2005 (5) TMI 612 - SC - Indian Laws

Whether social forestry department of State, which is a welfare scheme undertaken for improvement of the environment, would be covered by the definition of Industry under S. 2(j) of the Industrial Disputes Act, 1947? Held that - This Court must, therefore, reconsider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2(j). That no doubt is rather a difficult problem to resolve more so when both the legislature and executive are silent and have kept an important amended provision of law dormant on the statute book. We do not consider it necessary to say anything more and leave it to the larger Bench to give such meaning and effect to the definition clause in the present context with the experience of all these years and keeping in view the amended definition of industry kept dormant for long 23 years. Pressing demands of the competing sectors of employers and employees and the helplessness of legislature and executive in bringing into force the Amendment Act compel us to make this reference. Let the cases be now placed before Hon ble Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgment of this Court in the case of Bangalore Water, (1978 (2) TMI 204 - SUPREME COURT).

Issues Involved:
1. Definition of "Industry" under Section 2(j) of the Industrial Disputes Act, 1947.
2. Conflict between judgments: Chief Conservator of Forests v. Jagannath Maruti Kondhare and State of Gujarat v. Pratamsingh Narsinh Parmar.
3. Interpretation and scope of "sovereign functions."
4. Legislative amendment to the definition of "industry" and its non-enforcement.
5. Judicial precedents and the principle of stare decisis.
6. The role of the judiciary versus legislative intervention.

Detailed Analysis:

1. Definition of "Industry" under Section 2(j) of the Industrial Disputes Act, 1947:
The core issue revolves around whether the 'social forestry' department of the State, a welfare scheme for environmental improvement, qualifies as an "industry" under Section 2(j) of the Industrial Disputes Act, 1947. The case references the Bangalore Water Supply and Sewerage Board v. A. Rajappa decision, which provided an expansive interpretation of "industry." The judgment in Bangalore Water defined "industry" to include any systematic activity organized by cooperation between employer and employee for the production and/or distribution of goods and services to satisfy human wants and wishes, regardless of profit motive.

2. Conflict between Judgments:
The conflict arises from two differing judgments:
- Chief Conservator of Forests v. Jagannath Maruti Kondhare: This judgment, based on the Bangalore Water case, concluded that the 'Social Forestry Department' is covered by the definition of 'industry.'
- State of Gujarat v. Pratamsingh Narsinh Parmar: This judgment took a contrary view, excluding such departments from the definition of 'industry.'

3. Interpretation and Scope of "Sovereign Functions":
The judgment discusses the lack of unanimity on what constitutes "sovereign functions." The Bangalore Water case suggested that only certain inalienable functions like law and order, legislation, judiciary, and administration might be excluded from the definition of 'industry.' The present judgment argues that in a constitutional democracy, sovereignty vests in the people, and all welfare activities undertaken by the State under the Directive Principles of State Policy should be considered sovereign functions.

4. Legislative Amendment to the Definition of "Industry" and Its Non-Enforcement:
The Industrial Disputes (Amendment) Act, 1982, attempted to redefine "industry" by excluding certain activities. However, this amended definition has not been brought into force for over 23 years due to the lack of a notification. The judgment notes that the unamended definition remains in effect, causing ongoing confusion and necessitating judicial reconsideration.

5. Judicial Precedents and the Principle of Stare Decisis:
The judgment highlights the principle of stare decisis, emphasizing that the decision in the Bangalore Water case has been a binding precedent for over 23 years. However, it also notes that the judgment was not unanimous, with different judges providing separate and partly dissenting opinions.

6. The Role of the Judiciary versus Legislative Intervention:
The judgment underscores the judiciary's role in interpreting the law but also acknowledges that the expansive definition of "industry" provided in the Bangalore Water case was intended as a temporary measure until legislative intervention. The legislature did amend the definition, but the amendment has not been enforced, leaving the judiciary to reconsider the interpretation.

Conclusion:
The judgment concludes that there are compelling reasons to refer the interpretation of the definition of "industry" to a larger Bench for reconsideration. It highlights the need for a more comprehensive and precise legislative definition to address the ongoing confusion and ensure a balanced approach that considers the interests of both employers and employees. The case is referred to the Hon'ble Chief Justice of India for constituting a larger Bench to reconsider the judgment in the Bangalore Water case.

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