| Citation | (2005)5 SCC1 |
| Date of Judgment | 5TH May 2005 |
| Court | Supreme Court of India |
| Case Type | Civil Appeal |
| Appellant | State of U.P. (Uttar Pradesh) |
| Respondent | Jai Bir Singh |
| Bench | N. Santosh Hegde, K.G. Balakrishnan, D.M. Dharmadhikari, Arun Kumar,B.N. Srikrishna |
SUMMARY
In the case of the State of U.P. vs. Jai Bir Singh, a civil appeal (No. 897 of 2002) was heard before a Constitution Bench of the Supreme Court of India. The judgment was delivered on May 5, 2005, by Justice D.M. Dharmadhikari. The case was referred to this five-judge bench due to a conflict between two previous decisions of the court: Chief Conservator of Forests v. Jagannath Maruti Kondhare (1996) and State of Gujarat v. Pratamsingh Narsinh Parmar (2001).
The main issue revolved around whether the “social forestry” department of a state, established as a welfare scheme for environmental improvement, falls within the definition of “Industry” as per Section 2(j) of the Industrial Disputes Act, 1947. The court sought to resolve the conflict in interpretation between the two aforementioned cases and the seven-judge decision in Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978).
The appellant, the State of U.P., contended that the expansive interpretation of the term “industry,” as established in the Bangalore Water case, was not supported by the language of the definition. They argued that activities undertaken by the government for the public welfare, in line with the Directive Principles of State Policy, should be considered sovereign functions and excluded from the definition of industry.
On the other hand, the respondents argued that the Bangalore Water decision had been upheld for over two decades, effectively setting a binding precedent. They urged the court not to disturb this settled law.
After analyzing various decisions and arguments, Justice Dharmadhikari summarized the key points. He noted that the definition of “industry” under Section 2(j) is broad, encompassing systematic activities organized by cooperation between employers and employees to produce or distribute goods and services satisfying human needs. The absence of profit motive was deemed irrelevant. The focus was on the functional nature of the activity and the employer-employee relationship.
The judge acknowledged the lack of unanimity in the opinions of judges in the Bangalore Water case regarding the scope of sovereign functions. He emphasized that the legislative response to Bangalore Water through the Industrial Disputes (Amendment) Act 1982, which excluded certain categories of activities from the purview of industry, supported the contention that not all activities were intended to be covered.
Justice Dharmadhikari noted that the amended provision had not been enforced, but he argued that it still played a role in interpreting the unamended definition.
In conclusion, the judge emphasized the need for a holistic and contextual understanding of the term “industry.” He underscored that while some activities might fall within the definition, certain charitable and eleemosynary undertakings might be exempt, particularly those where individuals volunteer or engage in service without a master-servant relationship.
ISSUES
In the case of State of U.P. vs. Jai Bir Singh, the key issues revolved around the interpretation of the term “industry” under Section 2(j) of the Industrial Disputes Act, 1947, particularly in relation to the applicability of this definition to the “social forestry” department of a state, established for environmental improvement. The case raised questions about whether such a welfare scheme should be considered an industry and covered under the Act.
Issues in the Case:
- Whether the “social forestry” department of a state, aimed at environmental improvement and welfare, falls within the definition of “industry” as per Section 2(j) of the Industrial Disputes Act, 1947?
- Whether the interpretation of the term “industry” should encompass activities organized by cooperation between employers and employees for producing goods and services to satisfy human needs, even if not driven by profit motive?
- Whether certain categories of activities, including sovereign functions of the State, should be excluded from the purview of the definition of “industry” under the Act?
- Whether the previous precedent set by the Bangalore Water Supply and Sewerage Board case is binding, and whether it should be reconsidered or overruled?
ARGUMENTS OF THE APPELLANT (STATE OF U.P.):
The expansive interpretation of the term “industry,” as established in the Bangalore Water case, is not in line with the language of the definition. Activities undertaken by the government for public welfare, in accordance with the Directive Principles of State Policy, should be considered sovereign functions and excluded from the scope of “industry.”
The government’s welfare activities, aimed at fulfilling the obligations under the Directive Principles, should not be categorized as industries, as they are not driven by commercial motives.
The legislature’s response to the Bangalore Water case through the Industrial Disputes (Amendment) Act, 1982, which excluded certain categories of activities from the purview of the Act, indicates an intention to limit the scope of the term “industry.”
ARGUMENTS OF THE RESPONDENT (JAI BIR SINGH):
The definition of “industry” under Section 2(j) is broad and encompasses systematic activities organized by cooperation between employers and employees to produce or distribute goods and services satisfying human needs. Profit motive is irrelevant for determining whether an activity is an industry.
The Bangalore Water case has been a settled precedent for over two decades and should not be overturned. The interpretation provided by the case should continue to guide the understanding of the term “industry.”
The legislature’s amendment of the definition of “industry” in the Industrial Disputes (Amendment) Act, 1982, signifies a response to the Bangalore Water case and should be taken into consideration, even if the amended provision has not been enforced.
JUDGEMENT
The Supreme Court, in its judgment, did not directly address whether the “social forestry” department fell under the definition of “industry.” Instead, the Court primarily focused on the conflict of opinions regarding the interpretation of the term “industry” in the Bangalore Water case.
REFERENCES
This Article is written by Sakshi Pawar of ISBM College of Engineering Pune, Intern at Legal Vidhiya.
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