The High Court of Madhya Pradesh at Gwalior has ruled that an advocate running an office from their residential premises cannot be charged electricity tariffs at commercial rates. Justice Milind Ramesh Phadke held that while a commercial activity implies trading, buying, or selling, the legal profession is driven by personal skill and intelligence. Consequently, the court set aside the electricity department’s orders that sought to levy commercial rates on an advocate’s home office.
Background of the Case
The petitioner, Santosh Agrawal, an advocate practicing in Gwalior, filed a writ petition under Article 226 of the Constitution of India. The petition challenged the orders dated December 31, 2020 (Annexure P/1 and Annexure P/1A), passed by the Manager, Nagar Kendriya Sambhag Gwalior, M.P.
By way of the impugned orders, the electricity department had declared the petitioner’s office—which is operated within his residential premises—to be a “commercial activity” and consequently held him liable to pay electricity tariffs at commercial rates.
Arguments of the Parties
For the Petitioner
The petitioner, who represented himself, argued that since his office is operated inside his residential premises, it cannot be classified as a commercial activity. To support this contention, he relied upon:
- Dheeraj Singh v. Hemant Kumar Sharma (Second Appeal No. 2617 of 2024, decided on 06.08.2024): The petitioner argued that “commerce” or “commercial” fundamentally relates to trading activities like buying, selling, or supplying goods. He submitted that “in legal profession, there is no such kind of buying or selling nor any trading of any kind whatsoever,” making any comparison between the legal profession and business entirely misplaced.
- K. Kanagasabai v. The Superintending Engineer, Kaniyakumari Electricity Distribution Circle (W.P. No. 21731 of 2003, decided on 23.12.2010): The petitioner relied on this Madras High Court decision to argue that additional commercial tariffs cannot be charged for a residential office, unless the advocate operates from an independent commercial space.
For the Respondents
On behalf of the respondent electricity board, Advocate Narottam Sharma contended that the department’s billing was legally sound. He relied on the Supreme Court’s judgment in:
- Chairman, M.P. Electricity Board and Others v. Shiv Narayan and Another (Civil Appeal No. 1065 of 2000, decided on 27.10.2005): The respondents argued that the Supreme Court had classified an advocate’s office as “non-domestic.” Under this classification, the user is deemed non-domestic, placing them in the non-commercial/non-domestic category, which makes them liable to pay at commercial rates.
The Court’s Analysis and Observations
The High Court analyzed the precedents cited by both parties to determine whether a home-based legal office constitutes a commercial establishment.
Distinguishing the Supreme Court’s Decision in Shiv Narayan
Justice Phadke observed that in Chairman, M.P. Electricity Board v. Shiv Narayan, the applicable tariff classification was limited to only two categories: (a) domestic purposes, and (b) “commercial” and/or “non-domestic purposes.”
The High Court noted that the Supreme Court’s decision in that case rested solely on the “use of premises” being non-domestic:
“The Apex Court while dealing with the issue before it, did not went into the aspect whether, an Advocate can be said to be carrying on commercial activity or not and only on the basis of the use of premises, it was held that it was a non domestic use, therefore, held that the Advocate was liable to pay the electricity charges on commercial rate.”
Legal Profession vs. Commercial Activity
The Court then turned to the distinction between trade and a profession, referencing the decision in Dheeraj Singh v. Himanshu Kumar Sharma (referred to as Dheeraj Singh v. Hemant Kumar Sharma in the petitioner’s pleadings), which noted:
“The expression ‘commerce’ or ‘commercial’ necessarily has a concept of a trading activity. Trading activity may involve any kind of, activity, be it a transport or supply of goods. Generic term for almost all aspects is buying and selling. But in legal profession, there is no such kind of buying or selling nor any trading of any kind whatsoever. Therefore, to compare legal profession with that of trade and business is a far from correct approach and it will totally be misplaced.”
The Court further cited the observations in Dheeraj Singh:
“A professional activity must be an activity carried on by an individual by his personal skill and intelligence. There is a fundamental distinction, therefore, between a professional activity and an activity of a commercial character.”
The court noted that a similar distinction had been applied to medical professionals in Devendra M. Surti (Dr.) v. State of Gujarat, where a doctor’s establishment was held not to be a “commercial establishment” under the Bombay Shops and Establishments Act, 1948.
Office in a Residence vs. Office in a Commercial Space
Justice Phadke referenced the Madras High Court’s ruling in K. Kanagasabai v. The Superintending Engineer, which followed the larger Bench ruling of the Supreme Court, and the Rajasthan High Court’s Division Bench decision in J.V.V.N. Limited and others v. Smt. Parinitoo Jain and another (AIR 2009 Rajasthan 110). These decisions established a clear boundary:
“The larger Bench of the Supreme Court in the decision made in Civil Appeal No.1065 of 2000, dated 27.10.2005 held that the Advocate running his office from his residence cannot be charged the additional tariff on the commercial basis. However in case office is run in an independent commercial place then the advocate cannot be exempted from the same. A distinction has been made between the office in a residence and office in a commercial place.”
Based on these principles, the High Court clarified:
“Thus, it is clear that although the office of Advocate cannot be said to be a commercial activity, provided, the same is situated in residential premises but where, the office of Advocate is situated in a commercial building, then he cannot seek exemption from payment of higher electricity charges at the commercial rate.”
The Decision
The High Court concluded that charging commercial electricity rates for an office run from an advocate’s residence constitutes a “material illegality.”
Accordingly, the Court set aside the impugned orders dated December 31, 2020 (Annexure P/1 and P/1A). The respondents were directed to raise electricity bills at residential rates for the petitioner’s home office, holding that the petitioner is only liable to pay residential rates. With these directions, the writ petition was disposed of.
Case Details
- Case Title: Santosh Agrawal v. Madhya Pradesh Madhya Ksheta Vidhut Vitran Com. Ltd. and Others
- Case No.: Writ Petition No. 1507 of 2021
- Neutral Citation No.: 2026:MPHC-GWL:15567
- Bench: Justice Milind Ramesh Phadke
- Date: May 11, 2026
