A nine-judge Constitution Bench of the Supreme Court of India on Tuesday commenced hearing a significant reference examining the correctness of the expansive definition of “industry” laid down in the landmark 1978 ruling in Bangalore Water Supply and Sewerage Board v. A. Rajappa. Opening the proceedings, the Chief Justice of India, Justice Suryakant indicated that the Court would first hear the petitioners, noting that the scope of issues appears to have narrowed since earlier directions.
Attorney General R. Venkataramani, appearing for the Union in multiple petitions, framed the core questions before the Bench, including whether the “triple test” evolved by Justice V.R. Krishna Iyer remains good law, and how subsequent legislative developments particularly the Industrial Disputes (Amendment) Act, 1982 and the Industrial Relations Code, 2020 (brought into force in November 2025) impact the interpretation of “industry.” He submitted that while the triple and dominant nature tests are logically sound, their indiscriminate application has led to over-expansion, sweeping in activities not analogous to trade or business.
Senior Advocate C.U. Singh pointed out that with the formal repeal of the Industrial Disputes Act following notifications culminating in February 2026, the very definition under consideration “no longer exists,” raising questions about the continuing relevance of the reference in light of Section 6 of the General Clauses Act and pending (“pipeline”) cases. Senior Advocate Indira Jaising cautioned that any ruling on the old law could inadvertently affect the new labour code, potentially prejudicing challenges to the latter. The Bench responded that any interpretation could be expressly confined to the repealed framework.
The Attorney General, R Venkatramani emphasized that later legislation, including the 2020 Code, may serve as an interpretative guide though not determinative in resolving ambiguities in the earlier law. He argued that the modern welfare state performs a wide range of socio-economic functions that may superficially resemble industrial activities, but should not automatically fall within the ambit of “industry.” He urged a more calibrated approach, especially concerning government functions, charitable organisations, and activities relatable to “sovereign functions,” which, he said, cannot be reduced to a rigid formula.
Justice B.V. Nagarathna and Justice Dipankar Datta raised concerns about the changing economic landscape post-liberalisation and questioned whether an expansive 1970s-era definition remains appropriate. The Court also examined the validity of the original reference, the lack of legislative enforcement of the 1982 amendment, and whether subsequent codes could influence interpretation without being directly under challenge.
Additional Solicitor General K.M. Nataraj, appearing for states, argued that later legislative developments are clarificatory in nature and reflect Parliament’s intent to limit the breadth of the definition. He stressed that “sovereign functions” should be understood in the context of a modern constitutional state and that welfare activities were never intended to be treated as industrial undertakings.
During the hearing, the Court appointed Senior Advocates J.P. Cama and P.N. Sen Gupta as amicus curiae to assist in the matter.
The matter will be taken up tomorrow at 10.30am.