Definition Of Industry Under Industrial Dispute Act 1947 Law Essay

October 28, 2017 Law


The definition of the term industry was non included in the Trade Disputes Act, 1920. The new statute law, Industrial Disputes Act, that came in to existence in the twelvemonth 1947 had included as subdivision 2 ( J ) , the definition of the term industry[ 1 ] We Have Abilities To Write Papers In All Topics – Full Article  . The Act while making, so had borrowed words from the Australian statute law called the Commonwealth Arbitration and Conciliation Act, 1904. Section 4 of the Australian Act had defined industry as “ any concern trade or industry and project of naming of employees on land or H2O. Any naming of service, employment, handcraft or industrial business or by-line of employees on land or H2O and a subdivision of an industry or a group of industriesaˆ¦ ” The Industrial Disputes Act, 1947 has taken the first two paragraphs of its definition from this Australian statute law. But the term industry had non taken its full signifier merely as yet. It has been the topic of contention for many old ages through many different instances. The broad intension that it has received today that is including in its scope educational establishments, charitable societies, recreational nines, trusts and spiritual organic structures can be understood good by a survey of the term through statute laws and differences throughout the old ages.

A really simple apprehension of the word industry in a non proficient manner would be an project where capital and labor and co-operate with each other to bring forth wealth. The Industrial Disputes Act, 1947 ( hereinafter ‘the Act ‘ ) is a welfare statute law and hence the regulations of reading say that the Act as to be given the widest scope. There have been many cases in the yesteryear where the tribunals have had to increase the intensions of footings used in the Act. The instance of D N Banerjee v. P R Mukherjee[ 2 ]was one of the first cases in which the Supreme Court had to cover with the scope of the term industry as used in the Act. Chandrasekhar J in the instance had elaborated on the demand to construe the statute law in picturesque words. He said that the limited construct of that an industry meant in earlier times must now give topographic point to a wider construct so as to take in assorted and varied signifiers of industry so that the disputed arising in connexion with them must be settled without disruption or disorganisation of the demands of the society and in a mode more altered to conciliation and colony than the finding of rights and liabilities harmonizing to rigorous legal processs and patterns. The point of view of the struggles between labor and capital should alter from position to contract. Without such steps the struggles can non be tackled in a satisfactory manner.


The term Industry has been defined in the Industrial Disputes Act as any concern, trade, project, industry or naming of employers and includes any naming service, employment, handcraft, or industrial business or a career of workingmans. The definition has been through many phases and stages of judicial examination. The Apex tribunal has vacillated on the issue and has eventually reached a base merely capable to the alteration that clip brings.

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The research worker in this context will discourse in item the ‘Triple Test ‘ laid down by the Supreme Court in the Bangalore Water Supply and Sewage Board v. A.Rajjappa[ 3 ]which is imperative for farther treatment of anything in this respect.

The Bangalore Water Supply instance was adjudicated by a seven Judge Bench in the twelvemonth 1978. In the Seven Judge Bench determination of Bangalore, Justice Krishna Iyer laid down the undermentioned trial for finding “ industry ”

Where ( I ) systematic activity ( two ) organized by co-operation between employer and employee [ aˆ¦ ] ( three ) for the production and /or distribution of goods and services calculated to fulfill human wants and wants ( non religious or spiritual but inclusive of material things or services geared to heavenly bliss i.e. devising, on a big graduated table prasad or nutrient ) , leading facie, there is an industry in that endeavor.

Absence of net income motivation or paid aim is irrelevant, be the venture in public, private or other sector.

[ aˆ¦ ]

If the organisation is a trade or concern it does non discontinue to be one because of philanthropic gift inspiring the project.[ 4 ]

But the erudite Judge besides laid down certain exclusions to the trial in the same Judgment.

“ Autonomous maps purely, understood ( entirely ) measure up for freedom, non the public assistance activities and economic escapades undertaken by the State. ”[ 5 ]

“ If, in a pious or selfless mission many employ themselves, free or for little honorium or like return, chiefly drawn from sharing the intent of the cause, such as attorneies running a free legal assistance clinic or physicians functioning in their trim hours in a free medical centre or ashramities working at the command of their sanctity, deity or like personality, and the services are supplied free or at nominal costs and those who serve are non engaged for wage or on the footing of maestro retainer relationship, so the establishment is non industry even if isolated retainers, manual or proficient are hired. ”[ 6 ]

In the Bangalore Water Supply instance the bulk determination was given by a five Judge Bench with both Chief Justice Beg and Justice Chandrachud, flatly holding with the trial laid down by Justice Krishna Iyer. The trial, holding the support of the bulk in the Bangalore Bench, formed an important case in point of seven Judges on the inquiry of finding the significance and range of “ industry ” .[ 7 ]

The trial placed all activities under industry irrespective of whether they are correspondent to merchandise or concern and topographic points all constitutions holding the ternary elements- systematic activity, co-operation between employer and employees and production and distribution of goods and services for satisfaction of human wantsA­A­- within the scope of industry. The trial has merely two exclusions viz. one of autonomous maps and another of certain charitable organisations for most portion non holding an employer-employee relation. The instance of Coir Board v. Indira Devi[ 8 ]described the trial in the Bangalore Water Supply instance as a ‘sweeping trial ‘ as the trial was really broad in its range and virtually covered about all constitutions within “ industry ” .


An undecorated definition of the establishment of nine is that they are voluntary organisation formed by the members for their amusement and pleasance. The operation of such nines are governed by their by Torahs framed for the intent to modulate its direction. Such organic structures sometimes besides employ big figure of employees to provide to the demands of their members. Whether such nines are industries or non is the cardinal inquiry in our treatment.

In Madras Gymkhana Club Employees Union v. Gymkhana Club[ 9 ]the inquiry whether a non proprietary members ‘ nine is an ‘industry ‘ came for consideration in the Supreme Court. The instance came before the Supreme Court on entreaty by manner of particular leave as the Industrial Tribunal, Madras by its award, September 2, 1964 had held that the direction of Gymkhana Club, Madras was non apt to pay fillip to its workingmans for the twelvemonth 1962, as Club was non ‘an industry ‘ . The Madras Gymkhana Club, which was true a member nine, was non a proprietary nine. The object of the nine was to supply a locale for musca volitanss and games and installations for diversion and amusement. As portion of its latter activities, it arranged dance, dinner and other parties and ran a catering section, which provided nutrient and refreshments non merely by and large but besides for dinners and parties on particular occasions. The Supreme Court, while make up one’s minding the issue whether Madras Gymkhana Club was industry or non observed as follows:

“ Every human activity in which enters the relationship of employers and employees, is non needfully creative of an industry. Personal services rendered by domestic and other retainers, administrative services of public functionaries, service in assistance of residents of professional work forces, such as physicians and attorneies etc. , employment of instructors and so on may ensue in relationship in which there are employers on the one side and employees on the other but they must be excluded because they do non come within the indication of the term ‘industry ‘ .[ 10 ]

Chiefly, hence, industrial differences occur when the operation undertaken rests upon the cooperation between employers and employees with a position to production and distribution of stuff goods, in other words, wealth, but they may originate besides in instances where the cooperation is to bring forth material services. The normal instances are those in which the production or distribution is of material goods or wealth and they will fall within the look trade, concern and industry. Consequently, the Court held that the Madras Gymkhana Club being a member ‘s nine is non industry thereby upsetting the place of the Calcutta High Court held in two earlier instances viz. Bengal Club v. Santi Ranjan Sommadar[ 11 ]and Royal Calcutta Golf Club Mazdoor Union v. State of West Bengal.[ 12 ]

This was shortly followed by the determination in Cricket Club of India v. Bombay Labour Union[ 13 ]the inquiry before the tribunal was whether the Cricket Club of India was an ‘industry ‘ within the significance of S.2 ( J ) of the Act. The nine was a members ‘ nine and non a proprietary nine, though was incorporated as a company under the Companies Act. The tribunal said that the fact that the nine catered for maps of outside bureaus on certain occasions did non do it an industry inasmuch as these maps were arranged at the petition of the members of the nine from whom it realized the dues and who were responsible for payment to it. Establishing on that logical thinking and using the rule of Madras Gymkhana nine instance, the Supreme Court held that the nine is non an ‘industry ‘ .

However the 1978 determination in the Bangalore Water Supply Case[ 14 ]was a watershed every bit far as the issue was concerned. The determination overruled both the instances viz. Madras Gymkhana and Cricket Club of India. Hence nine would be an industry after 1978.

The inquiry whether Club falls under the definition of industry within the significance of Section 2 ( J ) is covered by Justice Krishna Iyer.[ 15 ]It the beginning of his treatment about nines the learned justice noted that the broad words used in SectionA 2 ( degree Fahrenheit ) A if applied without rational restrictions, may cover every bilateral activity even religious, spiritual, domestic, connubial, enjoyable or political. He besides points out that the merely land to untangle nines from the spirals of industrial jurisprudence ( except specific statutory proviso ) is absence of employer- employee co-operation on the familiar luring-firing form.

While keeping the judgement in the Madras Gymkhana Club ‘wrongly decided ‘ the justice points out that the ingredients necessary for an industry are present here and yet it is declared a non-industry because the nine belongs to members merely. A It is nonnatural logic to jettison the illation of an ‘industry ‘ from such a factual state of affairs on the clever supplication that a nine ‘belongs to members for the clip being and that is what affairs ‘ .

Harmonizing to the justice Cricket Club of India stood in a worse place. The justice points out that an indefinite subdivision of the community come ining as the invitees of the members besides portion in the services of the nine. The testimony of the activities can go forth none in uncertainty that this colossal ‘club ‘ is a vivacious collective project which offers goods and services to a subdivision of the community for payment and there is co-operation between employer and employees in this undertaking. The supplication of non-industry is un-presentable and exclusion is possible merely by striving jurisprudence to snarling point to salve a certain category of socialite constitutions.[ 16 ]

The consequence of the Bangalore Water Supply determination reverberated about immediately. The Calcutta High Court in Tollygunge Club Ltd. v. Fifth Industrial Tribunal[ 17 ]stated that “ The two determinations, viz. , The Madras Gymkhana Club and the Cricket Club of India have been expressly declared to be no longer good jurisprudence and trust thereon in my position does non originate. The High Court is bound by the determinations of the Supreme Court ”

The Punjab and Haryana High Court in Kanhaiya Lal V Satluj Club[ 18 ]quashed the determination of the Labour Court, Ludhiana which had placed trust on Madras Gymkhana and CCI determinations. The tribunal said that in position of the important dictum of the Supreme Court in the Bangalore Water Supply instance, there can be no justification, legal or other, for keeping that the Club does non fall within the definition of ‘Industry ‘ . The tribunal found the determination recorded by the Labour Court is antique facie perverse.

The Bombay High Court in Ratilal B. Rajiv v. Tata Sports Club and Anr[ 19 ]relied to a great extent on the Bangalore Water Supply judgement. The tribunal after through consideration of the judgement and the facts before it came to the decision that there is no mode of uncertainty that the Club falls within the definition of “ industry ” under subdivision 2 ( J ) of the Industrial Disputes Act in the visible radiation of rules laid down by the Apex Court in Bangalore Water Supply instance.


It is herby argued the general tendency among judicial determinations is that the definition of industry is better off broad in scope and should hold a broad building. Thus it is contented that the base taken in the Bangalore Water Supply instance to cover a broad rang of constitutions, is justified to a certain extend.

The Industrial Disputes Act is a “ public assistance legislative act ” and hence must have a broad building. The IDA, though puting down a mechanism for difference declaration in an “ industry ” besides provides for certain substantial rights to the workingmans and understood in that sense, is “ a public assistance legislative act ” . Such “ public assistance legislative acts ” , because they provide good commissariats for workers and besides because they guarantee conformity of these good commissariats, must be liberally construed and the tribunals ought to give it the “ widest operation, which its words would allow ” .[ 20 ]In this context, Justice Bhagwati in The Workmen of Indian Standards Institution v. The Management of Indian Standards Intuitions[ 21 ], commented-

“ Industrial Disputes act, 1947 is a statute law intended to convey approximately peace and harmoniousness between direction and labor in an industry so that production does non endure and at the same clip, labor is non exploited and discontented and hence, the trial must be so applied to give widest possible intension to the word industry and the attack must be wide and broad, non stiff or dogmatist. We can non bury that it is a societal public assistance statute law that we are construing and we must give such an reading as would progress the object and intent of the statute law and give full significance to it in the accomplishment to its avowed societal aim. ”[ 22 ]

The trial in the Bangalore Water Supply instance was itself really broad and the scope of the term industry was blocked by merely two exclusions. One, that of the autonomous maps and the 2nd being certain charitable organisations non holding an employer-employee relationship. Thus the trial covers a broad scope of constitutions with a wide and broad building on “ industry ” .

Besides the instance Torahs on the point the statute law excessively has contemplated the broadening of the definition of the term industry under the Act.

The Industrial Dispute Amendment Act ( 1982 ) has proposed amendments to Section 2 of the bing act. With respect to the issue at manus the proposed amendment has made considerable going from the instance jurisprudence in the respect peculiarly the determination of the Supreme Court in the Bangalore Water Supply instance. In account 9 to Section 2 the Amendment proposes that “ any activity, being an activity carried on by a co-operative society or a nine or any other like organic structure of persons, if the figure of individuals employed by the concerted society, nine or other like organic structure of persons in relation to such activity is less than 10 ” is an industry.[ 23 ]


The determination of the Court in the Bangalore Water Supply instance was a seminal minute every bit far as the inquiry whether Recreational Clubs autumn under the definition of Industry. The Court rejected the statement of sole nature of the nines and the statement that they do non function the community. These two statements founded the footing of Justice Hidayathulah ‘s determination in the Madras Gymkhana Club Case. The Court in the BWS instance observed that the nines are unfastened to public for rank topic to their ain regulations. The tribunal said that if there is productive cooperation between employer and employee so a struggle is bound arise between them, be it a societal nine, common benefit society, public service or professional office. Tested on this yardstick, most nines will neglect to measure up for freedom.

However the research worker feels that with the use of such a sweeping trial like the ternary trial, batch of establishments which were ne’er envisaged to be industries have come under the horizon of the Industrial Disputes Act. That the trial is ‘sweeping ‘ has already been stated by the Apex tribunal in the Coir Board Ernakulum Case. The research worker besides does non subscribe the position of Justice Hidayatullah in the Madras Gymkhana Case that “ size of the nine or the breadth of its rank or the figure or extent of there activities ” should non be considered. On the other manus the research worker feels the size of the nine should be made the exclusive standard to establish the determination as to whether a nine qualifies to be an industry or non. His statements are substantiated by the fact that the Industrial Dispute ( Amendment ) Act 1982 prescribes the same.[ 24 ]

It is hereby argued that there is a demand to follow a in-between way between the two determinations. It is submitted that a rigorous attachment to Justice Hidayatullah ‘s place in Madras Gymkhana instance will set every nine outside the horizon of the term industry and there by will corroborate the concern of Justice Krishna Iyer that it is non sensible to let such an organized establishment to be outside the bounds of the Act.

At the same clip, the application of the ternary trial in the instance of industries will convey every nine under the horizon of the term industry. There exists infinite recreational nines both in Rural and Urban India providing to assorted subdivisions of the people. While some of them, the larger 1s and the 1s run on a expansive graduated table have the character of industry the others are simply an association of people in pursuit to a corporate involvement in a peculiar activity that possess small or no properties of an industry. A sweeping trial on the likes of the ‘Triple Test ‘ will goad to state turn out counterproductive therefore striping a ample subdivision of the public of an of import beginning of amusement or diversion or academic cognition.

The ‘collateral harm ‘ as consequence of the ternary trial can be avoided by doing the figure of forces the nine employs as the standard to separate the Clubs.

Having said that, the research worker concludes by puting trust on Lord Denning ‘s words that ‘The responsibility of the tribunal is to construe the words that the legislative assembly has used ; those words may be equivocal, but even if they are, the power and responsibility of the tribunal to go outside them on a ocean trip of find are purely limited ‘ .

Additionally the research worker feels that an over-expansive definition of the word `industry ‘ might be a hindrance to private endeavors in India where employment chances are scarce. Gratuitous to state, a worker-oriented attack in interpreting the definition of industry, forgetful of the involvement of the employer, would be a nonreversible attack and non in conformity with the commissariats of the Act. There is an pressing necessity to construe industrial jurisprudence to guarantee that neither the employers nor the employees were in a place to rule the other.


Justice G.P Singh, ‘Principles of Interpretation of Statute ‘ , EBC Publication, 2004

Rao E.M, ‘O.P Malhotra Labor Law ‘ , Lexis Nexis Butterworths, 6th Ed, 2004

Misra S.N, S Kumar Misra, ‘Labour and Industrial Law ‘ , 19th Ed, 2002

Online Beginnings

Infusions from the Industrial Dispute ( Amendment ) Act is available at: hypertext transfer protocol: // ( last accessed 24th March 2010 )


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