1960 (2) TMI 53 - SC - Indian Laws

City of Nagpur Corporation's Activities Deemed 'Industry' under Industrial Disputes Act

THE CORPORATION OF THE CITY OFNAGPUR Versus ITS EMPLOYEES

THE CORPORATION OF THE CITY OFNAGPUR Versus ITS EMPLOYEES - 1960 AIR 675, 1960 SCR (2) 942 Issues Involved:1. Whether the activities of the Corporation of the City of Nagpur fall under the definition of 'industry' in Section 2(14) of the C.P. & Berar Industrial Disputes Settlement Act, 1947.2. Whether the services rendered by the Corporation must be analogous to a business or trade to be considered an industry.3. Whether the activities of the Corporation must share the common characteristics of an industry.4. Whether the findings of the Industrial Court regarding various departments of the Corporation being industries are correct.Issue-wise Detailed Analysis:1. Definition of 'Industry' under Section 2(14) of the Act:The Supreme Court examined whether the activities of the Corporation of the City of Nagpur fall under the definition of 'industry' in Section 2(14) of the C.P. & Berar Industrial Disputes Settlement Act, 1947. The Court referred to previous decisions, particularly D.N. Banerji v. P.R. Mukherjee and Baroda Borough Municipality v. Its Workmen, which held that municipal undertakings could be 'industries' within the meaning of the Industrial Disputes Act. The Court noted that the definition in the C.P. & Berar Act is comprehensive and includes any business, trade, manufacturing or mining undertaking, calling, service, employment, handicraft, or industrial occupation or avocation of employees. The Court concluded that the services rendered by the Corporation, if they comply with the conditions implicit in the definition, will be an 'industry' within the meaning of the Act.2. Analogy to Business or Trade:The argument that the services of the Corporation must be analogous to a business or trade to be considered an industry was rejected. The Court emphasized that the definition of 'industry' in the Act is broad and does not limit itself to activities analogous to trade or business. The Court clarified that the term 'industry' includes organized activities that are not strictly called trade or business ventures, as long as they involve cooperative effort between employer and employee and serve others.3. Common Characteristics of an Industry:The Court considered whether the activities of the Corporation must share the common characteristics of an industry. It identified five characteristics: (i) production or distribution of goods or services, (ii) serving others, (iii) cooperative effort between employer and employee, (iv) commercial transaction, and (v) not being in exercise of pure governmental functions. The Court concluded that the services rendered by the Corporation, which are not regal functions of the State, satisfy these characteristics and thus qualify as industries.4. Findings of the Industrial Court:The Industrial Court had held that all departments of the Corporation, except those dealing with (i) assessment and levy of house-tax, (ii) assessment and levy of octroi, (iii) removal of encroachment and pulling down of dilapidated houses, (iv) maintenance of cattle pounds, and (v) prevention and control of food adulteration, are industries. The Supreme Court examined each department in detail:- Tax Department: The Court upheld the finding that the Tax Department, which deals with the imposition and collection of taxes, is an industry as the taxes collected enable the municipality to discharge its statutory functions.- Public Conveyance Department: This department, which regulates the use of cycles, rickshaws, and bullock-carts, was considered an industry as it provides services that can be performed by private individuals for remuneration.- Fire Brigade Department: The Court held that the Fire Brigade Department is an industry as it provides services that can be undertaken by private bodies, despite the statutory powers conferred for effective functioning.- Lighting Department: The Court found that the Lighting Department, responsible for street lighting, is an industry as the services rendered satisfy the definition and tests laid down by the Court.- Water Works Department: The Court held that this department, which maintains head-works and pumping stations, is an industry as it involves services that can be provided by private individuals.- City Engineers Department: This department, which exercises supervisory and administrative control over subordinate departments, was considered an industry as it is part of the departments that come under the definition of 'industry.'- Enforcement (Encroachment) Department: The Court held that this department, which removes encroachments and unauthorized constructions, is an industry as the services rendered are not peculiar to a corporation and can be performed by private firms.- Sewage Department: The Court found that this department, involved in pumping sewage and utilizing it for irrigation, is an industry.- Health Department: The Court held that this department, which looks after scavenging, sanitation, control of epidemics, and running of public dispensaries, is an industry as private institutions can also render these services.- Market Department: This department, which issues licenses, collects ground-rent, and detects short weights and measures, was considered an industry as it provides services that can be performed by private individuals.- Public Gardens Department: The Court held that this department, responsible for maintaining public parks and gardens, is an industry as the services rendered can be performed by private individuals.- Public Works Department: This department, in charge of construction and maintenance of public works, was considered an industry as the services rendered can be performed by private individuals.- Assessment Department: The Court upheld the finding that this department, which deals with the assessment of taxes, fees, and rates, is an industry as the services rendered are predominantly connected with scavenging tax and water rate.- Estate Department: This department, which maintains records of properties and leases them out, was considered an industry as it performs functions analogous to those of a private company.- Education Department: The Court held that this department, responsible for primary education, is an industry as the services can be performed by private individuals.- Printing Press Department: This department, which prints passes, by-laws, rules, and proceedings, was considered an industry.- Building Department: The Court held that this department, which regulates the construction of buildings, is an industry as the services rendered are analogous to those performed by private individuals.- General Administration Department: This department, which coordinates the functions of all other departments, was considered an industry as it predominantly deals with industrial departments.The Supreme Court dismissed the appeals and upheld the findings of the Industrial Court, holding that the various departments of the Corporation of the City of Nagpur, except for the five departments not appealed against, fall within the definition of 'industry' under the Act. The appeals were dismissed with costs.