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 J. Cama continues her submissions.
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• Primacy of Statutory Text: Adv. Cama submits that the Industrial Disputes Act is clear in its intent and structure, and the present confusion has arisen because “courts have gone behind the words” to introduce a social welfare expansion. He argues that while social welfare is desirable, it cannot override clear statutory language, and where Section 2J is precise, it must be applied as it stands.
• Against Expansion of “Industry”: He contends that earlier judgments have impermissibly stretched the definition by including activities which do not fall within “business, trade, manufacture or undertaking,” and that entities such as clubs or research institutions cannot be brought within the definition merely on policy considerations.
• Relying on Constitution Bench precedent on “workman,” he submits that words in a definition must be read together and take colour from each other. On this basis, “undertaking” cannot be read independently but must be understood in the same industrial sense as the surrounding terms.
• “what has happened today is that because of these judgments, we have gone behind the words. We have gone behind the words to find something which will allow us to have a social welfare aspect. Now, I have no difficulty with social welfare. It’s a good thing. But social welfare must end where the definition is clear. There can be no social welfare legislation contrary to the strict language of the Act. And where the language, like in this case, is specific and clear, then you can’t have social welfare. You can’t take a club and put it into industry. You can’t take a research institute and put it into manufacturing. So therefore, this endeavour of the court earlier to try and find some methods, some means to extend the Act is with great respect not permissible nor was it required. Social welfare must stop where the statute is clear.”
Charity vs Economic Activity:
• He draws a distinction between purely altruistic activities and those involving economic elements, submitting that activities carried out without any financial or revenue component cannot be treated as industry, whereas those involving economic return may fall within the definition.
• He argues that “a charitable organization cannot come within trade or business,” and that charity by its very nature is antithetical to the statutory definition. According to him, even if employees are paid salaries, the threshold question remains whether the activity itself answers the description of “business, trade or manufacture.” If it does not, the presence of labour cannot convert it into an industry.
• He emphasises that Section 2J has two parts, and the inclusive portion relating to employment cannot be used to expand the core definition of “industry,” which remains anchored in business or trade activity.
“You can’t be overawed by what’s happening outside the definition. One has to read the definition as it stands. If the Parliament wanted that that should be covered, then like in the latest Act, they would have included it. But so long as the latest Act does not cover the subject we are dealing with, if it is not an industry, it is not an industry. I must say that we must have the courage to say it is not an industry. Why? Because it doesn’t come within those parameters. We have been going out of our way to find grounds and reasons to explain away the word intersection. Why? Why do we do that?”
Industry must precede employment: Sr. Adv. Cama submits that the Court must first determine whether an activity is “industry” in terms of “business, trade, manufacture or undertaking,” and only thereafter examine the presence of workmen. He illustrates this by stating that even in a cooperative canteen or a situation where workmen themselves run an activity, disputes may arise between workmen, but that does not automatically make the activity an “industry” vis-à-vis an employer. He emphasises that “the work itself must be intrinsically an industry,” and that “it does not become a business or manufacture merely because somebody works in it.”
Primacy of statutory definition over consequences:
He cautions the Court against being influenced by consequences of exclusion, submitting that interpretation must remain confined to the statutory language. He states that courts must have “the courage to say it is not an industry” where it does not fall within Section 2J, regardless of hardship or policy considerations.
Rejection of expansive interpretation:
• He reiterates that the Court should not “go out of its way to find grounds and reasons to explain away the words of the section,” and that social welfare considerations cannot justify reading beyond the statute. In his submission, “the mere fact that this is a social welfare legislation should not persuade the Court to go beyond the language.”
• Responding to concerns about lack of remedy, he submits that absence of a forum cannot justify expanding the statute. He points out that even categories like supervisors or white-collar employees may lack remedies under the Act, and “where the law wants to give a remedy, it gives; where it does not, it does not.”
• He ultimately submits that while purposive interpretation has a role, it cannot be used to override clear statutory language. Where the text is clear, “there should be no further inquiry,” and the Court must apply the definition as enacted rather than expanding it on policy grounds.
• “Means” indicates exhaustiveness: He stresses that Section 2J uses the word “means,” which makes the definition exhaustive and not illustrative. Therefore, unless an activity falls squarely within “business, trade, manufacture or undertaking,” it cannot be brought within the scope of “industry.”
• Sovereign functions (summary of case law): On the second issue, he submits a consolidated position from precedent that sovereign functions are those inalienable functions of the State such as defence, law-making, and administration of justice. He argues that only such core functions are excluded, while welfare or economic activities of the State are not sovereign merely because they are carried out by government departments.
Submissions of Senior Advocate Parthasarathi Sengupta
• He begins by taking the Court to the Objects and Reasons, submitting that the Act was enacted to cure defects in the 1929 law and to create a binding mechanism for the investigation and settlement of industrial disputes, stressing that the legislation is aimed at industrial peace and harmony and not merely one-sided protection.
• Balanced, not Pro-Labour: He expressly disagrees with the characterisation of the statute as pro-worker, submitting that “it is a balanced legislation which takes into its cover interests of labour as also interests of employers,” and points to restrictions on strikes and lockouts as evidence of checks on workmen.
Centrality of “Industry”:
• He emphasises that “there cannot be an industrial dispute unless there is an industry,” and therefore the entire framework of the Act, conciliation, adjudication, remedies, depends on how “industry” is interpreted.
• Referring to definitions of “employer” and “industrial dispute,” he argues that the Act itself clearly contemplates “industry carried on by or under the authority of the central government” and by local authorities, indicating that government activities are not excluded.
• He highlights that disputes can arise not only between employer and workmen but also “between employers and employers… or between workmen and workmen,” showing that the Act is concerned with maintaining overall industrial harmony.
• He underscores that tribunals under the Act have wide powers, including the ability to alter wage structures and order reinstatement, stating that it can create contracts between the employer and the workman, which distinguishes them from ordinary courts.
• Referring to Schedule I, he argues that even sectors like hospitals and atomic energy are included, submitting that this makes it abundantly clear that the government is not excluded.
Realist & Welfare-Oriented Approach:
• Relying on precedent, he submits “if there is any doubt… the benefit of reasonable doubt must go to the weaker section, labour,” and argues that the very fact that the issue has reached the Court after decades shows that doubt exists.
• He invokes a broader interpretive principle grounded in social reality, referring to judicial observations that “raw life, not rigid logic, is the mother of law,” and urges the Court to adopt an approach that reflects the lived conditions of workers.
• He relies on a moral test endorsed in precedent: “recall the face of the poorest and the weakest… and ask if the step you contemplate is going to be of any use to him,” submitting that interpretation of “industry” must ultimately serve the working class.
• He urges that where ambiguity exists, the definition of “industry” should receive a liberal interpretation, ensuring that workers are not left without protection and that the Act fulfils its purpose of maintaining industrial peace.
He will file an additional written note.
Submissions of the Attorney General
• The Attorney General cautioned against over-expanding welfare interpretation, stating that while courts may lean in favour of workmen in specific disputes, “the question is whether the activity itself is an industry or not… if you focus only on the weaker section… there could be a problem,” emphasising that classification of “industry” must remain legally grounded.
• He stressed the limits of judicial interpretation, submitting: “ironing out the creases will be a very narrow area… but… beyond that… would amount to a rewriting,” and warned that expanding the law in the name of welfare risks going beyond legislative intent.
• He argued that the earlier judgment may have gone too far, observing: “Bangalore supply is a little overbroad, and that may require some kind of moderation,” particularly where courts read into the statute elements not expressly provided.
• He emphasised that the focus should be on the nature of the activity, not merely employment: “mere focus on the employee may sometimes be an erroneous proposition,” and highlighted factors like purpose, dominant nature, and constitutional mandate in determining “industry.”
• Relying on precedent, he submitted: “courts cannot obviously expand… a socio-economic legislation… to levels unintended by the legislature,” and further: “does not extend to reading in the provisions of the Act what the legislature has not provided.”
• He clarified that the Bangalore Water Supply “triple test” is not determinative: “it is not a be all and an end all test… all activities that meet the triple test would not be industries.”
• He described the case as unusual, noting: “we are in a very unusual situation… trying to unravel the mysteries of a legislation… one is already dead,” and warned that the Court’s ruling may affect future interpretation.
• He highlighted concerns with including governmental functions: “if you have difficulties in having a forest department… irrigation department… declared an industry… there are very serious concerns,” especially in the context of economic policy and governance.
• He concluded by balancing welfare with statutory limits, stating: “if there is a welfare legislation, let it be so… but then how do you stretch it beyond the welfare element,” and urged the Court to remain within the text and structure of the statute, rather than expanding it through interpretation,
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Counsel responded to the argument on sovereign functions, submitting that entries in the First Schedule are not determinative: “these are entries which are added by the central government… the question whether that constitutes an industry or not… if your Lordships hold that sovereign functions are out, then of course this entry will be a nullity,” and further clarified that the use of the word “industry” in that context is not conclusive: “it need not be an industry as defined under Section 2J… it will depend upon the context.”
He argued that public utility provisions operate differently, stating: “the idea is to prohibit strikes and lockouts… these are vital economic activities,” and therefore the statutory use of “industry” in that context does not expand the core definition under Section 2J.
He distinguished between the two regimes: “the service law is entirely statute law… there is hardly any scope for an industrial adjudicator to adjudicate,” indicating that labour law protections cannot automatically extend into all government functions.
In brief rejoinder, he challenged reliance on the Bangalore Water Supply test: “since Bangalore water supply is followed… is hardly a ground… if the judgment is erroneous, it is erroneous,”
questioning its continued authority despite repeated application.
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Senior advocate Indira Jaising clarified that reliance on Australian law is not misplaced: “our Industrial Disputes Act is based on the Australian law… it is the parent of this Act,” thereby justifying comparative references.
She stressed contextual interpretation:“words must carry the meaning in a statute in relation to an organic whole,” and that meaning must align with the object and structure of the Act.
With these submissions, the 9-judge bench reserves a verdict on definition of ‘industry’.