Functionaries under the Code of Criminal Procedure

This article is written by Mohammed Fardeen Yusuf. This article provides the readers with an in-depth analysis of the Telangana Shops and Establishment Act, of 1988. It gives an overview of the purpose and objective behind the enactment of the Act. Further, it gives a detailed explanation of the important definitions of the Act, followed by an overview of the important provisions. The article also discusses the important judicial pronouncements relating to this Act.

It has been published by Rachit Garg.


The Telangana Shops and Establishment Act, 1988, is a regulation that provides shop owners with a basic licence. A business needs proper planning and, most significantly, the legal necessities. After deciding to establish a particular type of business, you need to check all the compulsory guidelines. Among all requirements, getting a licence is of utmost importance. In addition to this, the Act also determines the wages, the prescribed working hours of the employees, and other associated things that are necessary for a business owner to run a business in the state. The article will give an overview of this Act to the reader, going through the objectives, definitions, essential provisions, case laws, and recent developments.

Download Now

Purpose and Objectives of the Act

The purpose and objectives of various Acts about the shops and establishment may vary across diverse states; however, usually, the fundamental objectives are similar. There may be some differences in the purposes and objectives as articulated in different statutes. From the bare reading of the various provisions of the Telangana Shops and Establishment Act, 1988, the purposes and objectives of the Act are as mentioned below:

  • The first and foremost objective is to ensure proper registration of the business establishment.
  • Ensure that the shops and establishments maintain a proper register, including details of the employees.
  • To check the smooth functioning of the establishment, including the closing and opening of shops. The Act provides for specific working hours and states that there shall not be more than eight hours in a day and forty hours in a week.
  • To ensure that no child is required or allowed to work in the establishment.
  • To provide maternity benefits for the welfare of women.
  • To ensure proper health and safety measures for workers. The provisions for the same are enumerated in Chapter VI of this Act. The chapter provides provisions for various health and safety measures like cleanliness, ventilation, and permissible transportation loads.
  • To grant leave equally to all the employees who have served according to the period mentioned.
  • Equal wages for equal work are to be provided without any discrimination, as provided under the provisions of Chapter VIII of this Act.
  • To impose penalties and fines on the employee by the employer for not working within the guidelines provided by the establishment.
  • To ensure the appointment of authorities, which in turn are supposed to hear and decide the claims relating to wages. 
  • To safeguard the rights and privileges that are not affected by any other law of the employees working in the establishment.

Important definitions

There are several definitions described under Section 2 of the Telangana Shops and Establishment Act. The Act provides various definitions under Chapter I, Section 2. These definitions are provided to narrow down the scope of misinterpretation and reduce ambiguity while understanding the provisions enumerated in the Act.

Let’s discuss the definitions of these important terms:

Commercial Establishment

Section 2(5) talks about the commercial establishment, which refers to an establishment that carries on any trade, business, profession or any work in connection with or incidental or ancillary to any such trade, business, or profession, or the work which is clerical that also includes a factory or an industrial undertaking that is also a commercial, trading, banking, insurance establishment, and includes an establishment that is controlled by a co-operative society. It also includes the establishment of a factory or an industrial undertaking that falls outside the scope of the Factories Act, 1948, (Central Act 63 of 1948), and any such establishment that the government may declare by notification to be a commercial establishment under this act but does not include a shop.


Section 2(8) defines “employee,” which means a person wholly or principally employed in, and in connection with, any establishment, and includes an apprentice and any clerical or other staff of a factory or industrial establishment who fall outside the scope of the Factories Act, 1948 (Central Act, 63 of 1948), but does not include the husband, wife, son, daughter, father, mother, brother, or sister of an employer or his partner, who is living with and depending upon such employer or partner and is not in receipt of any wages.


Section 2(21) refers to the term “Shop,” which talks about the premises under which any form of trade or business is carried out, including customers, and the contribution of the cooperative society in ensuring the smooth working of shops. It consists of warehouses, godowns, and any form of storehouse found under the same premises ultimately used to achieve the motive of trade and business. Lastly, any other establishment that is notified by the government shall be regarded as a shop within this Act but not read within the commercial establishment.


Section 2(10) defines establishments, which includes shops, restaurants, food hubs, hotels, lodges, places of public entertainment, or any other establishment that the government may deem fit and notifies and declares to be an establishment under this Act.


Section 2 (23) talks about “wages” which means every remuneration, whether by way of salary, allowance, or otherwise expressed in terms of money or capable of being so expressed by the terms of employment, if fulfilled, would be payable to an employee towards the work done in such employment, which also includes:

  1. The remuneration that is payable under any settlement between the parties or order of a tribunal or court.
  2. The employee is entitled to the salary in respect of overtime work holidays or any leave period.
  3. The additional remuneration that is to be paid under the terms of employment is called a bonus.
  4. The sum to be paid on the termination of employment of the employee under any law, contract, or instrument that allows for the payment of such sum, but it does not provide for the time within which the payment is to be made.
  5. The sum that is paid to the employee under any scheme framed under any law for the time being in force.
  • The bonus, which is included under a scheme of profit sharing or otherwise, is not a remuneration payable under the terms of employment and is certainly not payable through an award or settlement between the parties or by the order of the court.
  • The payment to be made for the house accommodation value, or of the supply of light, water, medical essentials, or other amenities, or of any service excluded from the computation of wages by a general or special order of the government.
  • The payment that is made to the employer or any person and includes any of the interest which may have accrued thereon.
  • The amount to be paid for the travelling allowance including the value of any travelling concession.
  • The additional sum is paid to the employee for the special expenses according to the nature of his employment.
  • The compensation needed to be paid upon the termination of employment in cases other than those specified in subclause (d).
  • The subscription fees paid by the employee for the life insurance and the contribution paid by the employer to the life insurance of the employee under the provisions of this Act and the bonus which may have accrued thereon.
  • The house rent allowance is to be paid by the employer.

Essential provisions of the Act

This Act serves as a significant instrument for the establishment and operation of businesses or trades within Telangana. However, adherence to certain provisions is necessary to ensure a seamless business workflow. The following are the essential provisions under this Act that are to be kept in mind:


Section 3 of this Act refers to the registration of the establishment shall be done under the guidance of the appointed inspector, who shall make sure that this provision of the Act is duly followed, or else it will lead to the direct cancellation of the registration of the establishment. 

  1. The employer of an establishment shall,
  • Proceed with registration within thirty days from which the establishment came into existence from the date of commencement of this Act.
  • Thirty days from the date on which the establishment commences its work, which is sent to the inspector with a statement of particulars and the fees as prescribed.
  1. The inspector shall register the establishment upon receiving payment in the register of establishments and shall issue, in the prescribed form, a registration certificate to the employer, who shall display it at a prominent place in the establishment.
  2. A registration certificate is to be issued under sub-section (2), and be valid upon the date of issuance up to the 31st day of December.
  3. The employer is to inform the inspector in case of any changes made in the particulars under sub-section (1) within fifteen days. On receipt of such intimation and the fees prescribed, the inspector shall make the change in the register of establishments with the prescribed changes and shall amend the registration certificate or issue a fresh registration certificate, if required.
  4. On the closure of the establishment, the employer is required to inform the inspector within fifteen days to remove the name of the establishment from the register of establishments and cancel the registration certificate.

If the inspector is satisfied with such an intimation for the closure of the establishment, then he shall remove the name of such establishment from the register and cancel the registration certificate.

Opening and closing hours of shops 

Section 7 of this Act refers to the conditions of the functioning of the shops to regulate the hours for the functioning of the shop, followed by the interval period, and grant holidays on special occasions. 

  1. No shops are to be opened earlier or closed later than the prescribed period, and the customer who is served in that shop during the hours that are fixed for the closing shall be served.
  2. The government has the sole authority to prescribe the hours for the different classes of shops in different areas.

Application of this Chapter to establishments other than shops

Section 14 talks about the establishment other than the shops with all the essential conditions that are to be applied to the shops.

Children not to work in the establishment

Section 20 of this Act mentions that no children are allowed or required to undergo work in any establishment.


Section 26 refers that the area of the establishment shall be clean and free from any waste that may arise from the drains or any other nuisance and shall be required to be cleaned from time to time by any prescribed method.

Compulsory enrolment of employees in insurance cum savings scheme

Section 34 talks about the employees who have served for not less than one year in an establishment shall be subscribers to an insurance scheme or any saving scheme that is notified by the government and that shall apply to an establishment towards which the employee is associated with the rates as prescribed by the government. It can be paid in a lump sum or every year in monthly instalments, which are also to be prescribed by the government, and the employer is required to pay the authority on behalf of the employee and shall recover the same amount from the employee.

Every employer of the establishment whose insurance scheme is made to be applicable by the government is required to pay the fees in advance to the employee as notified by the government from time to time and shall also be notified by the authority.

Payment of Wages

Section 35 refers to the employer of an establishment being responsible for the payment of wages to the employee and all the other sums that are required to be paid under this Act.


Section 41 talks about the fines which are to be acquired as mentioned below:

  1. The employees shall be liable for the payment of fines towards such Acts and omissions on the employer’s part, which would certainly require the prior approval of the government or the authority in charge.
  2. To be notified by notice upon liability for such acts and omissions in the manner prescribed under which the employment is carried on.
  3. The fine shall not be imposed on the first instance, as an opportunity should be provided to the party to show cause for the validity of the imposed fine in compliance with the prescribed procedures.
  4. The imposed fine on the wage of the employee must not exceed the amount of three paise of the wages payable in that period.
  5. Fines shall not be imposed on those employees who have not completed the age of 15 years.
  6. The fines shall not be recovered from the person after the expiry of sixty days from the day on which the fine was imposed.
  7. A fine may only be imposed on the day of commission of the act or omission.
  8. Fines recovered by the employer shall be recorded by the employer in a register, and the fines shall only be consumed for the well-being of the employees in that establishment.

Appointment of authority to hear and decide the claims relating to wages

Section 50 talks about how the government shall appoint the authority for the matters and claims to be settled concerning the deductions, wages, delay of payment, and the compensation that is required to be paid under this act towards the employees in any establishment under the area.


Section 52 talks about the appeal arising from an order which dismisses the application partially or as a whole made under sub-section (1) of Section 51 shall be presented before the authority prescribed by the government within thirty days from the date on which the directions were given to the applicant or the employer.

  1. The employer is concerned with the total amount of sum that is to be paid in wages or service compensation, which certainly exceeds three hundred rupees.
  2. Any other person who has applied for the compensation to be claimed under sub-section (1) of section 51 is on hold by the employer towards the employee exceeding fifty rupees.
  3. By a person who is directed to pay the penalty under sub-section (3) of section 51.

Powers and duties of Chief Inspectors

Section 59 refers to the several powers granted to an inspector to be exercised within the limits of the prescribed jurisdiction:

  1. To enter into an establishment during reasonable hours and may accompany an assistant as he thinks fit for further assistance in the work which he believes to be an establishment.
  2. To conduct inspections of the premises, to check the records and the registers and to collect the required pieces of evidence that seem necessary.
  3. The sole power to exercise the powers which seem necessary to assure the proper implementation of the Act. 

Landmark case laws

St Anns College for Women v. State of Telangana (2021)

Brief Facts

In this case, the appellant institution was an educational institution, and the respondent was appointed in the year 1985 as an attendee and given resignation in 2009, and service dues were also settled. 


The question was whether the educational institution falls under the definition of “establishment” under Section 2(10) of the Telangana Shops and Establishment Act of 1988.


The Supreme Court referred to the definition of ‘establishment’ under the Bihar Shops and Establishments Act, which is exactly similar to the definition under the Telangana Shops and Establishment Act, and significantly held that an educational institution does not fall within the scope of establishment under the Act. The educational institution is not an establishment as held by the Supreme Court, although it may fall under the definition of ‘industry’, but does not fall under the meaning of ‘establishment’. Further, the order passed by an appellate authority was dismissed. Once this Court is of the view that the order passed by respondent 2 was without jurisdiction, this Court can certainly interfere with the same even though there is an alternative remedy of appeal before the Deputy Commissioner of Labour. Hence, a writ appeal was allowed.

Smt. Anita Hari v. The State of Telangana and 4 others (2020)


In this case, the applicant was appointed by the management (respondent) for the position of manager client for the daily tasks and the process plan to be implemented to create enhanced coordination. After her probation for 6 months, the company passed a letter to her announcing the emoluments, and the manager was informed about her noncompliance with higher posts as an allegation was made highlighting improper behaviour with the senior officials. The applicant was terminated by the arbitrary and illegal decision of the company and was demanding the continuation of employment with the pending wages and the rendered service benefits. Relief from the services without any reason; despite stating to resume her services, she received no reply and continued her services for 90 days. She further requested wages and compensation of Rs 5,00,000 for the harassment and mental agony caused to her by false allegations


Whether the termination was lawful? If not, is she entitled to the compensation? Regarding Section 48 (3) of the Telangana Shops and Establishment Act, 1988, alleging unlawful termination and seeking reinstatement with full back wages with all attendant benefits and continuity for the said service.


The HC further stated that Section 47 (1) of the Telangana Shops and Establishment Act, 1988, further describes the conditions for the termination of the services to be covered up with compensation. No employer shall terminate the service of an employee who has been in employment for six months and would be required to give one month’s notice in writing, with the wages in lieu, and the employee should be employed for not less than one year. As the applicant stated that she only worked for less than six months under the respondents, the removal that was made is justified, and no further interference can be made. Hence, the application was dismissed. 

New developments

The registration of any shop or commercial establishment can be done online by simply following the methods at the available portal for online registration and getting a licence:

  • Click on the “Register yourself” button.
  • Fill up the required blanks with information which shall include:
  1. the photographs of the establishment mentioned in Telugu font, 
  2. the employed number of workers, if on rent (rent deed required), 
  3. a photograph of the owner of the business, 
  4. certificate of incorporation and if a company would require an article of association and a Memorandum of Association.  
  • Log in after a successful registration.
  • Form 1 will appear. Fill out the form after entering the required details that have been asked in the form. 
  • Attach all the required copies of documents.
  • Pay the registration fees as per the number of employees in the establishment.
  • Form II will appear after the successful entry of the data.

You can further track the status of the application on the same site under “Track Application Status”.

The licence has to be renewed every 30 days, which requires a prescribed amount of fees to be paid.

The table below will give you an idea of the required fee structure for the number of employees for the process of registration:

No of EmployeesPrice 
0 1-5 6-10 11-20 21-50 51-100 100 + employees Rs. 100Rs. 500Rs. 1,000Rs. 2,000Rs. 5,000Rs. 10,000Rs 10,000+ Rs 5,000 for 50 additional employees


The Telangana Shops and Establishment Act, 1988 provides a safeguard for anyone who would set up a shop or commercial establishment by doing a proper registration and getting a valid licence and thus helps the business owner for the smooth workflow of the business with the conditions of work to be fulfilled accordingly, as both employers and employees can enjoy their environment of work. The recent new development provides ease of work for the online methods of registration with the limited number of documents required for registration.

Frequently Asked Questions

What is the validity of a shop and establishment licence in Telangana?

The certificate’s validity will remain from the issued date to the 31st day of December of that particular year. You need to renew this certificate within 30 working days after it expires.

What is the minimum Labour required for a Labour licence in Telangana?

The minimum number of labour required in an establishment, which includes the government, a local authority, or any place where any trade, industry, business, manufacture, or occupation is 5 to get a labour licence in Telangana under this Act.

What is the Telangana Shops and Establishment Act?

This Act was enacted to regulate the condition of work and employment in shops and commercial establishments, theatres, restaurants, and other establishments.


Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.


Please enter your comment!
Please enter your name here