Civil Appeal No. 897 of 2002

Definition of Industry

Case Description

This case seeks to clarify the definition of the term 'industry' under the Industrial Disputes Act, 1947.

Background

The term ‘Industry’ is defined in the Industrial Disputes Act, 1947 (the Act) as “any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen”. This extremely broad definition has led to litigation in courts across the country as to whether certain professions are an ‘industry’ or not. Is it necessary for there to be a profit motive for a business to be an industry? Is a cobbler or a domestic worker a part of an industry?

All of these questions have huge ramifications on every employe person in India. Any person who works in an industry as defined by the Act is entitled to the various protections under the Act. These protections include a mandatory notice period before someone is removed from service, maximum hours of work, leave and so on.

In the end, a 7 judge bench of the Supreme Court ruled on the question in Bangalore Water Supply and Sewerage Board v. A. Rajappa (Bangalore Water). In light of the extremely broad wording of the Act, the Court held that the term must have an inclusive definition and include every form of profession regardless of profit motive. As a result, universities, charitable organisations and even hospitals were found to be ‘industries’ under the Act.

However, the Court ruled that there must be a minimum number of employees for a business or profession to be considered an industry. Domestic workers, individual tradesmen and other such professions were therefore excluded from the Act. It is interesting to note that even the Supreme Court was forced to ask the legislature to clarify what exactly was meant by this definition.

Parliament did pass an amendment to the Act in 1982 which created several exceptions to the definition. But this amendment was never brought into force (notified) by the government. This means that the original definition quoted above continues to be the law in force. This also means that the Supreme Court’s definition in Bangalore Water continues to be the interpretation of the definition as it stands.

State of Uttar Pradesh v. Jai Bir Singh is a direct challenge to the interpretation of industry given by the Bangalore Water case. Jai Bir Singh had been hired by the State of Uttar Pradesh as part of a welfare scheme for ‘social forestry’. The Court has expressed doubt as to whether such welfare schemes can be considered an ‘industry’ under the Act. As a consequence, the Court seeks to reconsider the definition and the Bangalore Water case.


Issues

Whether the definition of the term ‘industry’ given in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa needs revision.


Resources

Written Submissions on behalf of the employees as submitted by Indira Jaising Sr. Advocate.

We would like to thank the office of Indira Jaising Senior Advocate for providing us with this document.

Latest Hearing


Judgment Pending

Matter referred to a 9 Judge Bench



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