It bears mentioning that full-scale commercial use of a residential flat is often opposed by co-operative housing societies. That said, utilizing 20% of the space in a residential flat is legally permissible as long as the business in question falls within certain categories.
For example, the MSC Apellate Court ruled favour of a certain resident in Ghatkopar, Mumbai in 1986, stating that carrying out activities such as yoga classes in a residential flat does not constitute a breach of the bye-laws of a co-operative housing society. The ruling basically meant that the professional activity of teaching certain arts would not be viewed as commercial activity, even if certain charges are levied.
In a case filed under the Karnataka Shops and Commercial Establishments Act, 1961, it was ruled that the use of a residence as an office by chartered accountants, lawyers and doctors would not be considered as a commercial activity. The premise of this ruling was that the work and skill involved in such a profession is predominantly mental or intellectual rather than physical or manual.
These cases clearly indicate that there are some instances where professional activity in a residential flat would be considered legal. However, these should not be taken as blanket rulings. Apart from the individual bye-laws of housing societies, different state laws would nned to be considered.
Whatever the other aspects of the case may be, it is certainly necessary to get the approval of the housing society in a general body before using a residential flat for commercial purposes. Depending on the nature of the business and also subject to the approval of the housing society, it may also be necessary to obtain permission from the local municipal authorities for conversion of the flat into a commercial establishment.
It may be possible to obtain permission from the housing society to conduct a business that does involve any movement of people or storage of goods in the residence. Nevertheless, it is not a good idea to start any kind of business in a residential flat without getting complete clarity on the legal aspects.
Even if a housing society permits business activity in a certain case, such activity can still be deemed illegal and be notified accordingly. It is not advisable to take anything for granted, and to have the legality of such an undertaking examined by a qualified lawyer.