Appeal No 1705 of1969
Appeal by special leave from the order dated February 21 1959 of the Central Government Labour Court Delhi in ICA No 2 of 1968 and Civil Appeal No 1781 of 1969
Appeal by special leave from the order dated February 24 1969 of the Additional Industrial Tribunal Delhi in ID No 73 of 1968 and Appeal from the judgment and order dated February 21 1969 of the Patna High Court in Civil Writ Jurisdiction Case No 730 of 1968
Niren De Attorney General and section P Nayar for the appellant in C A No 1705 of 1969
M K Ramamurthi E C Agarwala R P Agarwala and M V Goswami for the respondent in C A No 1705 of 1969
H R Gokhale Jitendra Mahajan for the appellant in CA No 1781 of 1969
M K Ramamurthi J Ramamurthy and Madan Mohan for the respondents in C A No 1781 of 1969
H R Gokhale M C Bhandare for the intervener
180 A K Sen Ranen Roy and A K Nag for theappellant in C A No 1777 of 1969
D Goburdhun for respondent No 1 in C A No 1777 of 1969
P N Tiwari and Shiva Pujan Singh for respondent No 3 in C A No 1777 of 1969
The Judgment of the Court was delivered by Hidayatullah CJ
This judgment will dispose of Civil Appeals Nos 1705 of 1969 1781 of 1969 and 1777 of 1969
The first is an appeal by the Management of Safdarjung Hospital New Delhi
The second by the Management of Tuber culosis Hospital New Delhi and the third by the Kurji Holy Family Hospital Patna
The first two are filed by special leave and the third by certificate
They call in question respectively the order of the Central Government Labour Court Delhi dated 21st February 1969 on an application under section 33C2 of the Industrial Disputes Act 1949 the order of the Presiding Officer Additional Industrial Tribunal Delhi dated 24th February 1969 and the judgment and order dated 21st February 1969 of the Patna High Court
They raise a common question of law whether these several hospitals can be regarded as industries within the meaning of the term in the Industrial Disputes Act
They also raise different questions on merits which will be considered separately
The facts of the three cases may be noticed briefly before we begin to examine the common question of law mentioned above
CA Nc 1705 of 1969
The Management of Safdarjung Hospital New Delhi was the respondent in a petition under section 33C2 of the in a petition by the present respondent Kuldip Singh Sethi a Lower Division Clerk in the Hospital for computation of the amount of salary etc
due to him in the pay scale of store keepers
Kuldip Singh Sethi was appointed as a Store keeper on October 26 1956 in the pay scale of Rs 60 5 75
This scale was revised to Rs 110 180 on July 1 1959 in accordance with the recommendations of the Second Pay Commission
Two or three months later the pay was re fixed and the time scale was Rs 110 131 with usual allowances
On July 1 1962 his basic pay was fixed at Rs 131
On November 26 1962 the Government of India in the Ministry of Health re revised the pay scales of Store keepers to Rs 130 5 160 8 200 EB 8 280 10 300 with the usual allowances
The order was to lake effect from the date of issue
Kuldip Singh Sethi complained by his petition that the Management of the Hospital had failed to give him pay in this scale and claimed Rs 914 for the period November 26 1962 to May 31 1968
181 In rely to his petition the Management contended that Kuldip p Singh Sethi was not a workman but a Government servant governed by the Conditions of Service for Government Servants and hence he could not invoke the since the Safdarjung Hospital was not an industry
The Tribunal following the decision of this Court in State of Bombay vs Hospital Mazdoor Sabha1 has held that the Hospital is an industry  that Kuldip Singh Sethi is a workman  and hence he is entitled to take recourse to section 3 3C 2 of the 
On merits his claim is found sustainable and he is given an award for Rs 914
We need not mention at this stage the grounds on which the merits of his claim are resisted
The point of law that arises in the case is whether the Safdarjung Hospital can be properly described as an industry  as defined in the 
CA No 1781 of 1969
In this case there is a dispute between the Management of the Tuberculosis Hospital New Delhi and its workmen represented by the Aspatal Karamchari Panchayat regarding pay scales and other facilities demanded by the workmen
The Management has taken the preliminary objection that the does not apply since the Hospital is not an industry and is not run as such
The Management
 therefore questions the reference to the Tribunal under section 101 d of the 
A preliminary issue is raised  Is TB Hospital an industry or not In support of the case that the Hospital is not an industry the Management emphasises the functions of the Hospital
It is pointed out that the Hospital is run by the Tuberculosis Association of India as a research institute where training is given to Medical graduates of the Delhi University for the DTCD and DCH Courses and postgraduates and undergraduates of the All India Institute of Medical Sciences are also provided training and nurses from the Delhi College of Nursing Safdarjung Lady Hardinge and Holy Family Hospitals receive training
The Hospital it is admitted has paid and unpaid beds but it is submitted that treatment of tuberculosis is a part of research and training and education and therefore the Hospital has affinity to a University and not to a Hospital proper
It is therefore contended that this Hospital is not an industry
The Tribunal holds that neither the research carried on nor the training imparted nor the existence of the Tuberculosis Association of India with which the Hospital is affiliated makes any difference and the case falls within the ruling of this Court in the Hospital Mazdoor Sabha1 case
The 1  182 Tribunal holds the Tuberculosis Hospital New Delhi to be an industry
CA No 1777 of 1969
The appeal arises from a writ petition filed in the High Court of Patna
The Kurji Holy Family Hospital took disciplinary action against two of its employees and the matter was taken up by the Kurji Holy Family Hospital Employees Association and the State of Bihar made a reference to the Labour Court Patna under section 10 of the 
Before the Tribunal the Management of the Hospital took the objection inter alia that a hospital was neither a trade nor a business nor an industry as defined in the and as such the provisions of the were not applicable and the reference was incompetent
The High Court holds this point against the Management following the Hospital Mazdoor Sabha1 case
The later case of this Court reported in Secretary Madras Gymkhana Club Employees Union vs Management of the Gymkhana Club2 is held not to have weakened the effect of the decision in the case relied upon
It is thus that the three cases came before us and were heard together
Counsel in these cases submit that the ruling in the HospitalMazdoor Sabha1 case has now been considerably shaken by the pronouncement in the Madras Gymkhana Club 2 case where it was I observed that the Hospital Mazdoor Sabha  case was one which might be said to be on the verge and that there were reasons to think that it took an extreme view of an industry
Relying on this observation counsel in the three appeals asked for a reconsideration of the Hospital Mazdoor Sabha1 case although they conceded that it was not yet overruled
We accordingly heard arguments on the general question whether a hospital can be said to be an industry falling within the and under what circumstances
We also heard arguments on the merits of the appeals to determine whether the decisions rendered therein could be upheld even if the Hospital Mazdoor Sabha1 case was held applicable
We shall follow the same course here
We shall first consider the general proposition whether a hospital can be considered to fall within the concept of industry in the and whether all hospitals of whatever description can be covered by the concept or only some hospitals under special conditions
We shall then consider the merits of the individual cases in so far as may be necessary
The was construed in the past on more than one occasion by this Court
A fairly comprehensive summary of the various cases with the rationes decidendi of those 1  2 1968 1 SCR 742
183 cases is to be found in the Gymkhana Club1 case
 The tests applied to find out whether a particular establishment falls within the definition of industry  or not were not found to be uniform and disclosed a pragmatic approach to the problem
This Court therefore in Gymkhana Club1 case fell back upon the statute for guidance pointing out that they were not concerned with a popular phrase but one which the statute had with great particularity defined itself
Examining the content of the definitions this Court came to certain conclusions and held in their light that a non proprietary members  club was not an industry
The reasoning in the Gymkhana Club1 case formed the basis of an attack on the former ruling in the Hospital Mazdoor Sabha2 case by the Managements of the three Hospitals which are appellants here
The other side relied
upon the ruling and the amendment of the by which Service in hospitals and dispensaries  has now been added as item No 9 in the First Schedule as one of the industries which may be declared to be public utility services under sub cl 
vi of cl
n of section 2 of the Act
It is claimed that this is a legislative determination of the question whether hospital is an industry or not
It has therefore become necessary to cover some of the ground coveredin the Gymkhana Club1 case
To begin with we may once again refer to the relevant definitions contained in the Act for they must necessarily control our discussion
The  as its title and indeed its whole tenor disclose was passed to make provision for the investigation and settlement of industrial disputes and for certain other purposes appearing in the Act
The term industrial dispute  is defined by section 2k in the following words  industrial dispute  means any dispute or difference between employers and employers or between employers and workmen or between workmen and workmen which is connected with the employment or non employment or the terms of employment or with the conditions of labour of any person
 The definition discloses that disputes of particular kinds alone are regarded as industrial disputes
It may be noticed that this definition does not refer to an industry
But the dispute on the grammar of the expression itself means a dispute in an industry and we must therefore turn to the definition of industry  in the Act
The word is defined in cl
j and reads   industry  means any business trade undertaking manufacture or calling of employers and includes any 1 1968 1 SCR 742
2  184 calling services employment handicraft or industrial occupation or avocation of workman
 This definition is in two parts
The first part says that it means any business trade undertaking manufacture or calling of employers and then goes on to say that it includes any calling service employment handicraft or industrial occupation or avocation of workmen
In dealing with this definition this Court in the Gymkhana Club case1 attempted to keep the two notions concerning employers and employees apart and gave the opinion that the denotation of the term industry  is to be found in the first part relating to employers and the full connotation of the term is intended to include the second part relating to workmen
It was therefore concluded If the activity can be described as an industry with reference to the occupation of the employers the ambit of the industry under the force of the second part takes in the different kinds of activity of the employees mentioned in the second part But the second part standing alone cannot define industry 
By the inclusive part of the definition the labour force employed in an industry is made an integral part of the industry for purposes of industrial disputes although industry is ordinarily something which employers create or undertake These observations need to be somewhat qualified
It is to be noticed that this definition modifies somewhat the definition of industry  in section 4 of the Commonwealth Conciliation and Arbitration Act 1909 1970 Acts Nos 13 of 1904 and 7 of 1910 of Australia where the definition reads  industry  means business trade manufacture undertaking calling service or employment on land or water in which persons are employed for pay hire advantage or reward excepting only persons engaged in agricultural viticultural horticultural or dairying pursuits
 Although the two definitions are worded differently the purport of both is the same
It is not necessary to view our definition in two parts
The definition read as a whole denotes a collective enterprise in which employers and employees are associated
It does not exist either by employers alone or by employees alone
It exists only when there is a relationship between employers and employees the former engaged in business trade undertaking manufacture or calling of employers and the latter engaged in any calling service 1 1968 1 SCR 742
185 employment handicraft or industrial occupation or avocation
There must therefore be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen who follow one of the avocations detailed for workmen
The definition no doubt seeks to define industry  with reference to employers  occupation but includes the employees for without the two there can be no industry
An industry is only to be found when there are employers and employees the former relying upon the services of the latter to fulfil their own occupations
But every case of employment is not necessarily productive of an industry
Domestic employment administrative services of public officials service in aid of occupations of professional men also disclose relationship of employers and employees but they cannot be regarded as in the course of industry
This follows from the definition of workman  in the Act defined in cls which reads workman  means any person including an ap prentice employed in any industry to do any skilled or unskilled manual supervisory technical or clerical work for hire or reward whether the terms of employment be express or implied and for the purposes of any proceed ing under this Act in relation to an industrial dispute includes any such person who has been dismissed discharged or retrenched in connection with or as a conse quence of that dispute or whose dismissal discharge or retrenchment has led to that dispute but does not include any such person i who is subject to the  or the or the Navy Discipline Act 1934 or ii who is employed in the police service or as an officer or other employee of a prison or iii who is employed mainly in a managerial or administrative capacity or ivwho being employed in a supervisory capacitydraws wages exceeding five hundred rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him functions mainly of a managerial nature
 The word industry  in this definition must take its colour from the definition and discloses that a workman is to be regarded as one employed in an industry if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers
Cl70 13 186 Therefore an industry is to be found when the employers are carrying on any business trade undertaking manufacture or calling of employers
If they are not there is no industry as such
What is meant by these expressions was discussed in a large number of cases which have been considered elaborately in the Gymkhana Club1 case
The conclusion in that case may be stated  Primarily therefore industrial disputes occur when the operation undertaken rests upon cooperation between employers and employees with a view to production and distribution of material goods in other words wealth but they may arise also in cases where the co operation is to produce material services
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade business and manufacture
 The words trade  business  manufacture  and calling  were next explained thus  The word trade  in this context bears the X X meaning which may be taken from Halsbury s Laws of England Third Edn
38 p 8 a exchange of goods for goods or goods for money b any business carried on with a view to profit whether manual or mercantile as distinguished from the liberal arts or learned professions and from agriculture and business means an enterprise which is an occupation as distinguished from pleasure
Manufacture is a kind of productive industry in which the making of articles or material often on a large scale is by physical labour or mechanical power
Calling denotes the following of a profession or trade
 It may be added here that in National Association of Local Government Officers vs Bolton Corporations2 at page 183 et seq Lord Wright observes that trade  is a term of the widest scope
This is true
We speak of the occupation of men in buying and selling barter or commerce as trade
We even speak of work especially of skilled work as trade eg the trade of goldsmiths
But the word as used in the statute must be distinguished from professions although even professions have trade unions 
The word trade  includes persons in a line of business in which persons are employed as workmen
Business too is a word of wide import
In one sense it includes all occupations and professions
But in the collocation of the terms
and their definitions these terms have a definite economic content of a particular type and on the 1 1968 1 SCR 742
2  183
187 authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production distribution and consumption of wealth and the production and availability of material services
Industry has thus been accepted to mean only trade and business manufacture or undertaking analogous to trade or business for the production of material goods or wealth and material services
Why professions must be held outside the ambit of industry may be explained
A profession ordinarily is an occupation requiring intellectual skill often coupled with manual skill
Thus a teacher uses purely intellectual skill while a painter uses both
In any event they are not engaged in an occupation in which employers and employees co operate in the production or sale of commodities or arrangement for their production or sale or distribution and their services cannot be described as material services
What is meant by material services  needs some explanation too
Material services are not services which depend wholly or largely upon the contribution of professional knowledge skill or dexterity for the production of a result
Such services being given individually and by individuals are services no doubt but not material services
Even an establishment where many such operate cannot be said to convert their professional services into material services
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power water transportation mail delivery telephones and the like
In providing these services there may be employment of trained men and even professional men but the emphasis is not on what these men do but upon the productivity of a service organised as an industry and commercially valuable
Thus the services of professional men involving benefit to individuals according to their needs such as doctors teachers lawyers solicitors etc are easily distinguishable from an activity such as transport service
The latter is of a commercial character in which something is brought into existence quite apart from the benefit to particular individuals
It is the production of this something which is described as the production of material services
Mr Ramamurti arguing against the Hospitals drew our atten tion to Citrine s book Trade Union Law  3rd edn
p 609 where the author observes  However whilst the words trade  and industry  are separately capable of a wide interpretation when they occur in conjunction the tendency of the courts is to give them a narrow one
 188 He cites the House of Lords case to which we have referred and criticises the tendency of the court to narrow the meaning of the expressions industry  and workman 
He says that this narrow interpretation unnecessarily excludes from workmen teachers employed by local authorities university employees nurses and others employed under the National Health Service the domestic staff of the Houses of Parliament and Civil Servants who are not employed in trading  or industrial undertaking 
He includes all these in the definitions because a person doing the same type of work for a commercial undertaking is within the definition
According to him any person gainfully employed must be within the definition
On the strength of this definition Mr Ramamurthi also contends that not the Hospital Mazdoor Sabha1 case but the earlier cases off this Court such as University of Delhi and Anr
vs Ramnath2 and National Union of Commercial Employees vs M R Meher3 must be reconsidered and overruled
The reason for these cases as also the Gymkhana Club4 case lies in the kind of establishment with which we are concerned
The Gymkhana Club4 case of this Court followed and applied in Cricket Club vs Labour Union5 has held that non profit making members  clubs are not employed in trade or industry and their employees are not entitled to engage in trade disputes with the clubs
This view finds support from Hotel and Catering Industry Training Board and Automobile Proprietary Ltd 6
The Solicitors case cited by Mr Ramamurti was so decided because there the services rendered by the employees were in aid of professional men and not productive of material goods or wealth or material services
The other case of University was also decided as it was for the same reason
It therefore follows that before an industrial dispute can be raised between employers and their employees or between employers and employers or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person there must be first established a relationship of employers and employees associating together the former following a trade business manufacture undertaking or calling of employers in the production of material goods and material services and the latter following any calling service employment handicraft or industrial occupation or avocation of workmen in aid of the employers  enterprise
It is not necessary that there must be a profit motive but the enterprise must be analogous to trade or business in a commercial sense
1  2  3 1962 Supp
3 SCR 157
4 1968 1 SCR 742
5 AIR 6 HL SC and CA 189 We do not find it necessary to refer to the earlier cases of this Court from which these propositions have been deduced because they are all considered in the Gymkhana Club case1
We accept the conclusion in that case that    before the work engaged in can be described as an industry it must bear the definite character of trade  or business  or manufacture  or calling  or must be capable of being described as an undertaking resulting in material goods or material services
 We may now consider closely the Hospital Mazdoor Sabha2 case and the reasons for which it was held that the workmen employed in a hospital were entitled to raise an industrial dispute
We may say at once that if a hospital nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there
Then the hospital is more than a place where persons can get treated for their ailment
It becomes a business
In the Hospital Mazdoor Sabha2 case hospitals run by Gov ernment and even by a private association not on commercial lines but on charitable lines or as part of the functions of Government Department of Health were held included in the definition of industry
The reason given was that the second part of the definition of industry contained an extension of the first part by including other items of industry
As we have pointed out the first and the second parts of the definition are not to be read in isolation as if they were different industries but only as aspects of the occupation of employers and employees in an industry
They are two counterparts in one industry
The case proceeds on the assumption that there need not be an economic activity since employment of capital and profit motive were considered unessential
It is an erroneous assumption that an economic activity must be related to capital and profit making alone
An economic activity can exist without the presence of both
Having rejected the true test applied in other cases before the test applied was can such activity be carried on by private individuals or group of indivi duals  Holding that a hospital could be run as a business proposition and for profit it was held that a hospital run by Government without profit must bear the same character
With respect we do not consider this to be the right test
That test was employed to distinguish between the administrative functions of Government and local authorities and their functions analogous to business but it cannot be used in this context
When it was emphasised in the same case that the activity must be analogous to business and trade and that it must be productive of goods or their distribution or for producing material services to the community at large 1 1968 1 SCR 742
2  190 or a part of it there was no room for the other proposition that privately run hospitals may in certain circumstances be regarded as industries
The expression satisfying material human needs  was evolved which bore a different meaning
These observations were apparently based on the observations of Isaacs and Rich JJ
in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation1 but they were  Industrial disputes occur when in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants and desires those engaged in co operation dispute as to the basis to be observed by the parties engaged respecting either a share of the produce or any other terms and conditions of their co operation
The question of profit making may be important from an income tax point of view as in many municipal cases in England but from an industrial dispute point of view it cannot matter whether the expenditure is met by fares from passengers or from rates
 The observations in the Australian case only indicate that in those activities in which government takes to industrial ventures the notion of profit making and the absence of capital in the true sense of the word are irrelevant
The passage itself shows that industrial disputes occur in operation in which employers and employees associate to provide what people want and desire in other words where there is production of material goods or material services
In our judgment the Hospital Mazdoor Sabha 2 case took an extreme view of the matter which was not justified
It is argued that after the amendment of the Industrial Dis putes Act by which service in hospitals and dispensaries  is included in public utility services there is no scope for saying that hospitals are not industries
It is said that Parliament has accepted that the definition is suited to include a hospital
This contention requires close attention in view of the fact that it was noticed in the Hospital Mazdoor Sabha2 case although that arose before the amendment
A public utility service is defined in the Act by merely naming certain services
It will be noticed that these services are i any railway service or any transport service for the Carriage of passengers or goods by air 1  2  191 ii any section of any industrial establishment on the working of which the safety of the establishment or the workmen employed therein depends iii any postal telegraph or telephone service iv any industry which supplies power light or water to the public v any system of public conservancy or sanitation After namingthese services the definition adds  vi any industry specified in the First Schedule which the appropriate Government may if satisfied that public emergency or public interest so requires by notification in the official gazette declare to be a public uti lity service for the purposes of this Act for such period as may be specified in the notification
Provided that the period so specified shall not in the first instance exceed six months but may by a like notification be exceeded from time to time by any period not exceeding six months at any one time if in the opinion of the appropriate Government public emergency or public interest requires such extension
The intention behind this provision is obviously to cassify certain services as public utility services with special protection for the continuance of those services
The named services in the definition answer the test of an industry run on commercial lines to produce something which the community can use
These are brought into existence in a commercial way and are analogous to business in which material goods are produced and distributed for consumption
When Parliament added the sixth clause under which other services could be brought within the protection afforded by the Act to public utility services it did not intend that the entire concept of industry in the Act could be ignored and anything brought in
Therefore it said that an industry could be declared to be a public utility service
But what could be so declared had to be an industry in the first place
We are concerned with the addition of item 9 service in hospitals and dispensaries
The heading of the First Schedule speaks again of industries which may be de clared to be public utility services
The original entries were five and they read 1
Transport other than railways for the carriage of passengers or goods by land water or air now air is omitted
Coal 192 3
Cotton textiles
Food stuffs 5
Iron and steel
It is obvious that general headings are given here
Coal is not an industry but certain aspects of dealing with coal is an industry and that is what is intended
That dealing must be in an industry in which there are employers and employees cooperating in the production of material goods or material services
Similarly cotton textiles or food stuffs or iron and steel as the entries stand are not industries
Therefore the heading of the First Schedule and the words of clause vi presuppose the existence of an industry which may be notified as a public utility service for special protection under the Act
Therefore when the list was expanded in the First Schedule and certain services were mentioned the intention could not be otherwise
The list was extended to 10 items by amendment of the Act by Act 36 of 1956 with effect from March 10 1957
The new items are a Banking b Cement c Defence Establishments d Service in hospitals and dispensaries and e Fire Brigade Service
Later by notifications issued under section 40 of the Act nine more items were added
Section 40 gives to governments the power to add to the Schedule
They are a Indian Government Mints b India Security Press c Copper Mining d Lead Mining e Zinc Mining f Iron ore mining g Service in any oil field h Any service in or in connection with the working of any major port or dock and i Service in the Uranium Industry
It is easy to see that most of them are items in which an industry proper involving trade business manufacture or something analogous to business can be found
It is hardly to be thought that notifications can issue in respect of enterprises which are not industries to start with
It is only industries which may be declared to be public utility services
Therefore to apply the notification the condition precedent of the existence of an industry has to be satisfied
If there is an industry which falls within the items named in the First Schedule then alone can it be notified to be classed as a public utility service
The law does not work the other way round that every activity connected with coal becomes an industry and therefore on notification that activity becomes a public utility service
The same is true of all items including all the services mentioned
They must first be demonstrated to be industries and then the notification will apply to them
To hold otherwise would largely render useless all the definitions in the Act regarding industry industrial disputes etc in relation to the scheduled items
Parliament has not attempted to declare that notwithstanding the definitions of 193 industry  industrial disputes workman  and employer  every hospital is to be regarded as an industry
All that has been provided is that an industry  may be notified as a public utility service
That is insufficient to convert non industries under the Act to industries
We now take up the individual cases
CA No 1705 of 1969
It is obvious that Safdarjung Hospital is not embarked on an economic activity which can be said to be analogous to trade or business
There is no evidence that it is more than a place were persons can get treated
This is a part of the functions of Government and the Hospital is run as a Department of Government
It cannot therefore be said to be an industry
In this case the petitioner chose to be a Lower Division Clerk
The amount of security which he had to furnish in the job of a Store keeper was also refunded to him
He had applied for the post on May 31 1962
On July 14 1962 he again drew attention to his application
His application was recommended on August 9 1962
It was only after November 26 1962 when the scale of Store keepers was raised to Rs 130 300 that he changed his views
On December 12 1962 he made a representation but in forwarding it the Medical Superintendent said that the incumbents of the posts of Store keepers could not be given the upgraded scale of Rs 130 300
In addition there were certain matters pending against him which precluded his appointment in that scale
On August 11 1966 the Director General wrote With reference to your letter No 1 2062 Estt dated the 4th Jan 1966 and subsequent reminder of even number dated the 24th May 1966 on the subject noted above I am directed to say that a reference was made to the Government of India in the Ministry of Health and Family Planning New Delhi who have stated that it was not intended that the revised scale of Rs 110 131 previous scale of Rs 60 75 should be further revised to Rs 130 300 as all incumbents of the posts carrying the pay scale of Rs 110 131 were promoted from Class IV and did not possess the requisite qualifications prescribed for posts carrying pay scale of Rs 130 300
In view of the position stated above further action in the matter may kindly be taken in the light of the above remarks and storekeepers concerned informed accordingly
In view of these facts it is hardly necessary to refer to the reports about the work of Kuldip Singh Sethi and other matters which 194 came in his way of promotion
Both on the question of law decided by us and on the merits of his case Kuldip Singh Sethi was not entitled to the pay scale of store keepers and the award of Rs 914 in his favour was wrong
The appeal is allowed
The order is set aside but there will be no order about costs
CA No 1781 of 1969
The Tuberculosis Hospital is not an independent institution
It is a part of the Tuberculosis Association of India
The hospital is wholly charitable and is a research institute
The dominant purpose of the Hospital is research and training but as research and training cannot be given without beds
in a hospital the hospital is run
Treatment is thus a part of research and training
In these circumstances the Tuberculosis Hospital cannot be described as an industry
The order of the Additional Industrial Tribunal Delhi on the preliminary point must be reversed
The reference to the Tribunal under section 101d of the was incompetent
The appeal is allowed but we make no order about costs
No 1777 of 1969
The objects of the Kurji Holy Family Hospital are entirely charitable
It carries on work of training research and treatment
Its income is mostly from donations and distribution of surplus as profit is prohibited
It is therefore clear that it is not an industry as laid down in the Act
The reference made by the State Government Bihar was thus incompetent
The appeal will be allowed
There will be no order about costs except in the first case CA 1705 of 1967 in which the earlier order of this Court shall be given effect to
VPS Appeals allowed


Summary:
1 The definition of industry in section 2j of the is in two parts
But it must be read as a whole
So read it denotes a collective enterprise in which employers and employees are associated
It does not exist either by employers alone or by employees alone
It exists only when there is a relationship between employers and employees the former engaged in business trade undertaking manufacture or calling of employers and the latter engaged in any calling service employment handicraft or industrial occupation or avocation
But every case of employment is not necessarily productive of an industry
A workman is to be regarded as one employed in an industry only if he is following one of the vocations mentioned in conjunction with his employers engaged in the vocations mentioned in relation to the employers namely any business trade undertaking manufacture or calling of employers
In the collocation of the terms and their definitions these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production distribution and consumption of wealth and the production and availability of material services
Industry has thus been accepted to mean only trade and business manufacture or undertaking analogous to trade or business for the production of material goods or wealth and material services
Material services involve an activity carried on through co operation between employers and employees to provide the community with the use of something such as electric power water transportation mail delivery telephones and the like
In providing these services there may be employment of trained men and even professional men but the emphasis is not on what they do but upon the productivity of a service organised as an industry and commercially valuable in which something is brought into existence quite apart from the benefit to particular individuals and it is the production of this something which is described as the production of material services
Thus the services of professional men involving benefit to individuals according to their needs such as doctors teachers lawyers solicitors etc are easily distinguishable from an activity such as transport service
They are not engaged in an occu pation in which employers and employees cooperate in the production or sale of commodities or arrangement for the production or sale or distribution and their services cannot be described as material services and are outside the ambit of industry
It therefore follows that before an industrial dispute can be raised between employers and employers or between employers and employees or between employees and employees in relation to the employment or non employment or the terms of employment or with the conditions of labour of any person there must first 178 be established a relationship of employers and employees associating together the former following a trade business manufacture undertaking or calling of employers in the production of material goods and material services and the attack following any calling service employment handicraft or industrial occupation or avocation of workmen in aid of the employers enterprise
It is not necessary that there must be profit motive but the enterprise must be analogous to trade or business in a commercial sense
183 H 184 G H 185 C H 186 H 187 A B E G 188 F H 2 The decision in State of Bombay vs Hospital Mazdoor Sabha  holding that a Government hospital was an industry took an extreme view of the matter and cannot be justified because  a it was erroneously held that the second part of the definition of industry  was an extension of the first part whereas they are only the two aspects of the occupation of employers and employees in an industry b it was assumed that economic activity is always related to capital or profit making and since an enterprise could be an industry without capital or profit making it was held that even economic activity was not necessary and c it was held that since a hospital could be run as a business proposition and for profit by private individuals or groups of individuals a hospital run by Government without profit must also bear the same character
This test was wrongly evolved from the observations in Federated Municipal and Shire Council Employees of Australia vs Melbourne Corporation   which only indicate that in those activities in which Government take to industrial ventures the motive of profit making and absence of capital are irrelevant
The observations on the contrary show that industrial disputes occur only in operations in which employers and employees associate to provide what people want and desire that is in the production of material goods or services and not the satisfaction of material human needs 
If however a hospital nursing home or dispensary is run as a business in a commercial way there may be found elements of an industry there
Then the hospital is more than a place where persons can get treated for their ailments and it becomes a business
189 D H 190 E F Hospital Case  over ruled
3 Under section 2nvi any industry specified in the First Schedule to the Act could be notified by the appropriate Government as a public utility service
But what could be declared had to be an industry in the first place
The original entries in the Schedule were five and obviously only general headings were given
For example coal  is not an industry but certain aspects of dealing with coal would be industry  and that is what is intended
The dealing must be an industry in which
there arc employers and employees cooperating in the production of material goods for material services
Similarly cotton textiles or food stuffs or iron and steel as the entries stand are not industries
Therefore the heading of the First Schedule and the words of cl
vi presuppose the existence of an industry which may be notified as a public utility service for special protection under the Act
191 F H When the list was expanded in the First Schedule and certain services were mentioned the intention could not have been otherwise
It could not have been intended by Parliament that the entire concept of industry  in the Act could be ignored and anything could be brought in as industry
Most of the new entries are items in which an industry proper involving trade business
manufacture or something analogous to business can be found Therefore to apply the notification
the condition precedent of the existence of an industry has to be satisfied
If there is an industry 179 which falls within the item named in the first Schedule then alone can it be notified to be classed as a public utility service
To hold otherwise would largely render useless all the definitions in the Act regarding industry industrial disputes etc in relation to the scheduled items
It is hardly to be thought that notifications can issue in respect of enterprises which are not industry  to start with
Parliament could not have attempted to declare that notwithstanding the definitions of industry  industrial dispute  workman  and employer  every hospital is to be regarded as an industry by including service in hospitals and dispensaries  in the First Schedule
192 B C F H 4 The activities in the cases of Secretary Madras Gytmkhana Club Employees Union vs Management of the Gymkhana Club 1968 1 SCR 742 University of Delhi vs Ramnath  and National Union of Commercial Employees vs M R Meher 1962 Supp 3 SCR 157 were rightly held not be industries because in the first the management was a non profit making members  club not employed in trade or industry and the other two were cases in which the services rendered by the employees were in aid of professional men and not productive of material wealth or services
188 C F Hotel and Catering Industry Training Board and Automobile Proprietary Ltd HL SC and 19683 All
ER 399 CA referred to
Therefore the Safdarjung Hospital which is run as a department of the Government the Tuberculosis Hospital which is a charitable and research institute
and the Kurji Holi Family Hospital which is entirely charitable are not industries within the meaning of the 
193 C 194 B E