Bombay Panjrapole, Bhuleshwar Vs. The
Workmen & ANR [1971] INSC 200 (16 August 1971)
MITTER, G.K.
MITTER, G.K.
REDDY, P. JAGANMOHAN
CITATION: 1971 AIR 2422 1972 SCR (1) 202 1971
SCC (3) 349
ACT:
Industrial Disputes Act, 1947-Section 2(j)
-'Industry'-A Panjrapole started initially as a charitable institution but
later organised commercially-If "Industry".
HEADNOTE:
The appellant Panjrapole was started in 1834
as a charitable institution for the care and protection of animals. it expanded
its activities considerably over the years. The institution gradually
diversified its objects from only tending to the sick, infirm and unwanted
cattle by adopting a policy of keeping cattle not merely for their own sake but
for the sake of improving the cattle population in order to get large
quantities of milk for sale and thereby get an income which would augment its
sources. The institution was using stud bulls for the purpose of breeding
healthy cattle including cows so as to be able to make a sizable income from
the sale of milk. The value of the milk sold was considerable compared to the
value of milk supplied to the sick and infirm cattle of the institution. The
expenses for treating the sick animals was also very little compared to the
total expenses of the Institution. A large number of workers were employed at
the institution. They raised an industrial dispute in relation to their wages
and other service benefits. The dispute was referred for adjudication to the
Industrial Tribunal. It was contended by the Appellant that the Institution was
a charitable institution and therefore was not an 'industry' within the meaning
of s.
2(j) of the Industrial Disputes Act. The
Tribunal found that the activities of the institution in connection with its
movable property and collection and sale of milk to be an "industry"
while the maintenance of lame, infirm and sick cows, dogs and other animals was
held not to constitute an "industry".
A petition under Art. 227 was moved in the
High Court for quashing the award of the Industrial Tribunal but the same was
summarily rejected. Dismissing the appeal,
HELD:On the facts and circumstances of the
case, the Bombay Panjrapole is an "Industry" within the meaning of
Sec. 2(j) of the Industrial Disputes Act. The activities of the Panjrapole,
though charitable at the. beginning, was not exclusively so in later years, and
the later activities show that it was carried on as a business concern. Even
the value of the milk supplied for the last 3 or 4 years itself was well in
excess ,of Rs. 2 lakhs per annum and this could only be possible if the cows
,and buffaloes had been kept and maintained not merely to keep them ,alive but
with the idea of getting as much production out of them as possible and the
Panjrapole was run like a dairy firm. [223H] State of Bombay v. The Hospital
Mazdoor Sabha, [1960] 2 S.C.R. 866, Safdar Jung Hospital, New Delhi v. K. S.
Sethi & Management of M/s T. B.Hospital, New Delhi v. The Workmen, A.I.R.
1970'S.C. 1407. Gynmkhana Club Union v. Management, [1968]. 1 S.C.R. 742, Lalit
Hari Ayurvedic College Pharmacy v.Its Workers Union, A.I. R. 1960 S. C. 1261,
Madras Panjrapole v. Labour Court, [1960] 2 L. L J. 686, Worknien Employed in
Madras Panjapole v. Madras Panjropole [1962] 2 L.L.J. 472, Cricket Club v.
Labour Union, ' [1969] 1 S.C.R. 60, Harinagar Cone Firma v. State of Bihar,
[1964] 2 S.C.R.
458, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeal
No.1331 of 1966.
Appeal by special leave from the order dated
January 20, 1966 of the Bombay High Court in Special Civil Application No. 54
of 1966.
D. V. Patel and L N. Shroff for the
appellant.
G. P. Pai, Bhajan Ram Rakhiani and R. K.
Khanna, for respondent No. 1.
The Judgment of the Court was delivered by
Mitter, J. The question involved in this appeal by special leave from an order
of the Bombay High Court rejecting summarily a petition -under Art.227 of the
Constitution for the issue of a writ of certiorari or other appropriate writ
for examining the legality of the award made by the Industrial Tribunal,
Maharashtra on July 27, 1965 and published in the Maharashtra Gazette on August
19, 1905 and for quashing the same appears to be one of first impression so far
as this Court is concerned.
The appellant before e this Court is an
institution which came into existence as far back as 1834. It originated in the
desire of certain Hindu and Parsee gentlemen of the City of Bombay to put a
stop to the practice of killing of stray dogs by the stray dogs by the sepoys
of the East India Company. the deed of October 18, 1834 shows that certain
Hindus , Parsees and Mahajuns had resolved to start a Panjrapole with
suitable.buildings by raising subscription and also by promising to pay certain
fees on stated mercantile commodities to the Panjrapole to be established for
the keeping of stray cattle and other animals and for protecting their lives.
This was followed by a deed of declaration oftrust executed on 2nd November,
1850. This shows that the institution mentioned in the earlier document had 204
been established and the management of its funds had been placed in the hands
of certain Banians. under the superintendence of Sir Jamshedjee Jeejeebhoy and
that out of the surplus funds collected Rs. 75,057/had been invested in the
purchase of Government Promissory notes. The trustees were -to stand possessed
of the said notes and interest and dividends thereof upon trust for the use and
benefit of the said institution.
On 2nd November, 1850 a deed of assignment
and declaration of trust in favour of panjrapole was executed by Sir Jamshedjee
Jeejeebhoy to Khimchand Motichand. This document shows that a part of the
surplus funds had been invested in the purchase of several pieces or parce Is
,of lands, houses etc. and the new trustees were to stand possessed of the same
upon trust for the use and benefit ,of the said institution. Another trust deed
was executed ,on 5th September, 1851 by Khimchand Motichand, Sir Jamshedjee
Jeejeebhoy and others. This document shows that the institution was then
possessed of considerable wealth comprising of Government promissory notes,
houses, lands and other immovable estate in the Islands of Bombay, besides cash
balances.
The funds of the institution appear to have
been augmented further-under a deed of 10th June, 1871. According to this
document certain charitably disposed persons, Hindus and Parsees, had raised a
fund for releasing animals in Surat meant for slaughter on the occasion of
Bakrild and Id-EKurbani. The trustees of the said fund being desirous of
transferring the sums in their hands with all accumulations of interest, income
etc. and also the trust thereof to the trustees of the Bombay Panjrapole had
requested the trustees of the said Panjrapole to become the trustees of Surat
Bakri-Id fund to which the latter had a in Surat meant for slaughter on the
occasion of Bakrild and Id-E-Kurbani. The trustees of the said fund being
desirous of transferring the sums in their hands with all accumulations of
interest, income etc. and also the trust thereof to the trustees of the Bombay
Panjrapole had requested the trustees of the said Panjrapole to become the
trustees of Surat Bakri-Id fund to which the latter had agreed. This document
shows further that the trustees of the Bombay Panjrapole had agreed to use the
said funds towards the purchasing, releasing and redeeming from slaughter some
of the cows, sheep and other animals intended or likely to be sacrificed at
Surat on the Bakrid or Id-Kurbani occasions and for conveyance of the animals
so purchased to be kept their according to the custom and rules of that
institution. In 1915 the Government 205 declared the institution as an
infirmary under the Prevention of Cruelty to Animals Act (IX of 1890).
it would appear that the Bombay Panjrapole
expanded its activities considerably over the years and had besides its
original seat at Bombay, branches at three other places viz., at Raita,
Bhiwandi and Chembur Cattle, birds and other animals were kept and maintained
at all these places. A very large number of persons was pursuing manifold activities
at the said places. Latterly the workers of the institution were not satisfied
with their wage scales and other service conditions. On the basis of the report
submitted by the Conciliation Officer under sub-s.(4) of s.12 of the Industrial
Disputes Act the Government of Maharashtra referred the dispute for
adjudication to the Tribunal constituted under a Government notification. An
order of reference was made on 25th June, 1963 and the heads of disputes were,
the wages, privilege, sick and casual leave, bonus, gratuity and reinstatement
of certain workmen.
In the written statement filed by Panjrapole
it was stated inter alia (a) The main aims and objects of the institution were
purely charitable. Whatever income the institution had was not all to be
distributed either to the donors or the trustees. It was wholly and solely for
the maintenance and treatment of animals of the Bombay Panjrapole to aehieve
the above objects the means to be adopted were (i) maintenance of a shelter
house for aged and unserviceable animals;
(ii) the feeding and treatment of all animals
entrusted to the institution either by the owners anxious to pension their old
animals or rescued by philanthropic persons from the hands of butchers and the
protection of animals remanded by magistrates;
(iii) the breeding of bulls under ideal and
sanitary conditions;
(iv) the maintenance of a dairy farm with
special attention to proper feeding, accommodation and water supply, the
proceeds to go to the benefit of other animals of the Panjrapole; and 20 6 (v)
bringing up of calves of the young cows under healthy conditions.
(b) The Managing Committee of trustees of the
institution was advised that in fulfilment of their primary and only object of
maintaining sick and infirm cattle and dogs etc.
it was necessary that they should have
healthy food and nutrition. Since milk from outside would not fulfil that
condition it was decided to upgrade the infirm cattle and rear them into good
animals so as to get good and pure milk for the inmates of the Panjrapole. Thus
the milk that was produced and remained surplus after feeding the old cows,
motherless calves and dogs and other such animals was sold to members of public
instead of being thrown off. The income derived therefrom was again utilised
only after maintenance of the Panjrapole animals. The sale proceeds of the milk
was never utilised nor meant for the benefit or the profit of the donors of of
trustees nor was it produced and sold for the purpose or satisfying human needs
or desires or with any object of rendering material service to the community.
The cows which yielded milk were kept by the
Panjrapole till the end of their lives. The milk derived from them could only
be considered as natural and incidental product in the maintenance of cows.
It was submitted on the basis of the above
that essentially object with which the institution received animals was not for
doing service to their owners or others but to the animals themselves. The
Tribunal examined meticulously the activities of the institution over a number
of years. The workers served various interrogatories on the trustees to elicit
from the various facts relating to the income by way of rent from building etc.
the income from milk and milk products, the income from sale of other
commodities, the number and categories of animals in the Panjrapole, the number
of animals, if any, purchased, the number of dry -and wet cows owned by the
-Panjrapole and the number of stud bulls either purchased by or bred at the
Panjrapole for the last ten years. The society answered all the particulars.
The chart below prepared by the respondent
shows the total cattle strength of the Panjirapole in all its four branches
comprising of productive animals (whether milch cows milch buffaloes, 207 stud
bulls and working bullocks), the number of unpro ductive animals, including
cows, buffaloes, buffalo calves, heifers and calves and bullocks. The chart was
compiled from the documents disclosed by the appellant and contains the figures
for the years 1958 to 1962 -Total strength in the following years.
1958 1959 1960 1961 1962Total strength Bombay
149 117 150 201 214 Raita 833 595 508 604 538 Bhiwandi 501 653 503 408 426
Chambur 191 233 272 275 281 --------------------------------------------Total
1,674 1,598 1,533 1,4881,459 ---------------------------------------------Sick,
old and infirm Bombay. Raita 32 19 10 16 31 Bhiwandi 424 364 132 150 171
Chambur. ----------------------------------------------Total 466 25 % 383 20%
142 10% 166 10% 202 15% ----------------------------------------------Young
animals Bombay Raita 181 44 120 50 36 Bhiwandi 6 47 5 99 59 Chambur 56 87 79 93
100 -------------------------------------------Total 243 178 204 242 185
--------------------------------------------Other cattle not sick Bombay 149
117 150 201 214 Raita 620 532 488 538 471 Bhiwandi 71 242 366 159 196 Chambur
135 146 193 182 181 ----------------------------------------------Total. 975
1,037 1,197 1,080 1,602 -----------------------------------------------The following
chart was pared by the respondents showing the values of the milk supplied to
the animals as 208 also the amounts fetched by sale of the surplus milk for the
same years.
Chart.
------------------------------------------------------------Year
Own consumption Sale Total Percentage.
Rs. Rs. Rs. of sale approximately
-------------------------------------------------------------1 2 3 4 5
--------------------------------------------------------------1958 2,681
1,49,854 1,314 3,995 1,53,849 2. 6% 1959 5,256 6,716 5,475 17,447 1,69,465
1,86,912 9. 5% 1960 1,755 6,570 2,686 11,011 2,13,117 24,1185% 1961 2,046 3,286
3,504 8,836 2,23,095 2,31,9314 4% 1962 1,954 4,555 3,650 10,159 2,30,043
2,40,2024% ---------------------------------------------------------The facts
found by the Tribunal may be summarised as follows (1) At the end of the year
1962 there were altogether, 445 cows, 48 bulls, bullocks and oxen, other cattle
(cows and bullocks) 508, calves 495, dogs 160, goats and sheep 32, horses 12, hares
18, cocks, hens and ducks' 18 and parrots 8 : the total number was 1754.
(2) The total income for the year was Rs.
6,64,043 including the amount of Rs. 1,73,583 received by way of donation. The
income proper was thus Rs. 4,90,459., 20 9 (3) Some lands of the institution
were under its personal cultivation. The sale proceeds of the yield thereof was
Rs.
6,492. The rent fetched by the immovable
property was Rs.
2,20.549. The milk vielded by the cows was
regularly collected and sold, the sale proceeds for the year being Rs.
4,30,034. A large number of workmen was
employed to attend to the cows and to feed them, to. milk the cows and to carry
and sell the milk to the public.
(4) The number of cows yielding milk at the
end of the year was 242. At that time there were 75 pregnant cows. There were
57 other cows, 101 grown-up calves (female) and 91 other small calves (female)
all described as "reserved". In the opinion of the Tribunal all these
calves would in course of time grow into cows.
(5) The institution maintained some stud
bulls. Besides there were bullocks which were used for plying the carts or for
cultivation of the lands of the institution.
(6) There were 36 heads of cattle described
as arrivals from Bombay. There were another 87 cows described as "danger";
the rest of the cattle (cows and bullocks) were 57 lame and blind, 177 weak, 51
infirm, quite infirm 80 and sick 108, the total of this category being 473;
including the "danger" cows the total was 560. These animals depended
entirely on the charity of the institution.
The Tribunal found the activities of the
institution in connection with its movable property and collection and sale of
milk to be an industry while the maintenance of danger cows, blind, lame,
infirm and sick, the dogs and other animals did not constitute an industry.
As already noted, the application under Art.
227 by the Panjrapole to the Bombay High Court was dismissed summarily and
therefore we do not have the benefit of a judgment of the High Court. As the
records stand we must proceed one the facts found by the Tribunal and such
light as is thrown thereon by arguments of counsel.
Before looking into the relevant authorities
on the subject, we may note the points canvassed in support of or against the
appeal by learned counsel on either side. Referring to the trust deeds it was
argued on behalf of the appellant that the essential purpose of the institution
was 210 to keep and foster animals which were either rejected by their owners
as old and infirm or of no use to them as suckling calves, dry -cows etc. It is
not necessary to take into account the other animals which were maintained by
the institution. Leaving out of account the number of dogs kept, the number of
other animals was insignificant. It was argued that although the sale of milk
produced a fair amount of income, certain portion of it was necessary for the
maintenance of the sick and infirm animals and the sale of the balance of the
milk ought to be regarded as incidental to the keeping of cows thrown on the
hands of the institution and ought not to lead to an inference that the
institution was pursuing an industry. With regard to the immovable properties,
it was said that they had been purchased out of surplus funds in the hands of
the institution over 50 years back and on a conspirator of the activities of
the institution it should be held that it was merely doing charity to animals
and it was not producing food or giving service to humans to constitute its
activity as an industry within the meaning of s.2(1) of the Industrial Disputes
Act.
Learned counsel for the respondent drew our
attention to certain facts which according to, him went to show that so far as
the activity of keeping cattle, specially cows and she-buffaloes was concerned,
there could be little doubt that it was pursued as an industry. He handed over
two charts containing analysis of the cattle population as culled from the
documents placed before the Tribunal by the institution itself. The total
strength of cattle in all the four branches of the institution in the year 1958
was 1674, 1598 in the year 1959, 1533 in the year 1960 and 1488 in 1961 and
1459 in 1962. The sick, old and infirm cattle for the year 1958 was 456 or
roughly 25 per cent of the total strength. Young animals numbered 243 and other
cattle which were not at all sick was 975 in number. The percentage of sick,
old and infirm cattle in the year 1959 was roughly 20 % in. the year 1960 and
1961, 10 per cent and in the year 1962 15%. The rest of the cattle according to
counsel were neither old nor infirm but were either producing milk or being put
to use immediately or capable of yielding milk or work in the future. Another
chart handed over by him went to show that the total value of milk produced in
the year 1958 was Rs. 1,53,849 and 211 leaving out of account of Rs. 3,995
being the value of milk supplied to the sick cattle, the institution derived an
income of Rs. 1,49,854/from the sale of milk. The corresponding figures for
1959 were total sales Rs. 1,86,912, value of milk consumed Rs. 17,447, income
from milk, Rs.1,69,465. The figures for 1960 were Rs. 2,24,-118, Rs. 11,011 and
Rs. 2,13,117/-; those for 1961 were Rs. 2,31,931, Rs. 8,836 and Rs. 2,23,095/-.
The figures for the last year 1962 were Rs. 2,40,202, Rs. 10,159 and Rs. 2,30,043.
Thus according to the above figures, the percentage of milk given to the
animals out of the total production was 2 6 in 1958, 9 5 in 1959, 5 in 1960 and
4 in the years 1961 and 1962.
Learned counsel drew our attention to the
figures of expenses of tending the sick and infirm cattle either by employment
of hospital workers or medical expenses and compared the same with the total
expenses of the institution and the number of men employed. The value of
medical relief to animals either by way of salary to workers, dearness
allowance paid to them, medical expenses and feeding of milk to the animals for
the Bombay Panjrapole in the year 1961 was Rs. 11,762, 'for Raita Rs. 5,551,
for Chembur Rs. 5,028 and for Bhiwandi Rs. 28,805. The expenses of feeding and
maintenance of sick animals for the said branches were Rs. 1,825, 13,596, 7,554
and 81,464. But it is pertinent to note that medical expenses accounted for
very small sums, namely, Rs. 1,267 for Bombay, Rs. 559 for Raita, Rs' 1,696 for
Chembur and Rs. 552 for Bhiwandi. The figures of medical expenses for the year
1962 were equally negligible.
The number of people employed for giving
medical relief at the Bombay Panjrapole in the year 1961 was only 7, namely, a
doctor, a dresser, 4 coolies and other workers and a sundry worker. Their total
salary came to Rs. 6,000 besides dearness allowance of Rs. 2,448. Similarly at
Raita there were a doctor, two coolies, two dressers and sundry workers and
expenditure was only Rs. 552 out of the total expenditure on all these items
Rs. 4,992.
It was argued oil the basis of these figures
that if the object of the Panjrapole was only to maintain andtreat the old,
diseased or infirm or rejected cattle on its hands acquired from different
sources, the number of men employed would be very small and the milk required
for the sick and infirm cattle could be had from only a few milch 212 cows and
she-buffaloes. It was urged that the fact that a large number of milch cattle
were to be found every year among the cattle population yielding milk regularly
of the value of over Rs.. 2,00,000 for the last 3 or 4 years went to show that
the institution was pursuing an activity mole or less like that of, a dairy
farm. It was maintaining a number of stud bulls and had actually purchased one,
the obvious object behind it being improving the cattle wealth of the
institution by the production of good and healthy cattle, the females of which
would come to yield milk in future. It was said that the value of milk sold
could not be as high as disclosed by the figures unless the institution was
getting a number of milch cattle every year to replace those which were going
dry for the time being.
This could only be possible if the
institution was in a position to keep up its number of milch cattle from the young
ones either given to the Panjrapole or those which were bred at the Panjrapole.
The only difference between the Panjrapole and a well organised dairy farm was
that the Panjrapole was not buying milch cattle of good quality nor destroying
or getting rid of any which were found to become useless. As the objects of the
institution did not permit it to get rid of any cattle it undoubtedly had to
maintain whatever cattle came to it but nevertheless the activities displayed
by the facts were enough to show that it was being run on the lines of a
business or an undertaking, though -not of the normal type of a well organised
dairy business.
In our view the arguments of learned counsel
for the respondent have considerable force. The main heads of the income of the
institution were income from immovable properties, donation from charitably
disposed members of the public and the sale of milk. No doubt the immovable
property had been acquired many years back from the surplus funds in the hands
of the trustees. These were old houses and buildings but the Panjrapole was
maintaining them in tenantable condition by incurring considerable expenses
every year over the repairs. The more significant factor was the steadily
growing income from the sale of milk derived from milch cows and buffaloes, the
number of which though not steady was always considerable. Regard must also be
had to the written statement of the institution itself before the Tribunal
showing 213 that the Managing Committee of the trustees had decided some time
back to upgrade the infirm cattle and rear them into good animals so as to get
good and pure milk for the inmates of Panjrapole. In fact however the upgrading
was to such an extent that the milk yielded always was far in excess of the
needs of the inmates of the Panjrapole. Although the sale proceeds of the milk
was never utilised nor was ever meant for the benefit or profits of the donors
or trustees, the very production of it in such large bulk wholly unrelated to
the needs of the sick cattle showed that the institution was pursuing an
activity with the central idea of obtaining a steady income there from. In our
view, the facts justifiably lead to the conclusion that the institution
deliberately diversified its objects from only tending to the sick, infirm or
unwanted cattle by adopting the policy of keeping cattle not merely -for their
own sake but for the sake of improving the cattle population committed to its
care with an eye to serve human beings by making large quantities of good milk
available to them and thereby getting an income which would augment its
resources. It pursued its policy just as any dairy owner, would by having a few
good quality bulls to impregnate the cows and thereby ensuring a steady
production of milk and also improve the quality of the progeny.
We have then to consider whether on the above
facts an inference ought properly to be drawn that the activities of the
Panjrapole constituted an industry. It is not necessary to go through the
plethora of cases decided by this Court to find out whether the Tribunal had
come to a proper conclusion. Although there is no decision of this Court
arising out of the affairs of a Panira Dole, there are several dealing with the
question as to whether hospitals constituted industries. The contention of
learned counsel for the appellant W. as that the main and chief object of the
appellant institution being the keeping and fostering of' animals incidental
activities ought to be disregarded and the institution ought to be considered
as a hospital.
If the activities relating to the -production
of milk could be said to be incidental to the maintaining of sick, infirm and
diseased or rejected cattle, the argument would, in our opinion, rest on solid
foundation.
2 1 4 At the time when the application under
Art. 227 of the Constantine was presented before the Bombay High Court, the
decision of this Court in State of Bombay v. The Hospital Mazdoor Sabha (1)
held the field and it can be assumed that it was on the strength of this
decision that the Bombay High Court did not feel called upon to examine the
merits of the case by issuing a rule. In the 'Hospital Mazdoor Sabha's case
(supra) the dispute arose out of the retrenchment of respondents 2 and 3 before
this Court who' had been engaged as ward servants in the J.J. Group of
Hospitals, Bombay under State control and management without payment of
compensation as required by S. 25-F(b) of the Industrial Disputes Act. The
decision of this Court shows that there was a group consisting of five
hospitals under the administrative control of the Surgeon General of the
appellant and its day to day affairs were conducted and controlled by a
Superintendent who was a full-time employee of the appellant. The residential
staff including the Resident Medical Officers, Horsemen, Nurses etc. were all
full-time employees of the appellant and their salaries were drawn on the
establishment pay bills of the appellant and paid entirely by the appellant.
According to this Court :
"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 knowledge of
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."
On the question as to whether the activities of this group of hospitals would
be covered by the definition of 'industry' in s.2(j) of the Industrial Disputes
Act, the Court ,observed (see-at p. 878) "In considering the question as
to whether the group of Hospitals run by the appellant undoubtedly (1) [1960] 2
S.C.R. 866.
21 5 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 the 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..... Trust 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." As to the attributes which made the activity an under taking
it was stated (see at p. 879) :
"It is difficult to state these possible
attributes denitely 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 or 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
the 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,, 5--Ml 1245 Sup. Cl/71 216 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." The recent decision of this Court in Safdar Jung
Hospital, New Delhi v. K. S. Sethi and Management of M/s T.B.Hospital, New
Delhi v. The Workmen (1) is a pointer in the contrary direction. There was also
another appeal relating to the Kurji Holy Family Hospital. The Court proceeded
to consider the general proposition whether a hospital could be considered to
fall within the concept of industry in the Industrial Disputes Act and whether
all hospitals of whatever description could be covered by the concept or only
some hospitals under special conditions.
According to this Court in Safdar Jung
Hospital case ,'(see p.1412 paragraph 1.3) "an industry is to be found
when the employers are carrying on any business, trade , undertaking,
manufacture or calling of employers.
If they are not, there is no industry as
such." The Court referred to the decision of this Court in Gymkhana Club
Union v. Management (2) and the conclusion therein that :
"Primarily, therefore, industrial
disputes occur when the operation undertaken rests upon co,operation between
employers and employees with a view to production and distribution of material
goods, in other words, wealth, but they may arise also in cases where the cooperation
is to reduce material services. The normal cases are those in which the
production or distribution is of material goods or wealth and they will fall
within the expressions, trade, business or manufacture." With regard to
trade and business it was said :
"Business too is a word of wide import.
In one sense it includes all occupations and professions. But in the
collocation of the terms and their defi(1) A. I.R. 1970 S.C. 1407.
(2) [1968] 1 S.C.R. 742.
217 nitions these terms have a definite
economic content of a particular type and all the authorities -of this Court
have been uniformly accepted as excluding professions and are only concerned
with the production, distribution and consumption of wealth and the production
and availability of material services." With regard to the Hospital
Mazdoor Sabha case (1) was remarked (see p. 1414) "The case proceeds on
the assumption that there need not be an economic activity since employment of
capital and profit motive were considered unessential. It is an erroneous
assumption -that an economic activity must be related to capital and
profit-making alone.
An economic activity can exist Without the
presence of both. Having rejected the true test applied in other cases before,
-the test applied was 'can such activity be carried on private -individuals or
group of individuals?' Holding that a hospital could be run as a business
proposition and for profit, it was held that a hospital run by Government
without profit must bear the same character. With respect, we do not consider
this to be the right test. This test was employed to distinguish between the
administrative functions of Government and local authorities and their
functions analogous to business but it cannot be used in this context. When it
was emphasised in the same case that the activity must be analogous to business
and trade and that it must be productive ,of goods or their distribution or for
producing ,material services to the community at large or a part of it, there was
no room for the other proposition -that privately run hospitals may in certain
circumstances be regarded as industries." This Court held that the
Hospital Mazdoor Sabha case(1) "took an extreme view of the matter which
was not justified". With regard to the activities of the individual
hospitals it was said the Safdar Jung hospital had not embarked on an economic
activity which could be said to be analogous to trade or business. There was no
(1) [1960] 2 S.-C. R. 866, 218 evidence that it was more than a place where
persons could get treated. This was a part of the functions of Government and
,the hospital was run as a Department of Government -and could not therefore be
said to be an industry. Again, with regard to Tuberculosis hospital it was
found not to be an independent institution but a part of the Tuberculosis
Association of India. The hospital was wholly charitable and was a research
institute. The dominant purpose of the hospital was research and training, but
as research and training could not be given without beds in a hospital, the
hospital was run. According to this Court, treatment is thus a part of research
and training. In these circumstances the Tuberculosis hospital could not be
described as an industry. With regard to the Kurji Holy Family Hospital again
it was found to be entirely charitable. It carried on the work of training,
research and treatment; its income was mostly from donations and distribution
of surplus as profit is prohibited. It could not therefore be an industry as
laid down in the Act.
Reference may also be made to the case of
Lalit Hari Ayurvedic College Pharmacy v. Its Workers' Union (1). In this the
appellate Tribunal found that the pharmacy run by the appellant sold medicines
in the market and realised about Rs. one lakh per annum whereas in the hospital
run by it about 30% of the medicines manufactured by it were consumed and about
70% were sold in the market. This judgment was delivered on the same date by
the same Bench which decided the Hospital Mazdoor Sabha case (supra). On the
facts found this Court held that there could be no doubt "that the
activity of the appellant in running the pharmacy and the hospital was an
undertaking under s.2(j) and was an industry".
The only case of Panjrapole which appears to
have come before the High Court’s was that of the Madras Panjrapole v. Labour
Court(2)which was the subject-matter of an industrial dispute referred to in
the year 1958 by the State Government for adjudication by the Labour Court,
Madras. This was decided after the Hospital Mazdoor, Sabha case. The facts
referred to by the High Court were that the Madras Panjrapole was a charitable
society (1) A.I.R. 1960] S.C. 1261.
(2) [1960] 2 L.L.J. 686..
219 registered under the Societies
Registration Act occupying an area of about Ac. 12-00 of land within the city
of Madras on which the munificence of several donors had enabled the
construction of shelters for animals as well as sanctuary for birds. The
objects of the society, as stated in the memorandum of association, are protection,
care and treatment of old, infirm and injured cows, calves, bullocks etc. and
affording freedom to such animals from being slaughtered unnecessarily and to
guarantee old-age relief to the old, infirm and unserviceable animals till they
die of natural causes. To achieve these objects, the means envisaged to be
adopted were :
(a) maintenance of shelter-house for aged and
unserviceable animals' (b) the feeding and treatment of all animals entrusted
to the care of the society either by the owners anxious to pension their old
animals or rescued by philanthropic persons from the hands of butchers and the
protection of animals remanded by magistrates;
(c) the breeding of bulls under ideal and
sanitary conditions (d) the maintenance of a dairy farm with special attention
being paid to proper feeding, accommodation and water supply, the proceeds of
which will go to the benefit of the other animals of the Panjrapole; and (e)
the bringing up of the calves of the young cows under healthy conditions.
The Court observed (see p. 689):
" It is a matter of common knowledge
that a number of dry cows in the City of Madras are sold away to butchers by
the poor milkmen who could not support them. Butchers themselves offer tempting
prices for such cows, a temptation which the poverty of the milkmen could not
but lead him to succumb. Dry cows were admitted into the Panjrapole to prevent
them from going into the slaughter house.
Maintenance of the dry cows called for stud
bulls Stud bulls were presented to the society by -the Government. In the
course of time, the dry cows brought forth their progeny and began to yield
milk.
220 The Panjrapole was, therefore, in a
position to sell milk yielded by the cows which were received by it with a view
to protect them from the slaughter-house details of the sale amounts in respect
of the milk produced shows that the institution had been receiving substantial
sums every year by sale of milk." So for as the activities of the Madras
Panjrapole and Bombay Panjrapole are concerned they are Practically identical
except that in the present case the maintenance, of a dairy farm is not
explicitly referred to anywhere but the facts as culled from the evidence makes
the same only too obvious.
There was however a certain difference in the
case of the Madras Panjra-pole inasmuch as the Madras High Court found that
(see p. 691) "During certain years, it even went a step further. The
Panjrapole purchased cows, maintained a dairy farm and supplemented their own
production of milk with out side milk and sold them. These activities would
certainly partake the character of a business, though the profit of such
business might have gone to the humanitarian activities undertaken by the
society. But the activities have long ago ceased. What the society is now having
is the -milk yielded by its own cows. Those cows are admittedly kept by the
Panirapole till their lives. They are not sold.They are the property of the
Panjrapole. The milk yielded by those cows could only be considered as an
incidental product in the maintenance of the cows. The sale of cowdung cakes
and menure and of the calves after the mother cows become dry are also
incidental. It cannot be held that a trade or business is conducted by the
institution." According to the learned single Judige who heard the petition
the activities of the Panjrapole had nothing to do with human needs. They were
solely devoted to the needs of helpless animals; though incidentally such
activities have a business tinge about them it cannot be said to be for human
need or material welfare. The objects were mainly religious and humanitarian.
Following the test laid down in the Hospital Mazdoor Sabha case the learned
Judge was of opinion that there was no industrial dispute which could be
referred by the State Government to the 221 Labour court for adjudication. The
case went in appeal to a Letters Patent Bench : Workmen Employed in Madras
Panjrapole v. Madras Panjrapole (1). The Bench took a somewhat different view
from that of the learned single Judge. It demurred to the observations of the
trial Judge that "there is no element of trade or business involved in the
various activities of the society". According to the Bench :
"These observations, however, do not
extend to subsequent developments, the result of the growth of the institution,
and its attempt to achieve self-sufficiency. There were (1) purchase and sale
of milk, a fairly wide upon scale, (2) the maintenance of a dairy farm during a
period of the history of the institution, and (3) similarly, the maintenance of
stud bulls, to enable dry cows to conceive and bear calves." The Bench
felt compelled to allow the appeal to the extent of modifying the writ of
certiorari and laying down that the actual decision would have to be arrived at
after the record of adequate evidence by the Labour court in the light of the
principles formulated, the available evidence being both inadequate and
contradictory. For the guidance of the Labour court the Bench observed Even if
the institution at the inception, and as basically defined, be purely
humanitarian,.
non-industrial and not amenable to any of the
tests. upon which the definition has been applied,, it cannot be gainsaid that,
if the.
institution had largely altered its
complexion through the years, so as to have become a focus of economic
production, the definition again night be applicable." The Bench also
examined the question whether the activity of the Panjrapole was in essence
religious, or spiritual, as according to it a temple or a church could not be
considered to be an industry.
(1) [1962]2 L.L.J. 472.
222 The net result of the above seems to be
that although the Bench was inclined to hold that the Madras Panjrapole at its
inception was not an industry the complexion of its activities might have been
altered by later developments so, as to render the institution as then
organised an industry within the meaning of, the Act. Further according to the
Bench individual units of the Organization (like the district dairy farm) might
constitute an industry though the society itself may not be one.
The matter came up again before the Madras
High Court (see 1967-2 L.L.J. 399)., The Tribunal held in favour of the workmen
and the learned Judge dismissed the application for the issue of a writ by the
Panjrapole. The learned Judge referred to the reports of the institution in
several years past from 1937 to 1957. He found that the object of the society
had been amended in 1937 to enable it to receive young cows and charge fees
from the owners. The idea of starting a dairy farm was for supporting the
infirm cows, bullocks and horses and in pursuance of that idea stud bulls were
acquired for improving the cattle breeding., The income from the sale of milk
rose phenomenally reaching the figure of Rs. 60,000 in the year 1957. The
learned Judge found himself unable to hold that maintaining cows and stud bulls
and selling milk were only Subsidiary in nature to the humane the society,
namely, to provide Shelter for the deCrePit and useless and infirm animals. The
learned Judge held that "if the Madras Panjrapole had confined itself to
the objectives at its inception, namely, to give -protection to the old, infirm
and decrepit animals, it could well be -con-tended that it was only for the
purpose of satisfying purely spiritual needs, as it is common knowledgethat
Hindus 'consider cow protection. as one of their religious duties. If -the
Madras Panjrapole had not extended its activities, following 'the, authorities cited
above, would have had no hesitation in holding that it is not an industr) -A
reading of the annual reports show that a large number of high milk yielding
cows and buffaloes were pur,chased, by the society and due to the successful
working -of the dairy farm the Panjrapole was able to supply milk to various
institutions .... The reports show that considerable profits were made by the
Panjrapole, the sale of milk fetching a sum of Rs. 60,000 in the year
1957". In the 223 result the petition was dismissed and the labour court
was directed to determine the other issues.
We have referred at some length to the Madras
Panjle case to show the analogy of the activities of the radoras Panjrapole to
the. Bombay Panjrapole. Save for the fact that the Madras Panjrapole definitely
and expressly changed its objective by starting a dairy farm and purchasing
mulch cows and stud bulls there is very little difference between the facts of
the case before us from those in the Madras Panjrapole case. In the present
case only one stud bull w s purchased but the activities pursued by the Bombay
Panjrapole make it clear that they were pursuing the same kind of activity,
namely, that of using ,stud bulls for the purpose of breeding healthy cattle
including cows so as to be able to make a very sizable income from the sale of
milk.
For the last few years, from 1958 to 1962 the
number of milch cows was always Considerable which could only be accounted for
by the fact that from time to time the place of cows which had become dry was
being taken up by cows fecundate by the bulls maintained for the purpose of keeping
up a steady supply of milk. We have already referred to the fact that' the
value of milk supplied to the sick and infirm cattle was infinitesimal compared
to that sold in the market. The expenses incurred in connection with the
treatment of sick and infirm animals was also negligible compared to the total
expenses of the institution. The number of men employed for such treatment was
very small at all times. The mere fact therefore that the Panjra pole never
purchased milch cows and never purchased stud bulls except once makes no
difference to the question as to whether their activity of maintaining cows and
bulls could only be considered as an investment. It was certainly carried on as
a business although it was not pursued in the same way as astute businessmen
only out to make profit would, namely, get rid of the animals which were no
longer fit for any Use. The value of the milk supplied for the last 3 or 4
years was well in excess of Rs. 2 lakhs per annum and this could only be
possible if the cows and buffaloes had been kept and maintained not merely to
keep them alive but with the idea of getting as much production out of them as
possible.
224 In this view of the matter, it is hardly
necessary to consider the other cases which were cited at the Bar, namely,
Gymkhana Club Union case (1), Cricket Club v. Labour Union (2) and Harinagar
Cane Farm v. State of Bihar (1). It was remarked in the Gymkhana Club case that
the activity of the club is conducted with the aid of employees, who follow
callings or avocations and that the activities of the club was not a calling or
business of its members, of Managing Committee and there was no undertaking
analogous to trade or business. In the Cricket Club's case (2) the Court
examined the different activities of the club and came to the conclusion that
they did not lead to the inference that the club was carrying on an industry.
On the facts of this case we hold that the
activities of the Panjrapole as disclosed in this case constituted an industry
within the meaning of section 2(j) of the Industrial Disputes Act and the
appeal must therefore be dismissed with costs.
S.C. Appeal dismissed..
(1) [1968] 1 S.C.R. 742.
(2) [1969] 1 S.C.R. 600..
(3) [1964] 2 S.C.R. 458.
225.
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