TaxTMI 
TaxTMI 
2005 (5) TMI 612
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....case of Bangalore Water Supply and Sewerage Board v. A. Rajappa, [1978] 2 SCC 213 (shortly hereinafter referred to as the Bangalore Water case). The Bench of three judges in the case of Chief Conservator of Forests v. Jagannath Maruti Kondhare, (supra) based on the decision of Bangalore Water case came to the conclusion that `Social Forestry Department' is covered by the definition of `industry' whereas the two judges Bench decision in State of Gujarat v. Pratamsingh Narsinh Parmar, (supra) took a different view. As the cleavage of opinion between the two Benches of this Court seems to have been on the basis of seven judges' Bench decision of this Court in the case of Bangalore Water, the present case along with the other connected cases, in which correctness of the decision in the case of Bangalore Water is doubted, has been placed before this Bench. Various decisions rendered by this Court prior to and after the decision in Bangalore Water, (supra) on interpretation of the definition of the word `industry' under the Industrial Disputes Act, 1947 have been cited before us. It has been strenuously urged on behalf of the employers that the expansive meaning given to the word `....
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....endment Act to the extent of its substituted definition of `industry' with specified categories of industries taken out of its purview, has not been brought into force. Such a piecemeal implementation to the Amendment Act, it is submitted, is not contemplated by sub-section (2) of Section 1 of the Amendment Act. The submission made is that if in response to the opinions expressed by the seven judges in Bangalore Water, case (supra), the legislature intervened and provided a new definition of the word `industry' with exclusion of certain public utility services and welfare activities, the unamended definition should be construed and understood with the aid of the amended definition, which although not brought into force is nonetheless part of the statute. On behalf of the employees, learned counsel vehemently urged that the decision in the case of Bangalore Water, (supra) being in the field as binding precedent for more than 23 years and having been worked to the complete satisfaction of all in the industrial field, on the principle of stare decisis, this Court should refrain from making a reference to a larger Bench for its reconsideration. It is strenuously urged that upsetting....
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....levant, be the venture in the public, joint, private or other sector. (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on employer-employee relations. (d) If the organization is a trade or business it does not cease to be one because of philanthropy animating the undertaking. II 141. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to over reach itself. (a) `Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji (supra) and in this judgment; so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I (supra), although not trade or business, may still be `industry' provided the nature of the activity, viz. the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold of `industry' undertakings, callings and services, adventures `analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organizing the co-operation between employer an....
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.... departments as explained in the Corporation of Nagpur (supra), will be the true test. The whole undertaking will be `industry' although those who are not `workmen' by definition may not benefit by the status. (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. (c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j). (d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby. V 144. We overrule Safdarjung, (supra), Solicitors', case (supra), Gymkhana, (supra), Delhi University, (supra), Dhanrajgirji Hospital, (supra) and other ruling whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha, (supra) is hereby rehabilitated.'' [Underlining for emphasis] What is to be noted is that the opinion of Krishna Iyer J on his own behalf and on behalf of Bh....
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....y in which he has even a legal share, however small, inasmuch as he exercises the right to vote. What is meant by the use of the term ``sovereign'', in relation to the activities of the State, is more accurately brought out by using the term ``governmental'' functions although there are difficulties here also inasmuch as the Government has entered largely new fields of industry. Therefore, only those services which are governed by separate rules and constitutional provisions, such as Articles 310 and 311 should, strictly speaking, be excluded from the sphere of industry by necessary implication.'' [Emphasis supplied] Since Beg CJ was to retire on 22.2.1978, the Bench delivered the judgment on 21.2.1978 with its conclusion that the appeal should be dismissed. The above conclusion was unanimous but the three Hon. Judges namely Chandrachud J on behalf of himself and Jaswant Singh J. speaking for himself and Tulzapurkar JJ., on the day the judgment was delivered i.e. as on 21.2.1978, had not prepared their separate opinions. They only declared that they would deliver their separate opinions later. This is clear from paragraph 170 of the judgment which reads thus: &....
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....ith the provisions of the Act. We may quote from the dissenting opinion of Jaswant Singh J. (for himself and for Tulzapurkar J.): However, bearing in mind the collocation of the terms in which the definition is couched and applying the doctrine of noscitur-a-sociis (which as pointed out by this Court in State of Bombay v. The Hospital Mazdoor Sabha, means that, when two or more words which are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. Expressed differently, it means that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it), we are of the view that despite the width of the definition it could not be the intention of the Legislature that categories 2 and 3 of the charities alluded to by our learned brother Krishna Iyer in his judgment, hospitals run on charitable basis or as a part of the functions of the Government or local bodies like municipalities and educational and re....
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....gislature. See the following observations: Our judgment here has no pontifical flavour but seeks to serve the future hour till changes in the law or in industrial culture occur. 3. Law, especially industrial law, which regulates the rights and remedies of the working class, unfamiliar with the sophistications of definitions and shower of decisions, unable to secure expert legal opinion, what with poverty pricing them out to the justice market and denying them the staying power to withstand the multi-decked litigative process, de facto denies social justice if legal drafting is vagarious, definitions indefinite and Court rulings contradictory. Is it possible, that the legislative chambers are too pre-occupied with other pressing business to listen to Court signals calling for clarification ambiguous clauses? A careful, prompt amendment of Section 2(j) would have pre-empted this docket explosion before tribunals and Courts. This Court, perhaps more than the legislative and Executive branches, is deeply concerned with law's delays and to devise a prompt delivery system of social justice.'' [Emphasis added] It is to be noted further ....
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.... left no doubt as to its meaning, the Court went on to observe that though Section 2(j) used words of a very wide denotation, ``it is clear'' that a line would have to be drawn in a fair and just manner so as to exclude some callings, services or undertakings from the scope of the definition. This was considered necessary because if all the words used in the definition were given their widest meaning, all services and all callings would come within the purview of the definition including services rendered by a person in a purely personal or domestic capacity or in a casual manner. The Court then undertook for examination what it euphemistically called ``a somewhat difficult'' problem to decide and it proceeded to draw a line in order to ascertain what limitations could and should be reasonably implied in interpreting the wide words used in Section 2(j). I consider, with great respect, that the problem is far too policy-oriented to be satisfactorily settled by judicial decisions. The Parliament must step in and legislate in a manner which will leave no doubt as to its intention. That alone can afford a satisfactory solution to the question which has agitated and perplexed the judici....
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.... any industry itself. Looking to the predominant purpose for which it is set up we would not call it an industry. However, if one were to apply the tests laid down by Bangalore Water Supply and Sewerage Board case it is an organization where there are employers and employees. The organization does some useful work for the benefit of others. Therefore, it will have to be called an industry under the Industrial Disputes Act. We do not think that such a sweeping tests was contemplated by the Industrial Disputes Act, nor do we think that every organization which does useful service and employs people can be labelled as industry. We, therefore, direct that the matter be placed before the Hon. Chief Justice of India to consider whether a larger Bench should be constituted to reconsider the decision of this Court in Bangalore Water Supply and Sewerage Board.'' When the matter was listed before a three judge Bench, in the case of Coir Board v. Indira Devi, [2000] 1 SCC 224 the request for constituting a larger Bench for reconsideration of the judgment in the Bangalore Water case was refused both on the ground that the Industrial Disputes Act has undergone an amendment and that the ma....
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....ubsequent to the delivery of the judgment in the Bangalore Water case. In such a situation, it is difficult to ascertain whether the opinion of Krishna Iyer J. given on his own behalf and on behalf of Bhagwati and Desai JJ., can be held to be an authoritative precedent which would require no reconsideration even though the judges themselves expressed the view that the exercise of interpretation done by each one of them was tentative and was only a temporary exercise till the legislature stepped in. The legislature subsequently amended the definition of the word `industry' but due to the lack of will both on the part of the Legislature and the Executive, the amended definition, for a long period of 23 years, has remained dormant. Sri Andhyarujina, learned Senior Counsel appearing for M/s National Remote Sensing Agency, which is an agency constructed by the Government in discharge of it sovereign functions dealing with Defence, Research, Atomic Energy and Space falling in the excluded category in Clause (6) of the amended definition of `industry' in Section 2(j), relies on the following decisions in support of his submission that where the unamended definition in the Act is amb....
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....legislative role of Parliament, the enacted provisions represented a detailed scheme approved by the legislature which until repealed stood as an enduring statement of its will; that while the provisions remained unrepealed it was not open to the Secretary of State to introduce a radically different scheme under his prerogative powers; and that, accordingly, in purporting to implement the tariff scheme, he had acted unlawfully and in abuse of those powers.'' The House of Lords in approving the decision of Court of Appeal held: That section 171(1) of the Criminal Justice Act 1988 imposed a continuing obligation on the Secretory of Sate to consider whether to bring the statutory scheme in sections 108 to 117 into force; that he could not lawfully bind himself not to exercise the discretion conferred on him; that the tariff scheme was inconsistent with the statutory scheme; and that, accordingly, the Secretary of State's decision not to bring sections 108 to 117 into force and to introduce the tariff scheme in their place had been unlawful.'' Senior Advocates Ms. Indira Jaising and Mr. Colin Gonsalves, Counsel appea....
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....re responded by amending the definition of `industry' to exclude certain specified categories of industries from the purview of the Act, employees of the excluded categories of industries could not be provided with alternative forums for redressal of their grievances. The unamended definition of industry, as interpreted by the Bangalore Water case, has been the settled law of the land in the industrial field. The settled legal position, it is urged, has operated well and no better enunciation of scope and effect of the `definition' could be made either by the legislature or by the Indian Labour Organization in its report. After hearing learned counsel for the contesting parties, we find there are compelling reasons more than on before us for making a reference on the interpretation of definition of `industry' in section 2(j) of the Act, to a larger Bench and for reconsideration by it, if necessary, the decision rendered in the case of Bangalore Water Supply and Sewerage Board. The larger Bench will have to necessarily go into all legal questions in all dimensions and depth. We briefly indicate why we find justification for a reference although it is stiffly opposed on behalf of ....
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.... is not to be searched in any ideology or philosophy which might have inspired it but it may be found in the experience of the people who made and put it into practice. In the case of Coir Board Ernakulam Kerala State and Anr. (Supra) Sujata V. Manohar J., speaking for the Bench while passing an order of reference to the larger Bench for reconsideration of the judgment of Bangalore Water Supply and Sewerage Board, (supra) has observed thus:- Looking to the uncertainty prevailing in this area and in the light of the experience of the last two decades in applying the test laid down in the case of Bangalore Water Supply and Sewerage Board (supra), it is necessary that the decision in Bangalore Water Supply and Sewerage Board case is re-examined. The experience of the last two decades does not appear to be entirely happy. Instead of leading to industrial peace and welfare of the community (which was the avowed purpose of artificially extending the definition of industry), the application of the Industrial Disputes Act to organizations which were, quite possibly, not intended to be so covered by the machinery set up unde....
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....errent to private enterprise in India where public employment opportunities are scarce. The people should, therefore, be encouraged towards self-employment. To embrace within the definition of `industry' even liberal professions like lawyers, architects, doctors, chartered accountants and the like, which are occupations based on talent, skill and intellectual attainment, is experienced as a hurdle by professionals in their self pursuits. In carrying on their professions, if necessarily, some employment is generated, that should not expose them to the rigours of the Act. No doubt even liberal professions are required to be regulate and reasonable restrictions in favour of those employed for them can, by law, be imposed, but that should be subject of a separate suitable legislation. If we adopt an ideological or philosophical approach, we would be treading on the wrong path against which learned Shri Justice Krishna Iyer himself recorded a caution in his inimitable style thus:- Here we have to be cautious not to fall into the trap of definitional expansionism bordering on reduction and absurdum nor to truncate the obv....
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....tituted the definition of `industry' by including within its meaning some activities of the government and excluding some other specified governmental activities and `public utility services' involving sovereign functions. For the past 23 years, the amended definition has remained unenforced on the statute book. The government has been experiencing difficulty in bringing into effect the new definition. Issuance of notification as required by sub-section 2 of sub-section 1 of Amendment Act, 1982 has been withheld so far. It is, therefore, high time for the court to reexamine the judicial interpretation given by it to the definition of `industry'. The Legislature should be allowed greater freedom to come forward with a more comprehensive legislation to meet the demands of employers and employees in the public and private sectors. The inhibition and the difficulties which are being exercised by the legislature and the executive in bringing into force the amended Industrial Law, more due to judicial interpretation of the definition of `industry' in the Bangalore Water Supply and Sewerage Board case, need to be removed. The experience of the working of the provisions of the Act would se....
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....thin the protection afforded by the Act to public utility services, it did not intend that the entire concept of industry in the Act, could be ignored and anything brought in. Therefore, it said that on industry could be declared to be a public utility service. But what could be so declared had to be an industry in the first place.'' The decision in the case of Management of Safdarjung Hospital (supra) was a unanimous decision of all the six judges and we are inclined to agree with the following observations in the interpretation of the definition clause:- But in the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.'' The....