Case Name:
Bangalore Water Supply & Sewerage Board v. A. Rajappa (Bangalore Water Supply Case)
Equivalent citations:
1978 AIR 548, 1978 SCR (3) 207
Bench:
Beg, M. Hameedullah (Cj), Chandrachud, Y.V., Bhagwati, P.N., Krishnaiyer, V.R. & Tulzapurkar, V.D., Desai, D.A. & Singh, Jaswant
Facts:
In the Bangalore Water Supply Case, the Appellant Board, responsible for providing essential amenities to citizens, imposed fines on its employees for instances of misconduct, and penalties were successfully recovered. However, the employees were not satisfied with the disciplinary actions taken against them and initiated Claims Application No. 5/72 under Section 33C(2) of the Industrial Disputes Act, asserting that the actions taken against them had transgressed the principles of natural justice.
The Appellant Board raised a preliminary objection before the Labour Court, arguing that the Board, being a statutory body, does not qualify as an “industry” as defined under section 2(j) of the Industrial Disputes Act. Consequently, it was argued that the employees were not classified as “workmen,” thus challenging the jurisdiction of the Labour Court to adjudicate upon the employees’ claim. The Labour Court, however, ruled in favor of the employees despite the Board’s objection. Subsequently, the Appellant Board filed two Writ Petitions – Nos. 868 and 2439 of 1973 – before the Karnataka High Court in Bangalore, challenging the Labour Court’s decision. The Appellant Board argued that it was not an “industry” under the definition of section 2(j) and, therefore, the Labour Court did not have the jurisdiction to adjudicate the employees’ claims.
The Division Bench of the High Court dismissed the Appellant Board’s petitions, stating that the Board indeed falls under the definition of an “industry” as stated in section 2(i) of the Industrial Disputes Act, 1947. Thus, the Appellant Board’s argument that it was not an industry under the Act and that the Labour Court did not have jurisdiction to decide the employees’ claim was rejected.
Issue:
The main issue in the Bangalore Water Supply case was whether a statutory body that provided essential basic amenities to citizens could be classified as an “industry” under the definition provided in Section 2(j) of the Industrial Disputes Act, 1947. This case aimed to determine if such activities could be subject to the legal provisions governing industrial disputes. The crux of the matter was whether the services the body provided were considered regal (sovereign) functions or not.
Judgment:
In the Bangalore Water Supply Case, a seven-judge panel of the Supreme Court examined the scope of “industry.” The majority decision, endorsed by five judges with two judges dissenting, overruled previous judgments such as Safdarjung Solicitors’ case, Gymkhana, Delhi University, Dhanrajgiri Hospital, and Cricket Club of India. The court upheld the principles established in the Hospital Mazdoor Shabha and Indian Standards Institution cases, following the precedents set by the Banerji and Corporation of City of Nagpur cases. The Bench in the Bangalore Water Supply Case was made up of seven esteemed judges: Beg M. Hameedullah (CJ), Chandrachud Y.V., Bhagwati P.N., Krishna Iyer V.R., Tulzapurkar V.D., Desai D.A. and Singh Jaswant.
The purpose of the case was to delineate the extent of “industry.” The concept of the “triple test” emerged from this case, serving as a benchmark for assessing the legality of various establishments.
The “Triple Test” is a set of criteria used in the Bangalore Water Supply Case to determine whether an establishment can be classified as an industry. The test consists of three factors:
1. Systematic activity
2. Cooperation between employer and employee
3. Activity related to the production of goods and services that fulfill human needs It’s important to note that religious services or other activities related to spiritual fulfillment are not considered industries.
The profit motive is also irrelevant in this context. The focus of the triple test is on the functional aspects of the relationship between employer and employee. Philanthropic activities do not disqualify an establishment from being classified as an industry. If an undertaking satisfies all the criteria listed above, it can be labeled as an “industry” under section 2(j) of the Industrial Disputes Act, of 1947.
Bangalore Water Supply Summary
The Bangalore Water Supply case involved a seven-judge Supreme Court panel that defined “industry.” It introduced the “triple test,” focusing on systematic activity, employer-employee cooperation, and goods/services production for human needs. Philanthropic activities or lack of profit motive were irrelevant.
The ruling encompassed organized activities meeting these criteria as “industry,” irrespective of trade/business, and extended to professions, clubs, educational institutions, etc. The “dominant nature test” determined an undertaking’s nature based on the most significant department. Sovereign functions were exempted and separable industry units within sovereign departments fell within Section 2(j) of the Industrial Disputes Act.
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