Appeal No 24 of 1961
APPeal from the judgment and order dated November 20 1958 of the Bombay High Court in Special Civil Application No 2789 of 1958
AS R Chari and K R Choudhuri for the appellants
ST Desai and V J Merchant for respondents Nos 2 and 4 and the Intervener The Bombay Incorporated Law Society
February 13 The Judgment of the Court was delivered by GAJENDRAGADKAR J
This appeal arises out of a dispute between the appellants the National Union of Commercial Employees  Anr and the respondents Pereira Fazalbhoy and Desai who constitute an Attorneys  firm by name Ms Pereira Fazalbhoy  Co It appears that in August 1957 159 the appellant wrote to the respondent firm setting forth certain demands on behalf of its employees
These demands related to bonus for the years 195556 and 1956 57 and to certain other matters
As the parties could not agree the dispute was taken before the Conciliation Officer
The Conciliation Officer also failed to bring about a settlement and so he submitted his failure report to the Government of Bombay
Thereafter the State Government referred the dispute in regard to the bonus for the two years 1956 and 1957 for adjudication before an Industrial tribunal under section 125 of the Industrial Disputes Act No 14 of 1947 hereinafter called the Act
Before the Tribunal the respondents raised a preliminary objection
They urged that the profession followed by them was not an industry within the meaning of the Act and so the dispute raised against them by the appellants was not an industrial dispute within the meaning of the Act the contention was that the dispute not being an industrial dispute under the Act the reference made by the Government was incompetent and so the Tribunal had no jurisdiction to adjudicate upon this dispute
The Tribunal upheld the preliminary objection and recorded its conclusion that it had no jurisdiction to adjudicate upon the dispute as it was not an industrial dispute
The order thus passed by the Tribunal was challenged by the appellants before the High Court at Bombay by special Civil Application No 2789 of 1958 filed under Articles 226 and 227 of the Constitution
The High Court considered the rival contentions raised before it by the appellants and the respondents and came to the conclusion that the respondent s firm did not constitute an industry and so the dispute between the said firm and its employees was nut ail industrial dispute which could validly form the subject matter of a reference under the Act
In that view of the matters the High Court hold that the Industrial Tribunal was 160 right in refusing to make an order on the reference and so the appellants  writ petition was dismissed
The appellants then applied for and obtained a certificate from the High Court and it is with the said certificate that the present appeal has come to this Court and the short question which it raises for our decision is whether the respondents  firm which carries on the work of Solicitors in Bombay can be aid to constitute an industry under section 2j of the Act
In dealing with this question it would be necessary to refer to the decision of this Court in the State of Bombay vs The Hospital Mazdoor Sabha 1
Both parties agreed that the present dispute would have to be determined in the light of the decision of this Court in that case
Let us therefore indicate the effect of the said decision
In the Hospital case 1 this Court had occasion to consider whether the services of workmen engaged as ward servants in the JJ Group of Hospitals Bombay under State control were workmen and whether the Hospital Group itself constituted
an industry under the Act or not
Both the questions were answered in the affirmative and in rendering those answers the scope and effect of the definition of the word industry  used in section 2j of the Act was considered
This Court held that the words used by section 2 j in defining industry  in an inclusive manner were of  wide import and had to be read in their wide denotation
Even so this Court stated that though section 2j uses words of very wide denotation a line would have to be drawn in a fair and just manner so as to exclude some callings services or undertakings from its purview
If all the words used are given their widest meaning all services and all callings would come within the purview of the definition even service rendered by a servant purely in a personal or domestic matter 11960 2 section C R866
161 or even in a casual way would fall within the definition
It is not and cannot be suggested that in its wide sweep the word service  is intended to include service howsoever rendered in whatsoever capacity and for whatsoever reason p 876
That is why this Court proceeded to consider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2j
In dealing with the somewhat difficult question of drawing a line this Court observed as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking
Such an activity generally involves the co operation of the employer and the employees and its object is the satisfaction of material human needs It must be organised or arranged in a manner in which trade or business is generally organised or arranged
It must not be casual nor must it be for oneself  nor for pleasure
Thus the manner in which the activity in question is organised or arranged the condition of the co operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which section 2 1 applies P 879
It was in the light of this working principle that this Court came to the conclusion that the State was carrying on an undertaking in running the Group of Hospitals in question In dealing with the question of hospitals this Court also referred to a material circumstance which supported the conclusion that running of hospitals is an industry under the Act
Section 2 n of third Act defines public utility service and under it five separate categories 162 of public utility service are enumerated
Clause VI of section 2 n provides that any industry specified in the Schedule as therein indicated would also be a public utility service
In 1956 Entry No 9 among others was added in the First Schedule specifying another public utility service
This Entry refers to service in hospitals and dispensaries
Therefore it was clear that since the validity of this entry was not disputed after service in hospitals and dispensaries was included in the First Schedule
it was inarguable that the hospital would not be an industry under the Act  unless a hospital was an industry under the Act service in the hospitals could not be regarded as public utility service
That is how this Court held that in running the JJ Hospital Group in Bombay the State  Government was carrying on an undertaking which was an industry under section 2j
The question which calls for our decision in the present appeal is  what would be the result of the application of the working test laid down by this Court in the Hospital case 1 in relation to the controversy between the parties in the present appeal  Mr Chari for the appellants contends that in dealing with the question as to whether the respondents carried on an industry under a 2 j it is necessary to distinguish between professional service rendered by an individual acting by himself and similar service rendered by a firm consisting of several partners because he suggests that professional service individually rendered stands on a different footing from professional service which is rendered in an organised and institutionalised manner
The Organisation of professional service which leads to its institutionalisation attracts the provisions of section 2j inasmuch as in such organised service there is bound to be co operation between the employers and the employees engaged by the firm for doing different categories of work According to Mr Chari the employment of 1 1960 2SCR 86 163 differentcategories of staff facilitates the work of the solicitors and it enables them to dispose of more work more quickly and more efficiently and he suggests that the presence of such co operation between the employees and their employers in the Organisation of the solicitors  firm satisfies the working test laid down by this Court in the Hospital case1
Tn our opinion the distinction sought to be drawn by Mr Chari between professional service rendered by an individual acting by himself and that rendered by a firm is not logical for the purPose of the application of the test in question
What is true about a firm of solicitors would be equally true about an individual Solicitor working by himself
the firm engages different categories of employees a single solicitor also engages different categories of employees to carry out different types of work and so the presence of co operation between the employees working in a solicitor s office and their employers the solicitor could be attributed to the work of a single solicitor as much as to the work of the firm  and therefore if Mr Chari is right and if the firm of solicitors is held to be an industry under the Act the office of an individual solicitor cannot escape the application of the definition of section 2j
That is why we think it would not be reasonable to deal with the matter on the narrow ground suggested by Mr Chari by confining our attention to the organisational or institutionalised aspect of a solicitors firm
When in the Hospital case 1 this Court referred to the Organisation of the undertaking involving the co operation of capital and labour or the employer and his employees it obviously meant the cooperation essential and necessary for the purpose of rendering material service or for the Purpose of production
It would realised that the concept of industry postulates partnership 1  164 between capital and labour or between the employer and his employees
It is under this partnership that the employer contributes his capital and the employees their labour and the joint contribution of capital and labour leads directly to the production which the industry has in view
In other words the co operation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry is the co operation which is directly involved in the production of goods or in the rendering of service
It cannot be suggested that every form or aspect of human activity in which capital and labour cooperate or employer and employees assist each other is an industry
The distinguishing feature of an industry is that for the production of goods or for the rendering of service co operation between capital and labour or between the employer and his employees must be direct and must be essential
Take for instance a textile mill
The employer contributes capital and installs the machinery requisite for the mills and the employees contribute their labour and by their cooperation assist the employer in producing the textile goods
When we refer to textile labour in relation to industrial disputes under the Act we refer to workmen who are engaged in the work of producing textile goods
It is obvious that in regard to textile mills a large majority of workmen concerned in carrying out the activities of most of the departments of the textile mills contribute directly in one form or another to the production of textile goods
It may be that even in a textile mill a very small minority of workmen may not be directly concerned with the production of textile goods  but even so their work is so integrally connected with the work carried on by the majority of workmen employed that they are treated as forming part of the same labour force
Thus there can be no doubt that 165 when a textile mill is regarded as an industry it is because capital and labour jointly contribute to the  production of goods which is the object of the mill
Let us consider the case of the hospitals
In  the hospitals the service to the patients begins with proper diagnosis followed by treatment either medical or surgical according to the requirements of the case
In the case of medical treatment the patients receive medical treatment according to the prescription and are kept in the hospital for further treatment
In surgical cases the patients receive surgical treatment by way of operation and then are kept in the hospital for further treatment until they are discharged
During the period of such treatment all their needs have to be attended to food has to be supplied to them nursing assistance has to be given to them medical help from time to time has to be rendered and ail incidental services required
for their recovery have also to be rendered
Now in the case of the activities of an organised Hospital the co operation of the employees is thus directly involved in rendering one kind of service or another which it is the duty of the hospital to render
It is true that the patients are drawn to the hospitals primarily because of the doctors or surgeons associated with them
But there can be no doubt that the work of the hospital and its purpose are not achieved merely when a surgical operation is performed or medical prescription provided
After medical treatment is determined or a surgical operation is performed the patient coming to a hospital as an indoor patient needs all kinds of medical assistance until he is discharged and the services rendered to him both initially and thereafter until his discharge are all services which the hospital has been established to render and it is in the rendering of the said services that the employees of the hospital co operate and play their part
That is how the test of cooperation between 166 the employer and his employees is satisfied in regard to hospitals which are properly organised and maintained
It is of course true that the quality the importance and the nature of the service rendered by different categories of employees in a hospital would not be the same but nevertheless all the categories of service rendered by respective classes of employees in a hospital are essential for the purpose of giving service to the patients which is the objective of the hospital
That is how the hospitals satisfy the test of co operation between the employer and his employees
Does a solicitors  firm satisfy that test  Superficially considered the solicitors  firm is no doubt organised at an industrial concern would be organised
There are different categories of servants employed by a firm each category being assigned separate duties and functions
But it must be remembered that the service rendered by it solicitor functioning either individually or working together with partners is service which is essentially individual  it depends upon the professional equipment knowledge and efficiency of the solicitor concerned
Subsidiary work which is purely of an incidental type and which in intended to assist the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor
For his own convenience a solicitor may employ a clerk because a clerk would type his opinion  for his convenience
 a solicitor may employ menial servant to keep his chamber clean and in order  and it is likely that the number of clerks may be large if the concern is prosperous and so would be the number of menial servants
But the work done either by the typist or the stenographer or by the menial servant or other employees in a solicitor s firm is not directly concerned with the service which the solicitor renders to his client and cannot therefore be said to 167 satisfy the test of co operation between the employer and the employees which is relevant to the purpose
There can be no doubt that for carrying on the work of a solicitor efficiently accounts have to be kept and correspondence carried on and this work would need the employment of clerks and accountants
But has the work of the clerk who types correspondence or that of the accountant who keeps accounts any direct or essential nexus or connection with the advice which it is the duty of the solicitor to give to his client The answer to this question must in our opinion be in the negative
There is no doubt a kind of co operation between the solicitor and his employees but that co operation has no direct or immediate relation to the professional service which the solicitor renders to his client
Therefore in our opinion it is difficult to accept the plea that a solicitor s firm carrying on the work of an Attorney is an industry within the meaning of section 2j
There is no doubt that the words used in section 21 are very wide but as has been held by this Court in the can of Hospital is necessary to draw a line in a fair and just manner putting some limitation upon the width of the said words and a working test has been enunciated in that behalf
The application of the said teat to the facts in the present appeal leads to the conclusion that the work of solicitors Which the respondents are carrying on as a firm is not an industry under section 2j of the Act
That is the view taken by the Bombay High Court and we think that view is right
It may be added that the same view has been taken by the Calcutta High Court in the case of Brij Mohan Bagaria vs N C Chaterjee 2 and DP Dunderdele vs G P Mukherjee3 
Looking at this question in a broad and general way it is not easy to conceive that a liberal profession like that of an
attorney could have been 1 2 1958 AIR 1938 Cal 460
3 AIRCal
168 intended by the Legislature to fall within the definition of industry under section 2j
The very concept of the liberal professions has its own special and distinctive features which do not readily permit the inclusion of the liberal professions into the four corners of industrial law
The essential basis of an industrial dispute is that it is a dispute arising between capital and labour in enterprises where capital and labour combine to produce commodities or to render service
This essential basis would be absent in the case of liberal professions
A person following a liberal profession does not carry on his profession in any intelligible sense with the active co operation of his employees and the principal if not the sole capital which he brings into his profession is his special or peculiar intellectual and educational equipment
That is why on broad and general considerations which cannot be ignored a liberal profession like that of an attorney must we think be deemed to be outside the definition of industry under section 2j In this connection it would be useful to refer to the observation made by Isaccs and Rich JJ in the Federated Municipal and Shire Council Employees  Union of Australia vs Melbourne Corporation 1
The concept of an industrial dispute said the learned Judges
may thus be formulated Industrial disputes occur when in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants or desires those engaged in co operation dispute as to the basis to be observed by the parties engaged respecting either a share of the product or any other terms and conditions of their co operation
This formula excludes the two extreme contentions of the claimant and the respondents respectively
It excludes for instance the legal and the medical professions because they are not carried on in any intelligible sense by the Cooperation of 1 191926CLR508554 169 capital and labour and do not come within the sphere of industrialism
It includes where the necessary co operation exists disputes between employers and employees employees and employees and employers and employers
It implies that industry to lead to an industrial dispute is not as the claimant contends merely industry in the abstract sense as if it alone effected the result but it must be acting and be consideredin association with its co operator capital in some form so that the result is in a sense the outcome of their combined efforts
Those observations support the view which we hive taken about the character of co operation between the employer and employees which affords a relevant test in determining whether the enterprise in question is an industry or not
Co operation to which the test refers must be co operation between the employer and his employees which is essential for carrying out the purpose of the enterprise and the service to be rendered by the enterprise should be the direct outcome of the combined efforts of the employer and the employees
There is one more minor point which still remains to be considered
Mr Chari argued that it would be idle for the respondents to contend
that the work of their firm is not an industry under a 2j because they have themselves described their work as the work of carrying on business of solicitors
It appears that the document of partnership executed between the different partners of the firm provided inter alia that all expenses of the business of the partnership or losses incurred in carrying on the business of the partnership shall be
borne out of the profits or capital of the partnership
It is on the use of the word business in this clause that Mr Chari relies
In support of his argumenthe referred us to a decision of Farwell J in Dickson vs Jones 1
In that case the Court was concerned to examine the validity of an agreement between the plaintiff solicitor and his junior clerk who 1 170 was subsequently articled to him
This agreement provided that the latter would not at any time hereafter practice as a solicitor within a radious of 15 miles from the Town Hall Hanley aforesaid or solicit any client of the solicitor
Farwell J held that the combination of a restriction over an area so great as a radious 15 miles and one extending to the whole life of the defendant articled clerk was in the circumstances wider than was necessary for the protection of the plaintiff and was therefore unenforceable as being in Undue restraint of trade
The argument is that the validity of an agreement between a solicitor and his articled clerk was tested on the ground that it was an agreement in restraint of trade and so the solicitor s work must be held to be a  trade under section 2j
There is obviously no force in this argument
If in their deed of partnership the respondents described the work of partnership as the business of solicitors that can hardly assist the appellants in contending that the work carried on by the firm is industry under section 2j
The work of a solicitor is in a loose sense of course of business and so if the solicitors entered into an agreement in restraint of trade its validity would have to be judged on the basis that their work in the nature of business
That however is hardly relevant in determining the question as to whether the said work is an industry under section 2j as we have already made it clear the definition of the word  industry is couched in words of very wide denotation
But that precisely is the reason why a line has to be drawn in a just and fair manner to demarcate the limitations of their scope and that necessarily leads to the adoption of some working test
Therefore in our opinion the argument that the respondents themselves have called their work as business is of no assistance
The result is the appeal fails there would be no order as to costs
Appeal dismissed


Summary:
The respondents were a firm carrying on the work of solicitors in Bombay
For the years 1956 and 1957 a claim for bonus was made against them by their employees
Before
the Industrial Tribunal to which the dispute was referred by the State Government for adjudication under the provisions of the  the respondents contended that the profession followed by them was not an industry within the meaning of section 2j of the Act that the dispute raised against them was not an industrial dispute under the Act and that therefore the reference made by the Government was incompetent
Held that the work of solicitors is not an industry within the meaning of section 2j of the  and that therefore any dispute raised by the employees of 158 the solicitors against them cannot be made the subject of reference to the Industrial Tribunal
The distinguishing feature of an industry is that for the production of goods or for the rendering of service co operation between capital and labour or between the employer and his employee must be direct
A person following a liberal profession does not carry on his profession in any intelligible sense with the active co operation of his employees and the principal if not the sole capital which he brings into his profession is his special or peculiar intellectual and educational equipment
Consequently a liberal profession like that of a solicitor is outside the definition of industry under section 2j of the Act
State of Bombay vs The Hospital Mazdoor Sabha   explained and distinguished
Brij Mohan Bagaria vs N
Chatterjee AIR 1958 Cal
460 and D P Dunderdele vs G P Mukherjee A 1
R  approved
Observations in Federated Municipal and Shire Council Employees  Union of Australia vs Melbourne Corporation   relied on