Summary: In State of Uttar Pradesh v. Jai Bir Singh, a nine-Judge Supreme Court Bench considered whether Bangalore Water Supply & Sewerage Board v. A. Rajappa correctly construed “industry” under Section 2(j) of the Industrial Disputes Act, 1947, including the Social Forestry Department issue. The Court considered the maintainability of the reference, reformulation of the Triple Test, the meaning of sovereign functions, and the effect of repeal of the Industrial Disputes Act and commencement of the Industrial Relations Code, 2020. The views on maintainability were divided six to three, while the proposed reformulation received support from only four Judges, with one Judge declining to answer on merits and four Judges finding no need to reconsider Bangalore Water Supply. All nine Judges agreed that Bangalore Water Supply governs pending matters under the repealed Act. The opinions also addressed the relationship between Section 2(j) and Section 2(p) of the Industrial Relations Code. The comment identifies issues concerning repeal dates, framing of questions and the wording of the operative conclusions that should be verified before reliance. Its central conclusion is that Bangalore Water Supply continues to govern live disputes under the repealed Act.
Civil Appeal No. 897 of 2002, with some forty-five connected matters, was placed before nine Judges to decide whether Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2 SCC 213, correctly construed the expression “industry” in Section 2(j) of the Industrial Disputes Act, 1947. The occasion was narrow — whether the Social Forestry Department of the State of Uttar Pradesh is an “industry.” The stakes were not.
A Declaration That Disclaims Itself
An analytical comment on State of Uttar Pradesh v. Jai Bir Singh, 2026 INSC 897 (nine Judges, decided 20 August 2026)
Prefatory
Civil Appeal No. 897 of 2002, with some forty-five connected matters, was placed before nine Judges to decide whether Bangalore Water Supply & Sewerage Board v. A. Rajappa, (1978) 2 SCC 213, correctly construed the expression “industry” in Section 2(j) of the Industrial Disputes Act, 1947. The occasion was narrow — whether the Social Forestry Department of the State of Uttar Pradesh is an “industry.” The stakes were not.
The Bench comprised Surya Kant, CJI, Satish Chandra Sharma, Alok Aradhe, Vipul M. Pancholi, P.S. Narasimha, B.V. Nagarathna, Dipankar Datta, Ujjal Bhuyan and Joymalya Bagchi, JJ. It delivered five opinions running to 489 pages: the Chief Justice for himself and three colleagues (154 pages); Nagarathna, J. (157 pages); Narasimha, J. (18 pages); Datta, J. for himself and Bhuyan, J. (75 pages); and Bagchi, J. (85 pages).
By the time the questions were framed on 16 February 2026, Section 2(j) had ceased to exist. The Industrial Relations Code, 2020 had come into force and the Industrial Disputes Act stood repealed. The Court was construing a dead provision, and every Judge on the Bench knew it.
This comment advances eight propositions. The first four concern what the judgment decided; the remaining four concern what practitioners and subordinate fora must now do with it.
I. The central holding neutralises itself, and does so deliberately
At page 152, in conclusion (iii), the Chief Justice records that the reformulated Triple Test set out in the judgment is to be understood as no more than the Court’s considered opinion on the proper construction of Section 2(j); that it is not intended to displace the governing legal position in respect of pending proceedings; and that all matters presently pending before courts, tribunals, labour authorities or other fora under the ID Act may be adjudicated in accordance with the Triple Test laid down in Bangalore Water Supply.
The reformulation is introduced, at page 150, with the words “hypothetically speaking.” Conclusion (iv) confines the exercise to prospective operation, expressly protecting judgments, awards, settlements and determinations that have attained finality, and — significantly — proceedings, appeals and hearings presently being adjudicated.
Comment. A nine-Judge Bench has redrafted the ratio of a seven-Judge Bench and, in the same breath, directed that the redraft not be applied to anything now before any forum in the country. Whatever else this is, it is not a declaration of law within the ordinary understanding of Article 141. It is an opinion about how a repealed provision ought to have been construed, delivered with an express disclaimer of operative effect.
That is a novel judicial form, and it should be named as such rather than absorbed silently. The Court did not overrule Bangalore Water Supply. It did not distinguish it. It did not confine it. It restated it with amendments and then instructed the field to ignore the amendments.
II. The reformulation never commanded a majority, and the disclaimer is best read as a consequence of that fact
The votes divide along three separate axes, and conflating them is the commonest error one may expect in the reporting of this judgment.
On maintainability of the reference — six to three in favour. The Chief Justice and his three colleagues, Narasimha, J. (the procedure by which the reference was made is valid, and the reference can be answered on merits) and Bagchi, J. (the reference conforms to Central Board of Dawoodi Bohra Community v. State of Maharashtra, as affirmed in Aligarh Muslim University) hold the reference good. Nagarathna, J. holds it “misconceived” and “uncalled for.” Datta and Bhuyan, JJ. hold that it “was not necessary and serves no practical, jurisprudential or doctrinal purpose,” and reject it.
On the merits of reformulation — four to four, with one abstention. Only the Chief Justice’s four support recalibration. Nagarathna, Datta, Bhuyan and Bagchi, JJ. hold that Bangalore Water Supply requires no reconsideration. Narasimha, J. declines to answer on merits, holding that an authoritative interpretation, compelling when the reference was made, has become unnecessary on repeal — and warns in his conclusion (vi) that modifying or restricting the ratio would exclude long-pending disputes from the ID Act regime and relegate the parties to civil courts.
On what governs pending matters — nine to nil. Bangalore Water Supply.
Comment. The disclaimer in conclusion (iii) is not judicial modesty. It is arithmetic. A proposition supported by four Judges of nine cannot bind, and the Chief Justice’s framing — “susceptible to further refinement,” “might have served the law better,” “hypothetically speaking” — reads as an acknowledgment of that constraint rather than a rhetorical flourish. The judgment is best understood as a plurality opinion that has recognised its own status and adjusted its language accordingly.
Practitioners should therefore resist the shorthand that “a nine-Judge Bench has recast the definition of industry.” Four Judges expressed a view; five did not join it; and the Court as a whole directed that it not be applied.
III. The maintainability reasoning is the durable part of the judgment, and it is severable from the merits
Whatever happens to the reformulation, Section C of the Chief Justice’s opinion will be cited for decades, and it deserves attention on its own terms.
On res judicata, the reasoning is orthodox but usefully consolidated: the plea requires identity of parties, of the right or entitlement claimed, and of the cause of action, together with jurisdictional competence in the earlier forum. It therefore operates only in personam. A determination on a question of law is not itself the “matter in issue,” which flows from the factual matrix of a cause of action; such a determination operates as precedent, not as res judicata. The authorities marshalled are Raj Lakshmi Dasi v. Banamali Sen, Mathura Prasad Bajoo Jaiswal v. Dossibai N.B. Jeejeebhoy and State (NCT of Delhi) v. BSK Realtors LLP.
Section C.2 then supplies the institutional justification, at paragraph 138: a reference that has traversed multiple Benches over decades and now stands before nine Judges ought not to be terminated on procedural objections of a technical character, which must not become “a convenient fig leaf cover” behind which the Court declines to engage with a question long awaiting authoritative determination.
Comment. This passage is double-edged and will be deployed in both directions. Used well, it is a statement that institutional responsibility outweighs procedural fastidiousness where a question of recurring importance is ripe. Used badly, it becomes a licence for any Bench to entertain any reference on the footing that engagement is preferable to abstention.
The tension is visible within the judgment itself. Nagarathna, J. demonstrates — persuasively, and at length — that the factual premise of the 2005 reference was simply wrong: there was no “cleavage of opinion” between Jagannath Kondhare (three Judges) and Pratamsingh Parmar (two Judges). The latter turned on the absence of any pleading establishing the nature of the establishment, not on a divergent reading of Bangalore Water Supply. Her conclusion is severe: the five-Judge Bench “could have either reconciled the aforesaid two decisions or overruled one of them in case of necessity”; instead it “adopted a third and strange path of questioning the correctness of the judgment of the seven-Judge Bench.”
If she is right — and on the material set out in her opinion she appears to be — then a reference premised on a conflict that did not exist consumed twenty-one years of judicial time and produced a holding the Court has directed no one to apply. The “fig leaf” passage answers the objection that the reference was procedurally irregular. It does not answer the objection that it was factually baseless.
IV. Commerciality has been reinstated while profit remains irrelevant, and the incoherence was identified before it was introduced
The reformulated limb (a), at page 150, requires a systematic activity, organised through employer–employee cooperation, producing goods or services “possessing a discernible commercial character that is analogous to trade or business and calculated to satisfy material human wants and wishes,” with a carve-out for the purely spiritual or religious — though not for the mere association of a religious objective. Satisfaction now yields only a prima facie presumption of industry.
Limb (b) — the irrelevance of profit motive, in whichever sector — is retained verbatim.
Limb (c) is moderated: the employer–employee relationship remains an important indicator but “cannot be elevated to the status of the sole or predominant determinant”; the inquiry becomes conjunctive, weighing the nature and character of the activity together with organised employer–employee cooperation.
Comment. The difficulty is structural, and Nagarathna, J. states it while addressing Jaswant Singh, J.’s dissent in Bangalore Water Supply — that is to say, before the Chief Justice’s reformulation arrives. To insist on commerciality while conceding that profit is irrelevant, she says, divorces commerciality from the very feature that ordinarily defines it. If profit is irrelevant, it is unclear what work the requirement of commerciality is meant to perform; and a commerciality that survives independently of profit is deprived of content, leaving no basis on which to distinguish commercial from non-commercial activity. What appears at first blush to narrow the definition in fact introduces a vague and subjective standard, to be filled in case by case without doctrinal foundation.
That objection is not answered anywhere in the Chief Justice’s opinion, and it applies to his limb (a) with the same force as to Jaswant Singh, J.’s dissent. The reformulation replaces a test criticised for over-inclusion with one whose operative term has no independent criterion. Whether “discernible commercial character analogous to trade or business” excludes a State irrigation project, a municipal water board or a university’s consultancy division is a question the formulation poses but does not equip anyone to answer.
There is a further point of interpretive method worth recording. The insertion is achieved by noscitur a sociis — the “contextual and associational shrinkage” of “undertaking” by reference to Banerji — which Section F.4.1 of the opinion develops at length. Bagchi, J.’s answer is that the triple test already performs the exclusionary work claimed for the maxim, since it carves out casual and unorganised activity, domestic service, individual professionals and small unorganised associations. On his reading, the criticism that the test converts every organised human endeavour into an industry is “misplaced.”
V. The retreat from institutional categorisation is the genuine contribution, and it is the part no one can presently use
Section F.4.4 is the most persuasive segment of the leading opinion. Highly specific illustrations and categorical classifications, it observes, are products of the circumstances prevailing when they were framed; what once served as a useful guide risks hardening into an inflexible rule. Entities today are multifaceted — a university engaging in research, consultancy, technology transfer and commercial collaboration; a hospital combining charitable healthcare with specialised commercial services; a research institution pursuing academic, welfare and market-oriented objectives at once. Proceeding by predetermined category risks pigeonholing institutions without examining the dominant character of the activity.
Comment. This is right, and it is the observation that four decades of post-1978 litigation most needed. Its practical value is nevertheless nil for the present, because conclusion (iii) directs pending matters to Bangalore Water Supply, whose Guideline IV categorisation is precisely what Section F.4.4 criticises. The insight is quarantined by the same disclaimer that quarantines the rest.
It should also be noted what the reformulation does not disturb. The dominant nature test survives. So does the proposition that sovereign functions may qualify for exemption but not welfare activities or economic adventures undertaken by Government or statutory bodies; that severable industrial units within departments discharging sovereign functions fall within Section 2(j); and that professions, clubs, educational institutions, cooperatives, research institutes and charitable projects cannot be exempted if the triple elements are satisfied. On the sovereign-function question — the one that actually decides the Social Forestry appeal — the reformulation changes nothing of substance.
VI. The real fault line is Section 2(p) of the IR Code, and the Court is not aligned upon it
The Chief Justice holds (paragraph 281) that in view of the clarification and reformulation, Bangalore Water Supply shall not be regarded as the sheet anchor for the interpretation of the IR Code; any question arising under the Code falls to be determined on its own text, scheme, object and legislative framework, uninfluenced by the reformulation undertaken in the judgment. Paragraph 288 confines the judgment to disputes under the ID Act.
Narasimha, J. goes further, and his paragraph 23 is the clearest statement of principle in the volume: the litigation that has surrounded Section 2(j) must not cast its shadow on the new Code, and Section 2(p) must be freed of the bondage of the Bangalore Water Supply ratio or of any new definition the Bench may propose. He records that the Chief Justice and the other Judges have said the same, and declares himself in full agreement.
Bagchi, J.’s conclusion VII is to the same effect. Datta, J. adds (paragraph 79) that nothing observed shall affect a challenge to the 2020 Code, of which the Bench was told.
Nagarathna, J. answers the residuary question differently. The interpretation of “industry” in Section 2(j) may have a bearing on the interpretation of Section 2(p), and not the converse; and there can be no interpretation of Section 2(j) on the basis of the definition in Section 2(p). Her reason (e) for declining the reference is that any pronouncement on the correctness of Bangalore Water Supply “would definitely cast its shadow” on Section 2(p).
Comment. Influence therefore runs one way for one Judge and neither way for the rest. This is not an academic disagreement. Section 2(p) contains a detailed statutory definition which, it was urged before the Bench, draws upon or substantially reflects the triple test — a submission the Chief Justice expressly declined to examine. The first serious contest under Section 2(p) will be fought in exactly this gap: whether the accumulated Section 2(j) jurisprudence is available as an aid to construction, or whether the Code begins with a clean slate.
The majority position is the more coherent one. A new statutory definition, deliberately enacted with fuller language, should not be read through the lens of judicial glosses on a differently worded predecessor. But Nagarathna, J.’s caution has force too: a court asked to construe Section 2(p) will not find it easy to unsee five decades of authority on the same word in the same field.
VII. Defects on the face of the record
Three matters should be verified before this judgment is relied upon in a pleading.
The repeal date. Every opinion except one places the repeal of the ID Act and the commencement of the IR Code at 21 November 2025. Paragraph 81 of the Chief Justice’s opinion alone states that the IR Code came into force on 21 November 2025 “and on 02.02.2026, the ID Act was formally repealed.” Datta, J. separately refers to the Code “becoming operational since February, 2026.” One judgment, three dates. Only the Gazette will settle it.
The framing of the questions. Paragraph 82 of the leading opinion sets out four questions. Datta, J. reproduces the order of 16 February 2026 as framing three broad issues plus a residuary head, and answers “the three questions.” Nagarathna, J. answers four, including the residuary head, in tabulated form. The text of the order of 16 February 2026 should be used, not any of the paraphrases.
The status of the reformulation in the operative portion. Conclusion (ii) says the test “would have been more appropriately structured, hypothetically speaking,” in the terms set out. Conclusion (iii) says the reformulation is not to displace the governing position. Paragraph 247, in the body, says the test “should have been reformulated” in those terms — indicative rather than hypothetical. The body and the conclusions are not phrased identically, and an opponent will seize on paragraph 247. The answer is conclusion (iii), which is in the operative portion and is unqualified.
VIII. What this means at the adjudication and first appellate stages
The direction is clear on paper. Every pending industrial dispute under the repealed Act is to be decided on Bangalore Water Supply as it stood — triple test, dominant nature test, sovereign-function exception, Guideline IV categorisation and all. Concluded matters are untouched. Matters presently under adjudication are untouched. Nothing is remanded.
The difficulty is one of practice, not of principle. Employers and State respondents will place the reformulated limb (a) before Labour Courts and Industrial Tribunals, and will do so with the considerable rhetorical advantage of being able to say that it comes from a nine-Judge Bench. The correct answer is conclusion (iii) at page 152, read with conclusion (iv). It should be pleaded expressly and not left to inference, because the paragraph that says “do not apply this” is invariably the paragraph least quoted.
The same caution applies in reverse. A workman’s counsel who cites Section F.4.4 to resist categorical exclusion of a welfare department is met by the identical answer. The disclaimer binds both sides.
Comment. There is a wider institutional point here, and it is worth stating plainly. Where the number of disputes decided at the adjudication and first appellate stages vastly exceeds the number that reach a High Court, what circulates in the field is not the judgment but its headline. The headline this judgment will generate — that a nine-Judge Bench has redefined “industry” — is materially inaccurate, and the burden of correcting it will fall on individual practitioners in individual matters, one Tribunal at a time.
Conclusion
The Court set out to lift an albatross and, on its own account, succeeded. The manner of the lifting deserves closer attention than the metaphor.
Bangalore Water Supply stands. It stands not because five Judges affirmed it — though four did so expressly and a fifth declined to disturb it — but because the four who would have refined it declined to give their refinement operative effect. The result is a nine-Judge decision whose most quotable paragraphs are, by the Court’s own direction, without application to any live dispute; whose most durable reasoning concerns not “industry” at all but the maintainability of references; and whose most consequential sentence is a negative one — that the decision it declined to overrule shall not be the sheet anchor for the statute that has replaced the one it construed.
Whether an exercise of this kind vindicates institutional responsibility or illustrates its costs is a question on which the five opinions themselves disagree. Datta and Bhuyan, JJ. put the competing consideration at its highest: institutional credibility lies in respecting finality, not in perpetuating doubt. Having been decided, the question is now at least closed. That it took twenty-one years and 489 pages to close a question that, on Nagarathna, J.’s analysis, ought never to have been opened, is the part of this judgment that will bear the longest reflection.
Note. This comment is based on the text of the judgment as pronounced on 20 August 2026 and reported as 2026 INSC 897. Page references are to the pagination of the respective opinions as delivered. The commencement and repeal dates, and the text of the order dated 16 February 2026 framing the questions, should be verified against the Gazette and the record respectively before this piece is filed or published.
