Day 2 Live- https://thebarbulletin.com/constitution-bench-industry-definition-day-2-live/
Senior Advocate C.U. Singh, appearing for a non-political nationwide workers’ federation, structures his arguments around practical impact, validity of the reference, and consequences of revisiting Bangalore Water Supply. He continues his submission on day 3 of the hearing:
• Mr Singh emphasises that the Industrial Disputes Act creates a complete preventive framework through Sections 20, 22 and 24. In public utility services, a 14-day notice triggers deemed conciliation, and any strike or lockout commenced before its conclusion is rendered illegal, thereby ensuring industrial peace. He stresses that this scheme is not merely worker-centric but is designed to protect workers, employers, industries, and the public at large, particularly in essential services such as hospitals, sanitation, and municipal functions.
• On the breadth of “industry”: He reiterates that Parliament has consciously adopted a wide definition, covering even government-linked and regulatory bodies (including provident fund institutions, ONGC, AAI, and banking entities), demonstrating that industrial disputes are not confined to private commercial activity.
• He highlights that the Act itself provides multiple mechanisms for exemption and adjustment (including Sections 9A proviso, 9B, 19(4), 36A and 36B), allowing governments to exempt industries or modify obligations where public interest so requires.
• Singh argues that if states seek exclusion of certain sectors, they must exercise their statutory exemption powers, rather than asking the Court to narrow the definition of “industry,” effectively shifting responsibility.
• Singh questions the exclusion of public hospitals, noting that without the Act’s framework, there could be unregulated or flash strikes even in critical institutions, adversely affecting patients and public welfare.
• Concluding the submissions, he added that the Industrial Disputes Act is a carefully balanced framework, and any attempt to dilute the definition of “industry” would undermine both industrial stability and public interest.
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Senior advocate Vijay Hansaria submits that the Triple Test does not expand the definition:
• He submits that the triple test laid down in Bangalore Water Supply merely explains the statutory definition of “industry” under Section 2(j). He argues that every business, trade, undertaking or calling necessarily involves systematic activity, cooperation between employer and employee, and production or distribution of goods or services.
• He contends that the triple test does not expand the scope of “industry” but only articulates what is already inherent in the legislative text, and therefore remains consistent with the Act.
Repercussions of exclusion of establishments from the ‘industry’ definition
• Mr Hansaria emphasises that the Industrial Disputes Act has, since 1947, created a framework of protection for workmen who have unequal bargaining power. These include remedies such as reinstatement, protection in retrenchment, and institutional mechanisms like works committees.
• He highlights that provisions relating to unfair labour practices derive their effectiveness from establishments being treated as “industry,” and exclusion would significantly dilute these protections.
• He notes that states across political lines have supported exclusion, and submits that such a position would effectively result in depriving workers of statutory rights rather than upholding the role of a model employer.
• He argues that the Act is not solely workman-centric, but is intended to secure harmonious and cordial industrial relations, and cannot be criticised on the ground that it benefits workers.
Stare Decisis and Consistency:
• Ansari submits that Bangalore Water Supply has stood the test of time for nearly five decades and has been consistently followed, with only limited deviation, and therefore commands strong precedential weight.
• He outlines that reconsideration requires clear and compelling reasons, such as manifest error or demonstrable incorrectness, and cannot be justified merely because another interpretation is possible.
Concluding his submissions, he adds that any changes in economic or industrial conditions are already addressed through subsequent legislation, and therefore do not warrant reopening the settled interpretation. He submits that there is no sufficient basis to revisit Bangalore Water Supply, and that doing so would unsettle settled law and adversely affect workmen’s protections.
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Submissions by Sr. Adv Gopal Shankarnacharya
Real issue before the court
• Senior advocate Gopal Shankarnacharya submits that the controversy before the Court is narrow and centres only on two aspects, sovereign/public functions and charitable activities, rather than any wholesale reconsideration of the definition of “industry.”
• He argues that the correct approach is to focus solely on the activity undertaken, examining whether it falls within “undertaking,” “calling,” or “avocation” under Section 2(j). According to him, both the identity of the actor (State or private) and the motive (profit or charity) are irrelevant, and even charitable activities cannot be left outside regulatory scrutiny.
Sovereign and Charitable Exceptions & Interpretation of Bangalore Water Supply
• Relying on Justice Chandrachud’s opinion, Mr Gopal submits that the judgment recognises the deliberately wide language of Section 2(j) and cautions against judicially carving out exceptions. He contends that subsequent exclusions, particularly for sovereign functions, are policy-driven limitations not grounded in the statutory text.
• He submits that there is no express statutory exclusion for sovereign functions, and constitutional principles establish that statutes bind the State unless expressly exempted. As regards charity, he argues that only a very narrow category of self-serving, small clubs was ever intended to be excluded, and not charitable institutions broadly.
• Mr Gopal points out that Bangalore Water Supply has been consistently applied across numerous Supreme Court and High Court decisions, and that this long-standing application weighs strongly against reconsideration.
• He cautions that excluding such activities would result in a large class of workers, particularly those employed in government departments and institutions, losing protection under the Act, since the status of “workman” is tied to the existence of an “industry.”
Concluding the submissions, he added that even the unnotified 1982 amendment reflects concern about the absence of alternative remedies if the definition were narrowed, reinforcing the need to retain the current interpretation. He further urges that any change, if at all made, must operate prospectively to avoid reopening settled positions and causing widespread uncertainty.
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Submissions by Sr. Adv. Jayna Kothari
Ground Reality & Purposive Interpretation of “Industry”
• Ms Kothari begins by highlighting that, despite statutory prohibitions, manual and sewage cleaning continues, with workers engaged by both municipalities and private entities, underscoring the continuing vulnerability of sanitation workers.
• She submits that the definition of “industry” must be approached through a purposive interpretation, focusing on the object of the Industrial Disputes Act. Relying on N. Banerjee and subsequent jurisprudence, she argues that meaning must be gathered not only from the text but from the context, scheme, and purpose of the legislation.
• Kothari emphasises that the Act is a beneficial, welfare legislation aimed at protecting workers and ensuring they are not left remediless. While it seeks industrial peace, its core function is the amelioration of workers’ conditions, as recognised in Bangalore Water Supply.
• She argues that interpretation must align with Directive Principles (Articles 38, 39, 42, 43, 43A), which mandate just and humane conditions of work, livelihood protection, and worker welfare. A narrow reading of “industry” would defeat these constitutional goals.
On Sovereign Functions Exception:
• Addressing the exclusion carved out in Bangalore Water Supply, Kothari submits that sovereign functions must be narrowly construed. Only those functions which are inalienable and cannot be privatised, such as defence, law and order, taxation, qualify as sovereign.
• Relying on precedent, she argues that welfare and regulatory activities of the State are not sovereign, and merely because an entity is statutory or government-controlled does not take it outside the Act. The Court must examine the nature of the function and apply severability where required.
• She reiterates that even within Bangalore Water Supply, the exclusion for sovereign functions was intended to be strictly limited, and not to cover economic or welfare activities undertaken by the State.
Policy and Commission Findings
• Referring to the National Labour Commission (2002), Kothari notes that expert recommendations favoured a broad, inclusive definition, extending protections across sectors irrespective of the nature of activity.
• She submits that a broad and inclusive interpretation of “industry” is necessary to ensure that workers, especially those in vulnerable sectors, are not excluded from statutory protections, and that no departure from the existing position is warranted.
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Senior Advocate KS Chauhan submits that the petitioners’ argument, in substance, seeks to classify government-performing industries as sovereign functions so as to deny labour law protections to workers employed therein, which he strongly opposes.
Constitutional Context & Scheme of the Act:
• He argues that Part IV of the Constitution is meant to protect the weaker sections, and the State cannot, in the name of implementing Directive Principles, deprive one class of vulnerable workers of their rights while benefiting another.
• Mr Chauhan submits that although the Industrial Disputes Act was enacted pre-Constitution, its interpretation today must be informed by fundamental rights and Directive Principles, ensuring that worker protections are preserved in the present constitutional framework.
• Referring to Articles 38 and 39, he argues that the State has a duty to ensure social and economic justice, fair conditions of work, and protection against exploitation, which would be compromised by narrowing the definition of “industry.”
• He emphasises that the Act is structured to maintain industrial harmony by balancing the rights of employers and workers, and excluding large categories of industries would disrupt this balance and defeat the purpose of the legislation.
Consequences of Exclusion
• Chauhan cautions that if such industries are treated as sovereign, workers would be left without effective remedies under labour law. Alternative routes, such as civil courts or writ jurisdiction, are inadequate and would burden High Courts while depriving workers of accessible adjudication.
• He submits that the removal of labour forum remedies would force workers directly to the constitutional courts, affecting judicial efficiency and undermining access to justice for ordinary workers.
• Mr Chauhan supports the correctness of Bangalore Water Supply, submitting that its interpretation strikes the right balance, and that any exclusions (such as charitable components) must be narrow and carefully applied, without undermining worker protections.
• He urges the Court to interpret “industry” in a manner that preserves workers’ dignity, ensures effective remedies, and maintains industrial peace, rather than marginalising labour rights.
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Another respondent’s Counsel argues that the suggestion that workers can rely on other statutes or remedies is misplaced. The ID Act is meant to supplement and provide specialised adjudication, and cannot be diluted on the ground that alternate forums exist.
• He submits that the Industrial Disputes Act is traceable to a distinct legislative entry and was conceived as a comprehensive, standalone framework for industrial relations. Other enactments, such as Shops and Establishments laws, operate in separate fields and were not intended to displace or substitute the ID Act.
• Addressing the suggestion of writ jurisdiction as an alternative, he submits that writ remedies are not suitable for industrial disputes, as they do not adjudicate disputed questions of fact and may entangle workers in preliminary objections rather than substantive relief.
• He emphasises that labour law has consistently moved towards specialised tribunals and adjudicatory mechanisms, and diverting such disputes to constitutional courts would burden High Courts and undermine efficient dispute resolution.
• Counsel submits that the State’s position effectively seeks to divert workers away from the ID Act, which runs contrary to the legislative scheme and would weaken the established framework for industrial adjudication.
• He requests that any ruling of the Court operate prospectively, and that issues concerning the 2020 legislation be left open for adjudication in appropriate proceedings, without being pre-emptively decided here.
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Adv. Sangeeta Bharti, appearing for the legal representatives of a deceased workman, submitted that hewas doing manual labour… he has expired during the pendency of the case. She explained that the workman had completed 240 days of service in the irrigation department and was terminated, but the objection raised was that the irrigation department is not an industry, despite the Labour Court and High Court having ruled in his favour.
She pointed out that due to the matter being tagged and prolonged, he could not get the benefit, and informed the Court that the workman had died on 25 December 2020 while the matter was pending.
Respondent informed the court that he is only on the legal question, namely whether the irrigation department falls within Section 2(j), while the claim on facts related to continuity of service and consequential benefits.
The Court, while invoking its power under Article 142 of the Constitution, proceeded to grant relief, observing: “We are of the opinion that the legal heirs of the deceased are entitled to a lump sum amount of compensation,” and directed that a sum of ?10 lakhs be paid to the legal representatives within six weeks, to be disbursed proportionately.
The Court clarified that the appeal would stand disposed of on facts with this compensation, while the “question of law” would remain open.
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Submissions by Sr. Adv. J. Cama
Sr. Adv. Cama submits at the outset that the present matter is effectively “an all or nil litigation,” where one side seeks inclusion of all activities within “industry,” while the other seeks exclusion of specific establishments.
• He clarifies that “industry in the hands of government makes no difference, industry is industry,” but insists that it must still satisfy Section 2J, i.e., it must be a “business, trade or undertaking.”
• He argues that “an undertaking is also an enterprise which is industrial in nature… it is either the whole industry or part of it,” and cannot be read independently.
◌ It must be read in conjunction with the surrounding words
◌ “You cannot have one word standing apart from the rest”
• He submits that provisions like Sections 2(k), 25FF, 25FFF, and 25O show that “undertaking must necessarily mean an industrial undertaking,” reinforcing a contextual interpretation.
• He emphasises: “Section 2J and 2S must coalesce… if either is absent, it is not an industrial dispute.”
• Against over-expansion, he cautions that: “Not everything is an industry… the definition cannot be magnified to overreach itself.”
• He draws a distinction between types of charitable activity:
◌ “Pure charity is not industry” (no revenue, purely altruistic)
◌ Where there is revenue or financial return, “there is an industrial element”
• On Sovereign/legal Functions, he submits a limited position: “Legal functions by themselves may not be a complete ouster… if they contain industrial elements, they may still be covered.”
• He disagrees with Justice Krishna Iyer’s formulation: “Employer-employee relationship cannot be the test… that exists in every activity.” Instead, he proposes a simpler test:
“Is it business, trade or undertaking… and does it employ workmen, that is all.”
• He argues for a common-sense, statutory reading: “Parliament legislates in common parlance… industry must be understood as business, trade or undertaking as ordinarily understood.”
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The matter will be taken after Lunch.
The Constitution Bench resumes after lunch and Sr Adv Indira Jaising gives her submissions.
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