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TMI Blog2000 (9) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... ve benefit under it. Because of width of the periphery of the word 'industry' there is tug of war repeatedly between the two, in spite of various decisions of this Court. This situation has led this Court, in Bangalore Water-Supply & Sewerage Board v. R. Rajappa [1978] 3 SCR 207 to record with anxiety and suggesting Legislature for bringing a comprehensive Bill to clear the fog. It records : "In view of the difficulty experienced by all of us in defining the true denotation of the term 'industry' and divergence of opinion in regard thereto as has been the case with this bench also we think, it is high time that the Legislature steps in with a comprehensive bill to clear up the fog and remove the doubts and set at rest once for all the controversy which crops up from time to time in relation to the meaning of the aforesaid term rendering it necessary for larger benches of this Court to be constituted which are driven to the necessity of evolving a working formula to cover particular cases." 3. This led the Legislature to amend the definition of the word 'industry' in section 2(j) of the Act, through amending Act in 1982 but left the said amendment to be given effect from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servants and provisions of the Karnataka Civil Service (Conduct Rules), 1966 and the Karnataka Civil Services (Classification, Control and Appeal) Rules, 1957 are applicable. This committee is established under section 9 of the Act and is subject to the restrictions imposed under it and is competent to contract, to acquire, hold, lease, sell or otherwise transfer any property and do all other things necessary for the purpose for which it is established. Section 58 confers power to appoint secretary and technical staff to the market committee. It stipulates, every such committee shall have a Government servant as the Secretary and also an Additional Secretary or Assistant Secretary who will also be a Government servant. Under sub-section (1) of section 59 the officers and servants of market committee holding the classes of posts specified in sub-sections (1), (2) and (3) of section 58, on the date immediately prior to the date of commencement of that Act, shall, with effect from the date of such commencement become officers and servants of the State Government. Sub-section (1A) provides, notwithstanding anything contained in this Act or in any other law for the time being in force, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and they shall draw their salary and allowances from the Consolidated Fund of the State. (2) The officers and servants of market committees who become officers and servants of the State Government under sub-section (1) [or sub-section (1A)] shall hold their office by the same tenure, at the same remuneration and upon the same terms and conditions of service and with the same rights and privileges as to pension, gratuity, provident fund and such matters as they would have held the same under the market committee concerned and shall continue to do so until their remuneration, terms and conditions of service including the privileges as to pension, provident fund and gratuity are altered by rules or other provisions made [under the Karnataka State Civil Services Act, 1978], and any such alteration shall have effect, notwithstanding anything contained in any contract or law for the time being in force. (3) Notwithstanding anything contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947), or in any other law for the time being in force or in any contract the transfer of the services of any officer or servant of a market committee by virtue of sub-section (1) [or sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying on business of agricultural produce to produce before him the accounts, other documents, furnish any information relating to the stock of such agricultural produce, or purchases, sales, deliveries of such produce and is also empowered to seize the accounts, register or documents. Section 67 authorises such authorities to stop any vehicle, vessel or other conveyance which is shown to be taking out of the market committee or moving in the market area for examining the contents in the vehicle, vessel or other conveyance. Section 69 confers power to acquire the land and hold it. Section 71 confers right on the market committee to issue licence for the regulation of trading under section 72 and section 73 confers right of such authority to cancel or suspend such licence. Section 83 deals with the production of account books etc. The question raised is that these functions are sovereign in nature. 9. Seven persons serving under the market committee raised dispute, following termination of their services before the Labour Court. First is Shri A.G. Harakuni, who was appointed as an Assistant Engineer on 3-3-1987 on daily wages for looking after the construction work and he worked as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any lien over any post. He has no right to seek regularisation. Once a person is appointed under the State Act his services would not be governed by the Central Act. The claimants being appointed under the State Act which received assent of the President of India on 19-8-1966 it will prevail over the Central Act. The functions of market committee are for the regulation of trade in notified agricultural produces in order to safeguard the interest of the agriculturist and public at large. This was to ensure legitimate price of the agricultural produce to be sold in the market area. This committee is not constituted for making any profit but only to serve the cause of the agriculturist so that they may receive fair price of their produce. The submission is, persons appointed to work under this market committee are Government servants, and they are appointed in accordance with the cadre and their wages are paid out of the consolidated fund. The temporary employees appointed by the market committee are paid salaries out of the fund known as market fund. Hence there is no relationship of employer and employee of those serving under it. It may be stated here, in the present case the subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would be the test to find an enterprise to be an 'industry'. As we have said, the matter has been under consideration by various courts in various parts of this country, including this Court. Some of which we are proceeding to refer hereunder. In Corporation of the City of Nagpur v. Its Employees [1960] (2) SCR 942, the question raised was, whether and to what extent the municipal activities of the Corporation of Nagpur City fell within the term 'industry' as defined by section 2(14) of the C.P. & Berar Industrial Disputes Settlement Act, 1947. Applying the decision of this Court in D.N. Banerji v. P.R. Mukherjee [1953] SCR 302, this Court held : "It is not necessary that an activity of the Corporation must share the common characteristics of an industry before it can come within the section. The words of section 2(14) of the Act are clear and unambiguous and the maxim noscitur a socii can have no application. The history of industrial disputes and the legislation, however, recognises the basic concept that the activity must be an organised one and not one that pertains to private or personal employment." 14. With reference to State of Bombay v. Hospital Mazdoor Sabha [1960] (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson. In the latter character it stands for the community in the administration of local affairs wholly beyond the sphere of the public purposes for which its Governmental powers are conferred." Isaacs and Rich, JJ., In The Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation in the context of the dual functions of State say much to the same effect at p. 530 : "Here we have the discrimen of Crown exemption. If a municipality either (1) is legally empowered to perform and does perform any function whatever for the Crown, or (2) is lawfully empowered to perform and does perform any function which constitutionally is inalienable a Crown function as, for instance, the administration of justice the municipality is in law presumed to represent the Crown, and the exemption applies. Otherwise, it is outside that exemption, and, if impliedly exempted at all, some other principle must be resorted to. The making and maintenance of streets in the municipality is not within either proposition." A corporation may, therefore, discharge a dual function : it may be statutorily entrusted with regal functions strictly so-called, such as making of laws, dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of Government, it is appropriate to state that if there are industrial units severable from the essential functions and possess an entity of their own it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. A blanket exclusion of every one of the host of employees engaged by Government in departments falling under general rubrics like, justice, defence, taxation, legislature, may not necessarily be thrown out of the umbrella of the Act. We say no more except to observe that closer exploration, not summary rejection, is necessary." This decision also records Corporation of the City of Nagpur's case (supra) as to how in that case various departments of the corporation were held to be an 'industry'. This Court considered the submission, as in the present case that functions of the various departments are only out of statutory sanction and no private individual can discharge those statutory functions. Corporation of the City of Nagpur's case (supra) considered this aspect and records to the following effect : "It is said that the functions of this department are statutory and no private individual can discharge those stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of Law. It was stated by Sahai, J. that acts like defence of the country, raising armed forces and maintaining it, making peace or war, foreign affairs, power to acquire and retain territory, are functions which are indicative of external sovereignty and are political in nature. They are, therefore, not amenable to the jurisdiction of ordinary civil court inasmuch as the State is immune from being sued in such matters. But then, according to this decision the immunity ends there. It was then observed that in a welfare State, functions of the State are not only the defence of the country or administration of justice or maintaining law and order but extends to regulating and controlling the activities of people in almost every sphere, educational, commercial, social, economic, political and even martial. Because of this the demarcating line between sovereign and non-sovereign powers has largely disappeared. The aforesaid shows that if we were to extend the concept of sovereign function to include all welfare activities as contended on behalf of the appellants, the ratio in Bangalore Water Supply case would get eroded, and substantially. We would demur to do so on the face of what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le limits and 'sovereign' functioning within its limited orbit. 18. In N. Negendra Rao & Co. v. State of A.P. [1994] 6 SCC 205, the question raised was about the liability of the State to pay compensation for the negligence or misfeasance on the part of its officers in discharge of their public duties under a statute, which are incidental or ancillary and not primary or inalienable function of the State. This decision holds that the State is immuned only in cases where its officers perform primary or inalienable functions such as defence of the country, administration of justice, maintenance of law and order. This Court held : "A search or seizure effected under such law could be taken to be an exercise of power which may be in domain of inalienable function. Whether the authority to whom this power is delegated is liable for negligence in discharge of duties while performing such functions is a different matter. But when similar powers are conferred under other statute as incidental or ancillary power to carry out the purpose and objective of the Act, then it being an exercise of such State function which is not primary or inalienable, an officer acting negligently is liable per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Objects and Reasons : Among other things, provision is made in this Bill for- (i )defining 'agricultural produce' to include all produce of agriculture, animal husbandry, apiculture, horticulture, forest produce and any other produce, live-stock and poultry; (ii)notifying the intention of Government to regulate the purchase and sale of agricultural produce in specified area and declaration of market area and of market yard; (iii)Establishment of market committees for trading in specified kinds of agricultural produce and also separate market committees within the same market area for trading in any particular kind of agricultural produce; (iv)representation on the market committee to purchasers of agricultural produce, representatives of the purchasers' co-operative societies, representatives of co-operative marketing and processing societies, municipalities, taluka boards and the Central Warehousing Corporation or State Warehousing Corporation; (v)levy and collection of market fees by the market committee; (vi)constitution of market committee funds and Central Market Fund; (vii)conferring borrowing powers on market committee; (viii)appointment of Government servants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special commodities. Chapter XII is about penalties, Chapter XIII controls the functioning of the various officers and members including that of market committee and Chapter XIV is miscellaneous which includes provisions for recovering of sums due to the market committee or board etc. After scanning the whole Act and perusing the preamble and Statement of Objects and Reasons of the Act, it reveals that this Act deals with various facets of regulating activities within the market area with respect to the trading in agricultural produce. It includes establishment of various committees including charging of fees for service rendered to the traders of agricultural producers. Any enactment, scheme or project which sponsors helps in the trading activity is one of the State's essential functions towards welfare activities for the benefit of its subject. Such activities can be undertaken even by any non-governmental organisation or a private person, corporate or company. In fact, prior to the abolition of Zamindari, the Hats and Bazars (Markets) held on Zamindar's (Landowner) land, the Zamindar used to charge fees for rendering service for holding such market, by providing land and facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Act defines 'Appropriate Government' in relation to any industrial disputes concerning any industry carried on by or under the authority of Central Government, or railway company etc. and refers to large number of corporations and corporate bodies which falls in the category of 'industry'. This indicates even Legislature's intends a very large arms of 'industry', to include large number of enterprises to be industry to confer benefit to the employees working under it. In fact, several corporations conferred with statutory powers also curtails individual rights like, through levy of demurrages, detention charges in the warehousing corporation under the Warehouse Corporation Act; Regulation of entry into airport, ATC, levy and regulation of taxes and fees by the international airport authority. Assessment and levy of damages as well as penalties by authorities under the Employees State Insurance Act and Employees Provident Fund Act. Though each of the aforesaid corporations and statutory bodes are 'industry'. So one of feeble submission that curtailment of right of an individual could only be by the exercise of sovereign power has also no merit. From the aforesaid catena of author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e last submission for the appellant is with reference to sub-section (3) of section 59 of the said Act. The submission is, this excludes the application of the Central Act to the employees under the State Act. The reliance is placed on the following opening words of this sub-section (3) namely : "Notwithstanding anything contained in the Industrial Disputes Act, 1947." 23. On the contrary this indicates that exclusion of the Central Act is limited to the sphere as specified under this sub-section, namely, payment of compensation to the officers or servants of the transferred employees. Thus by necessary implication, other field under the Central Act is made applicable. Hence this submission has no merit. 24. In view of the aforesaid settled legal principle the width of 'industry' being of widest amplitude and testing it in the present case, in view of the preamble, Objects and Reasons and the scheme of the Act, the pre-dominant object clearly being regulation and control of trading of agricultural produce, thus appellant-committee including its functionaries cannot be said to be performing functions which are sovereign in character. Most of its functions could be undertaken even ..... 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