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TMI Blog1960 (2) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... The Government of the State of Madhya Pradesh by its order dated October 23, 1956, referred the said disputes under s. 39 of the Act to the State Industrial Court, Nagpur and the reference was numbered as Industrial Reference No. 18 of 1956. The appellant filed a statement before the Industrial Court questioning the jurisdiction of that Court, inter alia, on the ground that the Corporation was not an industry as defined by the Act. On February 13, 1957, the Industrial Court made a preliminary order holding that the Corporation was an industry and that the further question whether any department of the Corporation was an industry or not, would be decided on the evidence. The appellant challenged the correctness of that order by filing a petition under Art. 226 of the Constitution in the High Court of Bombay at Nagpur, but that petition was dismissed, as the award was made before its hearing. On June 3, 1957, the Industrial Court made an award holding that the Corporation was an industry and further that all departments of the Corporation were covered by the said definition. It also revised the pay scales of the employees and accepted the major demands made by them. On July 15, 1957, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d both the references together and, by consent, the evidence in Reference No. 18 of 1956 was treated as evidence in Reference No. 1 of 1957. On December 14, 1957, an award was made in Reference No. 1 of 1957 and it was based on the findings in the award made in Reference No. 18 of 1956. The Industrial Court held that the Fire Brigade ]Department was an industry within the meaning of the Act and, on that basis, gave the necessary reliefs to the employees. Mr. Aggarwala, learned counsel appearing for the appellant in the first two appeals, raised before us the following points: (1) No service rendered by the Corporation would be an industry as defined by s. 2(14) of the Act. (2) Assuming that some of the services of the Corporation are comprehended by the definition of industry in the Act, the said services, in order to satisfy the definition, must 'be analogous to a business or trade. (3) Even otherwise, the activities of the Corporation to be called industry must partake the common characteristics of an industry. (4) The, finding of the Industrial Court holding that the various departments of the Corporation are industries is not correct, as the services rendered by the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not concerned with that aspect of the case here. These two cases, therefore, have finally and authoritatively held that municipal undertakings could be industry within the meaning of the Industrial Disputes Act. A faint argument is attempted to sustain a distinction between the definition of an industry in the Industrial Disputes Act and the definition of the same word in the Act in question. Section 2(j) of the Industrial Disputes Act defines industry to mean any business, trade, undertaking, manufacture or calling of employers and to include any calling service, employment, handicraft, or industrial occupation or avocation of workmen . Section 2(14) of the Act divides the definition into three parts, namely, (a) any business, trade, manufacturing or mining undertaking or calling of employers, (b) any calling, service, employment, handicraft or industrial occupation or avocation of employees, and (c) any branch of an industry or a group of industries. A comparative study of these two sections brings out the following differences: While the definition of industry in the Industrial Disputes Act means certain things and includes others, the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case is concerned with the definition of industry in a different Act, we shall briefly resurvey the law on the subject with specific reference to a corporation. Let us scrutinize the definition of industry to ascertain whether all or some of the conditions are implicit in the definition and whether the said conditions constitute the necessary basis for it. The true meaning of the section must be gathered from the expressed intention of the Legislature. Maxwell in his book On the Interpretation of Statutes , 10th Edn., rightly points out at p. 2 that If the words of the statute are in themselves precise and unambiguous no more is necessary than to expound those, words in their natural and ordinary sense, the words themselves in such case best declaring the intention of the legislature . The words used in the section are clear and unambiguous and they prima facie are of the widest import. We have pointed out that the section is in two parts: cl. (a) defines industry with reference to employers and cl. (b) defines it with reference to employees. Clause (c) extends the definition to any branch of an industry or a group of industries, i.e., industries Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alling, service, employment, handicraft are really intended to be qualified by the adjective industrial , one should expect the Legislature to affix the adjective to the first word calling rather than to the last word occupations. The inclusive definition is a wellrecognized device to enlarge the meaning of the word defined, and, therefore, the word , industry must be construed as comprehending not only such things as it signifies according to its natural import but also those things the definition declares that it should include: see Stroud's Judicial Dictionary, Vol. 2, p. 1416. So construed, every calling, service, employment of an employee or any business, trade or calling of an employer will be an industry. But such a wide meaning appears to overreach the objects for which the Act was passed. It is, therefore, necessary to limit its scope on permissible grounds , having regard to the aim, scope and the object of the whole Act. To arrive at the real meaning of the words, Lord Coke in Heydon's case, [1584] 3 Rep. 7 b. says that the following matters are to be considered: (1) What was the law before the Act was passed ; (2) What was the mischief or defect f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic Law into four sab-heads and under the sub-head Administrative Law he deals with a variety of topics including welfare and social activities of a State. The treatment of the subject Public Law by Holland and other authors, in our view, has no relevancy in appreciating the scope of the concept of regal powers-which have acquired a definite connotation. Lord Watson, in Coomber v. Justices of Berks (1883-84) 9 App. Cas, 61, 74, describes the functions such as administration of justice, maintenance of order and repression of crime, as among the primary and inalienable functions of a constitutional Government. Isaacs, J., in his dissenting judgment in The Federated State School Teachers' Association of the Australia v. The State of Victoria (1929) 41 C.L.R. 569., concisely states thus at p. 585 - Regal functions are inescapable and inalienable. Such are the legislative power, the administration of laws, the exercise of the judicial power. Non-regal functions may be assumed by means of the legislative power. But when they are assumed the State .acts simply as a huge corporation, with its legislation as the charter. Its action under the legislation, so far as it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have the discrimen of Crown exemption. If a municipality either is legally empowered to perform and does perform any function whatever for the Crown.,. is lawfully empowered to perform and does perform any function which constitutionally is inalienably a Crown function-as, for instance, the administration of justice the municipality is in law presumed to represent the Crown, and the exemption applies. Otherwise, it is outside that exemption, and, if impliedly exempted at all, some other principle must be resorted to. The making and maintenance of streets in the municipality is not within either proposition. A corporation may, therefore, discharge a dual function : it may be statutorily entrusted with regal functions strictly so-called, such as making of laws, disposal of certain cases judicially etc., and also with other welfare activities. The former, being delegated regal functions, must be excluded from the ambit of the definition of industry . The next head of exclusion from the definition is put by the learned counsel for the appellant thus : A municipality in the modern polity is also a trading and industrial corporation and in that capacity is empowered to carry on und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking in the first part of the definition and industrial occupation. or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business. The definition was apparently-intended to include within its scope what might Dot strictly be called a trade or business venture. This passage leaves no room for doubt that this Court construed the terms of the definition of industry in a way which takes in activities which are not strictly called trade or business. Therefore the words not strictly be called a trade or business venture and the words analogous to the carrying out, of a trade or business emphasize more the nature of the organised activity implicit in a trade or business than to equate the other activities with trade or business. This is made more clear by the learned Judge when be expressly reserves the Court's opinion on a wider question in the following words at p. 318: It is unnecessary to decide whether disputes arising in relation to purely administrative work fall within their ambit. We cannot, therefore, agree with the contention that the said decision, when it expressly accepted the comprehensive meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to private enterprise, and, if so fulfilled, could such a depute be industrial ? This test steers clear of the argument that to be an industry the activity shall be a trading activity. If a service performed by an individual is an industry, it will continue to be so notwithstanding the fact that it is undertaken by a corporation. Another test suggested by the learned counsel may be scrutinized. It is said that unless there is a quid pro quo for the service, it cannot be an industry. This is the same argument, namely, that the service must be in -the nature of trade in a different garb. This Court in D. N. Banerji v. P. B. Mukherjee [1953] S.C.R. 302 has held that neither the investment of capital or the existence of profitearning motive seems to beta sine qua non or necessary element in the modern conception of industry. The conception that unless the public who are benefited by the services pay in cash for the services rendered to them, the services so rendered cannot be industry is based upon an exploded theory. As observed by Chandrasekhara Aiyar, J., the conflicts between capital and labour have now to be determined more from the standpoint of status than of contract . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely in administrative charge of other departments. We do not see any justification for this artificial division of municipal activities. Barring the regal functions of a municipality, if such other activities of it, if undertaken by an individual, would be industry; then they would equally be industry in the hands of a municipality. It would be unrealistic to draw a line between a department doing a service and a department controlling or feeding it. Supervision and actual ,performance of service are integral part of the same activity. In other words, whether these three functions are carried out by one department or divided between three departments, the entire organizational activity would be an industry. This aspect of the question was incidentally touched upon by this Court in Baroda Borough Municipality v. Its Workmen and the following passage at p. 49 reads thus: We have already pointed out that under the Municipal Act a municipality may perform various functions, some obligatory and some discretional. The activities may be of a composite nature,: some of the departments may be mostly earning departments and some mostly spending departments. For example, the department w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfined to legislative power, administration of law and judicial power. (4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation. (5) If a service rendered by a corporation is an industry, the employees in the departments connected with that service, whether financial administrative or executive, would be entitled to the benefits of the Act. (6) If a department of a municipality discharges many functions, some pertaining to industry as defined in the Act and other non- industrial activities, the predominant functions of the department shall be the criterion for the purposes of the Act. The following are the various departments of the Nagpur City Corporation: (1) General Administration Department; (2) Octroi Department; (3) Tax Department; (4) Public Conveyance Department; (5) Fire Brigade Department; (6) Lighting Department; (7) Water Works Department; (8) City Engineer Department; (9) Enforcement (encroachment) Department: (10) Sewage Pumping Station Department; (11) Sewage Farm Department; (12) Health Department; (13) Market Department; (14) Cattle Pound Department; (15) Public Gardens Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not covered by s. 57, and which are comparatively not absolutely essential but are necessary for the happiness of the people of the State. Provisions of Ch. VI enable the municipality to hold and acquire properties, to manage public institutions maintained out of municipal funds. Section 79 enjoins on the municipality to apply the fund available with it to discharge its statutory duties and pay salaries and allowances of its various servants. Chapter IX enables the municipality to raise loans on the security of its properties for discharging debts and for meeting the capital expenditure. Part IV empowers the municipality to impose taxes for the purposes of this Act and also describes the procedure for collecting the same. Part V confers powers and imposes duties on the Corporation and its officers in respect of public health, safety and convenience. This Part deals with public convenience, drains and privies, conservancy, sanitary provisions, water supply and drainage, regulation of factories and trades, markets and slaughter places, food, drink, drug and dangerous articles, prevention of infectious diseases and disposal of the dead. Part VI empowers the Corporation to draw up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce rendered. The services, namely, scavenging and supply of water, can equally be undertaken by a private firm or an individual for remuneration and the fact that the munici- pality does the same duty does not make it any the less a service coming under the definition of industry . We would, however, prefer to sustain the finding on a broader basis. There cannot be a distinction between property tax and other taxes collected by the municipality for the purpose of designating the tax department as an industry or otherwise. The scheme of the Corporation Act is that taxes and fees are collected in order to enable the municipality to discharge its statutory functions. If the functions so discharged are wholly or predominantly covered by the definition of industry , it would be illogical to exclude the tax department from the definition. While in the case of private individuals or firms services are paid in cash or otherwise, in the case of public institutions, as the services are rendered to the public, the taxes collected from them constitute a fund for performing those services. As most of the services rendered by the municipality come under the definition of industry , we shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge the said services. A private person or a firm can equally do the same services and nothing prevents the legislature from conferring similar powers on an individual or a firm. These services also satisfy all the tests laid down by us and therefore we hold that this department is also an industry. (iv) Lighting Department: Lighting Department looks after the arrangements for lighting the streets in the Corporation area. There are two systems of lighting streets, namely, (1) by electricity, and (2) by kerosene oil lamps. Electric street lighting is given on contract to Nagpur Light and Power Co., Nagpur, by the Corporation. Kerosene oil street lighting is done departmentally by the lighting department. Electric Light and Power Co., is responsible to the Corporation for street lighting. The said Company has to fix electric lights according to the programme given to it by the Corporation. The burning hours are also fixed by the Corporation. The Corporation does not charge the public for street lighting. (See the evidence of Witness No. 5 for Party No. 1). We have already indicated that quid pro coin the shape of payment of money for particular services rendered is not a necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and dilapidated houses. These powers are necessary for the Corporation to protect its properties and to prevent encroachment thereon and to remove dilapidated houses in the interest of the public. But if a distinction is made between the powers and the nature of the services rendered, it would be obvious that the services rendered are not peculiar to a corporation. A private firm may undertake to manage the properties of others. It will have to. appoint persons to detect encroachment and to take steps to recover possession of lands encroached upon. The only difference between a firm and a municipal corporation is that the corporation can, in exercise of its statutory powers, remove the encroachment, but it does not prevent the aggrieved party from going to a civil court to establish his title to the property : but in the case of a firm, it cannot take the law into its own hands: it has to get the encroachment removed through a court of law. So far as the nature of the service is concerned, namely, protecting its properties in the interest of the public from encroachment and to recover possession of the lands encroached upon, there is no essential distinction between the said ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Department is to issue licences, collect ground-rent and registration fee and to detect short weights and measures. Rents are collected for permitting persons to enter the Corporation land and transact business thereon. Detection of short weights and measures is a service to the people to prevent their being cheated in the market. The setting apart of market places, supervision of weights and measures are services rendered to the public and the fees collected are remuneration for the services so rendered. 'These services can equally be done by any private individual. This department; also satisfies the tests laid down by us. We, therefore, hold that this department is an industry within the meaning of the Act. (xi) Public Gardens Department: The functions of this department are the maintenance of public parks and -gardens and laying of new gardens and parks; and planting of trees on road sides. (See the evidence of Witness No. 5 for Party No. 1). This service is covered by the definition of industry Any private individual can certainly perform the functions stated above and the fact that the municipality has undertaken those duties does not affect the nature of the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and roads constructed by the P.W.D. This department lets out lands and houses belonging to the Corporation by public auction and gets income therefrom, which no doubt is credited to the common fund. A department like this is equally necessary in a private company which carries out functions similar to the Corporation. Maintenance of records of the properties acquired, buildings and roads constructed and properties leased, is a necessary administrative function correlated to the corresponding services. If the service such as construction of buildings, roads etc., is an industry, its administrative wing is also an industry. The department as a whole, both with its administrative and executive wings, for reasons stated in connection with the other departments, is an industry. (xv) Education Department: This department looks after the primary education, i.e., compulsory primary education. within the limits of the Corporation. (See the evidence of Witness No. 1 for Party No. 1). This service can equally be done by private persons. This department satisfies the other tests. The employees of this department coming under the definition of employees under the Act would certainly be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proceedings and to draft by-laws. In the record section are kept records of most of the departments including health and engineering. Every big company with different sections will have a general administration department. If the various departments collated with this department are industries, this department would also be a part of the industry. Indeed the efficient rendering of all the services would depend upon the proper working of this department, for, otherwise there would be confusion and chaos. The state Industrial, Court in this case has held that all except five of the departments of the Corporation come under the definition of industry and if so, it follows that this department, dealing predominantly with industrial departments, is also an industry. Hence the employees of this department, are also entitled to the benefits of this Act. The State Industrial Court held that five of the departments of the Corporation did not fall within the terms of the definition of industry in the Act. The employees of these -departments did not file any appeal against the finding of the State Industrial Court and we do not propose to express our final opinion on the correctnes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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