Citation 1978 AIR 548, 1978 SCR (3) 207, 1978 SCC (2) 213
Date of Judgment 21-02-1978
Court Supreme Court of India
Petitioner Bangalore Water Supply and Sewerage Board
Respondent A. Rajappa and others
Bench BEG, M. HAMEEDULLAH (CJ), CHANDRACHUD, Y.V. BHAGWATI, P.N. KRISHNAIYER, V.R. SINGH, JASWANT TULZAPURKAR, V.D.DESAI, D.A.
INTRODUCTION:
The term “industry” is defined as any business, trade, undertaking, manufacture, or calling of employers and includes any calling, service, employment, handicraft, or industrial profession or vocation of workers under Section 2(j) of the Industrial Disputes Act, 1947. A relationship between employers and employees must exist for an industry to exist. The former must be involved in the business, trade, undertaking, manufacture, or calling of the employer, while the latter must be involved in the calling, service, employment, handicraft, industrial activity, and avocation. As a result, the definition can be thought of as having two components. Any business, trade, undertaking, manufacture, or calling on the part of an employer is covered in the first portion, which is referred to as “any”; the second part, “any calling, service, employment, handicraft, or industrial occupation or vocation of workmen,” is covered in the second part. We will talk about the Bangalore Water Works Case, also known as the Bangalore Water Supply and Sewerage Board v. Rajappa case, which provided a threefold test to determine the character of the organization.
FACTS OF THE CASE:
The Appellant Board penalized the respondent staff for misbehaviour, and various monies were taken back from them. They thereupon asserted that the aforementioned punishment was meted out in violation of the principles of natural justice by filing a Claims Application No. 5/72 under Section 33C (2) of the Industrial Disputes Act.
Before the Labour Court, the appellant Board raised a preliminary objection, arguing that because the Board is a statutory body performing what is essentially a regal function by providing citizens with the necessities, it is not an industry as defined by section 2(j) of the Industrial Disputes Act, the employees were not workmen, and the Labour Court lacked jurisdiction to hear the workmen’s claim.
After this objection was rejected, the appellant Board submitted two Writ “Petitions” to the Bangalore-based Karnataka High Court. The appellant Board is an industry within the sense of the phrase under section 2(i) of the Industrial Disputes Act, 1947, according to the Division Bench of the High Court, which dismissed the petitions.
The appeals by Special Leave were presented to a larger Bench for consideration, taking into account the likelihood of confusion from the crop of cases in a field where the average person must understand and apply the law as well as the necessity of a thorough, conclusive declaration of what constitutes an industry under the Industrial Disputes Act as it stands.
ISSUE RAISED:
The issues are related to Indian labour law.
This has to do with whether or not statutory body actions that effectively fulfill sovereign tasks by providing citizens with necessities are inside or outside the term of “industry.”
In Bangalore Water Supply Case, the main question was whether a statutory body engaged in activities considered to be regal (sovereign) functions, such as those necessary to provide citizens with basic amenities, could be categorized as a “industry” under the definition given in Section 2(j) of the Industrial Disputes Act, 1947. The main issue in the case was whether or not these actions might be covered by the laws governing labour disputes.
CONTENTION OF PETITIONER:
The petitioner brings up the question of which industries will fall under the term and which won’t. According to the petitioner’s argument or definition of the term “industry,” every organization that works to generate profits should be regarded as an industry and be required to abide by the same laws and standards that apply to all other industries.
With the emergence of that plantation legislation, it was also decided that the agriculture sector should be included in the definition of “industry” since in a nation like India, where agriculture accounts for more than 70% of the economy, it contributes significantly to national GDP and growth.
CONTENTION OF RESPONDENT:
The legislation does not expressly state in any of the act’s sections which sectors should belong under the term “industry,” hence the defendant has thrown out all of the claims.
As stated in Section 33C of the Act, the workers are entitled to any financial or other advantage that a regular employee would be entitled to. As a result, the regulations were in accordance with the standards and the labour laws.
JUDGMENT:
By stating the correct definition of the term “Industry” under section 2(j) of the act, the court has made the necessary decision, ensuring that everyone is aware of the sectors that may come under the given category. The project should, most notably, be contextual and associative in order to resemble the organization’s toughness. By referencing cults, creeds, and an inner sense of incongruity to produce the economic processes, the ideology of the Act should be upheld with logical reach.
First of all, it refers to a collaborative effort between an employer and employee that results in the production or distribution of goods or services with the intention of meeting human needs and aspirations (which need not be spiritual fulfilment but may include the creation of tangible goods and services). Second, whether there are lucrative purposes or not for any public, private, or mixed organization, it is obviously unimportant. Thirdly, even if an organization qualifies as a “industry” and engages in philanthropy, it will still be considered. The court declared in its ruling that the primary focus of functional and conclusive tests should be the nature of the activity, with employer-employee relations being a key consideration.
Depending on their structure and the nature of their employee-employer relationship, all organizations that meet all three requirements may still be regarded as being a member of an industry even in the absence of trade or commerce. All other characteristics, including the working environment, are variable with the sole exception of the activity’s technique. The form of the relationship between employers and employees is the main driver of the type of collaboration that will occur. The Act attempts to foster industrial peace by resolving and regulating disputes between employers and employees. The goal is to adhere to the legal definition.
TRIPLE TEST
The following criteria are part of the Triple Test set forth in the Bangalore Water Supply Case:
Continual Action
Employee and Employer Collaboration in the Provision of Goods and Services Manufacturing to Meet Human Needs
It’s significant to notice that the concept of “industry” excludes religious services and other pursuits of spiritual fulfilment. Profit motives are not relevant in this situation. The triple exam emphasizes the functional elements, concentrating on the interaction between the employer and employee.
The nature of an activity, whether it is in the public, joint, private, or another sector, is not negated by the absence of a profit motivation in Bangalore Water Supply & Sewerage Board vs. A. Rajappa.
The focus is on functionality, and the nature of the activity—in particular, the relationship between employer and employee—is a key factor.An activity’s status as a trade or business is unaffected by its altruistic nature. Even if they are not exactly commerce or business, organized activities that have all three of the aforementioned characteristics may be considered to be “industry.” Even if other characteristics differ, the presence of employer-employee relations similar to those in commerce or industry is crucial.
CONCLUSION:
The Industrial Dispute Act, 1947’s section 2(j)[47] was given a broad interpretation in this ruling, which the court used to dismiss the appellant’s appeal and create interpretational standards. The court also put an end to the needless confusion that the interpretation of the Act had brought about. The seven-judge panel of the Honourable Supreme Court gave a clear explanation and interpretation of the statute and encouraged the legislature to clear up any confusion and keep the act’s fundamental meaning. The adoption of the newly improved definition, which was now guided by the standards established in this case, was successful in fixing the problems that were not yet apparent[48].The court has made the proper determination that, regardless of whether the firm’s industry is profit-oriented or not, it should be subject to the act in order to preserve sovereignty.
REFERENCE :
https://www.lawinsider.in/judgment/bangalore-water-supply-sewerage-board-vs-r-rajappa-ors
https://indiankanoon.org/doc/1149369/
https://lawfoyer.in/bangalore-water-supply-amp-sewerage/
This Article is written by N. Shishwa, student of University of Law, Osmania University.
Intern at Legal Vidhya.
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