The Supreme Court’s nine-judge Constitution Bench has delivered its judgment in the long-pending reference concerning the interpretation of “industry” under Section 2(j) of the Industrial Disputes Act, 1947, with the Bench divided on the maintainability of the reference but ultimately holding that the Bangalore Water Supply triple test will continue to govern pending disputes under the repealed Act.
The 9-judge Bench comprised Chief Justice Surya Kant, Chief Justice of India (CJI) Surya Kant and Justices B.V. Nagarathna, P.S. Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe, and Vipul M. Pancholi.
The majority held that the reference was validly made and proceeded to answer the questions on the merits, while clarifying that its reformulated triple test would operate prospectively and would not disturb pending proceedings. The Court also made clear that it was not deciding the meaning of “industry” under the Industrial Relations Code, 2020, which would have to be interpreted independently.
The 6:3 majority on maintainability comprised CJI Surya Kant and Justices Vipul M. Pancholi, Satish Chandra Sharma, Alok Aradhe, P.S. Narasimha and Joymala Bagchi. Of these six, CJI Surya Kant and Justices Pancholi, Sharma, Aradhe and Bagchi agreed with the reformulation of the triple test, while Justice P.S. Narasimha held the reference maintainable but did not agree with creating a new test for pending cases. Justices B.V. Nagarathna, Dipankar Datta and Ujjal Bhuyan held that the reference itself was not maintainable; they favoured retaining the existing Bangalore Water Supply triple test.
“Triple Test” Reformulated But Will Not Displace Pending Proceedings: CJI Surya Kant-Led Majority
CJI Surya Kant’s opinion was fully concurred by Justices Vipul M. Pancholi, Satish Chandra Sharma and Alok Aradhe. It was substantially concurred by the opinion of Justice P.S. Narasimha. It held that the reference was maintainable and that certain aspects of the Bangalore Water Supply triple test could be refined.
The Court, however, expressly clarified that the reformulation would not displace the existing legal position governing pending proceedings under the 1947 Act.
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“Certain aspects of the triple test and the accompanying guidelines formulated in Bangalore Water Supply are susceptible to further refinement while the essential framework laid down therein has proved a test of time. We are of the opinion that some of its constituent elements could have been articulated differently in that judgment so as to better reflect the scope and contours of Section 2(j). It is not intended to displace the governing legal position in respect to pending proceedings. Consequently, all matters presently pending before courts, tribunals, labour authorities or other fora under the Industrial Dispute Act of 1947 may be adjudicated in accordance with the triple test as laid down in Bangalore Water Supply.”
The Bench also made clear that the judgment would not reopen matters that had already attained finality.
‘Bangalore Water Supply Does Not Require Any Reconsideration’: Justice BV Nagarathna
Justice B.V. Nagarathna authored a separate opinion in which she held that the Bangalore Water Supply judgment did not warrant reconsideration or modification and that the reference made by the five-judge Bench was unnecessary.
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“I have authored a separate opinion indicating as to why reconsideration of the judgment of this court in Bangalore Water Supply is not warranted. I have also stated that the reference made by a five-judge bench of this court was unnecessary. Nevertheless, I have analysed the judgment of this court in Bangalore Water Supply and have concluded that the same does not call for any interference or modification.”
Justice Nagarathna stressed that the Bangalore Water Supply interpretation had held the field for nearly five decades and should continue to govern pending cases. She observed that reopening the judgment would create uncertainty in disputes already pending under the repealed legislation.
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“In the interest of employers, workmen and industrial activity as well as the Indian economy itself, the definition of industry in section 2J as interpreted by Bangalore Water Supply must be followed in the pending cases.”
She also held that merely because an activity is performed by the State, it cannot automatically be excluded from the definition of “industry”; the nature of the activity would remain relevant.
‘Bangalore Water Supply Ratio Is Now Confined To Cases Under The Repealed Act’: Justice PS Narasimha
Justice P.S. Narasimha, in his opinion, agreed with the ultimate approach that the Bangalore Water Supply ratio should continue to govern disputes under the repealed Industrial Disputes Act, while the new Industrial Relations Code should be interpreted independently. He noted that the repeal of the earlier legislation had substantially altered the context in which the reference arose.
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“While an authoritative interpretation of the definition industry was compelling at the time of reference, such a determination has now become unnecessary with the repeal of the said provision with effect from 21-11-2025. With the advent of Industrial Relations Code 2020, with effect from 21-11-2025, the ratio in Bangalore Water Supply is now confined to cases arising under the repealed Act.”
Justice Narasimha therefore considered it prudent to dispose of pending cases under the old law on the basis of the established Bangalore Water Supply principles rather than create a new set of rules solely for those matters. He observed: “It is prudent to dispose of the pending cases on the basis of the ratio laid down in Bangalore Water Supply without attempting to create a third set of principles applicable only to the pending cases.”
He further clarified that the Industrial Relations Code would have to be interpreted on its own text and in its own context, without being burdened by the interpretation of the repealed Section 2(j).
Also Read: https://thebarbulletin.com/constitution-bench-industry-definition-hearing-worker-protections/
Reference Was Not Necessary And Serves No Practical, Jurisprudential Or Doctrinal Purpose”: Justices Dipankar Datta & Ujjal Bhuyan
Justice Dipankar Datta, whose opinion was concurred in by Justice Ujjal Bhuyan, took a fundamentally different view on the maintainability of the reference. They shared the same opinion as Justice Nagarathna on maintainability. They held that the five-judge Bench’s reference itself was unnecessary and that the Bangalore Water Supply judgment should not be reopened.
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“The reference..was not necessary and serves no practical, jurisprudential or doctrinal purpose. The reference seeks to disturb a quietness that has held the field for nearly half a century…Finality in law would be undermined without any corresponding public interest being served. We must remember, institutional credibility lies in respecting finality, not in perpetuating doubt. And absent compelling justification, none of which exists here, the chapter must be treated as closed..The reference is rejected and Bangalore Water Supply does not require any reconsideration.”
They concurred with the view that the reference was validly made only insofar as its maintainability was concerned, but disagreed with the majority’s reformulation of the triple test. They instead agreed with Justice Nagarathna that the existing triple test correctly determined the scope of “industry” under the 1947 Act.
Specious Plea Of Sovereign Functions Cannot Exclude State Welfare Activities: Justice Joymala Bagchi
Justice Joymala Bagchi delivered an independent opinion affirming the Bangalore Water Supply principles and stressing the broad application of the triple test to organised employer-employee relationships. He rejected an overly broad conception of sovereign functions that could exclude large categories of government employees from the protections of industrial law.
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“The concept of sovereignty has undergone a jurisprudential contraction and is restricted to core inalienable duties for which the state is not answerable to courts of law but to the people in a political democratic discourse…Viewed from this perspective welfare activities of the state undertaken by government departments and their instrumentalities are not by reason only of their public, charitable or welfare character placed beyond Section 2.”
He further reasoned that excluding such activities on a broad claim of sovereign function could leave a large number of workers without the statutory remedies intended by industrial law.
Also Read: https://thebarbulletin.com/constitution-bench-industry-definition-day-2-live/