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Tuesday, November 26, 2013

Licence is must under sec.394 (1)(e) of the Bombay Municipal Corporation Act, 1888 for running a Eating house/Catering establishment by any club whether for it's members or for commercial purpose = Brihanmumbai Mahanagarpalika and another ....Appellants versus Willingdon Sports Club and others ....Respondents = published in http://judis.nic.in/supremecourt/imgst.aspx?filename=40987

Licence is must under sec.394 (1)(e) of the Bombay Municipal Corporation Act, 1888 for running a Eating house/Catering establishment by any club whether for it's members or for commercial purpose =

 Section 394(1)(e) and relevant extracts of Schedule  ‘M’,  which  have
bearing on this case read as under:

      “394. Certain articles or animals not to be kept, and certain  trades,
      processes and operations not to be carried on without a  license;  and
      things liable to be seized  destroyed,  etc.,  to  prevent  danger  or
      nuisance.

      (1) Except under and in accordance with the terms  and  conditions  of
      the licence granted by the Commissioner, no person shall—


      (e) carry on or allow or suffer to be  carried  on,  in  or  upon  any
      premises.—
Part IV
      Trades or processes or operations connected with  trades  which  shall
      not be carried on or allowed  to  be  carried  on  upon  any  premises
      without a licence.


      Keeping an eating house or catering establishment"


If we examine the rules and
      by-laws, it is clear that the object with which they have been  framed
      is to promote and preserve sanitation and public health and to prevent
      the spread of disease within the municipal limits and if that was  the
      object, it is difficult to see how canteens conducted on no  loss  and
      no profit basis could be excluded from the definition of  a  "catering
      establishment". 

In Balkrishna Karkera v. K.J. Mishra and  another  AIR  1979  (Bombay)
198,  learned  Single  Judge  interpreted  Section  394(1)(e)(i)  read  with
Section 471 of the Act and observed:

      “Now it is pertinent to note  that  although  the  expression  "eating
      house" has been defined under the Bombay  Municipal  Corporation  Act,
      the expression "catering establishment" has not been  defined.  It  is
      true that the staff canteen run by Accused No. 2 was not open  to  the
      members of the public at large and the admission was restricted solely
      to the employees of the said Company. To that extent  Mr.  Shrikrishna
      would be justified in his submission that the staff canteen could  not
      be termed as an "eating house." However, what is  significant  is  the
      fact that Accused No. 2 has not  been  charged  with  carrying  on  an
      "eating house" but he has been charged  for  carrying  on  a  catering
      establishment. "Catering establishment"  is  an  expression  which  is
      wider in its  connotation  than  the  expression  "eating  house"  and
      whether a staff canteen was open to the public or restricted only to a
      section of the public, it would still fall within the definition of  a
      "catering establishment".



26.   In our view, the aforesaid judgments of  the  Bombay  High  Court  lay
down correct law and ratio thereof deserves to be applied  for  interpreting
Section 394 (1) (e) read with Part IV of Schedule ‘M’ of the Act.

27.   As a sequel to the above discussion, we  hold  that  the  Bombay  High
Court was not right in relieving the respondents of the obligation  to  take
licence under Section 394(1)(e) of the Act.


 In the result, the appeal is allowed, the impugned order is set  aside
and the writ petition filed by the respondents is  dismissed  with  cost  of
Rs.50,000. The amount of cost shall be deposited  by  respondent  No.1  with
Maharashtra State Legal Services Authority within a  period  of  four  weeks
from today.

29.    Within  four  weeks  from  today,  the  respondent  shall   file   an
application for grant of licence under Section  394(1)(e)  of  the  Act  and
produce the necessary documents.  The application  shall  be  processed  and
decided by the competent Authority within next four weeks.

30.   It is made clear  that  appellant  No.1  shall  be  free  to  initiate
proceedings for imposition of penalty on respondent No.1 for its failure  to
take licence and pass appropriate order in accordance with law.
                                

    REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO. 5840 OF 2013
                  (Arising out of SLP(C) No. 7119 of 2010)


Brihanmumbai Mahanagarpalika and another                 ....Appellants

                                   versus

Willingdon Sports Club and others                        ....Respondents




                               J U D G M E N T

G.S. SINGHVI, J.

1.    The question which arises  for  consideration  in  this  appeal  filed
against order dated 29.9.2009 passed by the Division  Bench  of  the  Bombay
High Court in Writ Petition  No.2199/1999  is
whether  respondent  No.1  is
obliged to take licence  under  Section  394(1)(e)  read  with  Part  IV  of
Schedule ‘M’ of the Bombay Municipal Corporation Act, 1888  (now  titled  as
‘the Mumbai Municipal Corporation Act, 1888’ – for  short,  ‘the  Act’)  for
the catering services provided by it to the members and their guests.

2.    Respondent No.1 provides  various  sporting  facilities,  viz.,  golf,
tennis, squash, billiards, badminton, etc., to its  members.  
The  Catering
Department of respondent No.1 provides catering services to the members  and
occasionally to their guests. 
 By order  dated  21.11.1990,  appellant  No.2
called upon respondent No.1 to make an  application  for  grant  of  licence
under Section 394 of the Act for the eating house. 
The latter submitted  the application  on  24.11.1990.  
Thereafter,  Senior  Sanitary   Inspector   of
appellant  No.1  sent  communication  dated  3.12.1990  to  respondent  No.2
requiring him to submit various  documents  including  NOCs  from  Assistant
Engineer  (Buildings  and  Facilities)  and  Executive  Engineer  (Buildings
Proposals). 
In compliance of that letter, respondent No.2 furnished some  of
the documents.  
However, nothing appears to have been done for the next  two
years.

3.    In May 1993, respondent No.1 approached appellant No.2  for  grant  of
No Objection Certificate for the eating house and permission  to  keep  L.P.
Gas Cylinders.
Appellant No.2 gave ‘No  Objection’  for  carrying  out  the
trade of eating house and for L.P. Gas as  fuel  subject  to  the  following
conditions:

      “(1)  The internal roads, passages in the premises &  complex  of  the
           Club shall be maintained free from obstructions.

        2) Entrances, exists, passages in both  the  Restaurants  shall  be
           maintained free from obstructions.

        3) The existing four cabins housing gas cylinders  of  i)  12  Nos.
           each of 50 kgs. ii) 18 Nos. each 19.2 kgs. iii) 15 Nos. each.  &
           iv) 8 Nos. each of 19.2 kgs. shall be of brick  masonary  R.C.C.
           and as per the plan signed in token of approval.

        4) The gas installation shall be maintained as  per  "Industrial  &
           Commercial use of L.P. Gas Rules" and got tested once in year by
           the gas dealer or any competent authority of inventory  to  that
           effect shall be maintained.

        5) The Gas cabins shall be kept under lock and key.

        6)  Smoking,  cooking,  heating,  use  of  naked  light  shall   be
           prohibited near the gas cabins.

        7) The gas  pipes  shall  be  supported,  protected  from  physical
           damages, painted in red and taken at  least  10  cms  below  the
           electric wirings/ cables.

        8) Main shut of valves shall be provided to  the  gas  pipes  where
           pipes enter into the building for promptly closing the valves in
           case of emergency.

        9) Tandoors in kitchen on  ground  floor  permitted.  However,  any
           other fuel, any gas cylinders shall not be used.

       10) Premises shall be kept well ventilated by providing Exhaust fans
           in the kitchens.

       11) Metal hood covering the burners shall be provided.  The  ducting
           shall be taken to roof level or water wash system.

       12) Fire extinguishers shall be kept as follows:

            a) One dry chemical powder extinguisher each of 10  kgs.  having
           I.S.I mark & two buckets of sand shall be kept at each of the  4
           gas cabins. b) Two dry chemical powder extinguishers each of  10
           kgs. & two sand buckets shall be kept in the kitchen  of  Indian
           Food. c) One dry chemical extinguisher of 10 kgs. shall be  kept
           in Chinese kitchen.”

                             (reproduced from the appeal paper book)



4.    After four months, appellant No.2 sent communication  dated  4.11.1993
to respondent No.2 for compliance of the requirements communicated by  Chief
Fire Brigade Officer and also by his department.
The relevant  portions  of
that communication are extracted below:

      “With reference to your above application, I have to inform  you  that
      your request will be considered subject to satisfactory compliance  of
      the following requirements communicated by Chief Fire Brigade  Officer
      alongwith the requirements of this  department  within  14  (fourteen)
      days from the date of receipt of this letter. If you fail to carry out
      the same within specified time, necessary action  under  Sec.  394  of
      Bombay Municipal Corporation Act will be initiated against  you  which
      please note.


      1)    The internal roads, passages, in the  premises  and  complex  of
           club shall be maintained free from obstructions.

      2)    Entrances, Exists, passages in both  the  Restaurants  shall  be
           maintained free from obstructions.

      3)    The existing four cabins housing gas cylinders of  (i)  12  Nos.
           each of 50 kgs., (ii) 18 Nos. each of 19.2 kgs., (iii)  15  Nos.
           each of 50 kgs., (iv) 8 Nos. each of  19.2  kgs.,  shall  be  of
           brick masonry / R.C.C. and as per the plan signed  in  taken  of
           approval.

      4)    The Gas installation shall be maintained as  per  "Industrial  &
           Commercial use of L.P. Gas Rules" and got tested once in year by
           gas dealer or any  competent  authority  of  Inventory  to  that
           effect shall be maintained.

      5)    The gas cabins shall be kept under lock and key.

      6)     Smoking,  cooking,  heating,  use  of  naked  light  shall   be
           prohibited near the gas cabins.

      7)    The gas pipe shall be supported, protected from physical damage,
           painted in red and taken at least 10  cms,  below  the  electric
           wiring / cables.

      8)    Main shut of valves shall be provided to  the  gas  pipes  where
           pipes enter into the building for promptly closing the valves in
           case of emergency.

      9)    Tandoors in kitchen on  ground  floor  permitted,  however,  any
           other fuel, any loose cylinders shall not be used.

      10)   Premises shall be kept well ventilated by providing exhaust  fan
           in the Kitchens.

      11)   Metal hood covering the  burners  shall  provided.  The  ducting
           shall be taken to roof level or water wash system.

      12)   Fire extinguishers shall be kept as follows:-

           a)    One dry chemical powder  extinguishers  each  of  10  kgs.
                 having I.S.I. Mark and two buckets of sand shall be kept at
                 each of 4 Gas cabins.

           b)    Two dry chemical powder extinguisher each of 10  kgs.  and
                 two sand buckets shall be kept in  the  kitchen  of  Indian
                 food.

           c)    One dry chemical extinguisher of 10 kgs. shall be kept  in
                 Chinese kitchen.”

                                                         (emphasis supplied)

                                     (reproduced from the appeal paper book)

5.    On the same day, i.e., 4.11.1993, appellant No.2 sent  another  letter
to respondent No.2 informing him that the application  for  grant  of  trade
licence  will  be  considered  subject  to  fulfillment  of  the   following
conditions:

      “(1)  In the eating house

           (a)   Where snacks are prepared and served, there  shall  be  at
                 least 3 rooms, one of which shall be used as a dining room,
                 another as kitchen and the third as a store room. The rooms
                 to be used as dining room and as kitchen shall not be  less
                 than 9.2903 sq.mt. (100 qt.ft.) each in floor area and  not
                 less than 2.440 mt.(8 ft) on any side. The third room to be
                 used as a store room shall not be less than  l/3rd  of  the
                 total area of the dining room  and  the  kitchen  upto  the
                 maximum of 9.2903 sq. mt.( 100 sq. ft.). The height of  all
                 these rooms shall be as required under  the  Building  Bye-
                 Laws of the Bombay Municipal Corporation,  i.e.  3.050  mt.
                 (10 feet).

           (b)   Where articles  of  food  other  than  snacks  are  to  be
                 prepared and served, there shall be at least 3 rooms one of
                  which  shall  be  used  as  a  dining room, another  as  a
                 kitchen and the third as a store room. The room to be  used
                 for dining and kitchen shall not be less than  11.1484  sq.
                 mt. (120 sq. ft.) each in floor  area  and  not  less  than
                 2.440 mt (8 feet) on any side. The third room to be used as
                 store room shall not be less than l/3rd of the  total  area
                 of the dining room and kitchen upto the maximum  of  9.2903
                 sq. mt. (100 sq. ft.), the height of all these  room  shall
                 be as required under the Building Bye-laws  of  the  Bombay
                 Municipal Corporation, i.e. 3.050 mt. (10 feet)

           (c )  where only ready-made articles of food are  served.  There
                 shall be at least two rooms, one of which shall be used for
                 storing ready-made articles of food  and  the  other  as  a
                 service room. None of the rooms shall be less  than  9.2903
                 sq. mt. (100 sq. ft.) each in floor area and no  less  than
                 2.440 mt. (8 ft.) on any side. The third room to be used as
                 store room shall not be less than l/3rd of the  total  area
                 of the dining room and kitchen upto the 9.2903sq. mt.  (100
                 sq. ft.). The  height  of  all  these  rooms  shall  be  as
                 required  under  the  Building  Bye-laws  of   the   Bombay
                 Municipal Corporation i.e. 3.050 mt. (10 feet)

      (2)    All  the  rooms  shall  be  well-lighted  and   well-ventilated
      naturally or with the aid of artificial means and the  cook  room  and
      the dining room especially shall have "thorough ventilation."

      (3)   The walls of all the rooms of the Eating House shall  either  be
      oil-painted or otherwise rendered impervious to moisture and dirt upto
      a height of at least  1.83  mt.  (6  feet)  from  the  floor  and  the
      remaining upper portion above 1.83 mt. (6 feet), if not oil-painted or
      made impervious to moisture and dirt, shall  be  limewashed.  All  the
      wood-work in all the rooms shall be oil-painted.

      (4)   Water shall be stored for use during non-supply hours in a brass
      receptacle with a tight fitting cover and a tap. The receptacle  shall
      be placed on a suitable stand at least  381  mt.  (15  inches)  height
      above the floor. It shall be tinned from inside whenever necessary and
      shall be cleaned twice daily and steps shall  be  taken  to  see  that
      water is not contaminated in the process of storing or handling.

      (5)   Freely ventilated fly-proof  safes  and  other  means  shall  be
      provided and meat, milk and other eatables shall be kept in them so as
      to protect all artificial food from contamination by dust,  flies  and
      insects.

      (6)   Metal sanitary dust bin or bins of approved pattern with a close
      fitting lid for each shall be provided and maintained in good  repairs
      and used for the deposit of waste food and sweepings of the floor etc.
      and shall be emptied at least once  a  day  at  the  Mahalaxmi  Refuse
      Siding which is the place appointed by the Municipal Commissioner  for
      the removal and deposit of trade refuse. In  the  alternate  transport
      facilities provided by Corporation shall be availed of on  payment  of
      fixed charges.

      (7)   A sufficient number of table shall be provided in the room  used
      for eating and cooking. The top of each table shall  be  covered  with
      marble, zinc or some other equally suitable material presenting a non-
      absorbent even surface. Only clean cloth or  other  dusters  shall  be
      used to clean tables etc.

      (8)   A proper washing place with tap from Municipal Main  Measurement
      shall be provided in the kitchen. Such washing place shall be properly
      drained and shall discharge over a half channel gully at least 457 mt.
      (18 inches) away from the drain inlet and in the  case  of  the  trade
      located in Greater Bombay where drainage system  does  not  exit,  the
      arrangement for disposal waste water shall be such as to meet with the
      approval of Municipal Health Authorities. In the absence of  Municipal
      Water mains in any area, arrangements shall  be  made  to  store  such
      quantity of water and in such  manner  as  will  be  directed  by  the
      Municipal Health Authorities.

      (9)   All copper and brass cooking utensils shall be tinned  as  often
      as necessary or at least once in two months.

      (10)  No person suffering from any contagious  or  infectious  disease
      shall be employed on the premises in any capacity.

      (11)  The room used for cooking shall be adequately separated from the
      room used for eating. All cooking operations including the preparation
      of bhajias or similar artificial shall be carried out in cooking  room
      only by using kerosene oil stoves, gas or electrical as fuel and  fuel
      of any other kind shall never be used therein.

      (12)  No "Panshop" or other structure shall be put up or allowed to be
      put at the entrance in such manner so as to encroach on the  space  or
      to obstruct light and ventilation of the Eating House.

      (13)  The entire premises of  Eating  House  and  all  appliance  used
      therein shall at all  times  be  kept  in  a  scrupulously  clean  and
      sanitary condition and any practice which may lead to the  food  being
      contaminated shall not be employed or permitted to be employed in  the
      storage, handling, preparation or serving of food.

      (14)  No broken, cracked or chipped articles of  crockery    or  other
      utensils shall be used in the eating house either for  preparation  of
      food-stuffs or to serve them.

      (15)  Boards in English and in vernacular prohibiting spitting on  the
      walls or the floor of the trade premises shall be exhibited.

      (16)  A certificate in the prescribed form that adequate water  supply
      by meter measurement has been provided  shall  be  obtained  from  the
      Hydraulic Engineer, Bombay Municipal Corporation.

      (17)  A wash-basin with a metered tap and a  looking  glass  shall  be
      provided in a suitable part of the service room of  the  Eating  House
      and maintained at all times in a clean and sanitary state for  use  of
      the visitors.

      (18)  Waiters or other servants employed in  the  eating  house  shall
      always wear clean apparel while engaged in work in the eating house.

      (19)  No part of the eating house shall be used for stocking,  storing
      or keeping unserviceable articles.

      (20)  The management shall take measures to have the premises occupied
      by Eating House treated with insecticides to rid it of any insect pest
      at least once in four months either through the  Municipal  agency  or
      any firm recognised in this behalf.

      (21)  The floor of every room used for eating, cooking or the  storage
      or preparation of food shall be paved with  hard  impervious  material
      with a smooth and even surface.

      (22)  The eating house or any  part  of  it  shall  not  be  used  for
      dwelling purposes, except in the Eating  Houses  which  have  separate
      special arrangements for lodging the customers.

      (23)  No encroachment shall be made  on  any  footpath  adjoining  the
      eating house by placing thereon chairs, benches,  tables,  soda  water
      boxes or any other articles either for the use  of  applicant  or  his
      customers.

      (24)  The entire trade of conducting the  eating  house  and  all  the
      operations connected therewith shall be  strictly  restricted  to  the
      area occupied by the concern.

                             (Para 25 is not given in the appeal paper book)

      (26)  No article of food which is adulterated,  unwholesome  or  unfit
      for human consumption shall be kept, sold or exposed for sale  on  the
      trade premises.

      (27)  Requirements of Chief fire brigade officer's are out.

      (28)  The applicant produces an authority letter issued by  said  Club
      authorising him to hold the licence in his name.”

                                     (reproduced from the appeal paper book)

6.    While the issue relating to compliance of  the  conditions  enumerated
in the two letters dated 4.11.1993 was pending, appellant No.2  sent  demand
notice dated 14.1.1994 to respondent No.2  for  payment  of  Rs.2,70,915  as
licence fees. The respondents paid the  amount,  but  after  expiry  of  the
period specified in notice dated 14.1.1994.  This  prompted  appellant  No.2
to send notice dated 23.6.1994 to respondent No.1 for payment of  additional
amount of  Rs.1,04,756.25.   Respondent  No.2  sent  reply  dated  27.6.1994
citing the opinion of a law firm that the club is  not  required  to  obtain
eating house licence under the  Act  because  food  and  beverages  are  not
served for any profit or gain.  The appellant did not accept this  assertion
and demanded Rs.1,21,715.65 towards compounding fee.

7.    Respondent No.1 and two of its office bearers  challenged  the  demand
notice before the Bombay High Court in Writ Petition No.2199/1999 
 primarily
on the ground that catering facilities being provided to  its  members  were
incidental to their main activities and the same are exclusively  meant  for
the members and not for the public.

8.    In the written statement filed by the appellants, it was averred  that
food items were being prepared by the Catering  Department  on  large  scale
and a licence was required to be obtained from the point of view  of  health
and safety of the members coming to the club.

9.    The  Division  Bench  of  the  High  Court  relied  upon  order  dated
18.9.1992 passed by a co-ordinate Bench in Writ  Petition  No.4765  of  1984
titled Sohrab Vakil (Lt.Col.) and another v. B.G.  Pimple  and  another  and
held that respondent No.1 is not required to take licence under Section  394
of the Act because the catering  facilities  provided  to  its  members  are
ancillary to the main activity, i.e., the sporting facilities.
The  relevant
portion of the High Court’s order is reproduced below:

      “The question
whether a Club which as  ancillary  activities  provides
      catering services exclusively to its members can be said to be running
      an eating house within the meaning of the Act,
 fell for  consideration
      before a Division Bench  of  this  Court  in  the  case  Sohrab  Vakil
      (Lt.Col.) and another Vs. B.G.Pimple and another  referred  to  above.
     
 Perusal of  that  judgment  shows  that  the  Division  Bench  has  in
      categorical terms held that a  club  which  maintains  a  facility  of
      catering for its members exclusively as ancillary activity  cannot  be
      said to be running an eating house. In  our  opinion,  therefore,  the
      question that arises for consideration in this petition is no more res
      integra in view of the judgment of the  Division  Bench  in  the  case
      Sohrab Vakil (Lt.Col.) and another Vs. B.G.Pimple and another referred
      to above. 
So far as the judgment of the learned Single Judge  of  this
      Court  in  the  case  1.W.I.A.A.Club  Ltd  &  Anr.   Vs.   1.Municipal
      Corporation of Gr.Bombay & others referred to above, 
which was  relied
      on by the learned Counsel  appearing  for  respondents  is  concerned,
      perusal of that judgment shows that that judgment does not decide  any
      controversy. 
It appears that initially  the  WIAA  Club  had  filed  a
      petition claiming that it is not required to  take  out  eating  house
      licence for providing catering services to its members. 
But  when  the
      petition came up for final hearing, it was stated  on  behalf  of  the
      petitioner-Club that now they have decided to engage a contractor  for
      running Canteen and therefore, they are not pressing their  contention
      that they are not required to take out a licence for  maintaining  the
      catering  services  for  its  members.  
The  learned   Single   Judge,
      therefore, did not decide that  question  in  that  petition. 
 In  our
      opinion, therefore, the submission made on behalf of  the  Corporation
      that the question that arises for consideration in  this  petition  is
      already decided by the judgment of the learned Single  Judge  in  Writ
      petition no.1413  of  1982  which  was  disposed  of  by  order  dated
      20.1.1986, cannot be accepted. 
In our opinion, in view of the law laid
      down by the Division Bench in the  case  Sohrab  Vakil  (Lt.Col.)  and
      another Vs. B.G.Pimple and another referred to  above,  this  petition
      has to succeed.”


10.   We have heard Shri Atul Y. Chitale, learned  senior  counsel  for  the
appellants  and  Shri  T.R.  Andhyarujina,  learned   senior   counsel   for
respondent Nos. 1 to 3.
The Act is divided into 25 Chapters.  
Chapters  IX
to XV except Chapter XII contain provisions which are regulatory  in  nature
and are meant for the benefit of  public  at  large.  
Chapter  IX  contains
provisions for construction of drains and cleaning  thereof,  connection  of
the drains of private streets with municipal  drains,  disposal  of  sewage,
construction  of  water-closets,  privies,  urinals,  etc.  and   inspection
thereof.
 Chapter  X  contains  provisions  for  regulating  water  supply,
inspection of water works, prohibition of building and other acts which  may
injure sources of water.
Chapter XI contains provisions for  regulation  of
streets, public as well  as  private  and  lighting  thereof.  
Chapter  XII
contains provisions for regulating construction  of  buildings,  removal  of
dangerous structures, etc.
Chapter XIII speaks  of  grant  of  licences  of
surveyors and plumbers and making of regulations for  guidance  of  licensed
surveyors and plumbers and fees, etc., to be charged by them.  
Chapter  XIV
contains the provisions relating to  municipal  fire  brigade.  
Chapter  XV
contains provisions of scavenging and cleaning of  streets  and  removal  of
refuse, inspection and sanitation  of  buildings,  etc.
This  chapter  also
contains  provisions  for  regulation  of  public  bathing,  washing,  etc.,
regulation  of  factories,  trades,  etc.,  maintenance  and  regulation  of
markets and  slaughter  houses,  prohibition  against  sale  and  supply  of
articles  of  food  outside  the  markets,  licensing  of  butchers,   etc.,
inspection of places of sales, etc., prevention of dangerous diseases,  etc.

Section 394, which finds place in Chapter XV is couched  in  negative  form
and lays down that the activities specified therein  shall  not  be  carried
out by any person  except  under  and  in  accordance  with  the  terms  and
conditions of licence granted by the Commissioner.

11.   Section 394(1)(e) and relevant extracts of Schedule  ‘M’,  which  have
bearing on this case read as under:

      “394. Certain articles or animals not to be kept, and certain  trades,
      processes and operations not to be carried on without a  license;  and
      things liable to be seized  destroyed,  etc.,  to  prevent  danger  or
      nuisance.

      (1) Except under and in accordance with the terms  and  conditions  of
      the licence granted by the Commissioner, no person shall—


      (e) carry on or allow or suffer to be  carried  on,  in  or  upon  any
      premises.—


      (i) any of the trades specified in Part  IV  of  Schedule  M,  or  any
      process or operation connected with any such trade;


      (ii) any trade, process or operation, which in  the  opinion  of,  the
      Commissioner, is dangerous to life, health or property, or  likely  to
      create a nuisance either from its nature or by reason of the manner in
      which, or the conditions under which, the, same is, or is proposed  to
      be carried on;”


      “Schedule M
      Articles which shall not be kept without a  licence  in  or  upon  any
      premises


      Part IV
      Trades or processes or operations connected with  trades  which  shall
      not be carried on or allowed  to  be  carried  on  upon  any  premises
      without a licence.


      Keeping an eating house or catering establishment"



The expression ‘eating-house’ has been  defined  in  Section  3(ff)  in  the
following words:
      “3(ff) - eating-house means any "premises  to  which  the  public  are
      admitted and where any kind  of  food  is  prepared  or  supplied  for
      consumption on the premises for the  profit  or  gain  of  any  person
      owning or having an interest in or managing such premises.”

12.   The provisions contained in various chapters of the  Act  referred  to
hereinabove are meant for maintaining public hygiene, health and safety  and
also for preventing dangers to life,  health  and  property.  Schedule  ‘M’,
which is part of Section 394, specifies the articles which  cannot  be  kept
in or upon  any  premises  without  a  licence.  Part  IV  of  the  schedule
specifies trades or processes or operations  connected  with  trades,  which
cannot be carried on or allowed to be carried  on  any  premises  without  a
licence.  These  include  keeping   of   an   eating   house   or   catering
establishment. The object of incorporating the requirement of a licence  for
an ‘eating house’ or ‘catering  establishment’  is  to  ensure  that  public
hygiene is maintained at the  place/premises  where  the  food  is  prepared
and/or supplied for consumption.  It is also intended to  ensure  safety  of
the people engaged in the preparation of food articles  and  supply  thereof
as  well  as  all  those  who  consume  the  articles  at   the   particular
place/premises.   The No Objection Certificate  dated  25.6.1993  issued  by
appellant No.2 shows that the municipal authorities are very much  concerned
about the safety and health  of  the  people  coming  to  the  premises  and
complex of the club.  The first requirement incorporated in that  letter  is
free access in and exit from the premises of the club and  the  restaurants.
The gas installations are required to be maintained as  per  industrial  and
commercial use of Liquid Petroleum Gas Rules.   The  person  having  overall
control of the premises is duty bound to ensure that the gas  cylinders  and
other equipments are tested once  in  a  year  by  the  gas  dealer  or  any
competent authority.  The gas cabins are required to be kept under lock  and
key.  Smoking, cooking, heating and use of naked light  is  prohibited  near
the gas cabins.  The gas pipes are required to be  protected  from  physical
damage and main shut valves are required to be provided  to  the  gas  pipes
where the pipes enter into the building.  While permitting tandoors  in  the
kitchen on the ground floor, the use of gas cylinders  is  prohibited.   The
premises where the food is cooked are required to  be  kept  well-ventilated
by providing exhaust fans in the kitchen. The burners  are  required  to  be
covered with metal hood.  The fire extinguishers are  also  required  to  be
provided.  The length, width and height of the dining rooms  has  to  be  as
per the building bye-laws framed by appellant No.1.  It is the duty  of  the
management to keep all the  rooms  well-lighted  and  well-ventilated.   The
cooking room and dining room should have thorough ventilation.  It  is  also
the duty of the management to keep water in brass receptacle  with  a  tight
fitting cover and a tap and they are  to  be  placed  15  inches  above  the
ground.  Freely ventilated and fly-proof safes are required for keeping  the
items, like, meat, milk and other  eatables  so  as  to  protect  them  from
contamination by dust, flies and insects.  Sanitary  bins  or  dustbins  are
also required to be provided and sweeping of floors has to  be  done.  There
is a prohibition against employment of any person suffering from  contagious
or infectious disease. The premises of eating house  have  to  be  regularly
cleaned  to  avoid  contamination  and  any  practice  which  may  lead   to
contamination shall not be employed or  permitted  to  be  employed  in  the
storage, handling, preparation or  serving  of  food.   Broken,  cracked  or
chipped articles of crockery and utensils  cannot  be  used  in  the  eating
house either  for  preparation  of  foodstuffs  or  for  serving  them.  The
management is duty bound to take  all  measures  to  have  the  premises  of
eating house  treated  for  insecticides.   No  article  of  food  which  is
adulterated, unwholesome or unfit for human consumption can be kept or  sold
or exposed for sale in the eating house.  These  conditions  are  meant  for
ensuring that the premises where the food is prepared and supplied are  kept
clean, adequately ventilated and appropriate measures are taken by those  in
control of the premises and quality of food is  maintained  to  ensure  that
there is no compromise with the health and safety of the people.

13.   In its publication titled ‘Safe Food for Better Health’  (2002  Edn.),
the World Health Organisation (WHO) has recognized that the availability  of
safe food is a basic human  right  because  it  contributes  to  health  and
productivity. Many countries  including  USA,  Australia,  Germany,  France,
Canada, United Kingdom and India  have  adopted  a  food  safety  regulation
mechanism, either through sui generis legislation or  through  the  adoption
of global codes prescribed by the WHO and other UN  agencies.  However,  the
implementation of these regulations cannot be  guaranteed  if  there  is  no
monitoring system. It is essential for the success of these regulations  and
policies  that  adequate  steps  are  taken  to  ensure  the  compliance  to
standards by those in the industry. In order to ensure compliance, a  strong
licensing system has been developed by these countries. The purpose of  such
a system is to ensure  that  the  food  supplied  to  customers  in  a  food
establishment is  certified  to  be  of  high  quality  and  standard  by  a
recognised  authority.  Although  licensing  alone  cannot  be  a  foolproof
mechanism for ensuring food safety but it  is  certainly  one  of  the  most
effective methods  of  ensuring  that  quality  food  is  prepared  in  most
hygienic conditions and is made available to the  consumers.  The  licensing
system prevents the opening of establishments that  pose  a  threat  to  the
health of the people. The licensing mechanism also  provides  for  penalties
in case of non-compliance with licensing conditions,  which  could  lead  to
cancelling or suspension of the licence. Such a fear created  in  the  minds
of the licensees also ensures that they comply with licensing conditions  in
order to continue enjoying the benefits of the  licence.  Thus,  it  can  be
said that a licensing system  goes  a  long  way  in  ensuring  food  safety
thereby guaranteeing the supply of fresh and safe food  and  preventing  the
spread of foodborne diseases.

14.   At this stage, we  may  also  take  notice  of  the  Food  Safety  and
Standards Act, 2006 (for short, ‘the  2006  Act’).  This  Act  provides  for
establishment of the Food Safety and Standards Authority of India  which  is
mandated to lay down science based standards for articles  of  food  and  to
regulate their manufacture,  storage,  distribution,  sale  and  import,  to
ensure availability of safe and wholesome food  for  human  consumption  and
for matters connected therewith or incidental thereto. In  exercise  of  the
powers vested in it under the  2006  Act,  the  Food  Safety  and  Standards
Authority of India made multiple regulations including the Food  Safety  and
Standards (Licensing and Registration of Food Businesses) Regulations,  2011
(for short, ‘the Regulations’). Regulation 2.1 and 2.2 makes  the  obtaining
of licence mandatory for commencement of  any  food  business.  Part  II  of
Schedule IV of the Regulations prescribes general requirements  of  hygienic
and sanitary practices  to  be  followed  by  all  food  business  operators
applying for licence. Part V of Schedule IV of  the  Regulations  prescribes
the specific  hygienic  and  sanitary  practices  to  be  followed  by  food
business operators  engaged  in  catering  /  food  service  establishments.
Relevant portions of these two parts are extracted below:

      “SCHEDULE IV

                                   PART-II

      GENERAL REQUIREMENTS ON HYGIENIC AND SANITARY PRACTICES TO BE FOLLOWED
      BY ALL FOOD BUSINESS OPERATORS APPLYING FOR LICENSE.

      The  establishment  in  which  food  is  being   handled,   processed,
      manufactured, packed, stored, and distributed  by  the  food  business
      operator and the persons handling them should conform to the  sanitary
      and hygienic requirement, food safety measures and other standards  as
      specified below. It shall also be deemed to be the  responsibility  of
      the  food  business  operator  to  ensure   adherence   to   necessary
      requirements.

      In addition to the requirements specified  below,  the  food  business
      operator shall identify steps in  the  activities  of  food  business,
      which are critical to ensure  food  safety,  and  ensure  that  safety
      procedures  are  identified,  implemented,  maintained  and   reviewed
      periodically.

                                  PART - V

      SPECIFIC HYGIENIC AND  SANITARY  PRACTICES  TO  BE  FOLLOWED  BY  FOOD
      BUSINESS OPERATORS ENGAGED IN CATERING / FOOD SERVICE ESTABLISHMENTS.

      In addition to Part-II the Catering/  food  Service  establishment  in
      which  food  is  being  handled,  processed,   manufactured,   stored,
      distributed and ultimately sold  to  the  customers  and  the  persons
      handling them should conform to the sanitary and hygienic requirement,
      food safety measures and other standard as specified below.

      It includes premises where  public  is  admitted  for  repose  or  for
      consumption of any food or drink or any place  where  cooked  food  is
      sold or prepared for sale. It includes:

      (a) Eating Houses

      (b) Restaurants & Hotels

      (c) Snack Bars,

      (d) Canteens (Schools, Colleges, Office, Institutions)

      (e) Food Service at religious places

      (f) Neighbourhood Tiffin Services / dabba walas

      (g) Rail and airline catering

      (h) Hospital catering”



15.   The definition of  the  term  ‘food  business’  contained  in  Section
3(1)(n) of the 2006 Act reads thus:

      “Section 3(1)(n) Food business  means  any  undertaking,  whether  for
      profit or not and whether public or private, carrying out any  of  the
      activities related to any stage of manufacture, processing, packaging,
      storage, transportation, distribution of  food,  import  and  includes
      food services, catering services, sale of food or food ingredients.”


16.   These provisions reinforce the determination of  the  legislature  and
the executive to ensure safety of food articles  manufactured  and  supplied
by the food business  operators  and  others  engaged  in  catering  /  food
service establishments.  Part  V  of  Schedule  IV  of  the  Regulations  is
inclusive and covers eating houses,  restaurants  and  hotels,  snack  bars,
canteens, food service at religious places, hospital catering, etc.

17.   In the light of the above, we shall  now  consider  whether  the  High
Court was right in taking the view that the  expression  ‘eating  house’  is
not applicable to a club. The main reason which prompted the High  Court  to
take that view is that predominant  activity  of  the  club  is  to  provide
sporting  facilities  to  the  members  and  the  catering  facilities   are
ancillary. The other reason given  by  the  High  Court  is  that  the  food
articles are supplied to the members and not to outsiders except  when  they
come to the club as guests of the members and  that  the  catering  services
are not made available to the members with the object of  making  profit  or
gain.

18.   In our view, both the  aforesaid  reasons  are  incorrect.  A  cursory
reading of the definition of the expression ‘eating house’ may  support  the
conclusion of the High Court because general public is not allowed entry  in
the premises of the club and, in the first blush, it appears  that  food  is
not supplied for consumption on the premises for profit or  gain.   However,
if we apply  purposive  interpretation,  then  it  becomes  clear  that  the
catering department of the club which prepares and serves/supplies  food  to
members of the club is covered by the definition of the  expression  ‘eating
house’.  It cannot be denied that members  of  club  also  fall  within  the
ambit of the term ‘public’.  No doubt, the primary activity of the  club  is
to provide sporting facilities to the members, but the supply of food is  an
integral part of such activity and  the  catering  department  of  the  club
satisfies an essential component of the facilities  provided  by  the  club.
One can take judicial notice  of  the  fact  that  many  members  who  avail
sporting  facilities  remain  on  the  premises  for  a  very  long  period.
Therefore, the articles of food become integral part  of  their  activities.
Not only this,  many  join  the  club  in  the  name  of  availing  sporting
facilities only for the purpose of spending their time in  leisure  and  for
enjoying the facilities provided by the Catering  Department  of  the  club.
Thus, even though profit  may  not  be  the  motto  of  catering  facilities
provided by respondent No.1, it certainly gains by these facilities.

19.   As per Merriam Webster Dictionary, the  word  ‘gain’  means  something
wanted or valued that is  gotten;  something  that  is  gained;  especially:
money gotten through some activity or process, something  that  is  helpful:
advantage or benefit; an increase in amount, size, or number.  In Words  and
Phrases, Permanent Edition, Volume 18, the word ‘gain’ has  been  given  the
following meanings:

           "Gain" means that which is acquired or comes as a benefit. Thorn
           v Dc Breteuil, 83 N.Y.S 849, 856, 86 App.Div. 405.

           "Gain" means increase or addition to what one has of that  which
           is of profit, advantage,  or  benefit;  resources  or  advantage
           acquired, profit; opposed to laws;  act  of  gaining  something;
           specially, the obtaining  or  amassing  of  profit  or  valuable
           possessions; acquisition; accumulation. In  Re  Breuer's  Income
           Tax, 190 S.W.2d 248, 249, 354 Mo. 578.

           GAIN, BENEFIT OR ADVANTAGE:

           Under the Retail Sales Tax Act,  defining  "retailer"  as  every
           person engaged in  business  of  making  sales  at  retail,  and
           defining "business" as any activity engaged in with  the  object
           of "gain, benefit or advantage", social  club  which  furnished,
           without profit food and drink to its members  and  their  guests
           was subject to tax, since, although club  realized  no  "profit"
           from furnishing of food and drink, it did realize "gain, benefit
           or advantage". Gen.Laws 1937, Act 8493, Section 2(c-e). "Profit"
           may be said to be  "gain,  benefit  or  advantage",  but  "gain,
           benefit or advantage" does not necessarily mean  only  "profit".
           Union League Club v Jhonson, 115 P.2d 425, 426, 18 Cal.2d 275.

           A "vendor engaged in the business of selling  tangible  personal
           property", so as  to  be  liable  for  sales  tax,  is  one  who
           commences, conducts or commences, conducts, or continues in  the
           activity of selling tangible personal property, with the  object
           of gain, benefit,  or  advantage,  either  direct  or  indirect,
           irrespective of whether sales are made for "profit",  since  one
           may engage in a business  activity  with  an  object  of  "gain,
           benefit,  or  advantage"  and  not  necessarily  for   "profit".
           Gen.Code, section 5546-1 et seq., 116 Ohio Laws, Pt. 2, p.  323.
           "Profit" may  be  "gain,  benefit,  or  advantage",  but  "gain,
           benefit, or advantage" does not necessarily mean only  "profit".
           State ex rel. City Loan & Savings Co. of Wapakoneta v.  Zcllner,
           13 N.E.2d 235, 238, 133 Ohio St. 263.”



20.   In Re: Arthur Average Association  for  British  Foreign  and  Colonia
Ships, ex p Hargrove and Company (1875) LR 10 Ch App  545  n  at  546,  547,
Jessel MR held that "Gain" is not  restricted  to  pecuniary  or  commercial
profits, it includes other considerations of value obtained.

21.   From the above dictionary meanings and judgment of  1875,  it  becomes
clear that the word ‘gain’ is not synonymous with the word ‘profit’.  It  is
not restricted  to  pecuniary  or  commercial  profits  and  includes  other
considerations of value gained.  Any advantage or benefit acquired or  value
addition made by some activities would amount to  ‘gain’.   Therefore,  even
though profit is not the motto of the club but the advantage derived  by  it
by supplying food to its members and their guests is  certainly  covered  by
the word ‘gain’ appearing in the definition of ‘eating house’.

22.   The issue deserves to  be  examined  from  another  angle.  While  the
expression ‘eating house’ has been defined in Section 3(ff) of the Act,  the
expression ‘catering establishment’ has not been defined. The scope of  that
expression is certainly wider than the expression ‘eating house’.

23.   The expression ‘catering establishment’  came  up  for  interpretation
before  the  Bombay  High  Court  in  Criminal  Appeal  No.593/1972.   After
adverting to dictionary meaning of the word ‘cater’,  V.D.  Tulzapurkar,  J.
(as he then was) held:

      “In this view of the matter, it is clear to me that the expression ' a
      catering establishment' will have  to  be  understood  in  its  normal
      dictionary meaning. The word 'cater' as a verb means, according to the
      Oxford Dictionary, "To act as caterer, or purveyor of  provisions;  to
      provide a supply of  food".  It  also  means  "To  occupy  oneself  in
      procuring or providing (requisites, things desired, etc.)  and  'cater
      is understood to mean "Purvey food and other requisites."  A  catering
      establishment would, therefore, be an establishment where purveying of
      food and other requisites takes place. It is therefore, not necessary,
      according to the  dictionary  meaning  of  the  expression,  that  the
      members of the public should have an access to such  an  establishment
      before it could become 'a catering establishment' within  the  meaning
      of the relevant entry in Part IV of Schedule M. It cannot be  disputed
      that in the canteen in question articles of food and other  requisites
      are being purveyed to the students and the members  of  the  Institute
      and, therefore, the canteen  in  question  clearly  falls  within  the
      expression 'a catering establishment' occurring in the relevant  entry
      in Part IV of Schedule.”

24.    In  Narayan  Gopal  Karadkar  v.  Hanumant   Ramrao   Palkar   (1969)
Maharasthra Law Journal 728, a learned  Single  Judge  of  the  Bombay  High
Court considered the question whether running of a canteen  by  Railwaymen’s
Cooperative Society at Lonawala without a licence  constituted  an  offence.
Initially, the Society had obtained a licence  for  conducting  the  canteen
but the same was not renewed for a number of years.  Therefore, the  Borough
Municipality sanctioned prosecution of the  Manager  of  the  Canteen  under
Sections  172  read  with  Section  61(1)(b)(ii)  of  the  Bombay  Municipal
Boroughs Act, 1925.   Judicial  Magistrate,  First  Class,  Vadgaon  (Mawal)
acquitted the accused. The appeal filed by the appellant was allowed by  the
learned Single  Judge  of  the  High  Court.  After  noticing  the  relevant
provisions, the learned Judge observed:

      “It is in pursuance of these provisions that the Borough  Municipality
      of Lonavala has  framed  its  rules  and  by-laws  for  licensing  and
      regulating the places for use of hotels, eating houses, tea or  coffee
      shops and restaurants within the Municipal  Borough  and  in  Part  I,
      which contains definitions, "catering establishment" has been  defined
      as meaning any place used for the business of sale of any  article  of
      food or drink for consumption on the  premises  and  including  hotel,
      eating house, tea or coffee shop or restaurant,  pan  bidi  shops  and
      sugarcane juice shop.  This  definition  would  clearly  show  that  a
      catering establishment means any place used for the business  of  sale
      of articles of food or drink and as pointed out by the  Supreme  Court
      in State of Bombay v. Hospital Mazdoor (1960) 62 Bom. L.R. 558:


           ...'trade' according to Halsbury, in  its  primary  meaning,  is
           'exchange of goods for goods or goods for  money',  and  in  its
           secondary meaning it is 'any business carried on -with a view to
           profit whether manual or mercantile, as distinguished  from  the
           liberal arts  or  learned  professions  and  from  agriculture';
           whereas 'business' is a wider term not synonymous with trade and
           means  practically  anything   which   is   an   occupation   as
           distinguished from a pleasure.


      It would thus be seen that the concept of earning  profits  is  not  a
      necessary appurtenant of the expression "business" and looked at  from
      this point of view, a place used for  the  business  of  sale  of  any
      article of food or drink does not cease to be so merely because it  is
      not  being  conducted  with  a  view  to  earn  profits.  Anyway,  the
      definition  contained  in  the  rules  and  by-laws  of  the   Borough
      Municipality is an inclusive definition. After saying that a  catering
      establishment means any place used for the business  of  sale  of  any
      article of food or drink for consumption, it further goes  on  to  say
      that it includes a hotel or an eating house,  etc.  and  in  the  same
      Supreme Court decision, to which a reference has already been made, it
      has been pointed out that the words used in  an  inclusive  definition
      denote extension and cannot be treated as  restricted  in  any  sense.
      Where the Courts are dealing with an inclusive definition it would  be
      inappropriate to put a restrictive interpretation upon terms of  wider
      denotation. Therefore, having regard to the  inclusive  definition  in
      this case, it is clear that the definition of "catering establishment"
      does mean and include a  cooperative  canteen  conducted  without  any
      motive of earning profits.


      If the object and scope of the rules and by-laws framed by the Borough
      Municipality are examined, there can be no difficulty in holding  that
      a catering establishment does include any canteen,  whether  conducted
      for the purpose of earning profits or not.
If we examine the rules and
      by-laws, it is clear that the object with which they have been  framed
      is to promote and preserve sanitation and public health and to prevent
      the spread of disease within the municipal limits and if that was  the
      object, it is difficult to see how canteens conducted on no  loss  and
      no profit basis could be excluded from the definition of  a  "catering
      establishment". 
It is as much necessary to preserve  cleanliness,  and
      public health in commercial establishments as  in  the  establishments
      conducted by co-operative societies like the one in this case. In this
      connection, the following passage appearing at  pages  58  and  59  of
      Maxwell on the Interpretation of Statutes, 1962 edn.,  may  be  quoted
      with advantage:


           It is in the interpretation of general words  and  phrases  that
           the principle of strictly adapting the meaning to the particular
           subject-matter with reference to which the words are used  finds
           its most frequent application. However  wide  in  the  abstract,
           they are more or  less  elastic  and  admit  of  restriction  or
           expansion to suit the  subject-matter.  While  expressing  truly
           enough  all  that  the  legislature  intended,  they  frequently
           express more in their literal meaning and natural force; and  it
           is necessary to give them the meaning which best suits the scope
           and object of the statute without extending to ground foreign to
           the intention. It is, therefore, a canon of interpretation  that
           all words, if they be general and not express and  precise,  are
           to be restricted to the fitness of the matter. They  are  to  be
           construed as particular if the intention be particular; that is,
           they must be understood as used with reference to  the  subject-
           matter in the mind of the legislature, and limited to it.”

                                                         (emphasis supplied)


25.   In Balkrishna Karkera v. K.J. Mishra and  another  AIR  1979  (Bombay)
198,  learned  Single  Judge  interpreted  Section  394(1)(e)(i)  read  with
Section 471 of the Act and observed:

      “Now it is pertinent to note  that  although  the  expression  "eating
      house" has been defined under the Bombay  Municipal  Corporation  Act,
      the expression "catering establishment" has not been  defined.  It  is
      true that the staff canteen run by Accused No. 2 was not open  to  the
      members of the public at large and the admission was restricted solely
      to the employees of the said Company. To that extent  Mr.  Shrikrishna
      would be justified in his submission that the staff canteen could  not
      be termed as an "eating house." However, what is  significant  is  the
      fact that Accused No. 2 has not  been  charged  with  carrying  on  an
      "eating house" but he has been charged  for  carrying  on  a  catering
      establishment. "Catering establishment"  is  an  expression  which  is
      wider in its  connotation  than  the  expression  "eating  house"  and
      whether a staff canteen was open to the public or restricted only to a
      section of the public, it would still fall within the definition of  a
      "catering establishment".



26.   In our view, the aforesaid judgments of  the  Bombay  High  Court  lay
down correct law and ratio thereof deserves to be applied  for  interpreting
Section 394 (1) (e) read with Part IV of Schedule ‘M’ of the Act.

27.   As a sequel to the above discussion, we  hold  that  the  Bombay  High
Court was not right in relieving the respondents of the obligation  to  take
licence under Section 394(1)(e) of the Act.

28.   In the result, the appeal is allowed, the impugned order is set  aside
and the writ petition filed by the respondents is  dismissed  with  cost  of
Rs.50,000. The amount of cost shall be deposited  by  respondent  No.1  with
Maharashtra State Legal Services Authority within a  period  of  four  weeks
from today.

29.    Within  four  weeks  from  today,  the  respondent  shall   file   an
application for grant of licence under Section  394(1)(e)  of  the  Act  and
produce the necessary documents.  The application  shall  be  processed  and
decided by the competent Authority within next four weeks.

30.   It is made clear  that  appellant  No.1  shall  be  free  to  initiate
proceedings for imposition of penalty on respondent No.1 for its failure  to
take licence and pass appropriate order in accordance with law.


                                                       ......………………………..….J.
                                              [G.S. SINGHVI]


New Delhi,                                        ...….……..…..………………..J.
November 18, 2013.                           [V. GOPALA GOWDA]
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