TMI Blog1997 (7) TMI 687X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;industry'. It, therefore, has no jurisdiction to adjudicate the dispute. Prabhadevi Exchange had a total strength of 3000 employees of the Telecommunication Department, working in three shifts. As per the Administrative Instructions issued by the Government, for the first shift there should be a '3A' type canteen, for the second shift 'A' type canteen and for the third shift there should be 'C' type canteen. It was averred that for Type '3A' canteen, there should be 57 employees, but only 24 employees were working on April 27, 1989. The claim of the petitioner is that the dismissed employees had joined the service in 1987. They are claiming wages as per the directions of this Court, i.e., as per the Fourth Pay Commission's recommendations. Since they were insisting upon payment of the wages, it is alleged, the services of five employees were terminated without giving any notice or giving any retrenchment compensation as enjoined by Section 25-F of the Act. Therefore, they sought reinstatement into service with full back wages and with continuity of service. The respondents, on the other hand, contended that the employees working in the cant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt is aware of the decision in Bangalore Water Supply case, AIR 1978 SC 548, in which this Court had held the test to determine whether an establishment is an 'industry' within the meaning of the Act. Therein, the employees of the appellant-Board were fined for misconduct and the fine was recovered from them. They filed an application under Section 33-C(2) of the Act. The question was whether the Tribunal has jurisdiction under Section 33-C(2) of the Act? The High Court had held it to be an industry and, therefore, the application was maintainable. On appeal, this Court laid down the tests as under: The term analogous to the trade or business could not cut down the scope of the term industry . The said words can reasonably mean only activity which results in goods made and manufactured or service rendered which are capable of being converted into saleable ones. They must be capable of entering the word of res commercium , although they may be kept out of the market for some reason. It is not the motive of an activity in making goods or running a service but the possibility of making them marketable if one who makes goods or renders service so desires, that should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y solution to the question which has agitated and perplexed the judiciary at all levels. Hospital Mazdoor Sabha was correctly decided insofar as it held that the JJ Group of Hospitals was an industry but the same cannot be said in regard to the view of the Court that certain activities ought to be treated as falling outside the definition clause. There is no justification for excepting the categories of public utility activities undertaken by the Government in the exercise of its inalienable functions under the Constitution, call it regal or sovereign or by any other name, from the definition of industry . If it be true that one must have regard to the nature of the activity and not to who engages in it, it is beside the point to enquire whether the activity is undertaken by the State, and further, if so, whether it is undertaken in fulfilment of the State's constitutional obligations or in discharge of its constitutional functions. In fact, to concede the benefit of an exception to the State's activities which are in the nature of sovereign functions is really to have regard not so much to the nature of the activity as to the consideration who engages in that ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho conducts the activity, is irrelevant for determining whether the activity is an industry so is the fact that the activity is charitable in nature or is undertaken with a charitable motive. The status or capacity, corporate or constitutional, of the employer, would have, if at all, closer nexus, than his motive on the question whether the activity is an industry. The motive which propels the activity is yet another step removed and ex hypothesi can have no relevance on the question as to what is the nature of the activity. It is never true to say that the nature of the activities is charitable. The subjective motive force of an activity can be charity but for the purpose of deciding whether an activity is an industry one has to look at the process involved in the activity, objectively. The jural foundation of any attempt to except charitable enterprises from the scope of the definition can only be that such enterprises are not undertaken for profit. But then, that clearly, is to introduce the profit concept by a side wind, a concept which has been rejected consistently over the years. If any principle can be said to be settled law in this vexed field it is this : the twin conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Solicitor's Assistant, Managing Clerk, Librarian and the Typist do not directly contribute to the intellectual and product which is a creation of his personal professional skill, as that, without their active assistance and co-operation it will be impossible for him to function effectively. The unhappy state of affairs in which the law is marooned will continue to baffle the skilled professional and his employees alike as also the Judge who has to perform the unenviable task of sitting in judgment over the directness of the cooperation between the employer and the employee, until such time as the Legislature decides to manifest its intention by the use of clear and indubious language. Beside the fact that this Court has so held in National Union of Commercial Employees the Legislature will find a plausible case for exempting the learned and liberal professions of Lawyers, Solicitors, Doctors, Engineers, Chartered Accountants and the like from the operation of industrial laws. But until that happens, in the present state of the law it is difficult by judicial interpretation to create exemptions in favour of any particular class. The case of the clubs on the present defini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rganizing the co-operation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy. III. Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more. (a) The consequences are : (i) professions, (ii) clubs, (iii) educational institutions, (iv) cooperatives, (v) research institutes, (vi) charitable projects, and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of Section 2(j). (b) A restricted category of professions, clubs, co-operatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantially and going by the dominant nature criterion, substantively no employees are entertained but in minimal matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sovereign here. I think that the term 'sovereign' should be reserved, technically and more correctly, for the sphere of ultimate decisions. Sovereignty operates on a sovereign plane of its own as suggested in Keshavananda Bharati's case supported by a quotation from Ernest Barker's Social and Political Theory . Again the term Regal , from which the term sovereign functions appears to be derived, seems to be a misfit in a Republic where the citizen shares the political sovereignty in which he has even a legal share, however small, inasmuch as he exercises the right to vote. What is meant by the use of the term sovereign , in relation to the activities of the State, is more accurately brought out by using the term governmental functions although there are difficulties here also inasmuch as the Government has entered largely now fields of industry. Therefore, only those services which are governed by separate rules and constitutional provisions, such as Articles 310 and 311 should, strictly speaking, be excluded from the sphere of industry by necessary implication. 6. In State of Bombay v. Hospital Mazdoor Sabha (1960)ILLJ251SC , this Court has given wider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, the Industrial Financial Corporation or the Life Insurance Corporation is an 'authority' within the meaning of Article 12 of the Constitution and whether the employees working in the Corporation are entitled to the protection of judicial review under Article 14. It was answered in favour of the employees. In separate but concurrent judgment, Mathew, J. laid the foundation demolishing the autonomous status and non-amenability to judicial review of the actions of corporate sector and held that when a Corporation was created by a statute, its rules or instructions partake the statutory character like a subordinate legislation. Therefore, they are to act consistently with the Rules or Regulations made under the Act or by the statutory authority. 7A. The power of statutory authority is controlled and restricted by the statute which created them and the rules and regulations framed thereunder. Any action of such bodies in excess of their power or in violation of restrictions placed on that power is ultra vires. Thus, the corporate veil given in Praga Tools case (1969)IILLJ479SC , was torn apart and their actions were made amenable to judicial review. In Ajay Hasia v. Kha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat of master and servant, there may be essential procedural requirement to be observed on grounds of natural justice . The Warehousing Corporation was held to be an authority and the dismissal, without conducting an enquiry and without an opportunity to lead evidence for the proposed punishment given to the respondent, was bad in law. Therefore, the appeal was dismissed and the judgment of the High Court was upheld. Chinappa Reddy, J. in his concurring judgment had held that there is hardly any distinction, on the principle, between a person directly under the employment of the Government and a person under the employment of an agency or instrumentality of the Government or a Corporation set up under a statute or incorporated but wholly owned by the Government. Therefore, there is no good reason, why, if Government is bound to observe the equality clauses of the Constitution in the matter of employment and in its dealings with the employees, the Corporations should not be equally bound. Some elements of public employment is all that is necessary to take the employee beyond the reach of the rule which denies him access to a Court: to enforce a contract of employment and denies him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the authority of the appropriate Government. (3) In commercial activities carried on by a Corporation established by or under the control of the appropriate Government having protection under Articles 14 and 19(2), it is an instrumentality or agency of the State. (4) The State is a service Corporation. It acts through its instrumentalities, agencies or persons - natural or judicial. (5) The governing power, wherever located, must be subject to the fundamental constitutional limitations and abide by the principles laid in the Directive Principles. (6) The framework of service regulations made in the appropriate rules or regulations should be consistent with and subject to the same public law principles and limitations. (7) Though the instrumentality, agency or person conducts commercial activities according to business principles and are separately accountable under their appropriate Bye-laws or Memorandum of Association, they become the arm of the Government. (8) The existence of deep and pervasive State control depends upon the facts and circumstances in a given situation and in the altered situation it is not the sole criterion to decide whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to avail constitutional remedy under Article 226 or 32 or 136, as the case may be. The remedy of judicial review to every citizen or every person has expressly been provided in the Constitution. It is a fundamental right of every citizen. In the absence of statutory /administrative instruction in operation, the remedy of reference under Section 10 of the Act is available. Therefore, two streams, namely, remedy under the Act by way of reference and remedy of judicial redressal by way of proceedings under Article 226 or a petition filed before the Administrative Tribunal to the aggrieved persons, are co-existing. If the doctrine laid in Bangalore Water Supply Board case (1978)ILLJ349SC , is strictly applied, the consequence is catastrophic and would give a carte blanche power with lesser faire legitimacy which was buried fathom deep under the lethal blow of Article 14 of the Constitution which assures to every person just, fair and reasonable procedure before terminating the services of an employee. Instead, it gives the management/employer the power to dismiss the employee/workman with one month's notice or pay in lieu thereof, and/or payment of retrenchment compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vereign functions and the traditional duty to maintain law and order is no longer the concept of the State. Directive Principles of the State policy enjoin the State to undertake diverse duties envisaged under Part IV of the Constitution. One of the duties of the State is to provide Telecommunication services to the general public an amenity; so, it is an essential part of the sovereign functions of the State as a welfare State. In Physical Research Laboratory v. K.G. Sharma CA No. 2663/97 decided on April 8, 1997 AIR 1997 SCW 1594 the question was whether the appellant who conducted research in a scientific laboratory was a 'workman' and the institution an 'industry'. Since the service conditions regulate conditions of employment, the Tribunal was devoid of jurisdiction to entertain the application under the Act for deciding the dispute. Following the judgment in T. Joseph's case and distinguishing a judgment of three-Judge Bench, it was held that research institute was a State within the meaning of Article 12. It is not an industry attracting the provisions of the Act. So, in Chief Conservator of Forests v. Jagannath Maruti Kandhare (1996)ILLJ1223SC , this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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