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Bangalore Water Supply and Sewerage Board v. A. Rajappa: A Critical Analysis
The case of Bangalore Water Supply and Sewerage Board v. A. Rajappa, (1978) 2 SCC 213 was decided by a Bench of 7 Judges, headed by Chief Justice M.H. Beg on 21st February 1978. The issues raised in the case were regarding the scope of the term Industry under Section 2(j) of the Industrial Disputes Act, 1947, whether a sovereign function of the government would come under the ambit of the term ‘industry’? and Whether Charitable institutions, hospitals, nonprofit making organizations, educational institutions, professionals qualify as an industry?
Relevant Law Provisions
Section 2(j) of The Industrial Disputes Act, 1947: Section 2(j) deals with the definition of the term ‘Industry’. It was amended in 1982, 4 years after the judgment in order to clarify the scope of the term. The landmark judgment revolves around this section so as to make the term more comprehendible to the common man.
Section 33C of The Industrial Disputes Act, 1947: It deals with the monetary benefits that the workmen are entitled to get from the employer and the limitation period of the same.
Triple Test and Dominant Nature Test
Triple Test: In 1978 while examining the scope of the term “industry” the Triple test was laid down by the Supreme Court in order to help to decide the same. It includes the following:
- Systematic Activity
- Harmony and sense of belongingness between the employer and the employees
- The manufacturing and distributing of goods and services so as to satisfy human needs and wants
Dominant Nature Test: Organisations where complex activities are involved, wherein some qualify for industry while others don’t, then the predominant nature of services would be taken into consideration. The whole organization will qualify as ‘industry’, although those who are not workmen may not benefit under it.
Recent Developments
In the case of State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1 a 5 judge Bench held that there should be some restriction to the term “sovereign function, rather than blindly following the traditional concept of the same. Moreover, the welfare activity undertaken should fall outside the scope of the term industry. The SC in 2017 held that this should be consulted by a larger bench. In the case of State of Rajasthan v. Ganeshi Lal, (2008) 2 SCC 553, the court held that the law department of the government won't qualify to be an industry.
Critical Analysis
The meaning of the term “industry” was clarified after 30 years of the implementation of the act. Section 2(j) was amended so as to incorporate the vast meaning of the term. The SC in interpreting the term crossed its power and in fact formulated altogether a new law. It did not stick to the liberal interpretation and did a constructive interpretation. The separation of powers between the legislature and the judiciary exists due to a reason, which was breached by this judgment. Does there even exist the concept of Separation of powers in reality? Moreover, through this judgment, the Supreme Court did not just fill the gaps but formulated an altogether different meaning and scope.
Conclusion
It was held that BSWWB would fall under the definition of the term industry. Further, the definition was amended so as to increase its scope. Hospitals, Sovereign Activities, Charitable institutions, professionals were kept out of the ambit of the term “industry”. This landmark judgment has helped in understanding the definition of industry in a better way and has also cleared the confusion which used to occur earlier.
