In the era of Globalization India is running towards massive industrialization and asking more and more investment from the world community in Indian economy. Industry today is not limited to its popular meaning. The scope and ambit of an industry is increasing day by day. The world business community is allowed to invest money not only in the education and research sector but is also increasingly involved in the fundamental sector associated with human development. Also, the Government of India in near future is going to privatize many of its sectors. In this scenario, the need of hour is to clarify the definition of industry under the Industrial Dispute Act, 1947.

DEFINITION OF ‘INDUSTRY’ A CONTROVERSIAL ISSUE According to s.2(j) of Industrial Dispute Act, “industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. The definition of ‘industry’ under the Act is both exhaustive and inclusive and ambivalently comprehensive in scope. The definition has two parts. The first part says that industry means any business, trade, undertaking, manufacture or calling of employers and the second part provides that it includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen. Thus, one part defines it from the standpoint of the employer; the other from the standpoint of the employees. The first part of the definition gives the statutory meaning of industry, whereas the second part deliberately refers to several other items of industry and bring them in the definition in an inclusive way. “if the activity can be described as an industry with reference to the occupation of the employers, the ambit of the industry, under the force of the second part takes in the different kinds of activity of employees mentioned in the second part. But the second part standing alone cannot define industry. By the inclusive part of the definition the labour force employed in any industry is made an integral part of the industry for the purpose of industrial disputes although industry is ordinarily something which employers create or undertake”. Further, it is necessary to view definition of industry under Section 2(j) in two parts. The definition read as a whole denotes a collective enterprise in which employers and employees are associated. It does not consist either by employers alone or by employees alone. And industry exists only when there is relationship between employers and employees,

the former engaged in business, trade, undertaking, manufacture or calling of employers, and the latter engaged in any calling, service, employment, handicraft or industrial occupation or avocation. Thus, a basic requirement of ‘industry’ is that the employers must be ‘carrying on any business, trade, undertaking, manufacture or calling of employers’. There is not much difficulty in ascertaining the meaning of the words business, trade, manufacture, or calling of employers in order to determine whether a particular activity carried on with the co-operation of employer and employees is an industry or not but the difficulties have cropped up in defining the word ‘undertaking.’ TESTS FOR RECOGNISING A BODY AS A INDUSTRY In Bangalore Water Supply v. A. Rajappa a seven Judges’ Bench of the Supreme Court exhaustively considered the scope of AIR 1978SC548 industry and laid down the following tests. Triple Test: Where systematic activity, Organized by co-operation between employer and employee, (the direct and substantial element is chimerical) 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 e.g. making, on a large scale, prasad or food), prima facie, there is an industry’ in that enterprise. Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint private or other sector. The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. If the organization is a trade or business it does not cease to be one because of philanthropy animating the undertaking. Although Section 2(j) uses words of the widest amplitude in its two limbs; their meaning cannot be magnified to overreach itself. ‘Undertaking’ must suffer a contextual and associational shrinkage as explained in Banerji 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 adventure ‘analogous’ to the carrying on the activity  viz. in organizing the co-operation between employer and employee may be dissimilar.

India is running towards massive industrialization and asking more and more investment from  the world community in Indian economy.

It does not matter, if on the employment terms there is analogy. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or other sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.

The consequences are (i) professions, (ii) Clubs (iii) educational institutions (iiia) co-operatives, (iv) research institutes (v) charitable projects and (vi) other kindred adventures, if they fulfill the triple tests listed in I (supra), cannot be exempted from the scope of Section 2(j).

JUDICIAL PROGRESSION FOR REDEFINING INDUSTRY Indian Judiciary through various judgments has discussed and widens the scope of definition of industry. Effect of Bangalore Water Supply Case In Bangalore Water Supply Case, it was tried to give a definition to the term “industry” with a view to wipe out all the confusions. In this case educational institutions, clubs, hospitals, municipal corporations, liberal functions, solicitor’s firm or lawyer’s office etc. were included in the term “industry”. But then confusions related to government departments and sovereign functions still perpetuate. According to Bangalore Water Supply Case, sovereign functions will not come within the meaning of the term “industry”, and in this case it was held that only the primary and inalienable functions such as law making, defense, maintenance of law and order and justice dispensation will be sovereign function.

Jai Bir Singh Case In, State of UP v. Jai Bir Singh, a five Judges Bench of the Supreme Court realized that there should be reconsideration of the Bangalore Water Supply Case by the larger Bench of Supreme Court. Reasons for reconsideration being : the decision in Bangalore Water Supply Case was not unanimous decision; Of the five Judges who constituted the majority, three had given a common opinion but two others had given separate opinions protecting a view partly different form the views expressed in the opinion of the other three judges. Majority opinion expressed the view that their interpretation was only tentative and temporary till the legislature stepped in and removed vagueness and confusion. In such circumstances it is difficult to ascertain whether the said decision can be an authoritative precedent; Judges in the said decision rendered different opinions at different points of time and in some instances without going through opinion of other judges; Worker-oriented approach in construing the definition of industry, unmindful of the interest of the employer and the public who are, the ultimate beneficiaries, is a one sided approach and not in accordance with the provisions of the Act; “Sovereign function”, should not be confined to its traditional concept. Experience of past years showing that the majority view in Bangalore Water Supply Case, instead of ushering in industrial peace, has given rise to large number of awards granting reinstatement in service and huge amounts of back wages to workers compelling the employers having moderate asses to close down their industries causing harm not only to employers and workers but the public in general, they being the ultimate beneficiaries

It is obvious that even after the Bangalore Water Supply Case decision; the judges themselves are not satisfied with the interpretation of the definition

-LawZ Bureau