India: Compliances Under The Delhi Shops and Establishments Act, 1954

Last Updated: 24 November 2016
Article by Vikrant Rana and Chanakya Sharma

Introduction: The Delhi Shops and Establishments Act, 1954 (hereinafter referred to as "the Act") was enforced with the view of regulating the working conditions of the employees working at such Shops and Establishments. Generally, the working conditions of many small shops and commercial establishments are prone to a lot of ill practices such as child exploitation, unreasonable working hours, unreasonably low wages and salary, lack of healthy working conditions etc. due to lack of government's supervision. The Act seeks to establish an Authority governing these establishments, improve working conditions for the employees and penalize employers who do not act in consonance with the Act.

Do you need to register under the Act?

The first and foremost question which would occur in the mind of any employer or occupier is, whether the said Act applies to his/her establishment. Though the definitions provided under the Act clearly categorize establishments within and outside the purview of the Act, there are various judgements which have simplified as well as expanded the definition of a shop or a commercial establishment while deciding on the applicability of the Act.

In the case of Chief Commissioner, Delhi v. Federation of Indian Chambers of Commerce and Industry, the Court, while interpreting the definition of "commercial establishments" laid the following essentials for a place in order to fall within the definition of "commercial establishments":

  • it must be "premises" and
  • it must have some trade, business or profession being carried on or
  • any work in connection with or incidental or ancillary thereto is carried on.1

Shops are basically premises where goods are sold either by retail or wholesale or where services are rendered.

Where economic activity leading to sale is carried:

The word 'shop' has acquired an expanded meaning. Where in a premises any economic activity is carried on leading to sale or purchase that premises will have to be held a shop for the purpose of the Act even though there is no actual giving or taking of goods in such premises. If the business carried on in a premises results in having some nexus with the purchase or sale the Act will be applicable.2

Branches of an office:

Offices which keep track of their branch offices and are involved in checking all transactions related to the sales carried on at such offices will also be held within the purview of this Act. It was observed that3, "Where it was indicated that the branches of an office are responsible and answerable to the party; that the head office kept track of the efficiency of each branch and its profitability; that the head office has control over the branch offices and gets information periodically as to stocks received and goods sold from each branch from time to time; that the business in respect of all branches is carried on with the same funds and there are transfers of employees as well from one branch to another branch; that a single audit is made by preparing a single statement of accounts including sales in all the branches which are put together. Such factors clearly indicated that the administrative office at Rajamundry is nothing but a controlling office to supervise the sales taking place in different branches and thus falls within the definition of expression shop".

Establishments such as:

  • Educational Or Other Institutions Run For Private Gain;
  • Journalistic And Printing Establishments;
  • An Office, A Store-Room, Godown, Warehouse Or Workhouse Or Work Place;
  • Premises In Which Business Of Banking, Insurance, Stocks And Shares, Brokerage Or Produce Exchange Is Carried On,

are all covered within the provisions of the Act.4

Registration under Companies Act, 2013: Even if an office branch is registered under The Companies Act, 2003 it is required to register under the Shops and Establishment Act, 1954 if there is any type of business activity or trading being carried on there.

Establishments exempted under the Act:

There are many establishments which are either partially or completely exempted from the purview of this Act. The definition clause and Schedule I collectively provide a list of exempted establishments and the extent of their exemption.

Certain examples of establishments which are completely exempted under the Act are listed below:

  • A Factory registered Under The Factories Act, 1948 (43 Of 1948),
  • Places of Public Amusements or Entertainment such as theatres, cinemas, restaurants, eating houses, residential hotels, clubs;
  • Quarries And Mines governed by the Mines Act, 1952 (35 Of 1952);
  • Establishments of doctors and medical practitioners;
  • establishments of legal practitioners and
  • Foreign News Agencies

However, there are certain establishments which are partially exempted under the Act. Such as, if the establishment is that of an accountant or an auditor, it will be entitled to exemption only under Section 15 (related to opening and closing hours of establishments) and Section 16(related to close day) of the Act.

Upon applying these principles along with the provision in the Act it would become clear to any occupier r not he falls within the purview of the Act.

Now, the next concern for every occupier of a shop or such other establishment shall be to make sure that his establishment is duly registered in the Record of Registers kept by the Chief Inspector within 90 days of forming such establishment.


If your establishment is not registered you can register it by following these few easy steps:

  • STEP 1: Online Registration

To register a shop or an establishment online forms are (Form A) available on website of Department of Labour, Government of Delhi. Also, while filing the form reference should be made to The Delhi Shops and Establishments Rules, 1954 (As amended in 2007) (hereinafter referred to as "the Rules") published on the website. Following details are required while filling up the registration form:


  • Name of the establishment, if any.
  • Postal address of the establishment.
  1. Full name of the occupier or the employer [including his father's name].
  2. Full name of the Manager, if any [including his father's name] 1
  3. Category of the establishment, i.e., whether a shop, commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment.

6. Nature of business.


  1. Names of members of employer's family, working in the establishment (state separately the names of young persons, if any).
  2. Names of other persons occupying position of management or employees engaged in confidential capacity.
  3. Total number of employees (state separately the number of men, women and/or young persons, if any).
  4. Date on which the establishment commenced its work2.


The occupier of the establishment shall send to the Chief Inspector a statement in Form "A" together with prescribed fee paid in cash, within 90 days of:

  1. the date on which the Act (or Notification) comes in force- for existing establishment at the time of passing of the Act.) and
  2. for new establishments, on the date when they commence their work.


The registration and renewal of registration fees (or renewal of registration fees) will depend upon the number of persons employed in the establishment.


On receipt of the statement and the prescribed fees, the Chief Inspector shall, on being satisfied about the correctness of the statement, register the establishment in appropriate part of the Register of ablishment in Form 'C' to the occupier of the



Renewal of Registration Certificate: The Registration Certificate shall be renewed at an interval of everyone year on payment of the prescribed fee.


Forms of notifying a change and fees- The occupier shall notify to the Chief Inspector any change in respect of any information contained in part I of his statement prescribed under Rule 3 within fifteen days after the change has taken place. The notice in Form 'D' shall be sent to the Chief Inspector with such fee as are prescribed in Schedule II.


  • Working hours: The Act provides that no employee must work for more than 9 hours per day and 48 hours per week. Work can be extended to 54 hours week for stock taking or making of accounts if the employer has provided for notice of such extension three days in advance.
  • For employing young persons 5: No young person shall be required or allowed to work about the business of an establishment for more than six hours a day, whether or not he is a member of the employer's family. Such working young persons must be provided a break every three and a half hours for resting or taking meals. Such young persons and also women, shall not be engaged in work for more than 8 hours per day or between 9 p.m. and 7 a.m. during the summer season and between 8 p.m. to 8a.m. during the winter season.
  • Holidays (Close day): Before the employer declares the holiday or a close day he must exhibit a notice of such day prior to such day in the premises. Every shop and commercial establishment shall remain closed on the close day. Close days will be declared by the government. Different close days can be prescribed for different classes of establishment or different area. In addition, commercial establishment shall remain closed on three of the National holidays each year as the Government may prescribe. There should be a weekly holiday for all employees for which no wages will be deducted.
  • Privilege leave: Every employee shall be entitled to a long privilege leave of fifteen days or more after every twelve months; that of 5 days for every four months, of continuous employment and yearly sick leaves of 12 days or more. A casual sick leave shall be available to the employee after every month of work. If the person is a caretaker or a watchman his privilege leave will be for 30 days or more.
  • Timely payment of wages: Wages should be paid, in cash, on fixed intervals which are pre-decided and which should not exceed one month. When an employer imposes fine which shall be deducted from his wages or otherwise for any damage or loss caused by the employee he must be informed about the reasons of such fine or deduction in writing and shall be recorded in the register kept for this purpose.
  • Letters of Appointment: Employer to furnish letters of appointment to employees. It is to be noted that failure to issue appointment letters under section 34 of the Act to the employee amounts to 'unfair labor practice' resorted to deprive them of the benefits which accrue to them due to the length of their service.6
  • The Act requires every employer to maintain Records of the leaves taken, hours of work, intervals allowed for rest and meals, overtime work of all employees in separate records. The occupier of any shop or establishment, in the prescribed manner shall keep exhibited in the shop or establishment notices setting forth the number of hours in the week during which persons may in accordance with the provisions of this Act be employed about the business of a shop or establishment and such other particulars as may be prescribed.
  • Chief Inspector: The Act also deals with powers and duties of the Chief Inspector. The role of the Chief Inspector is vital in implementing the provisions of the Act. It is his responsibility to take care that the provisions of the Act are duly followed. If in any shop or establishment there is any contravention of any provisions of this Act, or any rule or order made thereunder the proprietor, the employer or the manager thereof as the case may be shall, on conviction, be punished with fine which shall not be less than twenty-five rupees and which may extend to two hundred and fifty rupees or as may be prescribed under the Act.


The main aim of the Act is that upon its proper execution the employees will be assured of the benefits which they are entitled to as workers. It is supposed to improve the working conditions and thereby the quality of their work-life.


1, New Delhi, 1974 II LLJ 21 (SC): 45 FJR 306: (1974) Lab IC 1004.

2 Hindu Jea Band v. Regional Director, ESIC, 1987 (2) SCC 101, and ESI Corporation v. R.K. Swamy & Ors,; 1994

(1) SCC 445,

3 Southern Agencies, Rajamundry v. Andhra Pradesh Employees' State Insurance Corporation, 2001 LLR 93 (SC).

4 Section 2(27), Delhi Shops and Establishments Act, 1954.

5 The Act defines "young person" as a person who is not a child and has not completed his eighteenth year of age.

6 Bharat Mudranalaya v. Workmen, Delhi Gazette dated 7-5-1970 (IT).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Vikrant Rana
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions