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1997 (7) TMI 687

. This special leave petition has come up directly, from the award of the Central Government Industrial Tribunal No. 2, Bombay, made on August 9, 1996 in Reference No. CGIT-2/26/91. 2. Delay condoned. 3. The admitted position is that the petitioner-Association, representing five dismissed employees, had sought reference under Section 10(1) of the Industrial Disputes Act, 1947 (for short, the 'Act') to the Tribunal. The dispute arose on account of termination by the respondent-Management of the services of the said employees on April 28, 1989; it was alleged that the termination was without any notice and payment of retrenchment compensation under Section 25-F. The reference came to be made on April 19, 1991. The Tribunal has held that the Telephone Nigam Limited, Bombay is not an '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 shif .....

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rvices of the five employees is bad in law. Calling the decision in question, the above special leave petition has been directly filed under Article 136, contending that the ratio in Theyyam Joseph's case is contrary to the judgment of this Court in Bangalore Water Supply & Sewerage Board v: R. Rajappa (1978)ILLJ349SC The judgment, therefore, in Joseph's case is not correct in law. When its correctness was questioned in another case, notice was issued. It is, therefore, contended that the ratio of the Constitution Bench judgment of seven Judges in Bangalore Water Supply case applies to the facts herein. The judgment in Joseph's case, was rendered without reference to former and hence the matter needs fresh (sic)mination. The question is : whether the view is correct in law? This Court 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 .....

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s Act. The State today increasingly undertakes commercial functions and economic activities and services as part of its duties in a welfare State. Hence to artificially exclude State-run industry from the sphere of the Act, unless the statutory provisions expressly or by necessary implication have that effect, would not be correct. Section 2(j) of the Industrial Disputes Act (1947) which defines "industry" contains words of wide import, as wide as the Legislature could have possibly made them. The problem of what limitations could and should be reasonably read in interpreting the wide words used in Section 2(j) is far too policy-oriented to be satisfactorily settled by judicial decisions. The Parliament must step in to legislate in a manner which will leave no doubt as to its intention. That alone can afford a satisfactory 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 .....

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ecurity Press can be an industry even though these activities are, ought to be and can only be undertaken by the State in the discharge of its constitutional obligations or functions. The State does not trade when it prints a currency note or strikes a coin. And yet, considering the nature of the activity, it is engaged in an industry when it does so. A systematic activity which is organised or arranged in a manner in which the trade or business is generally organised or arranged would be an industry despite the fact that it proceeds from charitable motives. It is in the nature of the activity that one has to consider and it is upon the application of that test that the State's inalienable functions fall within the definition of industry. The very same principles must yield the result that just as the consideration as to who 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 indu .....

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tion clause. These refinements are, with respect not warranted by the words of the definition, apart from the consideration that in practice they make the application of the definition to concrete cases dependent upon a factual assessment so highly subjective as to lead to confusion and uncertainty in the understanding of the true legal position. Granting that the language of the definition is so wide that some limitation ought to be read into it, one must stop at a point beyond which the definition will skid into a domain too rarefied to be realistic. Whether the co-operation between the employer and the employee is the proximate cause of the ultimate product and bears direct nexus with it is a test which is almost impossible of application with any degree of assurance or certitude. It will be as much true to say that the 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 contin .....

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idest amplitude in its two limbs, their meaning cannot be magnified to overreach itself. (a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment; so also, service, calling and the like. This yields the interference that all organised activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' provided the nature of the activity, viz. the employer-employee basis bears resemblance to what we find in trade or business. This take into the fold of 'industry' 'undertakings, calling and services, adventures 'analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organizing 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 .....

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y Government or statutory bodies. (c) Even in departments discharging sovereign functions if there are units which are industries and they are substantially severable, then they can be considered to come within Section 2(j). (d) Constitutionally and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby. 5. It is not necessary to refer to the dissenting judgment. Beg, C.J. in his concurring judgment, at page 221, Placitum E to G , has held thus: I would also like to make a few observations about the so-called "sovereign" functions which have been placed outside the field of industry. I do not feel happy about the use of the term "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 .....

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led to the benefits of the Act". 7. In 1960's and 1970's, there were parallel stream of thinking being developed by this Court to engulf the service conditions of the employees of a Corporation either registered under the Companies Act or under the Societies Act or under a statute, vis-a-vis the Government . employees. In Heavy Engineering Mazdoor Union v. State of Bihar (1969)IILLJ549SC , this Court held that the Government Company is distinct from Government. In Praga Tools Corporation v. C.V. Imanual (1969)IILLJ479SC , the employees were held not entitled to avail the remedy under Article 226 of the Constitution. In Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975)ILLJ399SC , break-through was effected by a Constitution Bench in considering whether the Oil and Natural Commission, 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 d .....

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tain allegations and his explanation was sought and to indicate his evidence, if any. He had expressed his intention to cross-examine certain witnesses as also to examine some others in defence. Without taking any action on the respondent's request, the appellant passed an order dismissing him from service w.e.f. the date of his suspension. In the writ petition filed by him, the High Court quashed the order and directed his reinstatement with full back-wages. This Court, on these facts, had held that "in cases where there is an element of public employment and service or support by statute or something in the nature of an office or a status, which is capable of protection, then irrespective of the terminology used, and even though in some inter parties aspects the relationship may be called that 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 j .....

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ur, had not absorbed employees working on contract labour basis after contract labour system was abolished. They filed the writ petition in the High Court. The High Court gave the directions to absorb them on regular basis. On appeal, this Court considered the entire case law and laid down the following principles in para 26 thus: (1) The Constitution of the Corporation or instrumentality or agency or Corporation aggregate or Corporation sole is not of sole material relevance to decide whether it is by or under the control of the appropriate Government under the Act. (2) If it is a statutory Corporation, it is an instrumentality or agency of the State. If it is a company owned wholly or partially by a share capital, floated from public exchequer, it gives indicia that it is controlled by or under 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) Th .....

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even in the private field of contract, was bound by the essential principles of justice, equity and fair procedure and equality. In Bangalore Water Supply Board case (1978)ILLJ349SC , the Board was held to be an 'industry' and the action was amenable to adjudication under the Contract Labour (Regulation and Abolition) Act. 9. It is, therefore, clear that there have been two streams of thinking simultaneously in the process of development to give protection to the employees of the Corporation. Its actions are controlled as an instrumentality of the State and the rules are made amenable to judicial review. Where there exists no statutory or analogous rules/instructions, the provisions of the Act get attracted. The employees are entitled 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 referenc .....

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Act would always be available and availed of as it is an industry and indicia laid in Bangalore Water Supply Board case (1978)ILLJ349SC gets attracted. 10. From this perspective, this Court had approached the problem in T. Joseph's case AIR 1996 SCW 1365 T. Joseph's case was a case relating to the departmental employee whose services was dispensed with. Considering the rules in operation in that behalf, it was held that the Telephone Department is not an industry. The appointment orders were given under the rules. In that behalf, it was held that India is a Sovereign, Socialist, Secular Democratic Republic. It has to establish an egalitarian social order under the rule of law. The welfare measures partake the character of sovereign 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 Lab .....

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