h475

HIGH COURT OF JAMMU & KASHMIR AND LADAKH

AT JAMMU

Reserved on: 29.02.2024

Pronounced on: 07.03.2024

SWP No.1396/2003

Ashok Kumar S/o Sh. Gian Chand

R/o Nehalpur Simble Tehsil R.S.Pura,

Jammu, Age 35 years ...Petitioner(s)

Through:- Mr. Ajay Abrol, Advocate with

M/s Ayush Gupta & Manik Bhardwaj

Advocates

V/s

1. Union of India through Secretary to Govt.,

Industries Department, New Delhi.

2. Secretary to Govt. of India, Labour Departrment,

New Delhi.

3. Director, Small Industries Service Institute, 36-B/C,

Gandhi Nagar, Jammu.

4. Dy. Director, Small Industries Service Institute,

36-B/C, Gandhi Nagar, Jammu.

5. Central Government Industrtial Tribunal-cum-Labour Court,

Chandigarh.

...Respondent(s)

Through:- Mr. Vishal Sharma, DSGI

Coram: HON’BLE MR. JUSTICE SANJEEV KUMAR , JUDGE

JUDGMENT

1. The petitioner is aggrieved and has called in question an

award dated 30

th

June, 2003 passed by the Industrial Tribunal-cum-Labour 2023:JKLHC-JMU:2783

2 SWP No.1396/2003

Court, Chandigarh [“the Tribunal”], whereby the Tribunal has turned down

and returned the reference under the Industrial Disputes Act, 1947 to the

Central Government as “not maintainable”.

2. Briefly stated, the facts leading to the filing of this petition by

the petitioner invoking extraordinary writ jurisdiction vested in this Court

under Article 226 of the Constitution of India are that, on an industrial

dispute having been raised by the petitioner with the management of Small

Industries Service Institute, the Central Government vide No.L-

42012/132/93-1R(DV) dated 29.11.1994 referred the dispute to the

Tribunal for adjudication in the following term:-

“whether the action of the management of Small Industries

Service Institute, Jammu in terminating the services of Shri

Ashok Kumar is legal and justified? If not, to what relief the

workman is entitled to?”

3. The claim of the petitioner claiming to be a workman with the

respondent-Institute, as was laid before the Tribunal, was that he was

working as peon on daily wage basis with the respondent-Institute for the

last about seven years and his services were terminated on 12.02.1993

arbitrarily and without passing any order. He was neither paid any

retrenchment compensation nor was any prior notice of termination given

to him. A UDC of the respondent-Institute, who had no authority or

competence, terminated his services. The claim of the petitioner was

refuted by the respondent-Institute, which, apart from meeting the case of 2023:JKLHC-JMU:2783

3 SWP No.1396/2003

the petitioner on merits, also took a preliminary objection with regard to

the maintainability of the reference. It was claimed that the respondent-

Institute was not an „industry‟, as defined in the Industrial Disputes Act

and, therefore, not amenable to the provisions of the Industrial Disputes

Act, 1947. It was pleaded that the respondent-Institute provides only

consultancy services to prospective units and also assists the State

Government in implementing Central Government Policies. It also

provides technical guidance to the entrepreneurs proposing to set up their

industries. On merits, it was submitted that the engagement of the

petitioner was on daily wage basis and without availability of Class-IV

post in the respondent-Institute in Jammu. It was submitted that a request

was made to the Central Government to sanction three posts of Class-IV to

respondent-Institute at Jammu but the request was declined by the

headquarter and, therefore, the respondent-Institute was left with no option

but to terminate the arrangement under which the petitioner was appointed.

4. The matter was considered by the Tribunal. Relying upon

definition of the „industry‟ given in the Industrial Disputes Act, 1947 [“the

Act”] and the judgments referred to by the management of the respondent-

Institute, the Tribunal concluded that the respondent-Institute performing

consultancy services was not covered under the definition of „industry‟

and, therefore was not amenable to the provisions of the Act. It is in this

background, the reference was turned down and returned to the appropriate

government by the Tribunal vide its award dated 08.04.2003, which is

impugned in this petition. 2023:JKLHC-JMU:2783

4 SWP No.1396/2003

5. Having heard learned counsel for the parties and perused the

material on record, the following question seeks determination in this

petition:-

“whether the Small Industries Service Institute, Jammu

qualifies to be an „industry‟ under the Industrial Disputes

Act, 1947 and, therefore, amenable to the provisions of the

Industrial Disputes Act, 1947?

6. The core question to be determined in this petition is the

nature of activities, which the respondent-Institute performs and whether

such activities bring the respondent-Institute within the purview of the

term “industry” used under the Act.

7. The issue as to what makes an organization, society or

authority an industry within the meaning of the term given in the Act was

subject matter of considerable debate and discussion in Banglore Water

Supply and Sewerage Board v. R.Rajappa and others, (1978) 2 SCC

213. The definition of industry given by the Supreme Court in D.N.

Banerji v. P.R.Mukherjee and others, AIR 1953 SC 58 was adopted

with approval by the majority opinion in the Banglore Water Supply’s

case (supra) and the triple test as enunciated in Banerjee’s case to find out

as to whether a particular organization is „industry‟ as defined in Section

2(j) of the Act was accepted i.e.;

(a) an organization where a systematic activity is carried out; 2023:JKLHC-JMU:2783

5 SWP No.1396/2003

(b) the activity is organized by cooperation between employer

and employee (the direct and substantial element is

chimerical); and

(c) the activity is for production and /or distribution of goods and

services calculated to satisfy human wants and wishes (not

spiritual or religious but inclusive of material things or

services geared to celestial bliss i.e. making on a large scale

Prasad or food).

However, following were held irrelevant consideration:-

(A) Whether or not there is profit motive or gainful objective or

investment of capital in an industry.

(B) A private individual shall be employer of the industry. This

Act equally applies when the Government or the local

authority is the employer. The nature could be public, joint or

otherwise, the true focus is functional and the decisive test is

nature of activity with special emphasis on the employer and

employee relation.

8. The Supreme Court also enunciated “Dominant Nature Test”, which

is a test where there is complex of activities, the test would be predominant

nature of services and integrated nature of departments. All departments

integrated with industry will also be industry. Following are the exeptions

carved out to the „industry‟:-

i) Casual activities (because they are not systematic);

ii) Small clubs, co-operatives, research labs, gurukuls which

have essentially non-employee character; 2023:JKLHC-JMU:2783

6 SWP No.1396/2003

iii) Single door lawyer taking help from clerk (because there is no

organized labour) as contradiction to Solicitors Firm having

employed served people each one contributing directly or

indirectly to outcomes.

iv) Selfless charitable activities carried though volunteers e.g.

free legal or medical service;

v) Sovereign functions-strictly understood are maintenance of

law and order, legislative and judicial functions.

9. The discussion made in the Seven Judge Bench judgment in

Banglore Water Supply’s case (supra) in paras 140 to 144 highlights the

legal position churned out after considerable debate and discussion. The

majority did not find favour with the law laid down in Management of

Safdarjung Hospitals v. Kuldip Singh Sethi, (1970) 1 SCC 735 and

University of Delhi v. Ram Nath, AIR 1963 SC 1873 and reinstated the

view taken by the Hon‟ble Supreme Court in the case of State of Bombay

v. Hospital Mazdoor Sabha, AIR 1960 SC 610. This majority view is

still the law on the point, though there was suggestion made in the

judgment itself to the Union Government to come up with legislation to

clear the confusion created by the loosely and inadequately worded

definition of the term „industry‟ made in Section 2(j) of the Act. The

amendment was enacted but the same was not enforced by the Government

of India for the reasons best known to it.

10. At one point of time there was also an attempt made by a two Judge

Bench of the Supreme Court to seek reconsideration of the Banglore 2023:JKLHC-JMU:2783

7 SWP No.1396/2003

Water Supply case’s judgment but the same was declined by a three

Judge Bench of the Supreme Court in the case of Coir Board Ernakulam

Kerala State and another v. Indira Devi P.S. and others, (2000) 1 SCC

224. It is in the light of this judgment and the principles laid down therein,

the issue raised before this Court in the instant petition is required to be

examined.

11. From the material on record, it is seen that in the reply

affidavit/objections filed by the respondent-Institute before the Tribunal it

has been pleaded that the main functions of the respondent-Institute are as

under:-

a) to provide consultancy to the prospective entrepreneurs in

establishing their industrial units in the State of J&K;

b) to assist the State Government in implementing the Central

Government Policies; and

c) to provide technical guidance to the entrepreneurs for starting their

ventures.

12. The Branch office of Small Industries Service Institute headed by its

Director is functioning at Jammu since 1967. This position explained by

the respondent-Institute before the Tribunal has not been rebutted. From a

reading of the objects and functions of the Institute, it is clearly discernible

that the respondent-Institute is predominantly involved in providing of

consultancy services to the entrepreneurs for starting their business 2023:JKLHC-JMU:2783

8 SWP No.1396/2003

ventures or to the State Government for implementing the Central

Government policies. The activities, which are carried out by the

respondent-Institute are obviously carried through the experts in the field,

who are capable of providing technical guidance and consultancy in the

matter of starting industrial ventures by the entrepreneurs in the State. It

has also a duty to provide assistance to the State Government in

implementing the Central Government policies. The aforesaid activities

cannot, by any stretch of imagination, be said to be such activities as are

required to be performed by the experts involving the cooperation of

persons performing menial jobs in the office. The duties of the

organization are performed predominantly by the experts and the

consultants and in the performance of their duties they are not directly or

indirectly assisted by the workmen like the petitioner.

13. The petitioner was admittedly engaged as Class-IV on daily wage

basis and was, thus, providing services in the office. Undoubtedly, the

activity carried out by the respondent-organization/Institute is a systematic

activity providing services calculated to satisfy the human wants but the

question is whether this systematic activity is organized by cooperation

between the employer and the employee. The answer to this question, in

my humble opinion, is not in the affirmative. The cooperation between the

employer and the employee must have direct or indirect nexus with the

performance of duties and rendering of services by the Institute so as to

qualify the Institute to be an „industry‟ within the meaning of Section 2(j)

of the Act. 2023:JKLHC-JMU:2783

9 SWP No.1396/2003

14. Not only the predominant object but also the only object of the

respondent-Institute is to provide services in the form of consultancy to the

State Government in implementation of the Central Government policies

and to the entrepreneurs in establishing their ventures. The duties

performed by a person in the office as Class-IV do not directly or even

remotely contribute towards the performance of duties of consultancy and

the experts providing the intended services to the beneficiaries. The nexus,

direct or indirect between the services provided by an employee and the

services rendered by the Institute is sine qua non to bring an organization

within the scope of the term „industry‟ as defined in Section 2(j) of the

Act.

15. For the reasons given above, I find no legal infirmity in the award

passed by the Tribunal. The petition is, without merit and, therefore,

dismissed. The petitioner shall, however, be free to avail of any other

remedy/remedies available to him under law.

(Sanjeev Kumar)

Judge

JAMMU

07.03.2024

Vinod, PS Whether the order is speaking : Yes

Whether the order is reportable: Yes 2023:JKLHC-JMU:2783