The Corporation of The City of Nagpur
Vs. Its Employees  INSC 43 (10 March 1960)
GUPTA, K.C. DAS
CITATION: 1960 AIR 675 1960 SCR (2) 942
CITATOR INFO :
R 1963 SC1681 (12) E 1963 SC1873 (15,18) E
1968 SC 554 (10) RF 1969 SC 530 (2A) R 1972 SC 763 (12) E&R 1978 SC 548
(4,66,67,70,75,77,84,85,92,115 D 1981 SC2101 (5) RF 1988 SC 782 (65) R 1988
SC1182 (12) RF 1988 SC1353 (4) RF 1988 SC1700 (4) RF 1990 SC2047 (7)
Industrial Dispute-Services undertaken by
City CorporationIf and when industry Test-'Industry'. Meaning of-Central
Provinces and Berar industrial Disputes Settlement Act, 1947 (C.P. & Beray
XXIII of 1947). S. 2 (14) -City of Nagpur Corporation Act. 1948 (Madhya Pradesh
2 of 1950).
The question for determination in these
appeals was whether and to what extent the municipal activities of the
Corporation of 943 Nagpur City fell within the term 'industry' as defined by s.
2 (14.) of the C.P. and Berar Industrial Disputes Settlement Act, 1947.
Disputes having arisen between the said Corporation and its employees in its
various departments, the State Government referred them for adjudication to the
State Industrial Court under s. 39 of the Act and that Court by its award held
that the Corporation and all its departments were covered by the said
definition. Against that award the Corporation made an application to the High
Court under Art. 26 of the Constitution. The High Court rejected its contention
that the Corporation was not an industry within the meaning of the said section
and remanded the case to the Industrial Court for determination as to which of
its departments fell within the definition and making an award accordingly.
Thereafter The Industrial Court found all the
departments of the Corporation except those dealing with (1) assessment and
levy of house-tax (2) assessment and levy of Octroi, (3) removal of
encroachment and removal and pulling down of dilapidated houses, (4) prevention
and control of food adulteration, and (5) maintenance of cattle pounds, to be
industries within the meaning of the definition and passed its award
accordingly. The Corporation appealed to this Court by special leave but there
was no appeal on behalf of the employees of the five departments excluded from
Held, that the decision of the Industrial
Court except so far as it related to the five departments in respect of which
the re was no appeal, must be affirmed.
The definition of the word 'industry' in S. 2
(14) of the C.P. and Berar Industrial Disputes Settlement Act, 1947, although
in a language somewhat different from that of S. 2 (1) of the Industrial
Disputes Act, 1947, is very comprehensive. It is in two parts, cl. (a) defines
it from the standpoint of employers and cl. (b) from that of the employee. An
activity that falls within any of the two clauses must be -,in industry.
D.N. Banerji v. P. R. Mukherjee  S.C.R.
302 and Baroda Borough Municipality v. Its Workmen.  S.C.R. 33, applied.
It is not necessary that an activity of the
Corporation must share the common characteristics of an industry before it can
come within the section. The words Of S. 2 (14) of the Act are clear and unambiguous
and the maxim noscitur a socii can have no application. The history of
industrial disputes and the legislation, however, recognises the basic concept
that the activity must be an organised one and not one that pertains to private
or personal employment.
State of Bombay v. The Hospital Mazdoor
Sabha.  2 S.C.R. 866 and Heydon's Case (1584) 3 Rep. 7 b., referred to.
But the definition, however wide, cannot
include the regal, primary and inalienable, functions of the State though
statutorily delegated to a corporation and the ambit of such functions cannot
be extended so as to include the welfare activities of a modern state and must
be confined to legislative power, administration of law and judicial power.
120 944 Richard Coomber v. The Justices of
the County of Berks, Berks.(1883-84) 9 A.C. 61 and The Federated State School
Teachers' Association of Australia v. The State of Victoria.
(1928-29) 41 C.L.R. 569, County Council of
Middlesex v. Assessment Committee of St. George's Union. (1896) 2 Q.B.D. 143,
Verisimo Vasquez Vilas v. City of Manila, 220 U. S. 345, and The Federated
Municipal and Shire Council Employees' Union of Australia v. Mclbourne
(1918-19) 26 C.L.R. 508, referred to.
The real test as to whether a service undertaken
by acorporation is an industry must be whether that service, if' performed by
an individual or a private person, would be an industry. Monetary cosideration
cannot be an essential characteristic of industry in a modern State. It was,
therefore, incorrect to say that only such activities as were analogous to
trade or business could come within S. 2 (14) of the Act.
D. N. Banerji v. P.R. Mukherjee, 
S.C.R. 302, explained.The Federated Municipal and Shire Council Employees'
Union of Australia v. Melbourne Corporation.
(19l8-19) 26 C.L.R. 508, Federated
Engine-Drivey and Fireme's Association and Ors. v. The Broken Hill Proprietary
Company Limited and Ors. (1913) 16 C.L.R. 23 5 and The Federated State School
Teachers' Association Australia v. The State of Victoria, (1929) 41 C.L.R. 569,
Where a service rendered by a Corporation is
an industry, the employees of the departments connected with that service,
whether financial, administrative or executive, would be entitled to the
benefits of the Act.
Baroda Borough Municipality v. Its Workmen.
33, referred to.
If a department of a municipality discharges
many functions, some within and some without the definition of industry given
by the Act, the predominant functions of the department shall be the criterion
for the purposes of the Act.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 143 & 144 of 1959 and 545 of 1958.
Appeals by special leave from the Award dated
December 14, 1957, of the State Industrial Court at Nagpur in Industrial
References Nos. 18 of 1956 and I of 1957 respectively.
C. B. Aggarwala, S. N. Andley, J. B.
Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellants (in all the
A. V. Viswanatha Sastri, W.S. Barlingay, S.
W. Dhabe, Shanker Anand and A. G. Ratnaparkhi, for respondent No. 2 (in C. A.
No. 144/59 and respondent (in C. A. No. 143 of 1959).
H. R. Khanna and R. H. Dhebar, for respondent
No. 3 (in C.A. No. 144/59.) 945 A. V. Viswanatha Sastri, W. S. Barlingay,
Shankar Anand and A. G. Ratnaparkhi, for the respondents (in C.A. No. 545 of
1960 Feb. 10. The Judgment of the Court was
delivered by SUBBA RAO, J.-This batch of three connected appeals raises the
question whether and to what extent the activities of the Corporation of the
City of Nagpur come under the definition of "industry" in s. 2(14) of
the C.P. & Berar Industrial Disputes Settlement Act, 1947 (hereinafter
called the Act).
The appellant is the Corporation of the City
of Nagpur constituted under the City of Nagpur Corporation Act, 1948 (Madhya
Pradesh Act No. 2 of 1950). Disputes arose between the Corporation and the
employees in various departments of the Corporation in respect of wage scales,
gratuity, provident fund, house rent, confirmation, allowances etc.
The Government of the State of Madhya Pradesh
by its order dated October 23, 1956, referred the said disputes under s. 39 of
the Act to the State Industrial Court, Nagpur and the reference was numbered as
Industrial Reference No. 18 of 1956. The appellant filed a statement before the
Industrial Court questioning the jurisdiction of that Court, inter alia, on the
ground that the Corporation was not an industry as defined by the Act. On
February 13, 1957, the Industrial Court made a preliminary order holding that
the Corporation was an industry and that the further question whether any
department of the Corporation was an industry or not, would be decided on the
evidence. The appellant challenged the correctness of that order by filing a
petition under Art.
226 of the Constitution in the High Court of
Bombay at Nagpur, but that petition was dismissed, as the award was made before
its hearing. On June 3, 1957, the Industrial Court made an award holding that
the Corporation was an industry and further that all departments of the
Corporation were covered by the said definition. It also revised the pay scales
of the employees and accepted the major demands made by them. On July 15, 1957,
the appellant again filed a petition in the High Court of Bombay at Nagpur, 946
questioning the validity and the, correctness of the aid award. A division
bench of the said High Court, by its order dated September 11, 1957, rejected
the contention of the appellant that the, Corporation was not an industry as
defined by the Act and remanded the case to the State Industrial Court to
decide the activities of which departments of the Corporation fell within the
definition of "industry" given in the Act and to re-examine the
schedules and categories of persons and to restrict the award to the persons
concerned within the definition of the word "industry" in the Act. On
remand, the said Industrial Court scrutinized the activities of each of the
departments of the Corporation and hold that all the departments of the
Corporation, except those dealing with (i) assessment and levy of house-tax,
(ii) assessment and levy and pulling down of dilapidated houses, (iv)
prevention and control of food adulteration and (v) maintenance of cattle
pounds, were covered by the definition of "industry" under the Act.
It further gave findings in regard to the disputes between be parties and also
as to the persons entitled to the reliefs.
It is not necessary to give the particular-.
of the findings arrived at or the relief given by the Industrial Court, as
nothing turns upon them in this appeal. The appellant by special leave filed in
this Court Civil Appeal No. 143 of 1959 against the award of the Industrial
Court. It also filed in this Court by special leave Civil Appeal No. 144 of
1959 against the order of the High Court holding that the activities of the
Corporation came under the definition of "industry" in the Act and
remanding the case to the Industrial Court for decision on merits in respect of
each of the activities of the Corporation.
Civil Appeal No. 545 of 1958, the third
appeal in this batch, arises out of a reference made by the State Government of
Madhya Pradesh in regard to the disputes between the appellant, i.e. the
Corporation of the City of Nagpur, and the employees of the Corporation in the Fire
]Brigade Department, representing themselves and other employees. The said
reference was numbered as Industrial Reference No. 1 947 of 1957. As there was
overlapping of the disputes raised in Industrial Reference No. 18 of 1956 and
Industrial Reference No. 1 of 1957, the Industrial Court heard both the
references together and, by consent, the evidence in Reference No. 18 of 1956
was treated as evidence in Reference No. 1 of 1957. On December 14, 1957, an
award was made in Reference No. 1 of 1957 and it was based on the findings in
the award made in Reference No. 18 of 1956. The Industrial Court held that the
Fire Brigade ]Department was an industry within the meaning of the Act and, on
that basis, gave the necessary reliefs to the employees.
Mr. Aggarwala, learned counsel appearing for
the appellant in the first two appeals, raised before us the following points:
(1) No service rendered by the Corporation would be an industry as defined by
s. 2(14) of the Act. (2) Assuming that some of the services of the Corporation
are comprehended by the definition of " industry " in the Act, the
said services, in order to satisfy the definition, must 'be analogous to a
business or trade. (3) Even otherwise, the activities of the Corporation to be
called industry must partake the common characteristics of an industry. (4)
The, finding of the Industrial Court holding that the various departments of
the Corporation are industries is not correct, as the services rendered by the
said departments do not satisfy either of the aforesaid two tests.
The first question need not detain us, for it
has now been finally decided by two decisions of this Court against the
appellant. In D. N. Banerji v. P. R. Mukherjee (1), the chairman of a
municipality dismissed two of its employees, namely, the Sanitary Inspector and
the Head Clerk, and the Municipal Workers' Union questioned the propriety of
the dismissal and claimed that they should be reinstated and the matter was
referred by the Government to the Industrial Tribunal for adjudication under
the Industrial Disputes Act.
In that case two questions were raised before
this Court-one was whether the said dispute was industrial dispute within the
948 meaning of s. 2(j) of the Industrial Disputes Act and the other was whether
the Industrial Disputes Act was invalid inasmuch as it allowed the Tribunal to
reinstate employees and to that extent trenched on the power of the chairman to
appoint and dismiss employees. This Court held that the Act was not invalid, as
it was in pith and substance a law in respect of industrial and labour disputes
and that the conservancy service rendered by the municipality was an industry
and the dispute between the municipality and the employees of the conservancy
department was an industrial dispute within the meaning of the Industrial
Disputes Act. This decision was followed by this Court in Baroda Borough
Municipality v. Its Workmen (1). In that case the effect of the earlier
decision was summarized thus, at p. 38:
" It is now finally settled by the
decision of this Court in D. N. Banerji v. P. R. Mukherjee (2) that a municipal
undertaking of the nature we have under consideration here is an "
industry " within the meaning of the definition of that word in s. 2(j) of
the Industrial Disputes Act, 1947, 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 the workmen employed in the
electricity department of the Baroda Municipality demanded bonus. The
electricity undertaking of the Baroda Municipality was held to be an industry
and the dispute between the Municipality and its employees an industrial
dispute. Bonus was refused on other grounds and we are not concerned with that
aspect of the case here. These two cases, therefore, have finally and
authoritatively held that municipal undertakings could be " industry
" within the meaning of the Industrial Disputes Act.
A faint argument is attempted to sustain a
distinction between the definition of an "industry" in the Industrial
Disputes Act and the definition of the same word in the Act in question.
Section 2(j) of the (1)  S.C.R. 33.
(2)  S.C.R. 302 949 Industrial Disputes
Act defines " industry " to mean any business, trade, undertaking,
manufacture or calling of employers and to include any calling service,
employment, handicraft, or industrial occupation or avocation of workmen
". Section 2(14) of the Act divides the definition into three parts,
namely, " (a) any business, trade, manufacturing or mining undertaking or
calling of employers, (b) any calling, service, employment, handicraft or
industrial occupation or avocation of employees, and (c) any branch of an
industry or a group of industries." A comparative study of these two
sections brings out the following differences: While the definition of "
industry " in the Industrial Disputes Act means certain things and
includes others, the definition of " industry " in the Act includes
the three categories described therein; while the definition in the former Act
places 'undertaking' in a category different from ' manufacturing or mining ' ,
in the latter Act it is qualified by the words 'manufacturing or mining'. In
our view these differences do not justify us in taking a different view from
that accepted by this Court in the foregoing decisions. Clause (a) of the
definition defines industry with reference to the employers and cl. (b) with
reference to the employees. Excluding the words "manufacturing or mining
undertaking " from cl. (a) of the definition, the other words in cls. (a)
and (b) thereof are comprehensive enough to take in all the categories which
the definition of "industry" in the Industrial Disputes Act will take
in. That apart, a perusal of the decision of this Court in D. N. Banerji v. P.
R. Mukherjee (1) does not indicate that this Court would have come to a
different conclusion if the word " undertaking " in the Industrial Disputes
Act was qualified by the words " manufacturing or mining ". The
decision was founded on a broader basis, having regard to the history of the
legislation, the cognate definitions in the Act and the inclusive part of the
definition corresponding to s. 2(14)(b) of the Act. We, therefore, hold that a
service rendered by a corporation, if it complies with the conditions implicit
in the definitionwhich we would consider at a later stage (1)  S.C.R. 302
950 of the judgment-will bean " industry " within th meaning of the
definition in the Act.
The next question is whether activity of the
Corporation is not " industry " unless it shares the common
characteristics of an industry. The following five characteristics are stated
to be the conditions implicit in the definition: (i) the activity must concern
the production or distribution of goods or services; (ii) it must be to serve
others but not to oneself; (iii) it must involve cooperative effort between
employer and employer between capital an labour; (iv) it must be done as a
commercial transaction and (v) it must not be in exercise of pure governmental
We have considered this aspect in State of
Bombay v. The Hospital Maazdoor Sabha (1) in the context of the definition of
" industry " in the Industrial Disputes Act and formulated certain
broad principles. But as this case is concerned with the definition of
"industry" in a different Act, we shall briefly resurvey the law on
the subject with specific reference to a corporation.
Let us scrutinize the definition of "
industry " to ascertain whether all or some of the conditions are implicit
in the definition and whether the said conditions constitute the necessary
basis for it. The true meaning of the section must be gathered from the
expressed intention of the Legislature. Maxwell in his book "On the
Interpretation of Statutes", 10th Edn., rightly points out at p. 2 that
" If the words of the statute are in themselves precise and unambiguous no
more is necessary than to expound those, words in their natural and ordinary
sense, the words themselves in such case best declaring the intention of the
legislature ". The words used in the section are clear and unambiguous and
they prima facie are of the widest import.
We have pointed out that the section is in
two parts: cl. (a) defines " industry " with reference to employers
and cl. (b) defines it with reference to employees. Clause (c) extends the
definition to any branch of an industry or a group of industries, i.e.,
industries Coming within the definition of cls. (a) and (b). It is said that in
(1) 2 S.C.R. 866.
951 construing the definition we must adopt
the rule of construction noscuntur a sociis. Maxwell explains this doctrine at
p. 332 thus:
" When two or more words which are
susceptible of analogous meaning are coupled together noscuntur a sociis. They
are understood to be used in their cognate sense. They take, as it were, their
colour from each other, that is, the more general is restricted to a sense
analogous to the less general." On the basis of this doctrine, it is
argued that the words following the words " any business, trade,
manufacturing or mining undertaking " shall partake the characteristics of
any business, trade, manufacturing or mining undertaking, and the words "
any calling, service, employment, handicraft or industrial occupation or
avocation of employees " shall share the qualities of an industrial
occupation or avocation. In other words, the general word " calling "
in cl. (a) is controlled by the words preceding it, and the general words
" calling, service etc." in cl.
(b) are restricted by the succeeding words
" industrial occupation or avocation ". This doctrine was dealt with
by this Court in State of Bombay v. The Hospital Mazdoor Sabha (1). Therein
this Court has considered the scope of this doctrine and has observed thus:
" 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. It is only
where the intention of the Legislature in associating wider words with words of
narrower significance is doubtful that the present rule of construction can be
usefully 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 is clear and free of ambiguity, the rule of construction in
question cannot be pressed into service.
The said doctrine, therefore, cannot be
invoked in cases where the intention of the Legislature is clear and free of
ambiguity. The phraseology used in the (1)  2 S.C.R. 866 952 section is
very clear and it is not susceptible of any ambiguity. The words used in the
first part of cl. (b) are unqualified; and the qualification is introduced only
in the later part. If the words " calling, service, employment, handicraft
" are really intended to be qualified by the adjective " industrial
", one should expect the Legislature to affix the adjective to the first
word " calling " rather than to the last word "
occupations." The inclusive definition is a well recognized device to
enlarge the meaning of the word defined, and, therefore, the word ,
"industry " must be construed as comprehending not only such things
as it signifies according to its natural import but also those things the
definition declares that it should include: see Stroud's Judicial Dictionary,
Vol. 2, p. 1416.
So construed, every calling, service,
employment of an employee or any business, trade or calling of an employer will
be an industry. But such a wide meaning appears to overreach the objects for
which the Act was passed. It is, therefore, necessary to limit its scope on
permissible grounds , having regard to the aim, scope and the object of the
whole Act. To arrive at the real meaning of the words, Lord Coke in Heydon's
case, (1) says that the following matters are to be considered: (1) What was
the law before the Act was passed ; (2) What was the mischief or defect for
which the law had not provided; (3) What remedy Parliament hap, appointed; and
(4) The reason of the, remedy. The word " employers " in el. (a) and
the word " employees " in cl.
(b) indicate that the fundamental basis for
the application of the definition is the existence of that relationship.
The cognate definitions of "industrial
dispute", "employer", " employee ", also support it.
The long title of the Act as well as its preamble show that the Act was passed
to make provision for the promotion of industries and peaceful and amicable
settlement of disputes between employers and employees in an organized activity
by conciliation and arbitration and for certain other purposes. If the preamble
is read with the historical background for the passing of the Act, it is
manifest that the Act was introduced as an (1) 3 Rep. 7 b.
953 important step in achieving social
justice. The Act seeks to ameliorate the service conditions of the workers, to
provide a machinery for resolving their conflicts and to encourage co-operative
effort in the service of the community. The history of labour legislation both
in England and India also shows that it was aimed more to ameliorate the
conditions of service of the labour in organized activities than to anything
The Act was not intended to reach the
personal services which do not depend upon the employment of a labour force.
Before considering the positive aspects of
the definition, what is not an industry may be considered. However wide the
definition of " industry " may be, it cannot include the regal or
sovereign functions of State. This is the agreed basis of the arguments at the
Bar, though the learned counsel differed on the ambit of such functions. While
the learned counsel for the Corporation would like to enlarge the scope of
these functions so as to comprehend all the welfare activities of a modern
State, the learned counsel for the respondents would seek to confine them to
what are aptly termed " the primary and inalienable functions of a
constitutional government ". It is said that in a modern State the
sovereign power extends to all the statutory functions of the State except to
the business of trading and industrial transactions undertaken by it in its
quasiprivate personality. Sustenance for this contention is sought to be drawn
from Holland's Jurisprudence, wherein the learned author divides the general
heading "Public Law " into four sab-heads and under the sub-head
"Administrative Law " he deals with a variety of topics including
welfare and social activities of a State. The treatment of the subject "
Public Law " by Holland and other authors, in our view, has no relevancy
in appreciating the scope of the concept of regal powers-which have acquired a
definite connotation. Lord Watson, in Coomber v. Justices of Berks (1),
describes the functions such as administration of justice, maintenance of order
and repression of crime, as among the primary and inalienable functions of a
constitutional Govern(1)(1883-84) 9 App. Cas, 61, 74 954 ment. Isaacs, J., in
his dissenting judgment in The Federated State School Teachers' Association of
the Australia v. The State of Victoria (1), concisely states thus at p. 585 Regal
functions are inescapable and inalienable.
Such are the legislative power, the
administration of laws, the exercise of the judicial power. Non-regal functions
may be assumed by means of the legislative power. But when they are assumed the
State .acts simply as a huge corporation, with its legislation as the charter.
Its action under the legislation, so far as it is not regal execution of the
law is merely analogous to that of a private company similarly authorised.
" These words clearly mark out the ambit of the regal functions as
distinguished from the other powers of a State.
It could not have been, therefore, in the
contemplation of the Legislature to bring in the regal functions of the State
within the definition of industry and thus confer jurisdiction on Industrial
Courts to decide disputes in respect thereof. We, therefore, exclude the regal
functions of a State from the definition of industry.
This leads us to the question whether the
Corporation can be said to exercise regal functions by legislative delegation.
The Corporation functions under a statute and
its powers, duties and liabilities are regulated by it. It is a juristic person
and it can sue and be sued in its name. The statute constituting it may confer
upon it some strictly regal functions and other municipal functions. In County
Council of Middlesex v. Assessment Committee of St. George's Union (2), certain
premises were used for the administration of justice and also for municipal
purposes. The question raised was whether the said premises were rateable and
the Court held that they were rateable in so far as they were occupied for
municipal purposes and not rateable in so fares they were occupied for the
administration of justice, which was held to be a function of the Crown. So
too, the Supreme Court of America in Verisimo Vasquez Vilas (1) (1929) 41
(2) (1896) 2 Q.B.D. 143.
955 v. City of Manila (1) expounded the dual
character of a municipal corporation thus:
" They exercise powers which are
governmental and powers which are of a private or business character. In the
one character a municipal corporation is a governmental subdivision, and for
that purpose exercises by delegation a part of the sovereignty of the State. In
the other character it is a mere legal entity or juristic person. In the latter
character it stands for the community in the administration of local affairs
wholly beyond the sphere of the public purposes for which its governmental
powers are conferred. " Isaacs and Rich, JJ., in The Federated Municipal
and Shire Council Employees' Union of Australia v. Melbourne Corporation (2) in
the context of the dual functions of State say much to the same effect at p.
" Here we have the discrimen of Crown
exemption. If a municipality either (1) is legally empowered to perform and
does perform any function whatever for the Crown., or (2) is lawfully empowered
to perform and does perform any function which constitutionally is inalienably
a Crown function-as, for instance, the administration of justice the
municipality is in law presumed to represent the Crown, and the exemption
applies. Otherwise, it is outside that exemption, and, if impliedly exempted at
all, some other principle must be resorted to. The making and maintenance of
streets in the municipality is not within either proposition." A
corporation may, therefore, discharge a dual function : it may be statutorily
entrusted with regal functions strictly so-called, such as making of laws,
disposal of certain cases judicially etc., and also with other welfare
The former, being delegated regal functions,
must be excluded from the ambit of the definition of "industry".
The next head of exclusion from the
definition is put by the learned counsel for the appellant thus : A
municipality in the modern polity is also a trading (1) 220 U.S. 345. 356; 55
L. Ed. 491, 495.
(2) (1918-19),26 C.L.R. 508, 530-531.
956 and industrial corporation and in that
capacity is empowered to carry on undertakings partaking the Character of
business and trade, and that the definition of "industry" in the Act
only takes in such undertakings and no other statutory activities. To state it
differently, the contention is that activities which partake the character of
trade and business in the hands of a private individual would be an industry if
undertaken by a corporation. Some observations made by this Court in D. N.
Banerji v. P. R.
Mukherjee (1) are relied upon in support of
Chandrasekbara Aiyar, J., speaking for the
Court made the following observations at p. 317:
"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 employees and
employees, we are forced to the conclusion that the definitions in our Act
include also disputes that might arise between municipalities and their employees
in branches of work that can be said to be analogous to the carrying out of a
trade or business." Emphasis is laid upon the words " analogous to
the carrying out of a trade or business" and an argument is built upon
those words to the effect that this Court held that only such activities of
municipalities analogous to trade or business would be industry within the
meaning of the definition of "industry" in the Act. This argument, if
we may say so, is the result of an incorrect reading of the decision. There the
question was whether the sanitary department of a municipality was an industry
within the meaning of the Industrial Disputes Act and whether the dispute
between the municipality and its employees in that department was an industrial
dispute there under. At p. 311, the learned Judge specifically deals with a
contention based upon the collocation of the words in the section and observes
"Though the word "undertaking"
in the definition of "industry" is wedged in between business and
trade on the one hand and manufacture on the other, and though therefore it
might mean only a business or trade undertaking, still it must be (1) 
S.C.R. 302 957 remembered that if that were so, there wag no need to use the
word separately from business or trade. The wider import is attracted even more
clearly when we look at the latter part of the definition which refers to
"calling, service, employment, or industrial occupation or avocation of
workmen." "Undertaking" in the first part of the definition and
"industrial occupation. or avocation" in the second part obviously
mean much more than what is ordinarily understood by trade or business. The
definition was apparently-intended to include within its scope what might Dot
strictly be called a trade or business venture." This passage leaves no
room for doubt that this Court construed the terms of the definition of
"industry" in a way which takes in activities which are not strictly
called trade or business. Therefore the words "not strictly be called a
trade or business venture" and the words "analogous to the carrying
out, of a trade or business" emphasize more the nature of the organised
activity implicit in a trade or business than to equate the other activities
with trade or business. This is made more clear by the learned Judge when be
expressly reserves the Court's opinion on a wider question in the following
words at p. 318:
"It is unnecessary to decide whether
disputes arising in relation to purely administrative work fall within their
ambit." We cannot, therefore, agree with the contention that the said
decision, when it expressly accepted the comprehensive meaning which the words
of the section naturally bear, intended to circumscribe the wide sweep of the
section to business or trade and activities in the nature of trade or business.
Nor a fair reading of the section bears out such a construction. We have
already indicated our view on the construction of the section, having regard to
the clear phraseology used therein, that the section cannot be confined to
trade or business or activities analogous to trade or business.
A more workable and reasonable test is laid
down in an Australian decision cited at the Bar, and that test has also been
accepted and applied by this Court. In Federated Engine-Drivers and Firemen's
Association 958 of Australia, and Others v. The Broken. Hill Proprietory
Company Limited and Others (1) a distinction was drawn between trading and
non-trading operations, but the question as to how far non-trading operations
attracted the definition of "industry" was left undecided. That
question fell to be decided in The Municipal and Shire Council Employees' Union
of Australia v. Melboure Corporation (2 ) and that decision, if we may say so,
is illuminating and throws considerable light on the question to be decided in
the present appeal. It was held by the High Court of Australia that the
Commonwealth Court of Conciliation and Arbitration had authority to determine
by award a dispute between an organization of employees registered in
connection with "municipal and shire councils, municipal trusts and
similar industries", and municipal corporations constituted under State
laws. The dispute there related to those operations of municipal corporations
which consisted of the making, maintenance, control and lighting of public
streets. The learned Judges discussed at length the meaning of the word
"industrial dispute" in s. 51 (XXXV) ofthe Constitution of Australia.
It is manifest from this decision that even activities of a municipality which
cannot be described as trading activities can be the subject-matter of an
industrial dispute. Isaacs, J.,in his dissenting judgment in The Federated
State School Teachers' Association of Australia v. The State of Victoria (3),
has concisely expressed this idea at p. 587 thus:
"The material question is: What is the
nature of the actual function assumed is it a service that the State could have
left to private enterprise, and, if so fulfilled, could such a depute be
"industrial" ?" This test steers clear of the argument that to
be an industry the activity shall be a trading activity. If a service performed
by an individual is an industry, it will continue to be so notwithstanding the
fact that it is undertaken by a corporation.
Another test suggested by the learned counsel
may be scrutinized. It is said that unless there is a (1) (1913) 16 C.L.R. 245.
(2) (1918-19) 26 C.L.R. 508, 530531 (3) (1929) 41 C.L.R. 569 959 quid pro quo
for the service, it cannot be an industry. This is the same argument, namely,
that the service must be in -the nature of trade in a different garb. This
Court in D. N. Banerji v. P. B. Mukherjee (1) has held that neither the
investment of capital or the existence of profitearning motive seems to beta
sine qua non or necessary element in the modern conception of industry. The
conception that unless the public who are benefited by the services pay in cash
for the services rendered to them, the services so rendered cannot be industry
is based upon an exploded theory.
As observed by Chandrasekhara Aiyar, J.,
"the conflicts between capital and labour have now to be determined more
from the standpoint of status than of contract". Isaac and Rich, JJ., in
The Fede rated Municipal and Shire Council Employees' Union of Australia v.
Melbourne Corporation (2) formulated the modern concept of industry at p. 554
" 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 the basis to be observed, by the parties engaged,
respecting either a share of the product or any other terms and conditions of
The learned Judges proceeded to state at p.
" The question of profit-making maybe
important from an income tax point of view, as in many municipal cases in
England; but, from an industrial dispute point of view, it cannot matter
whether the expenditure is met by fares from passengers or from rates. In each
case the 'municipality is performing a function; and in the one case it
performs it with a variation in contrast with the other.
Isaac, J., elaborated the theme in his
dissenting judgment in The Federated State School Teachers' Association of
Australia v. The State of Victoria (3) at p. 577 thus:
" The contention sounds like an echo
from the dark ages of industry and political economy............... Such
disputes are not simply a claim to share (1)  S.C.R. 302 (2) [1918-19] 26
C.L.R. 508, 539-531.
122 (3)  41 C.L.R. 569.
960 the material wealth jointly produced and
capable of registration in statistics. At heart they are a struggle, constantly
becoming more intense on the part of the employed group engaged in co-operation
with the employing group in rendering services to the community essential for a
higher general human welfare, to share in that welfare in a greater degree. All
industrial enterprises contribute more or less to the general welfare of the
community, and this is a most material consideration when we come to determine
the present question apart from the particular contention raised at the Bar.
Monetary considerations for service is,
therefore, not an essential characteristic of industry in a modern State.
The learned counsel then sought to demarcate
the activities of a municipality into three categories, namely, (i) the
activities of the department which performs the services;
(ii) those of the department which only
impose taxes, collect them and administer them; and (iii) those of the
departments which are purely in administrative charge of other departments. We
do not see any justification for this artificial division of municipal
activities. Barring the regal functions of a municipality, if such other
activities of it, if undertaken by an individual, would be industry;
then they would equally be industry in the
hands of a municipality. It would be unrealistic to draw a line between a
department doing a service and a department controlling or feeding it.
Supervision and actual ,performance of service are integral part of the same
activity. In other words, whether these three functions are carried out by one
department or divided between three departments, the entire organizational
activity would be an industry. This aspect of the question was incidentally
touched upon by this Court in Baroda Borough Municipality v. Its Workmen and
the following passage at p. 49 reads thus:
" We have already pointed out that under
the Municipal Act a municipality may perform various functions, some obligatory
and some discretional. The activities may be of a composite nature,: some (1)
 S.C.R. 33 961 of the departments may be mostly earning departments and
some mostly spending departments. For example, the department which collects
municipal taxes or other municipal revenue, is essentially an earning
department whereas the sanitary department or other service department is
essentially a spending department. There may indeed be departments where the earning
and spending may almost balance each other." We have extracted this
passage only because the observations are apposite to the discussion on hand
but not to express our concurrence with the conclusion drawn in that case. The
question of bonus does not fall to be considered in the present appeal. These
observations and support to our view that integrated activities of a
municipality cannot be separated to take in some under the definition of "
industry " and exclude others from it.
We can also visualize different situations. A
particular activity of a municipality may be covered by the definition of
"industry". If the financial and administrative departments are
solely in charge of that activity, there can be no difficulty in treating those
two departments also as part of the industry. But there may be cases where the
said two departments may not only be in charge of a particular activity or
service covered by the definition of "industry" but also in charge of
other activity or activities falling outside the definition of
"industry". In such cases a working rule may be evolved to advance
social justice consistent with the principles of equity. In such cases the
solution to the problem depends upon the answer to the question whether such a
department is primarily and predominantly concerned with industrial activity or
incidentally connected therewith.
The result of the discussion may be
summarized thus: (1) The definition of " industry " in the Act is
very comprehensive, It is in two parts: one part defines it from the standpoint
of the employer and the other from the standpoint of the employee. If an
activity falls under either part of the definition, it will be an industry
within the meaning of the Act.
962 (2) The history of industrial disputes
and the legislation recognizes the basic concept that the activity shall be an
organized one and not that which pertains to private or personal employment.
(3) The regal functions described as primary and inalienable functions of State
though statutorily delegated to corporation are necessarily excluded from the
purview of the definition. Such regal functions shall be confined to
legislative power, administration of law and judicial power. (4) If a service
rendered by an individual or a private person would be an industry, it would
equally be an industry in the hands of a corporation. (5) If a service rendered
by a corporation is an industry, the employees in the departments connected
with that service, whether financial administrative or executive, would be entitled
to the benefits of the Act. (6) If a department of a municipality discharges
many functions, some pertaining to industry as defined in the Act and other nonindustrial
activities, the predominant functions of the department shall be the criterion
for the purposes of the Act.
The following are the various departments of
the Nagpur City Corporation: (1) General Administration Department; (2) Octroi
Department; (3) Tax Department; (4) Public Conveyance Department; (5) Fire
Brigade Department; (6) Lighting Department; (7) Water Works Department; (8)
City Engineer Department; (9) Enforcement (encroachment) Department: (10)
Sewage Pumping Station Department; (11) Sewage Farm Department; (12) Health
Department; (13) Market Department;
(14) Cattle Pound Department; (15) Public
Gardens Department; (16) Public Works Department; (17) Assessment Department;
(18) Estate Department; (19) Education Department; (20) Printing Press
Department; (21) Workshop Department; and (22) Building Department. Out of
these departments, the State Industrial Court has held that all the departments
except those pertaining to (i) assessment and levy of house-tax, (ii)
assessment and levy of octroi, (iii) removal of encroachment and pulling down
of dilapidated houses, (iv) maintenance of cattle pounds, 963 and (v)
prevention and control of food adulteration, are industries. Even in regard to
the departments which the State Industrial Tribunal held to be industries it
denied relief to persons who are not covered by the definition of " employees
" in the Act. As the employees have not preferred any appeal against the
award in so far as it went against them, nothing further need be said in regard
to the aforesaid five departments.
Before we consider whether all or any of the
departments of the Corporation fall within the definition of " industry
" in the Act, it will be convenient to notice the scheme of the City of
Nagpur Corporation Act, 1948 (Madhya Pradesh Act No. 2 of 1950). Section 7
makes the Corporation a body corporate with perpetual succession and a common
Section 6 describes the municipal authorities
charged with the execution of the Act and they are: (a) the Corporation;
(b) the Standing Committee; and (c) the Chief
Executive Officer. Chapter II of Part II contains the aforesaid sections and it
further provides for the constitution of the Corporation and the mode of
election to the said body.
Chapter III of the said Part prescribes the
procedure for the conduct of business of the Corporation. Chapter IV thereof
provides for the appointment of municipal officers and servants and for their
punishment and removal. Chapter V deals with powers, duties and functions of
the municipal authorities; it gives the obligatory and discretionary duties of
the Corporation. Under s. 57, the Corporation shall make adequate provision, by
any means or measures which it may lawfully use or take, such as for lighting
public streets, cleaning of public streets, disposal of nights oil and rubbish,
maintenance of fire brigade and other welfare activities in the interest of the
public. Section 58 confers a discretionary power on the Corporation to provide
for other amenities not covered by s. 57, and which are comparatively not
absolutely essential but are necessary for the happiness of the people of the
State. Provisions of Ch. VI enable the municipality to hold and acquire
properties, to manage public institutions maintained out of municipal funds.
Section 79 enjoins on the 964 municipality to apply the fund available with it
to discharge its statutory duties and pay salaries and allowances of its
various servants. Chapter IX enables the municipality to raise loans on the
security of its properties for discharging debts and for meeting the capital
expenditure. Part IV empowers the municipality to impose taxes for the purposes
of this Act and also describes the procedure for collecting the same. Part V
confers powers and imposes duties on the Corporation and its officers in
respect of public health, safety and convenience. This Part deals with public
convenience, drains and privies, conservancy, sanitary provisions, water supply
and drainage, regulation of factories and trades, markets and slaughter places,
food, drink, drug and dangerous articles, prevention of infectious diseases and
disposal of the dead. Part VI empowers the Corporation to draw up town planning
schemes, to regulate erection and re-erection of buildings, to close public
streets, to remove obstruction in streets, to regulate laying of new streets,
to dispose of mad and stray dogs, to control public begging, to prohibit
Part VIII lays down the general provisions
for carrying on the municipal administration and also enabling the Corporation
to make by-laws for carrying out the provisions and intentions of the Act.
Shortly stated, the Act creates the Corporation a juristic person capable of
holding and disposing of property, confers power on it to impose and collect
taxes and licence fees, to borrow money, to decide disputes in the first
instance in respect thereof, constitutes the amounts so collected as the fund
of the municipality from and out of which the liabilities of the Corporation
are met and the salaries of its employees are paid, imposed on it duties to
carry out various welfare activities in the interest of the public, confers on
it powers for, implementing their duties satisfactorily and also powers to make
by-laws for regulating its various functions. In short, a corporation is
analogous to a big public company carrying out most of the duties which such a
company can undertake to do with the difference that certain statutory powers
have been conferred on the corporation for carrying out its functions more
965 With this background let us take each of
the departments of the Corporation held by the State Industrial Court to be
governed by the Act.
(i) Tax Department: The main functions of
this department are the imposition and collection of conservancy, water and
property taxes. No separate staff has been employed for the assessment and levy
of property taxes: the same staff does the work connected with assessment and
collection of water rates as well as scavenging taxes. It is not disputed that
the work of assessment and levy of water rate and scavenging rate for private
latrines is far heavier than the other works entrusted to this department. No
attempt has been made to allocate specific proportion of the staff for
different functions. We, therefore, must accept the finding of the State
Industrial Court that the staff of this department doing clerical or manual
work predominantly does the work connected with scavening taxes and water rate.
The said rates are really intended as fees for the service rendered. The
services, namely, scavenging and supply of water, can equally be undertaken by
a private firm or an individual for remuneration and the fact that the municipality
does the same duty does not make it any the less a service coming under the
definition of "industry". We would, however, prefer to sustain the
finding on a broader basis. There cannot be a distinction between property tax
and other taxes collected by the municipality for the purpose of designating
the tax department as an industry or otherwise. The scheme of the Corporation
Act is that taxes and fees are collected in order to enable the municipality to
discharge its statutory functions. If the functions so discharged are wholly or
predominantly covered by the definition of " industry ", it would be
illogical to exclude the tax department from the definition. While in the case
of private individuals or firms services are paid in cash or otherwise, in the
case of public institutions, as the services are rendered to the public, the
taxes collected from them constitute a fund for performing those services.
As most of the services rendered by the
municipality come under the definition of industry ", we should hold that
the employees of the 966 tax department are also entitled to the benefits under
(ii) Public Conveyance Department: This is a
tax which is a wheel-cum-road tax. Conveyance department is meant to regulate
the using of cycles, rickshaws, bullock-carts etc.
This department recovers registration fees
for rickshaws, licence fee from rickshaw drivers and wheel tax from
bullock-carts. It also recovers cycle tax on every cycle used in Corporation
limits. (See the evidence of Witness No 1 for Party No. 1). These taxes are
therefore really fees collected by the Corporation for the services rendered to
the owners of cycles and other conveyances by way of maintenance and
construction of roads. These services can equally be performed by a private
individual or a firm for remuneration. It satisfies the tests laid down by us.
This department, therefore, is 'an industry within the meaning of the
definition in the Act.
(iii) Fire Brigade Department: Ex. N. A. 22
gives the duties of the driver-cum-fitter of the Fire Brigade Department. This
exhibit indicates that the function of this department is to attend to fire
calls. Witness No. 3 for Party No. 1 says that it is the duty of the fire brigade
to supply water at marriage functions and other public functions. The fire brigade
employees are not paid any extra amount for supplying water at public or
Though the department renders some extra
services, the main function of the department is to attend to " fire
Private bodies also can undertake this
service. It is said that under s. 333 of the City of Nagpur Corporation Act
powers are conferred on specified officers to remove or order the removal of
any person who interferes with or impedes the operation for extinguishing the
fire, to close any street or passage in or near which any fire is burning, to
break into or pull down or use for the passage of hoses or other appliances,
any premises for the purpose of extinguishing the fire and generally to take
such measures as may appear necessary for the preservation of life or property,
and that the services of the firebrigade cannot be satisfactorily rendered
without such powers and that no private individual 967 can perform the same.
Here 'the argument tends to be fallacious as it ignores the distinction between
he services and the statutory powers conferred to satisfactorily discharge the
said services. A private person or a firm can equally do the same services and
nothing prevents the legislature from conferring similar powers on an
individual or a firm. These services also satisfy all the tests laid down by us
and therefore we hold that this department is also an industry.
(iv) Lighting Department: Lighting Department
looks after the arrangements for lighting the streets in the Corporation area.
There are two systems of lighting streets, namely, (1) by electricity, and (2)
by kerosene oil lamps. Electric street lighting is given on contract to Nagpur
Light and Power Co., Nagpur, by the Corporation. Kerosene oil street lighting
is done departmentally by the lighting department.
Electric Light and Power Co., is responsible
to the Corporation for street lighting. The said Company has to fix electric
lights according to the programme given to it by the Corporation. The burning
hours are also fixed by the Corporation. The Corporation does not charge the
public for street lighting. (See the evidence of Witness No. 5 for Party No.
1). We have already indicated that quid pro coin the shape of payment of money
for particular services rendered is not a necessary condition for the
application of the definition of "industry ". The services rendered
by the department satisfy the terms of the definition. They also satisfy both
the positive and negative tests laid down by us. We, therefore, hold that this
department is an industry.
(v) Water Works Department: This department
maintains three head-works, Kanhan, Gorewara, and Ambazeri. There are pumping
stations at Kanhan and Gorewara. At the pumping stations the water is filtered
and pumped into service reservoir at Nagpur. The Corporation has a separate
staff at each pumping station. It has also a separate staff for distribution.
In addition it maintains an assessment.
department to assess water cess for the
distribution of water. (See the evidence of Witness No. 9 for Party No. 1).
These three branches of the department have
an 123 968 administrative and an executive staff. Whether the services rendered
by the department are concerned With manufacturing process or not, they are
certainly covered by the wide definition of " industry" in the Act.
They also satisfy both the positive and negative tests laid down by us. None of
them comprises delegated regal functions of State and they are such that a
private individual can equally undertake to do. We, therefore hold that the
said department comes under the definition of "industry".
(vi) City Engineers Department: The function
of this department is to exercise supervisory an administrative control over,
its subordinate departments. The City Engineer is the head of this department.
(See the evidence of Witness No. 5 for Party No. 1). As we are of the view that
the departments subordinate to this department come under the definition of
"industry", this department, which has administrative control Over
those subordinate departments, must be considered a part of those departments.
If so, it follows that this department is
also an industry.
(vii) Enforcement (encroachment) Department:
The function of this department is to remove encroachment and unauthorised
constructions and dilapidated houses. This department is a section of the
Estate Department. (See the evidence of Witness No. 5 for Party No. 1). It is
contended that the functions of this department are all statutory and that no
private individual can perform them. Statutory powers are conferred on the
Corporation to remove encroachment and unauthorised construction and
dilapidated houses. These powers are necessary for the Corporation to protect
its properties and to prevent encroachment thereon and to remove dilapidated
houses in the interest of the public. But if a distinction is made between the
powers and the nature of the services rendered, it would be obvious that the
services rendered are not peculiar to a corporation. A private firm may
undertake to manage the properties of others. It will have to. appoint persons
to detect encroachment and to take steps to recover possession of lands
encroached upon. The only difference between a firm and a municipal corporation
is that the corporation 969 can, in exercise of its statutory powers, remove
the encroachment, but it does not prevent the aggrieved party from going to a
civil court to establish his title to the property : but in the case of a firm,
it cannot take the law into its own hands: it has to get the encroachment
removed through a court of law. So far as the nature of the service is
concerned, namely, protecting its properties in the interest of the public from
encroachment and to recover possession of the lands encroached upon, there is
no essential distinction between the said service of the Corporation and a
similar service performed by a private firm. The service satisfies not only the
terms of the definition, but also the tests laid down by us.
Even so, it is contended that, the said
reasoning cannot be invoked in the case of the-service rendered by the
municipality in removing dilapidated houses and it is said that the said
service is rendered in exercise of a governmental function which a private
individual cannot himself discharge. Here again the incidental power is
confused with the service. To illustrate, a firm may undertake to remove
dilapidated houses and render the said service to those who engage it. It may
not have the power to remove dilapidated houses of persons other than those who
employed its services. The difference does not in any way affect the' character
of the service. We, therefore, hold that this department is also an industry.
(viii) Sewage Department; The sewage pumping
station is meant for pumping sewage at the outfall of the underground sewers.
The sewage is utilised on the land on broad irrigation system, and some crops
are also grown on the farm. (See the evidence of Witness No. 8 for Party No.
In the cross-examination of the said witness
it was elicited that whatever sewage is left after irrigating the farm
maintained by the Corporation will be sold to the neighbouring farms. For the
said reasons, it must be held that this department is also an industry.
(ix) Health Department: This department looks
after scavenging, sanitation, control of epidemics control of food adulteration
and running of public dispensaries. Private institutions can also render 970
these services. It is said that the control of food the adulteration and the
control of epidemics cannot be done by private individuals and institutions. We
do not see why. There can be private medical units to help in the control of
food adulteration and in the control of epidemics for remuneration. Individuals
may get the food articles purchased by them examined by the medical unit and
take necessary action against guilty merchants. So too, they can take advantage
of such a unit to prevent epidemics by having necessary inoculations and
advice. This department also satisfies the other tests laid down by us, and is
an industry within the meaning of the definition of "industry" in the
(x) Market Department: The function of the
Market Department is to issue licences, collect ground-rent and registration
fee and to detect short weights and measures.
Rents are collected for permitting persons to
enter the Corporation land and transact business thereon. Detection of short
weights and measures is a service to the people to prevent their being cheated
in the market. The setting apart of market places, supervision of weights and
measures are services rendered to the public and the fees collected are
remuneration for the services so rendered. 'These services can equally be done
by any private individual.
This department; also satisfies the tests
laid down by us.
We, therefore, hold that this department is
an industry within the meaning of the Act.
(xi) Public Gardens Department: The functions
of this department are the maintenance of public parks and -gardens and laying
of new gardens and parks; and planting of trees on road sides. (See the
evidence of Witness No. 5 for Party No. 1). This service is covered by the
definition of " industry" Any private individual can certainly
perform the functions stated above and the fact that the municipality has
undertaken those duties does not affect the nature of the service. This also
satisfies the tests laid down by us.
We, therefore, hold that this Department is
(Xii) Public Works Department : This department
is in charge of construction and maintenance of public 971 works such as roads,
drains, buildings, markets, public latrines etc. For the convenience of the
public this department is divided into zones and every zone has its office. The
outdoor staff in the P.W.D. consists of assistant engineer, overseers,
sub-overseers, timekeepers, mates, carpenters, masons, blacksmiths and coolies.
The other staff, consisting of clerks and peons performs indoor duties. (See
the evidence of Witness No. 5 for Party No. 1). This department performs both
administrative and executive functions. The services rendered are such that
they can equally be done by private individuals and they come under the
definition of "industry)', satisfying both the positive and negative tests
laid down by us in this regard. We, therefore, hold that this department is an
(xiii) Assessment Department: This department
deals with the assessment of taxes, fees and rates. The same staff does the
assessment work connected not only with taxes strictly so called but also other
fees and rates. As the services rendered, namely, scavenging and supply of
water can be done by private individuals, the State Industrial Court held that
they come under the definition of "industry" and therefore the department
assessing fees and rates is also part of that industry. There is no reason why
a distinction should be made in regard to the assessment of taxes so-called and
that of fees and rates. The taxes are collected only for enabling the
Corporation to render service to the public and, as most of the services come
under the definition of "industry", this department also, in our
view, is an industry within the meaning of the Act. That apart, the State
Industrial Court has held that the same staff does the work of assessment of
house-tax as well as other fees and rates and the work of this department is
predominantly connected with the assessment of scavenging tax and water rate.
Applying the test of "paramount and predominant duty ", this department
falls within the definition of " industry " in the Act.
(xiv) Estate Department : This department
maintains the record of property acquired, vested or transferred to the
Corporation and all buildings and roads constructed by the P.W.D. This
department 972 lets out lands and houses belonging to the Corporation by public
auction and gets income there from, which no doubt is credited to the common
fund. A department like this is equally necessary in a private company which
carries out functions similar to the Corporation. Maintenance of records of the
properties acquired, buildings and roads constructed and properties leased, is
a necessary administrative function correlated to the corresponding services.
If the service such as construction of buildings, roads etc., is an industry,
its administrative wing is also an industry. The department as a whole, both
with its administrative and executive wings, for reasons stated in connection
with the other departments, is an industry.
(xv) Education Department: This department
looks after the primary education, i.e., compulsory primary education.
within the limits of the Corporation. (See
the evidence of Witness No. 1 for Party No. 1). This service can equally be
done by private persons. This department satisfies the other tests. The
employees of this department coming under the definition of " employees
" under the Act would certainly be entitled to the benefits of the Act.
(xvi) Printing Press Department: The printing
press is maintained by the Corporation for printing passes. It is also used for
printing of by-laws and the rules and proceedings and forms, and the by-laws
and the rules so printed are sold to the public. For the reasons stated supra
in the case of the Water Works Department' this department is also an industry.
(xvii) Building Department: This department
is really a " building permission department ". The function of this
department is to regulate construction of buildings by private individuals and
to take action against those who violate the by-laws and the provisions of the
Corporation Act pertaining to this department. It is said that the functions of
this department are statutory and no private individual can discharge those
statutory functions. The question is not whether the discharge of certain functions
by the Corporation have statutory backing, 973 but whether those functions can
equally be performed by private individuals. The provisions of the Corporation
Act and the by-laws prescribe certain specifications for submission of plans
and for the sanction of the authorities concerned before the building is put
up. The same thing can be done by a co-operative society or a private
Cooperative societies and private individuals
can allot lands for building houses in accordance with the conditions
prescribed by law in this regard. The services of this department are therefore
analogous to those of a private individual with the difference that one has the
statutory sanction behind it and the other is governed by terms of contracts.
This department functions in the interest of the public and the services
rendered by this department satisfy both the positive and negative tests laid
down by us. We, therefore, hold that this department is covered by the
definition of "industry ".
(xviii) General Administration Department :
This department co-ordinates the functions of all the other departments. The
State Industrial Court describes the functions of this department thus: "
This department consists of treasury, accounts section, records section in which
are kept records of all the different departments and public relations section.
It also consists of a committee section the duty of which is to look after the
convening of meetings, to draw up agenda, minutes of proceedings and to draft
by-laws. In the record section are kept records of most of the departments
including health and engineering." Every big company with different
sections will have a general administration department. If the various
departments collated with this department are industries, this department would
also be a part of the industry.
Indeed the efficient rendering of all the
services would depend upon the proper working of this department, for,
otherwise there would be confusion and chaos. The state Industrial, Court in
this case has held that all except five of the departments of the Corporation
come under the definition of "industry" and if so, it follows that
this department, dealing predominantly 974 with industrial departments, is also
an industry. Hence the employees of this department, are also entitled to the
benefits of this Act.
The State Industrial Court held that five of
the departments of the Corporation did not fall within the terms of the
definition of "industry " in the Act. The employees of these
-departments did not file any appeal against the finding of the State
Industrial Court and we do not propose to express our final opinion on the
correctness of the decision of the Industrial Court in regard to these
In the result the appeals fail and are
dismissed with costs.