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State of Uttar Pradesh. v. Jai Bir Singh

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State of Uttar Pradesh. v. Jai Bir Singh

This case deals with the definition of the term "industry" under S. 2(j) of the Industrial Disputes Act, 1947.

Petitioners Arguments
It was urged on behalf of the employers that the meaning given to the word ‘industry’ in the judgment of Bangalore Water Supply and Sewerage Board v. A. Rajappa ([1978] 2 SCC 213) , is not warranted by the language used in the definition clause. The Government and its Departments while exercising its ‘sovereign functions’ have been excluded from the definition of ‘industry’. In a constitutional democracy where sovereignty vests in the people, all welfare activities undertaken by the State in discharge of its obligation under the Directive Principles of State Policy contained in Part IV of the Constitution are ‘sovereign functions’. There is no unanimity in the opinions expressed by the judges in the Bangalore Water case on the ambit of the definition of ‘industry’. If in response to the opinions expressed by the seven judges in Bangalore Water 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.
Responders Arguments
On behalf of the employees, it was argued that the decision in the case of Bangalore Water, 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 was urged that upsetting the law settled by Bangalore Water is neither expedient nor desirable. It was further pointed out that earlier an attempt was made in Aeltemesh Rein v. Union of India, ([1988] 4 SCC 54) to seek enforcement of the amended Act through this Court. 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.
Last Listed On
2026-03-19
Start Date
2017-01-02
Card Stage Date
2017-01-02
Review Petition No
C.A. No. 897/2002
Case Status
Pending
Bench Status
Constituted
Subject Matter
Labour Laws
Pendency
9 years, 5 months, 28 days

9 Judge Bench

Judgement Reserved

Consider As Stage Of Pendency
true

Date of institution of case

Date of reference to 7 Judge Bench

Date of reference to 9 Judge Bench

Judgement reserved

In 1978, the definition of industry under the Industrial Disputes Act, 1947 was determined by the seven-Judge bench in the Bangalore Water Supply case . The definition of the term 'industry' in Section 2(j) is both exhaustive and inclusive. It can be divided in two parts ; First part provides any business, trade, undertaking, manufacture or calling of employers, and the second part provides any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. The Supreme Court conducted triple tests to ascertain what shall be included and to be excluded in the sphere of the definition, which included systematic activity, co-operation between employer and employee and production of goods and services which satisfy human wants. Pursuant to the observations made by the judges in their different opinions in the judgment, the legislature responded and amended the Act by Industrial Disputes (Amendment) Act 1982. Parliament created certain exceptions to the definition, but the same was never brought into force and existing definition of industry given under Section 2(j) of the Act remained valid. In 2005, the present case was brought about on the question, if 'social forestry' department of state, which was a welfare scheme undertaken for improvement of the environment, would be covered by the definition of 'Industry' under S. 2(j) of the Industrial Disputes Act, 1947 and the five-Judge bench referred the Bangalore Water Supply case to a larger bench for reconsideration. In 2017, a seven judge bench of the Supreme Court passed an order for the constitution of a nine-Judge bench in light of the 2005 referral order

Whether ‘social forestry’ department of State would be covered by the definition of ‘‘Industry’’ under Section 2(j) of the Industrial Disputes Act, 1947 ?

Section 2(j) of the Industrial Disputes Act, 1947

The Court concluded that a reference to a larger bench for reconsideration of the Bangalore Water decision was required because the case was not a unanimous decision. The majority opinion that was expressed in the decision was tentative and temporary. The judges wanted the legislature to intervene and clarify the legal position by simply amending the definition of 'industry'. The legislature did respond by amending the definition of 'industry', but unfortunately, was unable to provide Alternative Dispute Resolution Forums to the employees of specified categories of industries excluded from the amended definition, resulting in more than 23 years delay in enforcing the amendment. The legal position therefore continued to be unclear and to a large extent uncovered by the decision of the Bangalore Water Supply case. The seven-Judge bench, in light of the of the judgement delivered by the five-Judge bench on this case and the decision of the court in the Bangalore Water case, observed that as serious doubts were expressed in the reference order about the correctness of the views taken in Bangalore Water Supply case and the issue under consideration has serious and wide ranging implications, the matter needs to be placed before nine- Judge bench.

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