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CJI Surya Kant-led 9-judge Constitution Bench to deliver verdict on definition of ‘industry’ today

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Forty-eight years after a seven-judge Bench of the Supreme Court laid down an expansive interpretation of the term ‘industry’ under the Industrial Disputes Act, 1947, a nine-judge Constitution Bench led by Chief Justice of India Surya Kant will on Thursday pronounce its verdict on the correctness of the 1978 judgment.The Bench had reserved its judgment on the contentious issue on March 19 after hearing detailed arguments from Attorney General R Venkataramani and Additional Solicitor General KM Nataraj for the government and senior advocates Shekhar Naphade, Indira Jaising, CU Singh and Sanjay Hegde and others for three consecutive days on the definition of ‘industry’ governing labour relations.The other eight judges on the Bench are Justice BV Nagarathna, Justice PS Narasimha, Justice Dipankar Datta, Justice Ujjal Bhuyan, Justice Satish Chandra Sharma, Justice Joymalya Bagchi, Justice Alok Aradhe and Justice Vipul M Pancholi.In its 1978 verdict in ‘Bangalore Water Supply and Sewerage Board versus A Rajappa’, the seven-judge Bench held that any systematic activity organised by cooperation between employer and employee for production or distribution of goods and services could fall within the definition of ‘industry’, even if the organisation was not engaged in profit-making.The Centre has contended that welfare activities and charitable functions undertaken by the state cannot be treated as “industry” under labour law. Attorney General R Venkataramani submitted that while the “triple test” evolved in the 1978 judgment may be logically sound, its indiscriminate application has led to an unwarranted expansion of the definition of ‘industry’. He had cautioned against an over-broad application of the test laid down in Bangalore Water Supply and Sewerage Board versus A Rajappa in 1978.Now, the nine-judge Bench will decide if the sweeping interpretation of ‘industry’ given in the 1978 judgment authored by Justice VR Krishna Iyer was the correct interpretation of law.On February 16, the court had formulated broad issues to be adjudicated by the nine-judge Constitution Bench. One of the issues to be examined was if the Industrial Disputes Act, 1982, and the Industrial Relations Code, 2020, had any legal impact on the interpretation of the expression ‘industry’ as contained in the principal Act.The nine-judge Bench will also decide if social welfare activities and schemes or other enterprises undertaken by the government departments or their instrumentalities could be construed to be “industrial activities” for the purpose of Section 2 of the Industrial Disputes Act, 1947.Earlier, a three-judge bench, in its 1996 judgment, had relied on a 1978 seven-judge bench verdict and had held that the social forestry department was covered by the definition of the word ‘industry’. Later, in 2001, another Bench took a different view on the issue after which the matter was referred to a five-judge Bench to resolve an “apparent conflict” between the two decisions.In May 2005, a five-judge Constitution Bench referred the matter to a larger Bench on the interpretation of ‘industry’ in Section 2 of the Industrial Disputes Act, 1947. A seven-judge Constitution Bench led by the then CJI TS Thakur in 2017 said that the appeals be placed before a Bench of nine judges keeping in view the “serious and wide-ranging implications” of the issue.

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