1281A

IN THE HONORABLE SUPREME COURT OF INDIA

AT NEW DELHI

Under Article 145(3) of the Constitution of India, 1950

Civil Appeal No. xxx of 20xx

In the Matter of

State of U.P……………………………………………………………………….…..Appellant

Versus
Jai Bir Singh………………………………………………………………………..Respondent

MEMORIAL ON BEHALF OF THE APPELLANT

Counsel for the Appellants

 TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................................ 2

STATEMENT OF FACTS ...................................................................................................... 3

STATEMENT OF JURISDICTION ...................................................................................... 4

ISSUES FOR CONSIDERATION ......................................................................................... 5

1. WHETHER THE EXPANSIVE DEFINITION OF INDUSTRY GIVEN IN THE BANGALORE WATER

SUPPLY CASE IS A CORRECT JUDICIAL LEGISLATION? .............................................................. 5

2. IS THERE BE A NEW TEST TO DETERMINE WHAT AN INDUSTRY IS? ................................... 5

ARGUMENTS ADVANCED .................................................................................................. 6

A. THE DEFINITION OF INDUSTRY IN THE BANGALORE WATER SUPPLY CASE IS OVER

EXPANSIVE AND IS AN ACT OF UNWARRANTED JUDICIAL LEGISLATION. .................................. 6

PRAYER FOR RELIEF........................................................................................................ 10

 STATEMENT OF FACTS

The interpretation of the term “Industry” as defined under Section 2(j) of the Industrial
Disputes Act, 1947 has been at the centre of a lot of debates and discussion. In the case of U.P
v. Jai Bir Singh [(2005) 5 SCC 1] the Seven Judge bench requested the then Hon’ble Chief
Justice of India to constitute a larger bench (9 judges) to reconsider the position of the term
“Industry” under Bangalore Water Supply v. A Rajappa [(1978) 2 SCC 213]. Dr. T. S Thakur,
the then Chief Justice of India heard the learned counsel for both the parties [(2017) 3 SCC
311] and ordered the constitution of a nine judge bench. The matter is now listed to be heard
in front of the 9 judges bench of the Supreme Court.
 STATEMENT OF JURISDICTION

The Counsel for the Appellants most humbly and respectfully submits that this Honourable
Supreme Court of India has the jurisdiction to hear and adjudicate the present matter under
Article 145(3) of the Constitution of India, 1950.

The Appellants most humbly submits that the same is maintainable.

All of which is most humbly and respectfully submitted.

 ISSUES FOR CONSIDERATION

1. WHETHER THE EXPANSIVE DEFINITION OF INDUSTRY GIVEN IN THE BANGALORE

WATER SUPPLY CASE IS A CORRECT JUDICIAL LEGISLATION?

2. IS THERE BE A NEW TEST TO DETERMINE WHAT AN INDUSTRY IS?

 ARGUMENTS ADVANCED

A. THE DEFINITION OF INDUSTRY IN THE BANGALORE WATER SUPPLY CASE IS OVER

EXPANSIVE AND IS AN ACT OF UNWARRANTED JUDICIAL LEGISLATION.

It is urged on behalf of the employers that the expansive meaning given to the word 'industry'
with certain specified exceptions carved out in the judgment of Bangalore Water is not
warranted by the language used in the definition clause.

After the Bangalore Water supply case the Supreme Court came up with a working principle
called as ‘triple test’1

 There should be systematic Activity

 Organised by Co-operation between employer and employee,

 For the production and/or distribution of goods and services calculated to satisfy human
wants and wishes.

The following points were also emphasised in this case:

1. Industry does not include spiritual or religious services or services geared to celestial
bliss

2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public,
joint, private or other sector.

3. The true focus is functional and the decisive test is the nature of the activity with special
emphasis on the employer- employee relationship

4. If the organization is a trade or business it does not cease to be one because of

philanthropy animating the undertaking.

5. The court also stated that, “Therefore, only those services which are governed by
separate rules and constitutional provisions, such as Articles 310 and 311 should,
strictly speaking, be excluded from the sphere of industry by necessary implication.”

1
(1978) ILLJ 349 SC
After the judgement there has been multiple instances where institution like co-operatives,
research institutes, charitable projects and other kindred adventures, if they fulfil the triple test
stated above cannot be exempted from the scope of section 2(j) of the Act and were considered
industry.

In the case of State of Rajasthan v. Ganeshi lal,2 the law Department was considered an industry
on a prima facie basis and the court had to intervene to say that a law department is not an
industry. In the case of State of Gujarat v. Pratam Singh Narsingh Parmar,3 the forest
department came under the expansive decision given by the court in Bengalore water supply
case and the court had to again correct itself and say that forest department is not an industry.
In the case of Md. Raj Mohammad v. Industrial Tribunal,4 the court had to intervene and clarify
that the census department would not constitute to be an industry even though it fulfils the
triple test. An employer, who having installed a Photostat machine in a room of 12’’ x 8’ and
working himself with the help of an operator and the shop itself being small in nature would
not come within the purview of ‘industry’ as defined under the industrial disputes act even
though it fulfils the triple test. This was held in Soni Photostat Centre v. Basudev Gupta.5 In
the case it was delivered that, “a single lawyer, a rural medical practitioner of urban doctor
with a little assistant and/or menial servant may play a profession but may not be said to run
an industry”. District Literary Samiti, as constituted under a scheme implemented by the
government for eradication of literacy, will not be ‘industry’ as defined by I.D Act and the
same was held in Project Director, District Literacy Samiti v. Ms. Mamta Srivastava and
another.6 The Diocese of Church was held to be not an ‘industry’ in the case of Diocese of
Amritsar of Church of North India and others v Buta Anayat Masih and others.7

2
AIR 2008 SC 690
3
(2001) 9 SCC 713
4
203 LLR 505
5
2004 (1) AWC 252
6
M.C.C. No : 40 of 2011
7
Civil Writ Petition No. 9995 of 2005
“A ‘temple’ is not an ‘industry”. And it was held in Indravadan N. Adhvaryu v.
Laxmidevnaryan Dev Trust.8 In Shrimali v. District Development Officer,9 wherein there was
an undertaking of famine and draught relief works by State government for introducing certain
schemes to provide relief and some works were also provided to the affected people, instead
of distributing doles. The question that arose was whether such functions were sovereign
functions. It was held that it would be difficult to hold such an undertaking as an industry.

All these instances, the institutions were considered to be industry under the explanation given
by the Bangalore Water case, which clearly shows that the interpretation is too expansive and
is unwarranted is too far than what was aimed under the act.

In the case of Coir Board v. Indira Devi,10 a two judges' Bench of this Court speaking through
Sujata V. Manohar J. surveyed all previous decisions of this Court including the seven judges
Bench decision in Bangalore Water (supra) and passed an order of reference to the Chief Justice
for constituting a larger Bench of more than seven judges if necessary and stated that
organization doing welfare work would unnecessarily come under the ambit of the explanation.

The honourable constitutional bench in the case of State of UP v. Jai Bir Singh made the
following observation:11

“. To restrict the meaning of 'sovereign functions' to only specified categories of so called

'inalienable functions' like Law and Order, Legislation, Judiciary, Administration and the
like is uncalled for. Wherever the government undertakes public welfare activities in
discharge of its constitutional obligations, as provided in part-IV of the Constitution, such
activities should be treated as activities in discharge of sovereign functions falling outside
the purview of 'industry'.”

The court also stated that:

“Industrial awards granting heavy packages of back wages, sometimes result in taking away
the very substratum of the industry. Such burdensome awards in many cases compel the
employer having moderate assets to close down industries causing harm to interests of not

8
CIVIL APPLICATION No. 5792 of 2010
9
(1989) 1 GLR 396
10
[1998]2SCR87
11
2005(3)CTC741
only the employer and the workers but also the general public who is the ultimate beneficiary
of material goods and services from the industry.”

An over expansive interpretation of the definition of 'industry' might be a deterrent to private

enterprise in India where public employment opportunities are scarce. The people should,
therefore, be encouraged towards self-employment. No doubt even liberal professions are
required to be regulated and reasonable restrictions in favour of those employed for them can,
by law, be imposed, but that should be subject of a separate suitable legislation.

In construing the definition clause and determining its ambit, one has not to lose sight of
the fact that in activities like hospitals and education, concepts like right of the workers
to go on 'strike' or the employer's right to 'close down' and 'lay off' are not contemplated
because they are services in which the motto is 'service to the community'. If the patients
or students are to be left to the mercy of the employer and employees exercising their
rights at will, the very purpose of the service activity would be frustrated.

Therefore, it is humbly requested to the court to pass a writ of mandamus to the Government
to bring into force the provisions of an Amendment Act of 1982 which provide for a less
expansive definition of industry and also order the setting up of Dispute and redressal
mechanism for the employees which would not be covered under the act.
 PRAYER FOR RELIEF

Wherefore in the light of the facts stated, issues raised, arguments advanced and authorities
cited, it is most respectfully prayed before this Honourable Court that it may be pleased to:

• hold that the test for determining ‘indusrty’ in the Bangalore Water supply case is not
good in law & pass a writ of mandamus to the Government to bring into force the provisions
of an Amendment Act of 1982.

And further pass any other order or decree in favour of the Defendants as this Learned Court
may deem fit in the ends of equity, justice and good conscience.

All of which is most humbly and respectfully prayed.

Date: 29th August, 2018

Place: Delhi