Supreme Court of India
Bangalore Water-Supply & Sewerage Board v. R. Rajappa
What is an 'industry' under the Industrial Disputes Act, and whether a water supply board, hospitals, educational institutions and research institutes can be industries.
Decided under an earlier law
The Court decided this case under the Industrial Disputes Act, 1947. Section 104 of the Industrial Relations Code, 2020 repeals the Industrial Disputes Act, 1947. The Court's words are shown below beside the Code provision this library compares them with. This library does not say whether the decision holds good under the Code: compare the two texts.
What the Court decided
Each point is this library's summary, followed by the Court's own words, checked word for word against the Supreme Court's typed copy of the judgment (JUDIS file 5125). The pinpoint gives the page of the Supreme Court Reports and the margin letter (A to H) printed beside the line where the words begin. The judges wrote separate opinions, so each point names the opinion its words come from.
The leading opinion set out the test: where there is systematic activity, organised by co-operation between employer and employee, for producing or distributing goods and services that satisfy human wants and wishes, there is prima facie an industry.
From the opinion of V.R. Krishna Iyer
(a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee, … (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes … prima facie, there is an ’industry’ in that enterprise.
[1978] 3 S.C.R. 207, at 282 A · open the report at p. 282 The absence of a profit motive is irrelevant, and the decisive test is the nature of the activity, with special emphasis on the relations between employer and employees.
From the opinion of V.R. Krishna Iyer
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint private or other sector.
[1978] 3 S.C.R. 207, at 282 B · open the report at p. 282 (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
[1978] 3 S.C.R. 207, at 282 C · open the report at p. 282 Professions, clubs, educational institutions, co-operatives, research institutes and charitable projects that meet the test are not exempt; of the activities of government and statutory bodies, only sovereign functions, strictly understood, are.
From the opinion of V.R. Krishna Iyer
(a) The consequences are (i) professions, (ii) Clubs (iii) educational institutions (iiia) co-operatives, (iv) research institutes (v) charitable projects and (vi) other kindred adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of sec. 2 (j).
[1978] 3 S.C.R. 207, at 282 G · open the report at p. 282 (b) Notwithstanding the previous clauses, sovereign functions, strictly understood, alone qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.
[1978] 3 S.C.R. 207, at 283 E · open the report at p. 283 The leading opinion overruled Safdarjung, the Solicitors' case, Gymkhana, Delhi University, Dhanrajgirji Hospital and other rulings that ran counter to these principles.
From the opinion of V.R. Krishna Iyer
We over-rule Safdarjung, Solicitors’ case, Gymkhana, Delhi University, Dhanrajgirji Hospital and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha is hereby rehabilitated.
[1978] 3 S.C.R. 207, at 283 F · open the report at p. 283 Beg C.J. endorsed the leading opinion and its conclusions.
From the opinion of M. Hameedullah Beg
For the reasons given above, I endorse the opinion and the conclusions of my learned brother Krishna Iyer.
[1978] 3 S.C.R. 207, at 223 B · open the report at p. 223 Chandrachud C.J. did not accept the basis of the dissent by Jaswant Singh and Tulzapurkar JJ.
From the opinion of Y.V. Chandrachud
I am unable to accept, respectfully, the basis on which Jaswant Singh and Tulzapurkar, JJ. have expressed their dissent.
[1978] 3 S.C.R. 207, at 284 F · open the report at p. 284 Jaswant Singh J. called on the legislature to settle the meaning of 'industry' with a comprehensive bill.
From the opinion of Jaswant Singh
we think, it is high time that the Legislature steps in with a comprehensive bill to clear up the fog and remove the doubts and set at rest once for all the controversy which crops up from time to time in relation to the meaning of the aforesaid term
[1978] 3 S.C.R. 207, at 292 · open the report at p. 292
The earlier provision and the Code
Industrial Disputes Act, 1947, section 2(j)
As quoted in the judgment: [1978] 3 S.C.R. 207, at 219 F · open the report at p. 219
any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen
Industrial Relations Code, section 2(p)
Definitions In force
(p) "industry" means any systematic activity carried on by co-operation between an employer and worker (whether such worker is employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not,—
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit,
Wording in common: 10% of the words, in the same order.
Wording differs; the decision may not carry over. The Code provision is not worded like the provision the Court interpreted.