9-judge Bench of Supreme Court to decide on the scope of definition of “Industry” under Industrial Disputes Act

The confusion surrounding the scope of definition of “industry” under the Industrial Disputes Act, 1947 (Act) has been persisting for the last 38 years. A 7-judge Bench of the Supreme Court, it seems, has decided to address the issue once and for all. Well, almost..Yesterday, the seven-judge bench ordered that a nine-judge Bench will decide the scope of definition of ‘industry’ under Section 2(j) of the Act..This order was passed by a Bench of Chief Justice TS Thakur and Justices Madan B Lokur, SA Bobde, AK Goel, UU Lalit, DY Chandrachud and L Nageswara Rao..The Court in its order said that since there are serious doubts expressed in the reference order about the correctness of the view taken in Bangalore Water Supply’s case of 1978, the matter has to be a heard by a 9-judge Bench..Background.The issue at the heart of the matter pertains to the scope of ‘industry’ under Section 2(j) of the Act and has seen conflicting judgments and interpretations..The seminal moment in this controversy was the 1978 case of Bangalore Water Supply and Sewerage Board v. A Rajappa & Ors. In this case, employees of the Bangalore Water Supply and Sewerage Board were fined for misconduct. These employees started litigation under the ID Act claiming violation of principles of natural justice. The Board’s contention was that it was a statutory body, one that did not fall under an “industry” in section 2(j) of the Industrial Disputes Act. Consequently the employees were not workmen and the Labour Court did not have jurisdiction to decide their claim..The Supreme Court constituted a 7-judge Bench to finally settle the issue. The Bench composed of M Hameedullah Beg, YV Chandrachud, PN Bhagwati, VR Krishna Iyer, Jaswant Singh, VD Tulzapurkar and DA Desai..Since Chief Justice Beg was to retire on February 21, 1978, the Bench delivered the judgment on that very day, concluding that the appeal should be dismissed. The above conclusion was unanimous. Justice VR Krishna Iyer penned the judgment on behalf of himself, Bhagwati, and Desai JJ. in what is widely considered to be the majority opinion. Justice Beg delivered a separate judgment..Interestingly, three judges, namely Chandrachud J. Jaswant Singh and Tulzapurkar JJ., did not deliver their separate opinions on the day the judgment was delivered. They only said that they would deliver their separate opinions later..Different judgments.Justice Krishna Iyer in his majority judgment held that ‘industry’ as defined in Section 2(j) has a wide import. He however, also held that the meaning of the words in the section cannot be magnified to overreach itself..Chief Justice Beg delivered a concurring but separate opinion. By his own admission, there was a certain degree of hurriedness in which he gave his opinion..Beg J seems to have dissented from the opinion of his other three brethren with regard to excluding only certain State-run industries from the purview of the Act. According to him, that was a matter purely of legislation and not of interpretation..Following Beg J’s retirement, Chandrachud J. took over as the CJI and he delivered his separate opinion. He did not fully agree with the opinion of Krishna Iyer J. that the definition of ‘industry’ although of wide amplitude can be restricted to take out of its purview certain sovereign functions of the State limited to its ‘inalienable functions’ and other activities which are essentially for self and spiritual attainments..A separate opinion was delivered much later by Jaswant Singh J. for himself and Tulzapurkar J., after they had gone through the separate opinion given by Chandrachud CJI (as he then was). The opinion of Jaswant Singh J. for himself and Tulzapurkar J. was the dissenting opinion. They held that they were not agreeable with categories 2 and 3 of the charities excluded by Krishna Iyer J..The confusion.The different judgments in Bangalore Water Supply case led to different interpretations by later benches. Noteworthy are two judgments – Chief Conservator of Forests [1996] 2 SCC 293 Pratamsingh Narsinh Parmar [2001] 9 SCC 713..This issue of conflict in the interpretation came to fore in the case of State of Uttar Pradesh v. Jai Bir Singh and connected matters heard along with it. A 3-judge Bench which noticed the conflict between the two aforesaid cases referred the matter to a Constitution bench. Eventually it reached the 7-judge Bench..Reference to 9-judge Bench answered in the affirmative.The immediate question before the 7-judge Bench was whether the case should be referred to a 9-judge bench or not..Senior Advocate Sunil Gupta, appearing for the petitioner State submitted that the matter should be referred to a larger Bench considering that there was no consensus among the judges in Bangalore Water Supply. Senior Advocates Indira Jaising, CU Singh and Colin Gonsalves argued against the reference..The Court proceeded to accept the submission in favour of reference holding the following:.“Having given our anxious consideration to the contentions urged at the bar and the serious and wide ranging implications of the issue that fall for determination as also the fact that serious doubts have been expressed in the 3 reference order about the correctness of the view taken in Bangalore Water Supply’s case (supra), we are of the opinion that these appeals need to be placed before a Bench comprising Nine-Judges to be constituted by the Chief Justice. We order accordingly.”.The matter will now be placed before the Chief Justice of India who will constitute a 9-judge Bench to hear the matter..Read the order referring the matter to 9-judge Bench below.