This present appeal along with other connected cases has been listed before this Constitution Bench of five Judges on a reference made by a Bench of three Hon’ble Judges of this Court finding an apparent conflict between the decisions of two Benches of this Court in the cases of Chief Conservator of Forests v. Jagannath Maruti Kondhare [(1996) 2 SCC 293] of three Judges and State of Gujarat v. Pratamsingh Narsinh Parmar [(2001) 9 SCC 713] of two Judges.
On the question of whether “Social Forestry Department” of State, which is a welfare scheme undertaken for improvement of the environment, would be covered by the definition of “industry” under Section 2(j) of the Industrial Disputes Act, 1947, the aforesaid Benches (supra) of this Court culled out differently the ratio of the seven-Judge Bench decision of this Court in the case of Bangalore Water Supply & Sewerage Board v. A. Rajappa [(1978) 2 SCC 213]
The Bench of three Judges in the case of Chief Conservator of Forests v. Jagannath Maruti Kondhare based on the decision of Bangalore Water Supply case came to the conclusion that “Social Forestry Department” is covered by the definition of “industry” whereas the two-Judge Bench decision in State of Gujarat v. Pratamsingh Narsinh Parmar took a different view.
As the cleavage of opinion between the two Benches of this Court seems to have been on the basis of the seven-Judge Bench decision of this Court in the case of Bangalore Water Supply, the present case along with the other connected cases, in which correctness of the decision in the case of Bangalore Water Supply is doubted, has been placed before this Bench.
ISSUE
To determine the correctness of the decision in the case of Bangalore Water Supply.
To understand the interpretation of the definition of “industry” contained in Section 2(j) of the Act.
CONTENTIONS BY EMPLOYEES:
On behalf of the employees, learned counsel vehemently urged that the decision in the case of Bangalore Water Supply being in the field as binding precedent for more than 23 years and having been worked to the complete satisfaction of all in the industrial field, on the principle of stare decisis, this Court should refrain from making a reference to a larger Bench for its reconsideration.
It is strenuously urged that upsetting the law settled by Bangalore Water Supply is neither expedient nor desirable. It is pointed out that earlier an attempt was made to seek enforcement of the amended Act through this Court [see Aeltemesh Rein v. Union of India [(1988) 4 SCC 54)]. The Union came forward with an explanation that for employees of the categories of industries excluded under the amended definition, no alternative machinery for redressal of their service disputes has been provided by law and therefore, the amended definition was not brought into force.
CONTENTIONS BY EMPLOYERS:
It has been strenuously urged on behalf of the employers that the expansive meaning given to the word “industry” with certain specified exceptions carved out in the judgment of Bangalore Water Supply is not warranted by the language used in the definition clause. It is urged that the Government and its departments while exercising its “sovereign functions” have been excluded from the definition of “industry”.
It is submitted that the definition of “industry” given in the Act is, no doubt, wide but not so wide as to hold it to include in it all kinds of “systematic organised activities” undertaken by the State and even individuals engaged in professions and philanthropic activities.
On behalf of the employers, it is also pointed out that there is no unanimity in the opinions expressed by the Judges in Bangalore Water Supply case on the ambit of the definition of “industry” given in the Act.
In the amended definition, certain specified types of activities have been taken out of the purview of the word “industry”. The Act stands amended but the amended provision redefining the word “industry” has not been brought into force. The amended definition thus remains on the statute unenforced for a period now of more than 23 years.
The submission made is that if in response to the opinions expressed by the seven Judges in Bangalore Water Supply case the legislature intervened and provided a new definition of the word “industry” with exclusion of certain public utility services and welfare activities, the unamended definition should be construed and understood with the aid of the amended definition, which although not brought into force is nonetheless part of the statute.
CASE REFERRED TO
In the Bangalore Water Supply case not all the Judges in interpreting the definition clause invoked the doctrine of noscitur a sociis. We are inclined to accept the view expressed by the six-Judge Bench in the case of Safdarjung Hospital that keeping in view the other provisions of the Act and words used in the definition clause, although “profit motive” is irrelevant, in order to encompass the activity within the word “industry”, the activity must be “analogous to trade or business in a commercial sense”.
We also agree that the mere enumeration of “public utility services” in Section 2(n) read with the First Schedule should not be held decisive. Unless the public utility service answers the test of it being an “industry” as defined in clause (j) of Section 2, the enumeration of such public utility service in the First Schedule to the Act would not make it an “industry”. The six Judges also considered the inclusion of services such as hospitals and dispensaries as public utility services in the definition under Section 2(n) of the Act and rightly observed thus: (SCC p.746, para 29)
The decision in the case of Safdarjung Hospital was a unanimous decision of all the six Judges and we are inclined to agree with the following observations in the interpretation of the definition clause: “But in the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade 96 and business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services.”(emphasis supplied)
The Court was inclined to agree with the observations of Shri Justice P.B. Gajendragadkar in the case of Harinagar Cane Farm:
“As we have repeatedly emphasised, in dealing with industrial matters, industrial adjudication should refrain from enunciating any general principles or adopting any doctrinaire considerations. It is desirable that industrial adjudication should deal with problems as and when they arise and confine its decisions to the points which strictly arise on the pleadings between the parties.”.
We conclude agreeing with the conclusion of the Hon’ble Judges in the case of Hospital Mazdoor Sabha:
“[T]hough Section 2(j) used words of very wide denotation, a line would have to be drawn in a fair and just manner so as to exclude some callings, services or undertakings.”(emphasis supplied)
HELD
In construing the definition clause and determining its ambit, one has not to lose sight of the fact that in activities like hospitals and education, concepts like right of the workers to go on “strike” or the employer’s right to “close down” and “lay off” are not contemplated because they are services in which the motto is “service to the community”.
If the patients or students are to be left to the mercy of the employer and employees exercising their rights at will, the very purpose of the service activity would be frustrated.
While agreeing with the conclusion of the Hon’ble Judges in the case of Hospital Mazdoor Sabha, this Court believed that it must, therefore, reconsider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in Section 2(j).
That no doubt is rather a difficult problem to resolve more so when both the legislature and the executive are silent and have kept an important amended provision of law dormant on the statute-book.
The case was placed before Hon’ble Chief Justice of India for constituting a suitable larger Bench for reconsideration of the judgment of this Court in the case of Bangalore Water Supply.