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Karnataka Shops and Commercial Establishments Act, 1961- Registration and process

July 8, 2022
Delhi Shops and Commercial Establishments Act

By Rupin Chopra and Apalka Bareja

At the time of enactment of the Karnataka Shops and Commercial Establishments Act, 1961, the Madras Shops and Establishments Act, 1947, was in force in the Madras area. In the Mysore area, the Mysore Shops and Establishments Act, 1948, was in force. Whereas in Hyderabad the Hyderabad Shops and Establishments Act, 1957, was in force and in Bombay the Bombay Shops and Establishments Act. 1948, was in force. Hence, it was considered expedient to have a uniform law in the State of Mysore for the regulation of the terms and conditions of work and employment in shops and commercial establishments.

The Karnataka Shops and Commercial Establishments Act, 1961 was enforced from March  01, 1962 and from time-to-time amendments have been made in the Act to accommodate the dynamic nature of requirements of the society. This Act provides for the regulation of conditions of work and employment in shops and commercial establishments in the State of Karnataka.

It is one of the most important regulations under which an establishment or a shop for commercial use is required to register and comply with the provisions of the said Act.

Definition of “Shop” under the Act

A shop as defined under the Act means any premises where any trade or business is carried on or where services are being rendered to the customers and may include offices, storerooms, godowns, warehouses, whether in the same premises or otherwise, used in such connection with such trade or business, but does not include a commercial establishment or a shop attached to a factory.

A commercial establishment on the other hand refers to a commercial or trading or banking or insurance establishment, an establishment or administrative service in which persons employed are mainly engaged in office work, a hotel, restaurant, boarding or eating house, a café or any other refreshment house, a theatre or any other place of public amusement or entertainment.

Registration Process under the Karnataka Shops and Commercial Establishments Act, 1961

The Act stipulates that it is necessary for every employer of an establishment to register under this Act if that establishment exists and, or is operating in the State of Karnataka.

If an establishment is already existing at the time of commencement of the Act, then the period of thirty days is provided to the employer commencing from the date of enactment of the Act to get their establishment registered.

In case of new establishments, the period of thirty days commences from the date of commencement of work in the said establishment. [2]

The employer of the establishment has to provide the Inspector with a statement along with the prescribed fees. The statement shall contain the following particulars[3]:

  • Name of the employer and the manager, if any
  • The postal address of the establishment
  • The name, if any, of the establishment
  • Or any other particulars that may be prescribed

On receipt of such statement the Inspector shall, according to the procedure and manner prescribed therein, on being satisfied upon the correctness of the statement provided by the employer register the establishment in the register of establishments and issue a registration certificate which is to should be prominently displayed by the employer in a conspicuous manner at the establishment.

This process has to be done within thirty- days’ time period.

Changes in Statement for Registration of Shop or Establishment

If any change is made or is to be made in the statement then it shall be the duty of an employer to notify to the registration authority, in the prescribed form, any change with respect to any information contained in his statement during registration/renewal within 15 days after the change. For example – any change in address, change in management or ownership, change in number of employees etc. Accordingly, changes will be made by the inspector in regards to change and he will either make amends to the existing registration certificate to the employer or issue a fresh one.

Closure of Shop or establishment

In case the establishment has been closed then the employer shall within a period of fifteen days from the date of closure notify the concerned Inspector in writing about the said closure of the establishment pertaining to which if the Inspector is satisfied with the facts of the statement provided by the employer in regards to the closure of the business then he shall remove the name of the establishment from the register and cancel the registration certificate. If the inspector is otherwise satisfied that the establishment has closed but has not received any information by the employer regarding the same then he may remove such establishment from such register as well.

Renewal of Registration Certificate[4]

The registration certificate provided to an employer is valid for five years and shall be renewed before the expiry of such period on the payment of the prescribed fees. Earlier the registration certificate used to be valid for a period of one year but this was amended by the Amending Act 25 of 1997 which provided for the renewal period to be extended to once every five years instead of every year.

Cancellation or Revocation of Registration

Any provision for cancellation or revocation or suspension is not mentioned under the Act but it would be reasonable to say, if the employer of the establishment violates the provision under this Act or if the said person or establishment has obtained the registration certificate through misrepresentation, fraud or by not fully disclosing the material facts the employer will be punished with an imprisonment of not less than six months and with a fine which may extend to five thousand rupees. The said is provided under Section 4 (8) of the Karnataka Shops and Commercial Establishments Act, 1961.
There are certain organizations that are exempted from registration under this Act. These are:

  • Offices of, or under the central or state Government, or local authorities, except commercial undertaking.
  • Any railway service, water transport service, postal, telegraph or telephone service, any system of public conservation or sanitation or any industry, or services like water, power, light to the public.
  • Railway dining cars
  • Establishments for the treatment or care of the handicap or mentally unfit.
  • Establishments of the food corporation of India.
  • Offices of legal practitioners and medical practitioners in which less than 3 people are employed.
  • Bank offices.

This in whole summarises the process of registration that needs to be followed and complied with by the employers to get their establishment registered under the Karnataka Shops and Commercial Establishments Act, 1961 and therefore the establishment will be subjected to the provisions of this Act if it exists or operate lawfully within the State of Karnataka.

[1] Karnataka Shops and Commercial Establishments Act, §4, Act of Karnataka State Legislature, 1961

[2] Karnataka Shops and Commercial Establishments Act, §4(3), Act of Karnataka State Legislature, 1961

[3] Karnataka Shops and Commercial Establishments Act, §4(1), Act of Karnataka State Legislature, 1961

[4] Karnataka Shops and Commercial Establishments Act, §4(4), Act of Karnataka State Legislature, 1961

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