Case : Bangalore water supply v/s A. Rajappa & Others

Appellant : Bangalore water supply

Respondent : A. Rajappa & Others

Ref : AIR 1978 SC 553

Subject : Case is based on section 2(j) of Industrial Dispute Act 1947 – Definition Of Industry.

Facts :

  • A. Rajappa – employee of Bangalore water supply & sewerage board.
  • A labour dispute arose between – board and employee, which could not be solved peacefully.
  • Dispute – All Employee were fined by Bangalore water supply board for misconduct, Fine was too heavy  and not reasonable. This is the main reason why employees were opposing against this decision.
  • A Rajappa & Others filled an application under sec 33(2) of Industrial Dispute Act 1947 . They said that the fine which was imposed on them was violation of natural justice.
  • In Defense board said, ” we are industry u/s 2(j) of IDA 1947 & therefore labour court has no jurisdiction to hear this case.

Labour Court Response in this behalf :

  • Objection raised by the Board was overruled.
  • Then Board filled two writ petitions to Karnataka High Court ( Under Article 226 Of Indian Constitution )

High Court In Response :

  • Dismissed petition & stated; That this industry comes under 2(j) of IDA 1947.
  • Then Board under article 136 of Indian Constitution filled another petition to Supreme Court.

Supreme Court In Response :

  • Matter tried upon by 7 judges bench, in which Chief Justice Shri Beg was one of them.
  • Before this case; Many case heard by SC on this issue, but no amendment made in definition of industry.
  • This case judgement gave a wider & more comprehensive import to word “INDUSTRY”.
  • Hon’ble SC held that ; meaning of industry to be considered in wider term not in narrow meaning.

Now Questions Before Supreme Court :

The SC considered whether these are “Industry” or not –

1. Without profit motive establishment.

2. Clubs, lawyers chambers, CA Office, Doctor Clinic,

3. Charitable Trust, Institutions,

4. Non profit organization,

5. University/college/school/research institutes.

SC laid out some principles to determine whether an enterprise/establishment is an industry or not :

1. Any activity will come under definition of Industry if he fulfills the triple test.

  • It is systematic activity,
  • There is cooperation between employer & employee,
  • There is production/distribution of goods, or rendering of services which satisfy human wants and wishes (Not religious/Spiritual Wants or wishes

2. Profit motive is immaterial :

3. Philanthropy or charitable nature is also immaterial

Exceptions to term “Industry” are :

  • Small clubs, gurukuls, ashrams, school, colleges, research institute, which has non employee characters,
  • Single doctor, lawyer (Because No Organized Labour)
  • Free legal and medical services,
  • Causal Activities  (They are not systemetic)
  • Sovereign Functions _ Maintenance of law & order, Legislative & Judicial Function.

on the basis of afore said interpretations, SC refused to accept the narrow meaning of definition of Industry & has recognized the wider definition of Industry.

Judgement :

  • Appeal was dismissed.
  • SC – Refused matter to 9 Judge bench

as a result, later in 1982, parliament amended the definition of “Industry” under section 2 of Industrial Dispute Act 1947.

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April 2021