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Shops and Establishment

Can Educational Institutions Be Covered under Shop and Establishment Law

The Shops and Establishments Act, enacted by every state in India, is one of the most essential regulations for most commercial enterprises. But given its wide scope, many ambiguities arise as to its applicability on different kinds of businesses. In this article we shall learn if educational institutes are subject to this Act or not. In this article we would understand can educational institutions be covered under the shops and establishments law.


In every corner of the country, individual states have crafted unique regulations governing shops and commercial establishments. This blog endeavours to unravel the intricate definitions and scopes of these terms as stipulated in various state legislations, with a particular focus on determining the inclusion of educational institutions under this regulatory umbrella. By talking about these legal intricacies, the aim is to assist educational institutions in deciphering the applicability of these laws to their operations. Lets have a look at Educational Institutions Under S&E Act.

Furthermore, this exploration extends beyond statutory texts to scrutinise diverse judicial pronouncements emanating from different courts. Through this comparative analysis, the article seeks to provide a conclusive understanding of whether educational institutions fall within the purview of shops and establishments regulations, offering valuable insights for both legal practitioners and educational institutions grappling with compliance concerns.

State-Specific Shop and Establishment Regulations:

In India, each state has formulated its distinctive set of regulations governing the functioning of shops and commercial establishments. These regulations encompass crucial aspects such as working hours, wage payments, leave policies, and other conditions of service. Understanding the intricacies of state legislations is essential to navigating the regulatory landscape effectively.

Focus on Educational Institutions:

One significant area of concern within these regulations is the inclusion of educational institutions. Private schools, colleges, and other learning centers often face ambiguity regarding their status under the Shops and Establishments Act. Given that these institutions can be construed as commercial establishments, this section aims to provide clarity on the applicability of state laws to educational entities. It addresses the specific considerations and challenges faced by educational institutions in adhering to these regulations.

Shop and Establishment Registration

Judicial Perspectives and Comparative Analysis:

To comprehend the evolving landscape, it’s imperative to examine judicial pronouncements from various courts across the country. 

The Shops and Establishments Act is not a nationwide legislation but rather varies among states. Examining key states such as Kerala, Delhi, Maharashtra, Tamil Nadu, and Andhra Pradesh, this study aims to address whether educational institutions fall under its purview.

Analyzing the term “commercial establishment” through case laws, the research uncovers varying interpretations by different courts across states. In Kerala, the Shops and Commercial Establishments Act of 1960 defines commercial establishments as entities engaged in trade, business, banking, insurance, or public entertainment. Administrative in nature, it includes spaces like hotels, restaurants, and theatres. The Act’s definition of “shops” encompasses premises associated with trade or services to customers, extending to co-spaces like warehouses.

A critical case, Sarangadharan v Asst. Labour Officer, posed the question of whether a CBSE-affiliated educational institution falls under the Kerala Shops & Establishment Act. The contention emphasized that educational institutions primarily exist to impart education, not engage in commercial activities. Arguments surfaced regarding fees and donations, suggesting a level of commercial transaction in educational institutions, raising questions about their inclusion under the Act.

Are Educational Institutions Under S&E Act?: A Brief Summary 

Whether educational institutions can be covered under the Shops and Establishments Act depends on several factors, including the specific law in your jurisdiction and the nature of the institution. Here’s a brief summary: 

Arguments for Coverage:

  • Commercial Activity: Some argue that educational institutions, especially private ones, engage in commercial activity by charging fees and selling services. This could mean they fall under the definition of an “establishment” as defined in the Shops and Establishments Act.
  • Regulation of Working Conditions: Extending the Act’s protections to employees of educational institutions, such as teachers and administrative staff, could guarantee them minimum wages, working hours, and other benefits.

Arguments against Coverage:

  • Non-profit Objectives: Many educational institutions, particularly non-profit and government-run ones, operate with the primary goal of education, not profit. The focus on social welfare and educational service distinguishes them from purely commercial establishments.
  • Educational Autonomy: Bringing educational institutions under the Shops and Establishments Act could raise concerns about interference with educational autonomy and curriculum management.

Recent Judicial Precedents:

  • Supreme Court of India: In 2001, the Supreme Court, in the case of Ruth Soren v. Managing Committee, held that educational institutions were not covered under the Bihar Shops and Establishments Act.
  • Telangana High Court: In 2021, the Telangana High Court reaffirmed the Supreme Court’s decision in the context of the Telangana Shops and Establishments Act.

Therefore, the current trend suggests that educational institutions, especially non-profit ones, may not be covered under the Shops and Establishments Act. However, depending on the specific Act in your jurisdiction and the nature of the institution, there might be exceptions or ongoing legal debates.


Nevertheless, it’s important to note that Educational Institutions Under S&E Act in India is enacted by individual states and may exhibit slight variations. The inclusion of educational institutes within its scope hinges on the discretion of each state’s administrative authority. According to the act, ‘Establishments’ are characterized as shops, commercial establishments, residential hotels, restaurants, eating-houses, theaters, or other venues for public amusement or entertainment. Additionally, the government holds the authority to designate other establishments through official notification in the Gazette.


Are educational institutions generally covered under the Shops and Establishments Act?

Educational institutions are not typically covered under the Shops and Establishments Act as they are governed by separate education-related regulations. The Shops and Establishments Act primarily pertains to commercial establishments and businesses, with educational institutions falling under distinct regulatory frameworks.

What factors might influence whether an educational institution falls under the Act?

Factors influencing the application of the Shops and Establishments Act to educational institutions may include whether they engage in commercial activities, offer vocational courses, or operate amenities like hostels or canteens. The nature of their activities and facilities may determine their inclusion or exclusion under the Act.

What are some recent court rulings on this issue?

Specific court rulings on the application of the Shops and Establishments Act to educational institutions can vary. Recent decisions often hinge on the commercial aspects of the institution's operations, emphasising the need for a case-by-case evaluation. Legal advice is crucial to understand the implications of recent court rulings in this context.

What if I'm unsure about the application of the Act to a specific educational institution?

If unsure about the Shops and Establishments Act's application to a specific educational institution, seeking legal counsel is advisable. Legal professionals can assess the institution's activities, structure, and relevant laws to provide accurate guidance on compliance and any potential obligations under the Act.

Are educational institutions considered as industry?

Educational institutions are generally not considered as industries under the Shops and Establishments Act. Industries typically involve manufacturing, production, or processing activities, while educational institutions focus on academic and instructional pursuits. The distinction lies in the nature of their operations, with education having its regulatory framework separate from industrial regulations.

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