In a landmark ruling that brings significant relief to thousands of cooperative housing societies across Maharashtra, the Bombay High Court has held that income from telecommunication towers or similar incidental sources does not transform a housing society into an “industry” under labour laws. The court also ruled that such societies are not liable to pay gratuity or other industrial dispute benefits to their employees, including managers and maintenance staff.
The judgment, delivered by Justice Sandeep V. Marne on January 5, 2026, in the case of Apsara Co-operative Housing Society Ltd. v. Vijay Shankar Singh (Writ Petition Nos. 3908 and 4146 of 2025), quashed claims filed by a former building manager seeking bonus, leave wages, and gratuity totaling over ₹8.5 lakhs.
Background and Sequence of Events
The dispute began in October 2022 when Apsara Co-operative Housing Society, a registered entity under the Maharashtra Co-operative Societies Act, 1960, terminated the services of its Building Manager, Vijay Shankar Singh, who had been appointed in August 2013 and was drawing a monthly salary of ₹90,000 at the time of termination. The society claimed it paid him ₹5 lakhs as a full and final settlement towards bonus dues.
Undeterred, Singh filed two separate applications in 2023:
- One under Section 33-C(2) of the Industrial Disputes Act, 1947 (ID Act), before the 10th Labour Court in Mumbai, claiming ₹3.87 lakhs towards unpaid bonus and leave wages for 2020-2023.
- Another under the Payment of Gratuity Act, 1972 (PG Act), seeking ₹4.67 lakhs in gratuity based on his nine years of service.
The society challenged the very maintainability of these proceedings, arguing that it was neither an “industry” under the ID Act nor an “establishment” under the Maharashtra Shops and Establishments Act, 2017, which triggers the applicability of the PG Act.
On January 17, 2024, both the Labour Court (also functioning as the Controlling Authority under the PG Act) rejected the society’s preliminary objections, allowing the claims to proceed. Aggrieved, the society approached the Bombay High Court through two writ petitions, which were heard together and finally decided on January 5, 2026.
Why a Housing Society is Not an ‘Industry’
Justice Marne’s detailed 28-page judgment extensively analysed the legal position, relying on Supreme Court and prior Bombay High Court precedents.
The court explained that under Section 2(j) of the ID Act, an “industry” requires systematic activity involving business, trade, or commerce. Cooperative societies engaged in trade (like cooperative banks or sugar factories) may qualify as industries, but housing societies do not.
Key reasons outlined:
- Housing societies are formed solely for the collective management and maintenance of residential buildings owned by flat purchasers. Their primary objective is to secure common ownership of land/building and provide personal services (cleanliness, security, lifts, etc.) to members for their own use.
- They do not carry on any systematic commercial or profit-oriented activity. Monthly contributions from members fund operations, and any surplus is not profit but excess over expenditure.
- Incidental income — such as from renting terrace space for telecom towers/antennas or operating a clubhouse — is merely to reduce members’ maintenance charges. It is an “adjunct” to the main non-commercial purpose, not a dominant trading activity.
The court heavily relied on the Supreme Court’s 2002 ruling in Management of Som Vihar Apartment Owners Housing Maintenance Society Ltd. v. Workmen, which held that societies rendering personal services only to members are not industries. It also cited Bombay High Court decisions like Dalamal House Commercial Complex CHS (2018, upheld by Supreme Court), Arihant Siddhi, and Shantivan-II, reinforcing that even telecom towers or clubhouses do not change this status.
Rejecting the ex-manager’s plea for evidence to prove commercial activity, the court said no amount of evidence could alter the settled legal position.
Not an ‘Establishment’ Under Gratuity Law
On the gratuity claim, the court held that the PG Act applies only to “establishments” under state shops and establishments laws, which require carrying on business, trade, or profession. Analogous to the “industry” reasoning, housing societies lack this commercial character and thus fall outside the PG Act’s ambit.
Outcome and Implications
The High Court set aside the lower authorities’ orders, dismissed both the ex-manager’s applications as non-maintainable, and imposed no costs considering the circumstances.
This ruling provides clarity and relief to cooperative housing societies, preventing them from being dragged into protracted labour disputes. Legal experts hail it as a “historic” affirmation of prior precedents, potentially impacting similar pending cases statewide.
