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TMI Blog2005 (5) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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). - Appeal (civil) 897 of 2002 - - - Dated:- 5-5-2005 - HEGDE, N. SANTOSH, BALAKRISHNAN, K.G., DHARMADHIKARI, D.M., KUMAR, ARUN AND SRIKRISHNA, B.N., JJ. JUDGMENT Dharmadhikari, J. This present Appeal along with other connected cases has been listed before this Constitution Bench of five judges on a reference made by a Bench of three Honourable judges of this Court finding an apparent conflict between the decisions of two Benches of this Court in the cases of Chief Conservator of Forests v. Jagannath Maruti Kondhare, [1996] 2 SCC 293 of three judges and State of Gujarat v. Pratamsingh Narsinh Parmar, [2001] 9 SCC 713 of two judges. On the question of 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, the aforesaid Benches (supra) of this Court culled out differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaken by the State and even individuals engaged in professions and philanthropic activities. On behalf of the employers, it is also pointed out that there is no unanimity in the opinions expressed by the judges in the Bangalore Water case on the ambit of the definition of `industry' given in the Act. Pursuant to the observations made by the judges in their different opinions in the judgment of Bangalore Water, (supra), the legislature responded and amended the Act by Industrial Disputes (Amendment) Act 1982. In the amended definition, certain specified types of activities have been taken out of the purview of the word `industry'. The Act stands amended but the amended provision redefining the word `industry' has not been brought into force because notification to bring those provisions into effect has not been issued in accordance with sub-section (2) of Section 1 of the Amendment Act. The amended definition thus remains on the statute unenforced for a period now of more than 23 years. On behalf of the employers, it is pointed out that all other provisions of the Amendment Act of 1982, which introduced amendments in various other provisions of the Industrial Disputes Act h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bhagwati and Desai JJ in his inimitable style has construed the various expressions used in the definition of `industry'. After critically examining the previous decisions, he has recorded his conclusions thus: So we proceed to formulate the principles, deducible from our discussion, which are decisive, positively and negatively, of the identity of `industry' under the Act. We speak, not exhaustively, but to the extent, covered by the debate at the bar and, to that extent, authoritatively, until overruled by a larger Bench or superseded by the legislative branch. 140. `Industry', as defined in Section 2(j) and explained in Banerji, (supra), has a wide import. (a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee (the direct and substantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e. making, on a large scale or prasad or food), prima facie, there is an `industry' in that enterprise. (b) Absence of profit motive or gainful object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-employee character of the unit. (c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertaking alone are exempt - not other generosity, compassion, developmental passion or project. IV 143. The dominant nature test: (a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not `workmen' as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases cited before us, including those an what are known as ``sovereign'' functions'. Beg CJ clearly seems to have dissented from the opinion of his other three brethren on excluding only certain State - run industries from the purview of the Act. According to him, that is a matter purely of legislation and not of interpretation. See his observations contained in paragraph 163: 163. I would also like to make a few observations about the so-called ``sovereign'' functions which have been placed outside the field of industry. I do not feel happy about the use of the term ``sovereign'' here. I think that the term `sovereign' should be reserved, technically and more correctly, for the sphere of ultimate decisions. Sovereignty operates on a sovereign plane of its own as I suggested in Keshavananda Bharati's case supported by a quotation from Earnest Barker's Social and Political Theory. Again, the term ``Regal'', from which the term ``sovereign'' functions appears to be derived, seems to be a misfit in a Republic where the citizen shares the political sovereignty in which he has even a legal share, however small, inasmuch as he exercises the right to vote. What is meant b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome other types impliedly outside its purview. A separate opinion was delivered much later by Jaswant Singh J. for himself and Tulzapurkar J., after they had gone through the separate opinion given by Chandrachud CJ (as he then was). The opinion of Jaswant Singh for himself and Tulzapurkar J. is clearly a dissenting opinion in which it is said that they are not agreeable with categories 2 and 3 of the Charities excluded by Brother Krishna Iyer J. In the dissenting opinion of the two judges, the definition covers only such activities `systematically and habitually carried on commercial lines for production of goods or for rendering material services to the community.' The dissenting opinion is on the lines of the opinion of Gajendragadkar J. in the case of State of Bombay v. Hospital Mazdoor Sabha, AIR (1960) SC 866 where it was observed that although the definition in the Act is very wide, `a line has to be drawn in a fair and just manner' to exclude some callings of services or undertakings which do not fit in with 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is suggested that to avoid reference of the vexed question of interpretation to larger Benches of the Supreme Court it would be better that the legislative intervenes and clarifies the legal position by simply amending the definition of `industry'. The legislature did respond by amending the definition of `industry' but unfortunately 23 years were not enough for the legislature to provide Alternative Disputes Resolution Forums to the employees of specifies categories of industries excluded from the amended definition. The legal position thus continues to be unclear and to a large extent uncovered by the decision of Bangalore Water case as well. Krishna Iyer J . himself, who delivered the main judgment in the Bangalore Water case, at various places in his opinion expressed that the attempt made by the Court to impart definite meaning to the words in the wide definition of `industry' is only a workable solution until a more precise definition is provided by the legislature. 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 industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aporous and tall-and-dwarf definition or tidy up the scheme although judicial thesis and anti-thesis, disclosed in the two-decades-long decisions, should have produced a legislative synthesis becoming of a welfare state and socialistic society, in a world setting where I.L.O. norms are advancing and India needs updating.'' The separate opinion of Beg J. has the same refrain and he also observes that the question can be solved only by more satisfactory legislation. Chandrachud CJ (as he then was) in his separate opinion delivered on 7.4.1978 concurred partly but went a step further in expanding the definition of `industry'. He has felt the necessity for legislative intervention at the earliest and has observed thus:- But having thus expressed its opinion in a language which 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 meanin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious decisions of this Court including the seven judges Bench decision in Bangalore Water, (supra) and passed an order of reference to the Chief Justice for constituting a larger Bench of more than seven judges if necessary. See the following part of that order:- Since the difficulty has arisen because of the judicial interpretation given to the definition of `industry' in the Industrial Disputes Act, there is no reason why the matter should not be judicially re-examined. In the present case, the function of the Coir Board is to promote coir industry, open markets for it and provide facilities to make the coir industry's products more marketable. It is not set up to run 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 Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court. As has been stated by us above, the decision of Bangalore Water is not a unanimous decision. Of the five Judges who constituted majority, three have given a common opinion but tow others have given separate opinions projecting a view partly different from the views expressed in the opinion to see the opinions delivered by the other judges subsequent to his retirement. Krishna Iyer J., and the two judges who spoke through him did not have the benefit of the dissenting opinion of the other two judges and the esparto, partly dissenting opinion of Chandrachud J. as those opinions were prepared and delivered subsequent 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 `indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a reasonable time. Failure to enforce the Act for a period of more than 23 years is an unconstitutional attempt by the Executive Branch of the State to frustrate the clear intention of the legislature. Reliance has been placed by Senior Advocate, Shri Andhiyarujina, on the Court of Appeal decision in Regina v. Secretary of State for the Home Department, (1995) 2 weekly Law Reports page 2 which was upheld by the House of Lords in the decision reported in the same volume at page 464. It was held in that case thus: Having regard to the overriding 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 obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... `industry' as provided in the Amendment Act of 1982. The only question before us is as to whether the amended definition, which is now undoubtedly a part of the statute, although not enforced, is a relevant piece of subsequent legislation which can be taken aid of to amplify or restrict the ambit of the definition of `industry' in Section 2(j) of the act as it stands in its original form. On behalf of the employees, it is submitted that pursuant to the decision in Bangalore Water case, although the legislature 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 part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is obliged by the Constitution to uphold democratic values, as has been said in some other judgement by Krishna Iyer J., `the Court should be guided not by `Maxwell' but `Gandhi' who advocated protection of the interest of the weaker sections of the society as the prime concern in democratic society. In the legal field, the Court has always derived guidance from the immortal saying of the great judge Oliver W. Holmes that `the life of law has never been logic, it has been experience.' The spirit of law 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial dispute raised by him. Exploitation of workers and the employers has to be equally checked. Law and particularly industrial law needs to be so interpreted as to ensure that neither the employers nor the employees are in a position to dominate the other. Both should be able to cooperate for their mutual benefit in the growth of industry and thereby serve public good. An over expansive interpretation of the definition of `industry' might be a deterrent 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 shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, apart from the constitutional rights conferred on them, may be a subject of separate legislation but for that reason, such governmental activities cannot be brought within the fold of industrial law by giving an undue expansive and wide meaning to the words used in the definition of industry. In response to the Bangalore Water Supply and Sewerage Board case, the Parliament intervened and substituted 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 em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Schedule to the Act would not make it an `industry'. The six judges also considered the inclusion of services such as hospitals and dispensaries as public utility services in the definition under section 2(n) of the Act and rightly observed thus:- When Parliament added the sixth clause under which other services could be brought within 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, distributio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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