 6 of the Act provides that no employee in any establishment shall be required or allowed to work for more than eight hours on any day or for more than 48 hours in any week. Section 8 requires that, the period of work of an employee in an establishment for each day shall be so fixed that no period shall exceed four hours and that no such person shall work for more than four hours before he has had an interval for rest of at least one hour. Under section 10, no establishment shall, on any day, be opened earlier than and closed later than such hours as may be fixed by the Government, provided that any customer who is being served or is waiting to be served in any establishment at the hour fixed for its closing may be served during a quarter of an hour immediately following such hour. These and other cognate provisions of the Act show that a lawyer’s office cannot possibly be comprehended within the meaning of the expression ‘commercial establishment’ as defined in Section 2(4) of the Act. We are quite solicitous about the welfare of those who work in the lawyers’ offices. But, there are many other ways in which their welfare can be ensured. If the current trends are any indication and if old memories fail not, the earnings of lawyers’ clerks cannot, in reality, bear reasonable comparison with the earnings of employees of commercial establishments, properly so called. They, undoubtedly, work hard but they do not go without their reward. They come early in the morning and go late at night, but that is implicit in the very nature of the duties which they are required to perform and the time they spend is not a profitless pastime.
An argument was strongly pressed upon us on the basis of the decision of this Court in Bangalore Water-Supply & Sewerage Board v. A. Rajappa (1978) 2 SCC 213. The High Court has rightly observed that the question which arose in that case was entirely different, namely, the sweep of the meaning of the word ‘industry’. The ratio of that decision is that the term ‘industry’ covers any activity which is systematically or habitually undertaken for the production or distribution of goods or for rendering material services to the community at large with the help of employees. The question which arises in this appeal is basically different, namely, whether a lawyer’s office or the office of a firm of lawyers is a commercial establishment. Considerations which were germane to the determination of the question in the Bangalore Water Supply case are foreign to the decision of the question before us.”
(emphasis supplied)
11. The Apex Court observed that legal profession is neither trade nor business, and the office of a lawyer cannot be equated with an establishment engaged in commerce or industry.
12. The legal profession is founded upon ethics, integrity and responsibility to justice system. The profession of advocacy is not a trade or business but a regulated intellectual and ethical pursuit in aid to justice. It is devoid of commercial motive, involves personal skill and statutory discipline and carries duties to the Court and the client. The advocates office cannot therefore be equated with a ‘commercial establishment’ contemplated under commercial tariff.
13. In view of the well settled position of law, the action of the respondents in reclassifying the petitioners’ connection from domestic to commercial tariff is wholly unsustainable. Accordingly, this Court pass the following:
ORDER
i. The writ petition is allowed.
ii. The impugned order dated 30.09.2024 passed by respondent No.2 as per Annexure-A is set aside.
iii. Respondent No.2 shall continue to levy the tariff under LT1 (domestic purpose) and the petitioner shall continue to pay the bills as raised thereunder.
iv. The amount in deposit pursuant to the order dated 30.09.2024 is directed to be refunded to petitioner No.1 on due identification.
Notes:
1 1984 AIR 1700
2 WP No.40975/2013 D.D. 04.02.2015
3 ILR 2010 KAR 169
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