State of Bombay & Ors Vs. The
Hospital Mazdoor Sabha & Ors  INSC 13 (29 January 1960)
GUPTA, K.C. DAS
CITATION: 1960 AIR 610 1960 SCR (2) 866
CITATOR INFO :
E&R 1960 SC 675 (8,9) F 1960 SC1261 (3) R
1961 SC 484 (2,6) E 1962 SC1080 (3,5,6,8,11) R 1963 SC1681 (12) E 1963 SC1873
(3,10,12,13) R 1964 SC 903 (11) R 1964 SC1617 (9) E 1968 SC 554 (12) RF 1969 SC
63 (7) O 1970 SC1407 (3,4,5,6,8,17,21,22,23) R 1971 SC1259 (2) RF 1971 SC2422
(17) R 1972 SC 763 (11,12,17,19) RF 1975 SC2032 (4) F 1976 SC 145
(5,6,7,9,10,29) R 1976 SC1111 (9) APL 1978 SC 548
(4,11,66,67,157,84,92,159,161) R 1979 SC 170 (16) RF 1981 SC1253 (9) D 1981
SC2101 (5) D 1988 SC1182 (5) RF 1990 SC2047 (7) RF 1991 SC 754 (12) R 1992 SC
Industrial Dispute-Retrenchment of workmen by
hospital without compensation- Validity-Hospital, if an industry- 'Industry'
Meaning- industrial Disputes Act. 1947 (14 Of 1947). SS. 2(j). 25F". 251.
The services of respondents 2 and 3, engaged
as ward servants in the J. J. Group Of Hospital, Bombay, under State control
and management were retrenched without payment of compensation as required by
S. 25F(b) of the Industrial Disputes 867 Act, 1947. The respondents applied to
the High Court for a writ of mandamus under Art. 226 of the Constitution. The
single judge who heard the matter held that non-payment of retrenchment
compensation did not render the retrenchment orders invalid as S. 25I of the
Act provided a specific remedy for its recovery and dismissed the application.
The Division Bench on appeal reversed the decision of the single judge
upholding the respondents' contention that the said hospitals were an industry
as defined by S. 2(i) of the Act and non-payment of retrenchment compensation
rendered the retrenchment bad in law. On appeal by the State of Bombay.
Held, that the decision of the Division Bench
was right and must be affirmed.
The mandatory language of S. 25F(b) of the Industrial
Disputes Act, 1947, plain and unambiguous in effect, leaves no manner of doubt
that the payment of compensation as required by it is a condition precedent to
retrenchment and that S. 25I Of the Act is intended to provide for the recovery
of other monies that became due to the employees under Ch. V of the Act.
The object and the scope of the Act, as
apparent from its various provisions, made it amply clear that the Legislature
in defining the word 'industry' in s. 2(j) of the Act was deliberately using
term of wide import in its first clause and referring to several other
industries in the second in an inclusive way obviously denoting extention. In
construing the definition, therefore, it is inappropriate to apply the maxim
noscitur a sociis so as to restrict its meaning. The maxim is a rule of
construction and can apply only where the intention of the Legislature in
associating terms of wider import with those or narrower import or the meaning
of the wider terms used is in doubt.
The corporation of Glasgow v. Glasgow Tramway
and Omnibus Co. Ltd., 1898 A. C. 631, referred to.
Nor can undue importance be attached to the
conventional meaning attributed to trade or business in construing the wide
words of the definition since it has lost some of its force and can no longer
be wholly valid for the purpose of industrial adjudication in a modern welfare
state. It is clear that the presence of a profit motive or the investment of
capital, traditionally associated with notion of trade and business, can be no
indispensable requisite for an industry under S. 2(j) of the Act.
Such activities of the Government as can
properly be decribed as regal or sovereign activities easily fall outside the
scope of the definition. But the field of such activities cannot be extended to
cover other activities which are undertaken by the State in implementation of
the Directive Principles of State Policy and the ideal of a welfare State.
Coomber v. Justices of Berks, 9 A. C. 61,
Although it 'may not be possible to enumerate
all possible attributes that can make an activity an undertaking under S. 2(j)
as being analogous to trade or business, the working principle should be that
any activity systematically and habitually under- 868 taken for the production
or distribution of goods or for the rendering of material services to the
community or a part of it with the help of employees organised or arranged in the
manner of a trade or business in such an undertaking.
No question of the application of the
doctrine of quid pro quo can arise in deciding such a matter, for that would
only be raising the question of profit motive in another form.
So judged there could be no doubt that the
State in running the hospitals in question was carrying on an industry within
the meaning of the Act.
D. N. Banerji v. P. R. Mukherjee, (1953) S.
C. R. 302, Baroda Borough Municipality v. Its Workmen, (1957) S. C. R. 33, Sri
Vishuddhananda Saraswathi Marwari Hospital v. Their Workmen (1952) II L. L. J.
327 and The Federated State School Teachers' Association of Australia v. The
State of Victoria & Ors., (1929) 41 C. L. R. 569, referred to.
Brij Mohan Bagaria v. Chatterjec (N. C.) (1958)
L. L. J.
CIVIL APPELLATE J-URISDICTION: Civil Appeal
No. 712 of 1957.
Appeal from the judgment and order dated
April 18, 1956, of the Bombay High Court in Appeal No. 65 of 1955, arising out
of the judgment and order dated July 28, 1955, of the said High Court is Misc.
Petition No. 113 of 1955.
C. K Daphtary, Solicitor-General of India,
and R. H.
Dhebar, for the appellants.
K. R. Chaudhuri, T. S. Venkataraman and K. R.
Sharma, for the respondents.
1960. January 29. The Judgment of the Court
was delivered by GAJENDRAGADKAR, J.-This is an appeal by the State of Bombay
(hereinafter called the appellant) and two others and it arises from a writ
petition filed against it by the Hospital Mazdoor Sabha, a trade union
registered under the Industrial Trade Unions Act XIV of 1926 and two of its
members Mrs. Vatsala Narayan and Mrs. Ruth Isaac (hereinafter called
respondents I to 3). Respondents IQ and 3 were employed as Ward servants in the
J. J. group of Hospitals. The superintendent of this said group of Hospitals
informed the said respondents by notices issued respectively against them that
their services would be terminated with effect from the dates mentioned in the
said notices and in accordance with the said notices their services were in
869 subsequently in their place two State
servants who were discharged from the Civil Supplies Department were appointed.
The writ petition filed by the respondents alleged that the retrenchment of
respondents 2 and 3 was void as it did not comply with the mandatory provisions
of ss. 25F and 25H of the Industrial Disputes Act, 1947 (14 of 1947)
(hereinafter called the Act) and it claimed a writ of mandamus directing the
appellant to reinstate them in their posts. This petition was resisted by the
appellant on several grounds. It was urged that the orders terminating the
services of respondents 2 and 3 were not void and so the respondents' claim for
a writ was unjustified on the merits and it was argued that the writ
application was wholly misconceived inasmuch as the J. J group of Hospitals did
not constitute an industry and so the relevant provisions of the Act were
inapplicable to the respondent's case.
This writ petition was heard by Tendolkar J.
The learned judge did not think it necessary to consider what he called the
somewhat ticklish question as to whether the group of Hospitals constitutes an
industry because he held that even assuming that the relevant provisions of the
Act were applicable and could be invoked by the respondents it was not shown
that the impugned orders were void. In his opinion non-compliance with the
provisions of s. 251' did not invalidate the said orders, and it was open to
the respondents to seek for an appropriate remedy under s. 251 of the Act. He
also held that the question about the application of s. 25H did not arise. On
these findings the writ petition filed by the respondents was dismissed.
The matter was then taken before the Court of
Appeal. The Court of Appeal held that the impugned orders had not complied with
the mandatory provisions of s. 25F and so they were invalid and inoperative.
That is why the question as to whether s. 25H applied was not considered by it.
The finding that the impugned orders were invalid for contravention of the
mandatory provisions of s. 25F made it necessary to decide the larger issue as
to whether the Act 870 applied to the Hospitals. The Court of Appeal has
observed that it was first inclined to send the matter back to Tendolkar J. but
it was requested by the learned counsel appearing for both the parties that it
Would be better if the said question was decided by it as it was a question of
law and the decision of the said issue by the Court of Appeal would avoid a
remand and a further appeal. That is how the issue was considered by the Court
of Appeal and answered in favour of the respondents. In the result the decision
of Tendolkar J. was reversed, the writ petition was allowed and a writ in the
nature of mandamus was issued against the appellant.
The appellant then applied for and obtained a
certificate of fitness from the Bombay High Court and with the said certificate
it has brought the present appeal before us. On behalf of the appellant two
points have been raised for our decision in the present appeal: Was the Appellate
Court justified.in holding that the contravention of the material provisions of
s. 25F of the Act rendered the impugned orders invalid; and do the relevant
provisions of the Act apply to the group of Hospitals run by the appellant; are
they an industry within the meaning of the Act ? Before dealing with these
points it would be relevant to state the material facts in regard to the group
of Hospitals themselves which are not in dispute. This group consists of five
Hospitals. It appears that in 1835 Sir Robert Grant, the then Governor of
Bombay, desired to start an institution for the purposes of imparting medical
education in the Presidency of Bombay. His proposal in that behalf was
sanctioned by the Board of Directors of the East India Company and funds
amounting to Rs. 44,000 were collected for the purpose and an equal amount was
contributed by the Directors to defray the cost of construction of the College
building. 'In 1843 the foundation of the Medical College building was laid and
the same was completed in 1845. About that time an idea of building a hospital
for the sick people of all classes and castes was mooted and Sir Jamsetjee
Jeejibboy offered donation and some contribution was made by the Government 871
with which the J. J. Hospital was constructed and it was formally opened on May
15, 1845. Similarly the other four Hospitals in the group were built in course
of time from donations. Except for a small amount of Rs. 10,000 the rest of the
expenditure which is in the neighbourhood of Rs. 27 lakhs is entirely met by
the appellant out of the grant sanctioned in the budget under the bead "
38-Medical ". The group is under the administrative control of the
Surgeon- General of the appellant and its day-to-day affairs are conducted and
controlled by the Superintendent who is a full time employee of the appellant;
the residential staff including the Resident Medical Officers, Assistant
Medical Officers, Housemen, Nurses and others are all full-time employees of
the -appellant and their salaries are drawn on the establishment pay bills
every month and paid entirely by the appellant. This group serves as a clinical
training ground for students of the Grant Medical College which is a Government
Medical College run and . managed by the appellant for imparting medical
sciences leading to the Degrees of Bachelor of Medicine and Bachelor of Surgery
of the Bombay University as well as various Post-Graduate qualifications of the
said University and the College of Physicians and Surgeons, Bombay; the group
is thus run and managed by the appellant to provide medical relief and to
promote the health of the people of Bombay.
Now, turning to the first point, it may be
stated that the facts on which the respondents' plea is based are not in
dispute. It is conceded that the services of respondents 2 and 3 have been
retrenched though it may be for the purpose of making room for other Government
servants with a longer record of service who had to be retrenched owing to the
closure of the appellant',-, Civil Supplies Department,. It is also not
disputed that the said respondents had not been paid at the time of
retrenchment compensation as prescribed by s. 25F(b). The respondents'
contention is that the failure to comply with the said requirement makes the
order of retrenchment invalid. This plea has been upheld by the Court of
Appeal. Section 25F (b) provides that no workman employed III 872 in any
industry who has been in continuous service for not less than one year under an
employer shall be retrenched by that employer until he has been paid at the
time of retrenchment compensation which shall be equivalent to fifteen days'
average pay for every completed year of service or any part thereof in excess
of six months.
Clauses (a) and (c) of the said section
prescribe similar conditions but we are not concerned with them. On a plain
reading of s. 25F (b) it is clear that the requirement prescribed by it is a
condition precedent for the retrenchment of the workman. The section provides
that no workman shall be retrenched until the condition in question has been
satisfied. It is difficult to accede to the argument that where the section
imposes in mandatory terms a condition precedent, non-compliance with the said
condition would not render the impugned retrenchment invalid.
The argument which appealed to Tendolkar, J.,
however, was that the consequence of non-compliance with the requirement of s.
25F (b) was not to render the impugned retrenchment invalid, because be thought
that by s. 251 a specific provision has been made for the recovery of the
amount prescribed by s. 25F (b). Section 251 provides for the recovery of
monies due from employers under Ch. V, and according to Tendolkor J. this
provision covers the amount due to the workman by way of compensation under s.
In our opinion, this view is untenable.
Having regard to the fact that the words used in s. 25F (b) are mandatory and
their effect is plain and unambiguous it seems to us that the Court of Appeal
was right in holding that s. 251 covered cases of recover of ninnies other than
those specified in s. 25F (b), an it is obvious that there are several other
cases i which monies become due from the employers to th employees under Ch. V;
it is for the recovery of the monies that s. 251 had been enacted. Therefore,
we see no substance in the argument that the Court of Appeal has misconstrued
s. 25F (b). That being so failure to comply with the said provision renders the
impugned orders invalid and inoperative, 873 Does the said provision apply to
the present proceedings ? In other words, is the Act itself applicable to the
group of Hospitals with which are concerned ? That is the next question which
calls for an answer in the present appeal.
Indeed it is this general question which has
been strenuously argued before us by the learned Solicitor- General on behalf
of the appellant. The decision of this question depends upon the interpretation
of the definition of industry " prescribed by s. 2(j) of the Act.
Let us first read the definition. Section
2(j) provides that ',industry" means any business, trade, undertaking,
manufacture of calling of employers and includes any calling, service,
employment, handicraft, or industrial occupation or avocation of workmen. It
would be noticed that the words used in the definition are very wide in their
import and even so its latter part purports to provide an inclusive definition.
The word "undertaking" according to Webster means" anything
undertaken ; any business, work or project which one engages in or attempts, an
Similarly, " trade " according to
Halsbury, in its primary meaning, is " exchange of goods for goods or
goods for money ", and in its secondary meaning it is " any business
carried on with a view to profit whether manual or mercantile, as distinguished
from the liberal arts or learned professions and from agriculture ";
whereas " business " is a wider term not synonymous with trade and
means practically " anything which is an occupation as distinguished from
a pleasure The word SC calling " again is very wide; it means` one's usual
occupation, vocation, business or trade"; so is the word
"service" very wide in its import. Prima facie, if the definition has
deliberately used words of such wide import, it would be necessary to read
those words in their wide denotation; and so read, Hospitals cannot be excluded
from the definition.
It is, however, contended that, in construing
the definition, we must adopt the rule of construction noscuntur a sociis. This
rule, according to Maxwell, means that, when two or more words which are
susceptible of analogous meaning are coupled together they are understood to be
used in their cognate sense. They take is it were their colour from each other,
that is, the more general is restricted to a sense analogous to a less general.
The same rule is thus interpreted in " Words and Phrases " (Vol. XIV,
P. 207): " Associated words take their meaning from one another under the
doctrine of noscuntur a sociis, the philosophy of which is that the meaning of
a doubtful word may be ascertained by reference to the meaning of words
associated with it; such doctrine is broader than the maxim Ejusdem
Generis." In fact the latter I maxim "is only an illustration or
specific application of the broader maxim noscuntur a sociis ". The argument
is that certain essential features or attributes are invariably associated with
the words " business and trade " as understood in the popular and
conventional sense, and it is the colour of these attributes which is taken by
the other words used in the definition though their normal import may be much
wider. We are not impressed by this argument. It must be borne in mind that
noscuntur a sociis is merely a rule of construction and it cannot prevail in
cases where it is clear that the wider words have been deliberately used in
order to make the scope of the defined word correspondingly wider. 1 is only
where the intention of the Legislature i associating wider words with words of
narrow significance is doubtful, or otherwise not clear that the present rule
of construction can be useful applied. It can also be applied where the meaning
of the words of wider import is doubtful;
but, where the object of the Legislature in
using wider words i clear and free of ambiguity, the rule of construction in
question cannot be pressed into service. As ha been observed by Earl of
Halsbury, L. C., in The Corporation of Glasgow v. Glasgow Tramway an Omnibus
Ltd. (1), in dealing with the wider word used
in s. 6 of Valuation of Lands (Scotland) Act, 1854 " the words 'free from
all expenses whatever i connection with the said tramways' appear to me to be
so wide in their application that I should have thought it impossible to
qualify or cut them down by their being associated with other words on the (1)
(1898) A.C 63, at p. 634.
875 principle of their being ejusdem generis
with the previous words enumerated ". If the object and scope -of the
statute are considered there would be no difficulty in holding that the
relevant words of wide import have been deliberately used by the Legislature in
defining " industry" in s. 2(j).
The object of the Act was to make provision
for the investigation and settlement of industrial disputes, and the extent and
scope of its provisions would be realised if we bear in mind the definition of
" industrial dispute " given by s. 2(k), of " wagesby s. 2(rr),
" workman " by s. 2(s), and of " employer by s. 2(g). Besides,
the definition of public utility service prescribed by s. 2(m) is very
significant. One has merely to glance at the six categories of public utility
service mentioned by s. 2(m) to realise that the rule of construction on which
the appellant relies is inapplicable in interpreting the definition prescribed
by s. 2(j).
There is another point which cannot be
ignored. Section 2(j) does not define " industry " in the usual
manner by prescribing what it means: the first clause of the definition gives
the statutory meaning of " industry " and the second clause
deliberately refers to several other items of industry and brings them in the definition
in an inclusive way. It is obvious that the words used in an inclusive
definition denote extension and cannot be treated as restricted in any sense.
(Vide: Stroud's " Judicial Dictionary ", Vol. 2, p. 1415). Where we
are dealing with an inclusive definition it would be inappropriate to put a
restrictive interpretation upon terms of wider denotation.
Besides, it would be relevant to point out
that too much reliance cannot be placed on what are described as the essential
attributes or features of trade or business as conventionally understood. The
conventional meaning attributed to the words "trade and business" has
lost some of it validity for the purpose of industrial adjudication.
Industrial adjudication has necessarily to be
aware of the current of socioeconomic thought around; it must recogiiise that
in the modern welfare State healthy industrial relations are a matter of
paramount importance and its essential function is to assist the State by
helping a solution of industrial disputes which constitute a distinct and
persistent phenomenon of modern industrialised States. ~In attempting to solve
industrial disputes industrial adjudication does not and should not adopt a doctrinnaire
approach. It must evolve some working principles and should generally avoid
formulating or adopting abstract generalisations. Nevertheless it cannot harp
back to old-age notions about the relations between employer and employee or to
the doctrine of laissez faire which then governed the regulation of the said relations.
That is why, we think, in construing the wide
words used in s. 2(j) it would be erroneous to attach undue importance to
attributes associated with business or trade in the popular mind in days gone
It is clear, however, that though s. 2(j)
uses words of very wide denotation, a line would have to be drawn in a fair and
just manner so as to exclude some callings, services or undertakings. If all
the words used are given their widest meaning, all services and all callings
would come within the purview of the definition; even service rendered by a
servant purely in a personal or domestic matter or even in a casual way would
fall within the definition. It is not and cannot be suggested that in its wide
sweep the word "service" is intended to include service howsoever
rendered in whatsoever capacity and for whatsoever reason. We must, therefore,
consider where the line should be drawn and what limitations can and should be
reasonably implied in interpreting the wide words used in s. 2(j); and that no
doubt is a somewhat difficult problem to decide.
It is true that under the old-world notion
prevailing under the capitalist form of society industry generally means an
economic activity involving investment of capital systematically carried on for
profit for the production or sale of goods by the employment of labour. When it
is urged by the appellant that an undertaking should be analogous to trade or
business what is really intended is that unless the undertaking in question
shares the aforesaid essential features associated with the conventional notion
of trade or 877 business it should not be treated as falling under s. 2(j).
There are two serious difficulties in
accepting such a suggestion, and indeed the appellant concedes the presence of
these two difficulties. It is not disputed that under s. 2(j) an activity can
and must be regarded as an industry even though in carrying it out profit
motive may be absent.
It is also common ground that the absence of
investment of any capital would not make a material difference to the
applicability of s. 2(j). Thus, two of the important attributes conventionally
associated with trade or business are not necessarily predicated in
interpreting s. 2(j).
What then can be said to be the attributes or
features which should be common between trade and business on the one hand and
an undertaking and other items mentioned in s. 2(j) on the other ? It would be
possible to exclude some activities from s. 2(j) without any difficulty.
Negatively stated the activities of the Government which can be properly
described as regal or sovereign activities are outs idly the scope of s. 2(j).
These are functions which a constitutional
Government can and must undertake for governance and which no private citizen
can undertake. This position is not in dispute. An attempt is, however, made by
the appellant to suggest that in view of the Directive Principles enunciated in
Part IV of the Constitution and in view of the ideal of a welfare State which
has been placed before the country, Governments, both at the level of the
States as well as at the Centre, undertake several welfare activities; and the
argument is that the field of governmental or regal activities which are
excluded from the operation of s. 2(j) should be extended to cover other
activities undertaken by the Governments in pursuit of their welfare policies.
In our opinion, this contention cannot be accepted . The activities which do
not fall within s. 2(j) and which are described as governmental or regal or
sovereign have been pithily described by Lord Watson as "the primary and
inalienable functions of a constitutional Government" (Vide: Coomber v.
Justices of Berks(1) ); and it is only these activities that are outside the
scope of s. 2(j). It sounds incongruous and self- contradictory (1) (1883) App.
878 to suggest that activities undertaken by
the Government in the interests of socioeconomic progress of the country as
beneficial measures should be exempted from the operation of the Act which in
substance is a very important beneficial measure itself In this connection it
would be relevant to point out that the definition of the word
"employer" given by s. 2(g) is not without significance: an
"employer" means under s.
2(g)(i) "in relation to an industry
carried on by or under the authority of any department of the Central
Government or State Government authority prescribed in this behalf, or where no
authority is prescribed the head of the department." This definition
clearly indicates that the Legislature intended the application of the Act to
activities of the Government which fall within s. 2(j).
In considering the question as to whether the
group of Hospitals run by the appellant undoubtedly for the purpose of giving
medical relief to the citizens and for helping to impart medical education are
an undertaking or not, it would be pertinent to enquire whether an activity of
a like nature would be an undertaking if it is carried on by a private citizen
or a group of private citizens. There is no doubt that if a hospital is run by
private citizens for profit it would be an undertaking very much like the trade
or business in their conventional sense. We have already stated that the
presence of profit motive is not essential for bringing an undertaking within
s. 2 (j). If that be so, if a private citizen runs a hospital without charging
any fees from the patients treated in it would nevertheless be an undertaking
under s. 2(j). Thus the character of the activity involved in running a
hospital brings the institution of the hospital within s. 2(j). Does it make
any difference that the hospital is run by the Government in the interpretation
of the word "undertaking" in s. 2(j) ? In our opinion, the answer to
this question must be in the negative. It is the character of the activity
which decides the question as to whether the activity in question attracts the
provision of s. 2(j); who conducts the activity and whether it is conducted for
profit or not do not make a material difference.
879 We have yet to decide which are the attributes
the presence of which makes in activity an under taking within s. 2(j), on the
ground that it is analogous to trade or business. It is difficult to state
these possible, attributes definitely or exhaustively; as a working principle
it may be stated that an activity systematically or habitually undertaken for
the production or distribution of goods or for the rendering of material
services to the community at large or a part of such community with the help of
employees -is an. undertaking. Such an activity generally involves the co-
operation of the employer and the employees; and its object is the satisfaction
of material human needs. It must be organised or arranged in a manner in which
trade or business is generally organised or arranged. It must not be casual nor
must it be for oneself nor for pleasure. Thus the manner in which the activity
in question is organised or arranged, the condition of the co-operation between
employer and the employee necessary for its success and its object to render material
service to the community can be regarded as some of the features which are
distinctive of activities to which s. 2(j) applies. Judged by this test there
would be no difficulty in holding that the State is carrying on an undertaking
when it runs the group of Hospitals in question.
Is quid pro quo necessary for bringing an
activity under s. 2(j) ? It has been urged before us that though profit motive
may not be essential, it is nevertheless necessary that the person who carries
on the activity should receive some consideration in return ; and it is only if
the test of quid pro quo is satisfied that an activity should be treated as an
undertaking. Though this argument is put in a slightly different form, in
substance it is really based on the idea that profit motive is necessary to
make any activity an undertaking analogous to trade or, business. If the
absence of profit motive is immaterial why should an activity be excluded from
s. 2(j) merely because the person responsible for the conduct of the activity
expects no consideration, does not want any quid pro quo and is actuated by
philanthropic or charitable motive ? In our opinion, in deciding the question
as 112 880 to whether any activity in question is an undertaking under s. 2(j)
the doctrine of quid pro quo can have no application. Therefore, we are
satisfied that the High Court was right in coming to the conclusion that the
conduct and running of the group of Hospitals by the appellant amounted to an
undertaking under s. 2 (j) and the relevant provisions of the Act were
In this connection it would be relevant to
refer to the fact that in the First Schedule to the Act which enumerates
industries which may be declared as public utility service under s. 2(n)(vi),
three entries have been added by Act 36 of 1956. They are Defence
Establishment, services in hospitals and dispensaries, and Fire, Brigade
service. In other words, by the addition of these three entries the Leo-
islature has clearly indicated its intention that service in hospitals and
dispensaries can be declared to be a public utility service under s. 2(n)(vi);
and there is no doubt that unless the service in hospitals falls under s. 2(j)
and is treated as an industry it cannot be declared to be a public utility
service. It is true that this particular entry had not been included in the
First Schedule at the time when the present reference wag made, but its
subsequent inclusion can be reasonably taken as evidence of legislative
intention, and, if on a construction of s. 2(j) we have independently reached
the conclusion that service in hospitals is service or the conduct of hospitals
is an undertaking, we may reasonably seek to derive corroboration to our
conclusion by this subsequent legislative enactment,.
After the addition of the relevant entry in
the First Schedule it would not be open to anybody to suggest that service in
hospitals does not fall under s. 2(j).
It now remains to consider some of the
decisions to which our attention was invited. In D. N. Banerji v. P. R. Mukherjee
& Ors. (1), this Court was dealing with a a industrial dispute raised by
the Municipal Workers' Union of the Budge Budge Municipality, on behalf of the
Sanitary Inspector and Head Clerk of the said Municipality on the ground that
the dismissal of the said two Municipal employees was unjustified and (1)
881 illegal, and that they were entitled to
an order of reinstatement. The dispute thus referred to the Industrial Tribunal
was decided in favour of the Union and an award was made directing the
Municipality to reinstate the said two employees. The Municipality then took
the matter to the High Court at Calcutta by means of a petition for a writ of
certiorari under Arts. 226 and 227 of the Constitution. It was urged in support
of the petition that the Act was inapplicable to the dispute in question and
that there was really no industrial dispute which could be validly referred to
the Industrial Tribunal. Other contentions were also raised but it is
unnecessary to refer to them. The High Court rejected all the pleas raised by
the Municipality and dismissed the application for a writ. The Municipality
then brought the dispute to this Court under Art. 132(1) of the Constitution.
This Court dismissed the appeal preferred by the Municipality and confirmed the
order of the High Court.
In dealing with the appeal this Court laid
down certain propositions which are relevant for our purpose in the present
appeal. It was observed that " in determining the meaning of the word
" industry " and " industrial dispute " it was necessary to
leave aside the original meaning attributed to the words in a simpler state of
society; then the contention of the Municipality that its activities in
question did not amount to an industry were dealt with in these words: "
The only ground on which one could say that what would amount to the carrying
on of an industry if it is done by a private person ceases to be so if the same
work is carried on by a local body like the Municipality is that in the latter
there is nothing like the investment of any capital or the existence of a
profit earning notice as there generally is in a business. But neither the one
nor the other seems a sine qua non or necessary element in the modern
conception of industry ". It is because of this positive decision that the
appellant has fairly conceded in the course of the argument before us that the
absence of the profit motive or of investment of capital would not make a
material difference in determinig the character of an activity this court has
also examined the other relevant factors pertaining 882 to the construction of
the word " industry " and industry dispute" and has declared its
decision thus; Having regard to the definitions found In our Act the aim or
objective that the Legislature had in view and the nature, variety and range of
disputes that occur between employers and employees, were forced to the
conclusion that the definitions in our Act include also disputes that right
arise between municipalities and their employees in branches of work that can
be said to be analogy to the carrying out of a trade or business ". In the
present appeal we have to decide the question as to ",hat attributes or
features can be said to make an activity in question analogous to trade or
business. Incidentally we may add that quite apart from the relevant
considerations which we have already discussed it would be difficult to suggest
that though the sanitary department of a local body is an undertaking under s.
2(j) a hospital run by a Government is not.
This decision has been referred to by this,
Court in Baroda Borough Municipality v. Its Workmen (1), and it has been
observed that it is now finally settled that a municipal undertaking of the
nature with which the court was then concerned is an industry within the
meaning of the definition of that word in s. 2(j) of the Act and that the
expression" industrial dispute " in that Act includes disputes
between municipalities and their employees in branches of work that can be
regarded as analogous to the carrying on of a trade or business. In that case
this Court was concerned with the claim for bonus made by the workmen of the
Baroda Borough Municipality and it was rejected;
comment has been made by learned counsel on
some of the grounds accepted by this Court in support of its final decision,
but in the present appeal we are not concerned with the claim for bonus and it
is not necessary for us to refer to the said comment or to deal with it.
So far as the decisions of the Industrial
Tribunals are concerned it appears that the Labour Appellate Tribunal has held
as early as 1952 that a hospital is an undertaking within the meaning of s.
2(j). In (1) S.C.R. 33.
883 Sri Vishuddhananda Saraswathi Marwari
Hospital v. Their Workmen (1) the, Labour Appellate Tribunal considered at
length the policy and object of the Act, several judgments cited before it and
came to the conclusion that the definition of industry in s. 2(j) was of wide
amplitude and that there was no good reason for cutting down its natural meaning
so as to limit its operation to profit-making enterprises only. It has not been
suggested before us that this view has ever been doubted or dissented from in
any subsequent industrial adjudication.
In judicial discussions about the scope and
character of the concept of industry as it has developed in a modern democratic
State the decision of the High Court of Australia in The Federated State School
Teachers' Association of Australia And The State of Victoria& Ors (2), is
generally cited. In that case, according to the majority decision it was held
that the educational activities of the State carried on under the appropriate
statutes and statutory regulations of each State relating to education did not
constitute an industry with the meaning of s. 4 of the Commonwealth
Conciliation and Arbitration Act, 1904-1928 ;
that the occupation of teachers so employed
was riot an industrial occupation; and that the dispute which existed between
the State and the teachers employed by them was therefore, not an industrial
dispute within s. 51 (xxxv) of the Constitution. Isaacs J., however, struck an
emphatic note of dissent, and the principles enunciated in this note of dissent
have received approval from industrial tribunals in this country, and they have
been rightly accepted by the Bombay High Court as affording valuable assistance
in deciding the question in the present proceedings. Isaacs J.
has uttered a note of caution that in dealing
with industrial disputes industrial adjudicators must be conversant with the current
knowledge on the subject and they should not ignore the constant currents of
life, around them for otherwise it would introduce a serious infirmity in their
approach. Dealing with the general characteristics of industrial enterprises
the learned judge observed (1)  II L.L.J. 327.
(2)  4 C.L.R. 569.
884 that they contribute more or less to the
general welfare of the community; and he has reiterated his earlier
observations on the point in these words: "Industrial disputes occur when
in relation to operations in which capital and labour are contributed in
co-operation for the satisfaction of human wants or desires, those engaged in
co-operation dispute as to basis to be observed by the parties engaged,
respecting either a share of the product or any other terms or conditions of
their co-operation ".
According to the learned judge, the question
must always be decided by determing the true character of the activity in
question. It is these tests which the High Court has applied in deciding the
present dispute and we are in general agreement with the decision of the High
Court. We ought to make it clear that in the present appeal we are not
expressing any opinion on the question as to whether running an educational
institution would be an industry under the Act; that question does not arise in
the present proceedings.
There are two more decisions to which
reference may be made before we part with this appeal. In Brij Mohan Bagaria
And Chatterjee (N.C.) & Ors. (1), the Calcutta High Court was dealing with
a dispute between an attorney of the court and some of his employees who bad
been dismissed by him; and it was held that the said dispute was outside the
purview of the Act. Sinha J., who heard the petition filed by the attorney,
observed that " however extended the meaning be given to the word industry
or to industrial dispute or to undertaking or calling we cannot include within
their concept the case of an individual who carries on a profession dependent
upon its own intellectual skill ". The learned judge has then added that
" every case must be decided upon its own facts ". It appears that,
according to the learned judge, if an attorney or a doctor or a lawyer who
follows a liberal profession, the pursuit of which depends upon his own education,
intellectual attainments and special equipment, engages employees, that would
not mean that the employer is engaging in an industry under s. 2(j);
but with the question of the attorney or
doctor (1) (1958) 11 L.L.J. 190.
885 or the lawyer we are not directly
concerned in the present appeal. We have, however, referred to this decision
because, in the course of discussion, the learned judge has expressed his
dissent from the view taken by the Bombay High Court in regard to hospitals,
and we wish to make it clear that, in our opinion, the criticism made by the
learned judge against the inclusion of hospitals within s. 2(j) is not
well-founded. Dealing with a similar case of an attorney, the Bombay High Court
has taken the same view in National Union of Commercial Employees & Anr.
And Meher (M.R.) & Ors. (Pereira Fazalbhoy & Co.) (1).
We would accordingly bold that the High Court
was right in holding that the dispute between the appellant and the respondents
was an industrial dispute to which s. 251' of the Act applied. The order passed
by the High Court on the writ petition filed by the respondents is confirmed
and the appeal is dismissed with costs.