Civil Appeals Nos 143  144 of 1959 and 545 of 1958
Appeals by special leave from the Award dated December 14 1957 of the State Industrial Court at Nagpur in Industrial References Nos 18 of 1956 and I of 1957 respectively
C B Aggarwala section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for the appellants in all the appeals
A V Viswanatha Sastri WS Barlingay section W Dhabe Shanker Anand and A G Ratnaparkhi for respondent No 2 in C A No 14459 and respondent in C A No 143 of 1959
H R Khanna and R H Dhebar for respondent No 3 in CA No 14459 945 A V Viswanatha Sastri W section Barlingay Shankar Anand and A G Ratnaparkhi for the respondents in CA No 545 of 1958
1960 Feb 10
The Judgment of the Court was delivered by SUBBA RAO J
This batch of three connected appeals raises the question whether and to what extent the activities of the Corporation of the City of Nagpur come under the definition of industry in section 214 of the CP  Berar Industrial Disputes Settlement Act 1947 hereinafter called the Act
The appellant is the Corporation of the City of Nagpur constituted under the City of Nagpur Corporation Act 1948 Madhya Pradesh Act No 2 of 1950
Disputes arose between the Corporation and the employees in various departments of the Corporation in respect of wage scales gratuity provident fund house rent confirmation allowances etc
The Government of the State of Madhya Pradesh by its order dated October 23 1956 referred the said disputes under section 39 of the Act to the State Industrial Court Nagpur and the reference was numbered as Industrial Reference No 18 of 1956
The appellant filed a statement before the Industrial Court questioning the jurisdiction of that Court inter alia on the ground that the Corporation was not an industry as defined by the Act
On February 13 1957 the Industrial Court made a preliminary order holding that the Corporation was an industry and that the further question whether any department of the Corporation was an industry or not would be decided on the evidence
The appellant challenged the correctness of that order by filing a petition under article 226 of the Constitution in the High Court of Bombay at Nagpur but that petition was dismissed as the award was made before its hearing
On June 3 1957 the Industrial Court made an award holding that the Corporation was an industry and further that all departments of the Corporation were covered by the said definition
It also revised the pay scales of the employees and accepted the major demands made by them
On July 15 1957 the appellant again filed a petition in the High Court of Bombay at Nagpur 946 questioning the validity and the correctness of the aid award
A division bench of the said High Court by its order dated September 11 1957 rejected the contention of the appellant that the Corporation was not an industry as defined by the Act and remanded the case to the State Industrial Court to decide the activities of which departments of the Corporation fell within the definition of industry given in the Act and to re examine the schedules and categories of persons and to restrict the award to the persons concerned within the definition of the word industry in the Act
On remand the said Industrial Court scrutinized the activities of each of the departments of the Corporation and hold that all the departments of the Corporation except those dealing with i assessment and levy of house tax ii assessment and levy and pulling down of dilapidated houses iv prevention and control of food adulteration and v maintenance of cattle pounds were covered by the definition of industry under the Act
It further gave findings in regard to the disputes between be parties and also as to the persons entitled to the reliefs
It is not necessary to give the particular 
of the findings arrived at or the relief given by the Industrial Court as nothing turns upon them in this appeal
The appellant by special leave filed in this Court Civil Appeal No 143 of 1959 against the award of the Industrial Court
It also filed in this Court by special leave Civil Appeal No 144 of 1959 against the order of the High Court holding that the activities of the Corporation came under the definition of industry in the Act and remanding the case to the Industrial Court for decision on merits in respect of each of the activities of the Corporation
Civil Appeal No 545 of 1958 the third appeal in this batch arises out of a reference made by the State Government of Madhya Pradesh in regard to the disputes between the appellant ie the Corporation of the City of Nagpur and the employees of the Corporation in the Fire Brigade Department representing themselves and other employees
The said reference was numbered as Industrial Reference No 1 947 of 1957
As there was overlapping of the disputes raised in Industrial Reference No 18 of 1956 and Industrial Reference No 1 of 1957 the Industrial Court heard both the references together and by consent the evidence in Reference No 18 of 1956 was treated as evidence in Reference No 1 of 1957
On December 14 1957 an award was made in Reference No 1 of 1957 and it was based on the findings in the award made in Reference No 18 of 1956
The Industrial Court held that the Fire Brigade Department was an industry within the meaning of the Act and on that basis gave the necessary reliefs to the employees
Mr Aggarwala learned counsel appearing for the appellant in the first two appeals raised before us the following points 1 No service rendered by the Corporation would be an industry as defined by section 214 of the Act
2 Assuming that some of the services of the Corporation are comprehended by the definition of  industry  in the Act the said services in order to satisfy the definition must be analogous to a business or trade
3 Even otherwise the activities of the Corporation to be called industry must partake the common characteristics of an industry
4 The finding of the Industrial Court holding that the various departments of the Corporation are industries is not correct as the services rendered by the said departments do not satisfy either of the aforesaid two tests
The first question need not detain us for it has now been finally decided by two decisions of this Court against the appellant
In D N Banerji vs P R Mukherjee 1 the chairman of a municipality dismissed two of its employees namely the Sanitary Inspector and the Head Clerk and the Municipal Workers  Union questioned the propriety of the dismissal and claimed that they should be reinstated and the matter was referred by the Government to the Industrial Tribunal for adjudication under the 
In that case two questions were raised before this Court one was whether the said dispute was industrial dispute within the 948 meaning of section 2j of the and the other was whether the was invalid inasmuch as it allowed the Tribunal to reinstate employees and to that extent trenched on the power of the chairman to appoint and dismiss employees
This Court held that the Act was not invalid as it was in pith and substance a law in respect of industrial and labour disputes and that the conservancy service rendered by the municipality was an industry and the dispute between the municipality and the employees of the conservancy department was an industrial dispute within the meaning of the 
This decision was followed by this Court in Baroda Borough Municipality vs Its Workmen 1
In that case the effect of the earlier decision was summarized thus at p 38  It is now finally settled by the decision of this Court in D N Banerji vs P R Mukherjee 2 that a municipal undertaking of the nature we have under consideration here is an  industry  within the meaning of the definition of that word in section 2j of the  and that the expression  industrial dispute  in that Act includes disputes between municipalities and their employees in branches of work that can be regarded as analogous to the carrying on of a trade or business
 In that case the workmen employed in the electricity department of the Baroda Municipality demanded bonus
The electricity undertaking of the Baroda Municipality was held to be an industry and the dispute between the Municipality and its employees an industrial dispute
Bonus was refused on other grounds and we are not concerned with that aspect of the case here
These two cases therefore have finally and authoritatively held that municipal undertakings could be  industry  within the meaning of the 
A faint argument is attempted to sustain a distinction between the definition of an industry in the and the definition of the same word in the Act in question
Section 2j of the 1  2  949 defines  industry  to mean any business trade undertaking manufacture or calling of employers and to include any calling service employment handicraft or industrial occupation or avocation of workmen 
Section 214 of the Act divides the definition into three parts namely  a any business trade manufacturing or mining undertaking or calling of employers b any calling service employment handicraft or industrial occupation or avocation of employees and c any branch of an industry or a group of industries
 A comparative study of these two sections brings out the following differences While the definition of  industry  in the means certain things and includes others the definition of  industry  in the Act includes the three categories described therein while the definition in the former Act places undertaking  in a category different from  manufacturing or mining   in the latter Act it is qualified by the words manufacturing or mining 
In our view these differences do not justify us in taking a different view from that accepted by this Court in the foregoing decisions
Clause a of the definition defines industry with reference to the employers and cl
b with reference to the employees
Excluding the words manufacturing or mining undertaking  from cl
a of the definition the other words in cls
a and b thereof are comprehensive enough to take in all the categories which the definition of industry in the will take in
That apart a perusal of the decision of this Court in D N Banerji vs P R Mukherjee 1 does not indicate that this Court would have come to a different conclusion if the word  undertaking  in the was qualified by the words  manufacturing or mining 
The decision was founded on a broader basis having regard to the history of the legislation the cognate definitions in the Act and the inclusive part of the definition corresponding to section 214b of the Act
We therefore hold that a service rendered by a corporation if it complies with the conditions implicit in the definition which we would consider at a later stage 1  950 of the judgment will bean  industry  within th meaning of the definition in the Act
The next question is whether activity of the Corporation is not  industry  unless it shares the common characteristics of an industry
The following five characteristics are stated to be the conditions implicit in the definition i the activity must concern the production or distribution of good or services ii it must be to serve others but not to oneself iii it must involve co operative effort between employer and employer between capital an labour iv it must be done as a commercial transaction and v it must not be in exercise of pure governmental functions
We have considered this aspect in State of Bombay vs The Hospital Maazdoor Sabha 1 in the context of the definition of  industry  in the and formulated certain broad principles
But as this case is concerned with the definition of industry in a different Act we shall briefly resurvey the law on the subject with specific reference to a corporation
Let us scrutinize the definition of  industry  to ascertain whether all or some of the conditions are implicit in the definition and whether the said conditions constitute the necessary basis for it
The true meaning of the section must be gathered from the expressed intention of the Legislature
Maxwell in his book On the Interpretation of Statutes 10th Edn rightly points out at p 2 that  If the words of the statute are in themselves precise and unambiguous no more is necessary than to expound those words in their natural and ordinary sense the words themselves in such case best declaring the intention of the legislature 
The words used in the section are clear and unambiguous and they prima facie are of the widest import
We have pointed out that the section is in two parts cl
a defines  industry  with reference to employers and cl
b defines it with reference to employees
Clause c extends the definition to any branch of an industry or a group of industries ie industries Coming within the definition of cls
a and b
It is said that in 11960 2 SCR 866 951 construing the definition we must adopt the rule of construction noscuntur a sociis
Maxwell explains this doctrine at p 332 thus  When two or more words which are susceptible of analogous meaning are coupled together noscuntur a sociis
They are understood to be used in their cognate sense
They take as it were their colour from each other that is the more general is restricted to a sense analogous to the less general
 On the basis of this doctrine it is argued that the words following the words  any business trade manufacturing or mining undertaking  shall partake the characteristics of any business trade manufacturing or mining undertaking and the words  any calling service employment handicraft or industrial occupation or avocation of employees  shall share the qualities of an industrial occupation or avocation
In other words the general word  calling  in cl
a is controlled by the words preceding it and the general words  calling service etc in cl
b are restricted by the succeeding words  industrial occupation or avocation 
This doctrine was dealt with by this Court in State of Bombay vs The Hospital Mazdoor Sabha 1
Therein this Court has considered the scope of this doctrine and has observed thus  It must be borne in mind that noscuntur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider
It is only where the intention of the Legislature in associating wider words with words of narrower significance is doubtful that the present rule of construction can be usefully applied
It can also be applied where the meaning of the words of wider import is doubtful but where the object of the Legislature in using wider words is clear and free of ambiguity the rule of construction in question cannot be pressed into service
The said doctrine therefore cannot be invoked in cases where the intention of the Legislature is clear and free of ambiguity
The phraseology used in the 1  952 section is very clear and it is not susceptible of any ambiguity
The words used in the first part of cl
b are unqualified and the qualification is introduced only in the later part
If the words  calling service employment handicraft  are really intended to be qualified by the adjective  industrial  one should expect the Legislature to affix the adjective to the first word  calling  rather than to the last word  occupations
 The inclusive definition is a wellrecognized device to enlarge the meaning of the word defined and therefore the word  industry  must be construed as comprehending not only such things as it signifies according to its natural import but also those things the definition declares that it should include see Stroud s Judicial Dictionary Vol 2 p 1416
So construed every calling service employment of an employee or any business trade or calling of an employer will be an industry
But such a wide meaning appears to overreach the objects for which the Act was passed
It is therefore necessary to limit its scope on permissible grounds  having regard to the aim scope and the object of the whole Act
To arrive at the real meaning of the words Lord Coke in Heydon s case 1 says that the following matters are to be considered 1 What was the law before the Act was passed  2 What was the mischief or defect for which the law had not provided 3 What remedy Parliament hap appointed and 4 The reason of the remedy
The word  employers  in el
a and the word  employees  in cl
b indicate that the fundamental basis for the application of the definition is the existence of that relationship
The cognate definitions of industrial dispute employer  employee  also support it
The long title of the Act as well as its preamble show that the Act was passed to make provision for the promotion of industries and peaceful and amicable settlement of disputes between employers and employees in an organized activity by conciliation and arbitration and for certain other purposes
If the preamble is read with the historical background for the passing of the Act it is manifest that the Act was introduced as an 11584 b 953 important step in achieving social justice
The Act seeks to ameliorate the service conditions of the workers to provide a machinery for resolving their conflicts and to encourage co operative effort in the service of the community
The history of labour legislation both in England and India also shows that it was aimed more to ameliorate the conditions of service of the labour in organized activities than to anything else
The Act was not intended to reach the personal services which do not depend upon the employment of a labour force
Before considering the positive aspects of the definition what is not an industry may be considered
However wide the definition of  industry  may be it cannot include the regal or sovereign functions of State
This is the agreed basis of the arguments at the Bar though the learned counsel differed on the ambit of such functions
While the learned counsel for the Corporation would like to enlarge the scope of these functions so as to comprehend all the welfare activities of a modern State the learned counsel for the respondents would seek to confine them to what are aptly termed  the primary and inalienable functions of a constitutional government 
It is said that in a modern State the sovereign power extends to all the statutory functions of the State except to the business of trading and industrial transactions undertaken by it in its quasi private personality
Sustenance for this contention is sought to be drawn from Holland s Jurisprudence wherein the learned author divides the general heading Public Law  into four sab heads and under the sub head Administrative Law  he deals with a variety of topics including welfare and social activities of a State
The treatment of the subject  Public Law  by Holland and other authors in our view has no relevancy in appreciating the scope of the concept of regal powers which have acquired a definite connotation
Lord Watson in Coomber vs Justices of Berks 1 describes the functions such as administration of justice maintenance of order and repression of crime as among the primary and inalienable functions of a constitutional Govern 11883 84 9 App
Cas 61 74 954 ment
Isaacs J in his dissenting judgment in The Federated State School Teachers  Association of the Australia vs The State of Victoria 1 concisely states thus at p 585 Regal functions are inescapable and inalienable
Such are the legislative power the administration of laws the exercise of the judicial power
Non regal functions may be assumed by means of the legislative power
But when they are assumed the State acts simply as a huge corporation with its legislation as the charter
Its action under the legislation so far as it is not regal execution of the law is merely analogous to that of a private company similarly authorised
 These words clearly mark out the ambit of the regal functions as distinguished from the other powers of a State
It could not have been therefore in the contemplation of the Legislature to bring in the regal functions of the State within the definition of industry and thus confer jurisdiction on Industrial Courts to decide disputes in respect thereof
We therefore exclude the regal functions of a State from the definition of industry
This leads us to the question whether the Corporation can be said to exercise regal functions by legislative delegation
The Corporation functions under a statute and its powers duties and liabilities are regulated by it
It is a juristic person and it can sue and be sued in its name
The statute constituting it may confer upon it some strictly regal functions and other municipal functions
In County Council of Middlesex vs Assessment Committee of St George s Union 2 certain premises were used for the administration of justice and also for municipal purposes
The question raised was whether the said premises were rateable and the Court held that they were rateable in so far as they were occupied for municipal purposes and not rateable in so fares they were occupied for the administration of justice which was held to be a function of the Crown
So too the Supreme Court of America in Verisimo Vasquez Vilas 1  2 955 vs City of Manila 1 expounded the dual character of a municipal corporation thus  They exercise powers which are governmental and powers which are of a private or business character
In the one character a municipal corporation is a governmental sub division and for that purpose exercises by delegation a part of the sovereignty of the State
In the other character it is a mere legal entity or juristic person
In the latter character it stands for the community in the administration of local affairs wholly beyond the sphere of the public purposes for which its governmental powers are conferred
 Isaacs and Rich JJ in The Federated Municipal and Shire Council Employees  Union of Australia vs Melbourne Corporation 2 in the context of the dual functions of State say much to the same effect at p 530  Here we have the discrimen of Crown exemption
If a municipality either 1 is legally empowered to perform and does perform any function whatever for the Crown
 or 2 is lawfully empowered to perform and does perform any function which constitutionally is inalienably a Crown function as for instance the administration of justice the municipality is in law presumed to represent the Crown and the exemption applies
Otherwise it is outside that exemption and if impliedly exempted at all some other principle must be resorted to
The making and maintenance of streets in the municipality is not within either proposition
 A corporation may therefore discharge a dual function  it may be statutorily entrusted with regal functions strictly so called such as making of laws disposal of certain cases judicially etc and also with other welfare activities
The former being delegated regal functions must be excluded from the ambit of the definition of industry
The next head of exclusion from the definition is put by the learned counsel for the appellant thus  A municipality in the modern polity is also a trading 1  356   495
2   530 531 956 and industrial corporation and in that capacity is empowered to carry on undertakings partaking the Character of business and trade and that the definition of industry in the Act only takes in such undertakings and no other statutory activities
To state it differently the contention is that activities which partake the character of trade and business in the hands of a private individual would be an industry if undertaken by a corporation
Some observations made by this Court in D N Banerji vs P R Mukherjee 1 are relied upon in support of this contention
Chandrasekbara Aiyar J speaking for the Court made the following observations at p 317 Having regard to the definitions found in our Act the aim or objective that the Legislature had in view and the nature variety and range of disputes that occur between employees and employees we are forced to the conclusion that the definitions in our Act include also disputes that might arise between municipalities and their employees in branches of work that can be said to be analogous to the carrying out of a trade or business
 Emphasis is laid upon the words  analogous to the carrying out of a trade or business and an argument is built upon those words to the effect that this Court held that only such activities of municipalities analogous to trade or business would be industry within the meaning of the definition of industry in the Act
This argument if we may say so is the result of an incorrect reading of the decision
There the question was whether the sanitary department of a municipality was an industry within the meaning of the and whether the dispute between the municipality and its employees in that department was an industrial dispute thereunder
At p 311 the learned Judge specifically deals with a contention based upon the collocation of the words in the section and observes  Though the word undertaking in the definition of industry is wedged in between business and trade on the one hand and manufacture on the other and though therefore it might mean only a business or trade undertaking still it must be 1  957 remembered that if that were so there wag no need to use the word separately from business or trade
The wider import is attracted even more clearly when we look at the latter part of the definition which refers to calling service employment or industrial occupation or avocation of workmen
 Undertaking in the first part of the definition and industrial occupation or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business
The definition was apparently intended to include within its scope what might Dot strictly be called a trade or business venture
 This passage leaves no room for doubt that this Court construed the terms of the definition of industry in a way which takes in activities which are not strictly called trade or business
Therefore the words not strictly be called a trade or business venture and the words analogous to the carrying out of a trade or business emphasize more the nature of the organised activity implicit in a trade or business than to equate the other activities with trade or business
This is made more clear by the learned Judge when be expressly reserves the Court s opinion on a wider question in the following words at p 318 It is unnecessary to decide whether disputes arising in relation to purely administrative work fall within their ambit
 We cannot therefore agree with the contention that the said decision when it expressly accepted the comprehensive meaning which the words of the section naturally bear intended to circumscribe the wide sweep of the section to business or trade and activities in the nature of trade or business
Nor a fair reading of the section bears out such a construction
We have already indicated our view on the construction of the section having regard to the clear phraseology used therein that the section cannot be confined to trade or business or activities analogous to trade or business
A more workable and reasonable test is laid down in an Australian decision cited at the Bar and that test has also been accepted and applied by this Court
In Federated Engine Drivers and Firemen s Association 958 of Australia and Others vs The Broken
Hill Proprietory Company Limited and Others 1 a distinction was drawn between trading and non trading operations but the question as to how far non trading operations attracted the definition of industry was left undecided
That question fell to be decided in The Municipal and Shire Council Employees  Union of Australia vs Melboure Corporation 2  and that decision if we may say so is illuminating and throws considerable light on the question to be decided in the present appeal
It was held by the High Court of Australia that the Commonwealth Court of Conciliation and Arbitration had authority to determine by award a dispute between an organization of employees registered in connection with municipal and shire councils municipal trusts and similar industries and municipal corporations constituted under State laws
The dispute there related to those operations of municipal corporations which consisted of the making maintenance control and lighting of public streets
The learned Judges discussed at length the meaning of the word industrial dispute in section 51 XXXV ofthe Constitution of Australia
It is manifest from this decision that even activities of a municipality which cannot be described as trading activities can be the subject matter of an industrial dispute
Isaacs Jin his dissenting judgment in The Federated State School Teachers  Association of Australia vs The State of Victoria 3 has concisely expressed this idea at p 587 thus The material question is What is the nature of the actual function assumed is it a service that the State could have left to private enterprise and if so fulfilled could such a depute be industrial  This test steers clear of the argument that to be an industry the activity shall be a trading activity
If a service performed by an individual is an industry it will continue to be so notwithstanding the fact that it is undertaken by a corporation
Another test suggested by the learned counsel may be scrutinized
It is said that unless there is a 1  2   530 531 3  959 quid pro quo for the service it cannot be an industry
This is the same argument namely that the service must be in the nature of trade in a different garb
This Court in D N Banerji vs P B Mukherjee 1 has held that neither the investment of capital or the existence of profitearning motive seems to beta sine qua non or necessary element in the modern conception of industry
The conception that unless the public who are benefited by the services pay in cash for the services rendered to them the services so rendered cannot be industry is based upon an exploded theory
As observed by Chandrasekhara Aiyar J the conflicts between capital and labour have now to be determined more from the standpoint of status than of contract
Isaac and Rich JJ in The Fede rated Municipal and Shire Council Employees  Union of Australia vs Melbourne Corporation 2 formulated the modern concept of industry at p 554 thus  Industrial disputes occur when in relation to operations in which capital and labour are contributed in co operation 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 cooperation
The learned Judges proceeded to state at p 564  The question of profit making maybe 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
In each case the municipality is performing a function and in the one case it performs it with a variation in contrast with the other
Isaac J elaborated the theme in his dissenting judgment in The Federated State School Teachers  Association of Australia vs The State of Victoria 3 at p 577 thus  The contention sounds like an echo from the dark ages of industry and political economy  
Such disputes are not simply a claim to share 1  2   539 531
122 3  960 the material wealth jointly produced and capable of registration in statistics
At heart they are a struggle constantly becoming more intense on the part of the employed group engaged in co operation with the employing group in rendering services to the community essential for a higher general human welfare to share in that welfare in a greater degree
All industrial enterprises contribute more or less to the general welfare of the community and this is a most material consideration when we come to determine the present question apart from the particular contention raised at the Bar
Monetary considerations for service is therefore not an essential characteristic of industry in a modern State
The learned counsel then sought to demarcate the activities of a municipality into three categories namely i the activities of the department which performs the services ii those of the department which only impose taxes collect them and administer them and iii those of the departments which are purely in administrative charge of other departments
We do not see any justification for this artificial division of municipal activities
Barring the regal functions of a municipality if such other activities of it if undertaken by an individual would be industry then they would equally be industry in the hands of a municipality
It would be unrealistic to draw a line between a department doing a service and a department controlling or feeding it
Supervision and actual performance of service are integral part of the same activity
In other words whether these three functions are carried out by one department or divided between three departments the entire organizational activity would be an industry
This aspect of the question was incidentally touched upon by this Court in Baroda Borough Municipality vs Its Workmen and the following passage at p 49 reads thus  We have already pointed out that under the Municipal Act a municipality may perform various functions some obligatory and some discretional
The activities may be of a composite nature some 1  961 of the departments may be mostly earning departments and some mostly spending departments
For example the department which collects municipal taxes or other municipal revenue is essentially an earning department whereas the sanitary department or other service department is essentially a spending department
There may indeed be departments where the earning and spending may almost balance each other
 We have extracted this passage only because the observations are apposite to the discussion on hand but not to express our concurrence with the conclusion drawn in that case
The question of bonus does not fall to be considered in the present appeal
These observations and support to our view that integrated activities of a municipality cannot be separated to take in some under the definition of  industry  and exclude others from it
We can also visualize different situations
A particular activity of a municipality may be covered by the definition of industry
If the financial and administrative departments are solely in charge of that activity there can be no difficulty in treating those two departments also as part of the industry
But there may be cases where the said two departments may not only be in charge of a particular activity or service covered by the definition of industry but also in charge of other activity or activities falling outside the definition of industry
In such cases a working rule may be evolved to advance social justice consistent with the principles of equity
In such cases the solution to the problem depends upon the answer to the question whether such a department is primarily and predominantly concerned with industrial activity or incidentally connected therewith
The result of the discussion may be summarized thus 1 The definition of  industry  in the Act is very comprehensive It is in two parts one part defines it from the standpoint of the employer and the other from the standpoint of the employee
If an activity falls under either part of the definition it will be an industry within the meaning of the Act
962 2 The history of industrial disputes and the legisla tion recognizes the basic concept that the activity shall be an organized one and not that which pertains to private or personal employment
3 The regal functions described as primary and inalienable functions of State though statutorily delegated to corporation are necessarily excluded from the purview of the definition
Such regal functions shall be confined to legislative power administration of law and judicial power
4 If a service rendered by an individual or a private person would be an industry it would equally be an industry in the hands of a corporation
5 If a service rendered by a corporation is an industry the employees in the departments connected with that service whether financial administrative or executive would be entitled to the benefits of the Act
6 If a department of a municipality discharges many functions some pertaining to industry as defined in the Act and other non industrial activities the predominant functions of the department shall be the criterion for the purposes of the Act
The following are the various departments of the Nagpur City Corporation 1 General Administration Department 2 Octroi Department 3 Tax Department 4 Public Conveyance Department 5 Fire Brigade Department 6 Lighting Department 7 Water Works Department 8 City Engineer Department 9 Enforcement encroachment Department 10 Sewage Pumping Station Department 11 Sewage Farm Department 12 Health Department 13 Market Department 14 Cattle Pound Department 15 Public Gardens Depart ment 16 Public Works Department 17 Assessment Department 18 Estate Department 19 Education Department 20 Printing Press Department 21 Workshop Department and 22 Building Department
Out of these departments the State Industrial Court has held that all the departments except those pertaining to i assessment and levy of house tax ii assessment and levy of octroi iii removal of encroachment and pulling down of dilapidated houses iv maintenance of cattle pounds 963 and v prevention and control of food adulteration are industries
Even in regard to the departments which the State Industrial Tribunal held to be industries it denied relief to persons who are not covered by the definition of  employees  in the Act
As the employees have not preferred any appeal against the award in so far as it went against them nothing further need be said in regard to the aforesaid five departments
Before we consider whether all or any of the departments of the Corporation fall within the definition of  industry  in the Act it will be convenient to notice the scheme of the City of Nagpur Corporation Act 1948 Madhya Pradesh Act No 2 of 1950
Section 7 makes the Corporation a body corporate with perpetual succession and a common seal
Section 6 describes the municipal authorities charged with the execution of the Act and they are a the Corporation b the Standing Committee and c the Chief Executive Officer
Chapter II of Part II contains the aforesaid sections and it further provides for the constitution of the Corporation and the mode of election to the said body
Chapter III of the said Part prescribes the procedure for the conduct of business of the Corporation
Chapter IV thereof provides for the appointment of municipal officers and servants and for their punishment and removal
Chapter V deals with powers duties and functions of the municipal authorities it gives the obligatory and discretionary duties of the Corporation
Under section 57 the Corporation shall make adequate provision by any means or measures which it may lawfully use or take such as for lighting public streets cleaning of public streetsdisposal of nightsoil and rubbish maintenance of firebrigade and other welfare activities in the interest of the public
Section 58 confers a discretionary power on the Corporation to provide for other amenities not covered by section 57 and which are comparatively not absolutely essential but are necessary for the happiness of the people of the State
Provisions of Ch
VI enable the municipality to hold and acquire properties to manage public institutions maintained out of municipal funds
Section 79 enjoins on the 964 municipality to apply the fund available with it to discharge its statutory duties and pay salaries and allowances of its various servants
Chapter IX enables the municipality to raise loans on the security of its properties for discharging debts and for meeting the capital expenditure
Part IV empowers the municipality to impose taxes for the purposes of this Act and also describes the procedure for collecting the same
Part V confers powers and imposes duties on the Corporation and its officers in respect of public health safety and convenience
This Part deals with public convenience drains and privies conservancy sanitary provisions water supply and drainage regulation of factories and trades markets and slaughter places food drink drug and dangerous articles prevention of infectious diseases and disposal of the dead
Part VI empowers the Corporation to draw up townplanning schemes to regulate erection and re erection of buildings to close public streets to remove obstruction in streets to regulate laying of new streets to dispose of mad and stray dogs to control public begging to prohibit brothels etc
Part VIII lays down the general provisions for carrying on the municipal administration and also enabling the Corporation to make by laws for carrying out the provisions and intentions of the Act
Shortly stated the Act creates the Corporation a juristic person capable of holding and disposing of property confers power on it to impose and collect taxes and licence fees to borrow money to decide disputes in the first instance in respect thereof constitutes the amounts so collected as the fund of the municipality from and out of which the liabilities of the Corporation are met and the salaries of its employees are paid imposed on it duties to carry out various welfare activities in the interest of the public confers on it powers for implementing their duties satisfactorily and also powers to make by laws for regulating its various functions
In short a corporation is analogous to a big public company carrying out most of the duties which such a company can undertake to do with the difference that certain statutory powers have been conferred on the corporation for carrying out its functions more satisfactorily
965 With this background let us take each of the departments of the Corporation held by the State Industrial Court to be governed by the Act
i Tax Department The main functions of this department are the imposition and collection of conservancy water and property taxes
No separate staff has been employed for the assessment and levy of property taxes the same staff does the work connected with assessment and collection of water rates as well as scavenging taxes
It is not disputed that the work of assessment and levy of water rate and scavenging rate for private latrines is far heavier than the other works entrusted to this department
No attempt has been made to allocate specific proportion of the staff for different functions
We therefore must accept the finding of the State Industrial Court that the staff of this department doing clerical or manual work predominantly does the work connected with scavening taxes and water rate
The said rates are really intended as fees for the service rendered
The services namely scavenging and supply of water can equally be undertaken by a private firm or an individual for remuneration and the fact that the munici pality does the same duty does not make it any the less a service coming under the definition of industry
We would however prefer to sustain the finding on a broader basis
There cannot be a distinction between property tax and other taxes collected by the municipality for the purpose of designating the tax department as an industry or otherwise
The scheme of the Corporation Act is that taxes and fees are collected in order to enable the municipality to discharge its statutory functions
If the functions so discharged are wholly or predominantly covered by the definition of  industry  it would be illogical to exclude the tax department from the definition
While in the case of private individuals or firms services are paid in cash or otherwise in the case of public institutions as the services are rendered to the public the taxes collected from them constitute a fund for performing those services
As most of the services rendered by the municipality come under the definition of industry  we should hold that the employees of the 966 tax department are also entitled to the benefits under the Act
ii Public Conveyance Department This is a tax which is a wheel cum road tax
Conveyance department is meant to regulate the using of cycles rickshaws bullock carts etc
This department recovers registration fees for rickshaws licence fee from rickshaw drivers and wheel tax from bullock carts
It also recovers cycle tax on every cycle used in Corporation limits
See the evidence of Witness No 1 for Party No 1
These taxes are therefore really fees collected by the Corporation for the services rendered to the owners of cycles and other conveyances by way of maintenance and construction of roads
These services can equally be performed by a private individual or a firm for remuneration
It satisfies the tests laid down by us
This department therefore is an industry within the meaning of the definition in the Act
iii Fire Brigade Department exhibit N A 22 gives the duties of the driver cum fitter of the Fire Brigade Department
This exhibit indicates that the function of this department is to attend to fire calls
Witness No 3 for Party No 1 says that it is the duty of the firebrigade to supply water at marriage functions and other public functions
The firebrigade employees are not paid any extra amount for supplying water at public or private functions
Though the department renders some extra services the main function of the department is to attend to  fire calls
Private bodies also can undertake this service
It is said that under section 333 of the City of Nagpur Corporation Act powers are conferred on specified officers to remove or order the removal of any person who interferes with or impedes the operation for extinguishing the fire to close any street or passage in or near which any fire is burning to break into or pull down or use for the passage of hoses or other appliances any premises for the purpose of extinguishing the fire and generally to take such measures as may appear necessary for the preservation of life or property and that the services of the firebrigade cannot be satisfactorily rendered without such powers and that no private individual 967 can perform the same
Here the argument tends to be fallacious as it ignores the distinction between he services and the statutory powers conferred to satisfactorily discharge the said services
A private person or a firm can equally do the same services and nothing prevents the legislature from conferring similar powers on an individual or a firm
These services also satisfy all the tests laid down by us and therefore we hold that this department is also an industry
iv Lighting Department Lighting Department looks after the arrangements for lighting the streets in the Corporation area
There are two systems of lighting streets namely 1 by electricity and 2 by kerosene oil lamps
Electric street lighting is given on contract to Nagpur Light and Power Co Nagpur by the Corporation
Kerosene oil street lighting is done departmentally by the lighting department
Electric Light and Power Co is responsible to the Corporation for street lighting
The said Company has to fix electric lights according to the programme given to it by the Corporation
The burning hours are also fixed by the Corporation
The Corporation does not charge the public for street lighting
See the evidence of Witness No 5 for Party No 1
We have already indicated that quid pro coin the shape of payment of money for particular services rendered is not a necessary condition for the application of the definition of industry 
The services rendered by the department satisfy the terms of the definition
They also satisfy both the positive and negative tests laid down by us
We therefore hold that this department is an indus try
v Water Works Department This department maintains three head works Kanhan Gorewara and Ambazeri
There are pumping stations at Kanhan and Gorewara
At the pumping stations the water is filtered and pumped into service reservoir at Nagpur
The Corporation has a separate staff at each pumping station
It has also a separate staff for distribution
In addition it maintains an assessment
department to assess water cess for the distribution of water
See the evidence of Witness No 9 for Party No 1
These three branches of the department have an 123 968 administrative and an executive staff
Whether the services rendered by the department are concerned With manufacturing process or not they are certainly covered by the wide definition of  industry in the Act
They also satisfy both the positive and negative tests laid down by us
None of them comprises delegated regal functions of State and they are such that a private individual can equally undertake to do
We therefore hold that the said department comes under the definition of industry
vi City Engineers Department The function of this department is to exercise supervisory an ad ministrative control over its subordinate departments
The City Engineer is the head of this department
See the evidence of Witness No 5 for Party No 1
As we are of the view that the departments subordinate to this department come under the definition of industry this department which has administrative control Over those subordinate departments must be considered a part of those departments
If so it follows that this department is also an industry
vii Enforcement encroachment Department The function of this department is to remove encroachment and unauthorised constructions and dilapidated houses
This department is a section of the Estate Department
See the evidence of Witness No 5 for Party No 1
It is contended that the functions of this department are all statutory and that no private individual can perform them
Statutory powers are conferred on the Corporation to remove encroachment and unauthorised construction and dilapidated houses
These powers are necessary for the Corporation to protect its properties and to prevent encroachment thereon and to remove dilapidated houses in the interest of the public
But if a distinction is made between the powers and the nature of the services rendered it would be obvious that the services rendered are not peculiar to a corporation
A private firm may undertake to manage the properties of others
It will have to
appoint persons to detect encroachment and to take steps to recover possession of lands encroached upon
The only difference between a firm and a municipal corporation is that the corporation 969 can in exercise of its statutory powers remove the encroachment but it does not prevent the aggrieved party from going to a civil court to establish his title to the property  but in the case of a firm it cannot take the law into its own hands it has to get the encroachment removed through a court of law
So far as the nature of the service is concerned namely protecting its properties in the interest of the public from encroachment and to recover possession of the lands encroached upon there is no essential distinction between the said service of the Corporation and a similar service performed by a private firm
The service satisfies not only the terms of the definition but also the tests laid down by us
Even so it is contended that the said reasoning cannot be invoked in the case of the service rendered by the municipality in removing dilapidated houses and it is said that the said service is rendered in exercise of a governmental function which a private individual cannot himself discharge
Here again the incidental power is confused with the service
To illustrate a firm may undertake to remove dilapidated houses and render the said service to those who engage it
It may not have the power to remove dilapidated houses of persons other than those who employed its services
The difference does not in any way affect the  character of the service
We therefore hold that this department is also an industry
viii Sewage Department The sewage pumping station is meant for pumping sewage at the outfall of the underground sewers
The sewage is utilised on the land on broad irrigation system and some crops are also grown on the farm
See the evidence of Witness No 8 for Party No 1
In the cross examination of the said witness it was elicited that whatever sewage is left after irrigating the farm maintained by the Corporation will be sold to the neighbouring farms
For the said reasons it must be held that this department is also an industry
ix Health Department This department looks after scavenging sanitation control of epidemics control of food adulteration and running of public dispensaries
Private institutions can also render 970 these services
It is said that the control of food the adulteration and the control of epidemics cannot be done by private individuals and institutions
We do not see why
There can be private medical units to help in the control of food adulteration and in the control of epidemics for remuneration
Individuals may get the food articles purchased by them examined by the medical unit and take necessary action against guilty merchants
So too they can take advantage of such a unit to prevent epidemics by having necessary inoculations and advice
This department also satisfies the other tests laid down by us and is an industry within the meaning of the definition of industry in the Act
x Market Department The function of the Market Department is to issue licences collect ground rent and registration fee and to detect short weights and measures
Rents are collected for permitting persons to enter the Corporation land and transact business thereon
Detection of short weights and measures is a service to the people to prevent their being cheated in the market
The setting apart of market places supervision of weights and measures are services rendered to the public and the fees collected are remuneration for the services so rendered These services can equally be done by any private individual
This department also satisfies the tests laid down by us
We therefore hold that this department is an industry within the meaning of the Act
xi Public Gardens Department The functions of this department are the maintenance of public parks and gardens and laying of new gardens and parks and planting of trees on road sides
See the evidence of Witness No 5 for Party No 1
This service is covered by the definition of  industry Any private individual can certainly perform the functions stated above and the fact that the municipality has undertaken those duties does not affect the nature of the service
This also satisfies the tests laid down by us
We therefore hold that this Department is an industry
Xii Public Works Department  This department is in charge of construction and maintenance of public 971 works such as roads drains buildings markets public latrines etc
For the convenience of the public this department is divided into zones and every zone has its office
The outdoor staff in the PWD consists of assistant engineer overseers sub overseers time keepers mates carpenters masons blacksmiths and coolies
The other staff consisting of clerks and peons performs indoor duties
See the evidence of Witness No 5 for Party No 1
This department performs both administrative and executive functions
The services rendered are such that they can equally be done by private individuals and they come under the definition of industry  satisfying both the positive and negative tests laid down by us in this regard
We therefore hold that this department is an industry
xiii Assessment Department This department deals with the assessment of taxes fees and rates
The same staff does the assessment work connected not only with taxes strictly so called but also other fees and rates
As the services rendered namely scavenging and supply of water can be done by private individuals the State Industrial Court held that they come under the definition of industry and therefore the department assessing fees and rates is also part of that industry
There is no reason why a distinction should be made in regard to the assessment of taxes so called and that of fees and rates
The taxes are collected only for enabling the Corporation to render service to the public and as most of the services come under the definition of industry this department also in our view is an industry within the meaning of the Act
That apart the State Industrial Court has held that the same staff does the work of assessment of house tax as well as other fees and rates and the work of this department is predominantly connected with the assessment of scavenging tax and water rate
Applying the test of paramount and predominant duty  this department falls within the definition of  industry  in the Act
xiv Estate Department  This department maintains the record of property acquired vested or transferred to the Corporation and all buildings and roads constructed by the PWD
This department 972 lets out lands and houses belonging to the Corporation by public auction and gets income therefrom which no doubt is credited to the common fund
A department like this is equally necessary in a private company which carries out functions similar to the Corporation
Maintenance of records of the properties acquired buildings and roads constructed and properties leased is a necessary administrative function correlated to the corresponding services
If the service such as construction of buildings roads etc is an industry its administrative wing is also an industry
The department as a whole both with its administrative and executive wings for reasons stated in connection with the other departments is an industry
xv Education Department This department looks after the primary education ie compulsory primary education
within the limits of the Corporation
See the evidence of Witness No 1 for Party No 1
This service can equally be done by private persons
This department satisfies the other tests
The employees of this department coming under the definition of  employees  under the Act would certainly be entitled to the benefits of the Act
xvi Printing Press Department The printing press is maintained by the Corporation for printing passes
It is also used for printing of by laws and the rules and proceedings and forms and the by laws and the rules so printed are sold to the public
For the reasons stated supra in the case of the Water Works Department  this department is also an industry
xvii Building Department This department is really a  building permission department 
The function of this department is to regulate construction of buildings by private individuals and to take action against those who violate the by laws and the provisions of the Corporation Act pertaining to this department
It is said that the functions of this department are statutory and no private individual can discharge those statutory functions
The question is not whether the discharge of certain functions by the Corporation have statutory backing 973 but whether those functions can equally be performed by private individuals
The provisions of the Corporation Act and the by laws prescribe certain specifications for submission of plans and for the sanction of the authorities concerned before the building is put up
The same thing can be done by a co operative society or a private individual
Cooperative societies and private individuals can allot lands for building houses in accordance with the conditions prescribed by law in this regard
The services of this department are therefore analogous to those of a private individual with the difference that one has the statutory sanction behind it and the other is governed by terms of contracts
This department functions in the interest of the public and the services rendered by this department satisfy both the positive and negative tests laid down by us
We therefore hold that this department is covered by the definition of industry 
xviii General Administration Department  This department co ordinates the functions of all the other departments
The State Industrial Court describes the functions of this department thus  This department consists of treasury accounts section records section in which are kept records of all the different departments and public relations section
It also consists of a committee section the duty of which is to look after the convening of meetings to draw up agenda minutes of proceedings and to draft by laws
In the record section are kept records of most of the departments including health and engineering
 Every big company with different sections will have a general administration department
If the various departments collated with this department are industries this department would also be a part of the industry
Indeed the efficient rendering of all the services would depend upon the proper working of this department for otherwise there would be confusion and chaos
The state Industrial Court in this case has held that all except five of the departments of the Corporation come under the definition of industry and if so it follows that this department dealing predominantly 974 with industrial departments is also an industry
Hence the employees of this department are also entitled to the benefits of this Act
The State Industrial Court held that five of the departments of the Corporation did not fall within the terms of the definition of industry  in the Act
The employees of these departments did not file any appeal against the finding of the State Industrial Court and we do not propose to express our final opinion on the correctness of the decision of the Industrial Court in regard to these activities
In the result the appeals fail and are dismissed with costs
Appeal dismissed


Summary:
C who was the Karta of the Hindu undivided family con sisting of his wife three sons and himself was a partner in six managing agency firms in six Mills and the income received by him as partner was being assessed as that of the Hindu undivided family for the purposes of income tax
On December 31 1945 C acting for his three minor sons and himself and his wife entered into an oral agreement for a partial partition with effect from January 1 1946 by which C gave a certain share to his daughter in the managing agency commission from two of the six managing agencies held by the family and the balance together with the share in the other managing agencies was divided into five equal shares between C his wife and sons
The agreement was subsequently recorded in a document dated September II 1946 which recited inter alia  By this partition we decided that whatever commission fell due till 31 12 45 and which is received after 31 12 45 should be kept joint and in respect of the commission which accrues from 1 1 46 and received after that date each of us become absolute owner of his one fifth share and therefore from the date ie from 1 1 46 these commissions cease to be the joint property of our family
 For the assessment years 1947 48 and 1948 49 C claimed that the income from the managing agency firms should no longer be treated as the income of the Hindu undivided family but as the separate income of the divided members but the Income tax authorities rejected the claim on the grounds that by the document in question the division was of the income and not of the assets from which the income was 297 derived and since income tax was payable at the moment of time when income accrued this income must be taken to have accrued to the Hindu undivided family Held that inasmuch as there was no other effective mode of partitioning this asset and further in view of the finding that the partition was not a pretence the asset must be treated as divided for purposes of income tax law and the income was not assessable as the income of the Hindu undivided family