Civil Appeal No 5415 of 1985 etc
From the Order dated 711985 of the Presiding officer Labour Court Amritsar in Application No 547 of 1979
619 Jitendera Sharma P Gaur DK Garg KK Mohan and RC Kaushik for the Appellants
SC Mohanta Mahabir Singh and CM Nayar for the Respondents
The Judgment of the Court was delivered by RANGANATH MISRA J
Each of these appeals is by special leave and is directed against the Award made in different disputes by the Labour Court
The common justification for ignoring the High Court and approaching this Court directly by way of special leave according to Mr Jitendra Sharma for each of the appellants is that there are a couple of Full Bench decisions of the Punjab and Haryana High Court holding that the Irrigation Department of the State Government of Punjab is not an industry  and no useful purpose would have been served by routing the matters through the High Court as the Full Bench decision would have been followed
The appellant in Civil Appeal No 5415 of 1985 was a Foreman in the Mechanical Construction Division under the Irrigation Department and had applied under Section 33 C 2 of the  hereinafter referred to as the  before the Labour Court for recovery of arrears of annual increments
The appellant in Civil Appeal No 2168 of 1987 was a T Mate in the PWD Drainage Division
When his services were terminated without complying with the requirements of the law he challenged the termination before the Labour Court
The appellant in the remaining appeal was an operator in the Mechanical Division Rohtak under the Irrigation Department of Haryana State
His services were terminated and thereupon he approached the Labour Court disputing the validity of the said order
In each of these cases challenge was advanced by the governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an industry  and the did not apply
The Labour Court by different orders made in each of these cases upheld the objection and declined relief to the employees
The common question in these appeals therefore is as to whether the Irrigation Department of either Government is an industry 
The definition of industry  occurring in Section 2 of the has now to be seen
The defines industry  in Section 2J to mean 620 any business trade undertaking manufacturer or calling of employers and includes any calling service employment handicraft or industrial occupation or avocation of workmen
 By Section 2c of the Amending 46 of 1982 this definition has been amended but the amendment has not yet been brought into force
The amended definition of industry is as follows Industry means any systematic activity carried on by co operation between an employer and his workmen whether such workmen are employed by such employer directly or by or through any agency including a contractor for the production supply or distribution of goods or services with a view to satisfy human wants or wishes not being wants or wishes which are merely spiritual or religious in nature whether or not i any capital has been invested for the purpose of carrying on such activity or ii such activity is carried on with a motive to make any gain or profit and includes a any activity of the Dock Labour Board established under Section 5A of the  b any activity relating to the promotion of sales or business or both carried on by an establishment but does not include 1 any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity being any such activity as is referred to in the foregoing provisions of this clause and such other activity is the predominant one Explanation For the purposes of this sub clause agricultural operation  does not include any activity carried on in a 621 plantation as defined in clause f of Section 2 of the  or 2 hospitals or dispensaries or 3 educational scientific research or training institutions or 4 institutions owned or managed by organisation wholly or substantially engaged in any charitable social or philanthropic service or 5 khadi or village industries or 6 any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research atomic energy and space or 7 any domestic service or 8 any activity being a profession practised by an individual or body of individuals if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten or 9 any activity being an activity carried on by a cooperative society or a club or any other like body of individuals if the number of persons employed by the cooperative society club or other like body of individuals in relation to such activity is less than ten Since the amended statutory definition is not yet in force the parent definition and judicial pronouncements have to be referred to for finding the law
The field is covered by pronouncements of this Court and it is not necessary to go beyond these precedents
In case the Irrigation Department is accepted to be industry there is no dispute that each of the appellants would be a workman and each of the claims would constitute an industrial dispute as defined in Section 2s and k respectively
A five Judge Bench in DN Banerji vs PR Mukherjee  Ors 622  considered the scope of the definition of industry
Chandrashekhara Aiyer J speaking for the Court stated It is therefore incumbent on us to ascertain what the statute means by industry and industrial dispute leaving aside the original meaning attributed to the words in a simpler state of society when we had only one employer perhaps doing a particular trade or carrying on a particular business with the help of his own tools material and skill and employing a few workmen in the process of production or manufacture and when such disputes that occurred did not go behind individual levels into acute fights between rival organisations of workmen and employers and when large scale strikes and lock outs throwing society into chaos and confusion were practically unknown
Legislation had to keep pace with the march of times and to provide for new situations
Social evolution is a process of constant growth and the State cannot afford to stand still without taking adequate measures by means of legislation to solve large and momentous problems that arise in the industrial field from day to day almost 
When our came to be passed labour disputes had already assumed big proportions and there were clashes between workmen and employers in several instances
We can assume therefore that it was to meet such a situation that the was enacted and it is consequently necessary to give the terms employed in the referring to such disputes as wide an import as reasonably possible
Do the definitions of industry industrial dispute and workman take in the extended significance or exclude it 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 remembered that if that were so there was 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 623 include within its scope what might not strictly be called a trade or business venture
 The ratio in Mukherjee s case was relied upon by a three Judge Bench in State of Bombay  Ors
vs The Hospital Mazdoor Sabha  Ors  and Gajendragadkar J who spoke for the Bench observed There is another point which cannot be ignored
Section 2j does not define industry in the usual manner by prescribing what it means the first clause of the definition gives the statutory meaning of industry and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way
It is obvious that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense
Where we are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation Besides it would be relevant to point out that too much reliance cannot be placed on what are described as the essential attributes or features of trade or business as conventionally understood
The conventional meaning attributed to the words trade and business has lost some of its validity for the purpose of industrial adjudication
Industrial adjudication has necessarily to be aware of the current of socio economic thought around it must recognise that in the modern welfare State healthy industrial relations are a matter of paramount importance and its essential function is to assist the State by helping a solution of industrial disputes which constitute a distinct and persistent phenomenon of modern industrialised States in attempting to solve industrial disputes industrial adjudication does not and should not adopt a doctrinaire approach
lt must evolve some working principles and should generally avoid formulating or adopting abstract generalisations
Nevertheless it can t harp back to old age notions about the relations between employer and the employee or to the doctrine of laissez faire which then governed the regulation of the said relations
That is why we think in construing the wide words used in section 2j it would be erroneous to attach undue importance to the attributes 624 associated with business or trade in the popular mind in days gone by
 The Bench thereafter adverted to the negative side and stated It would be possible to exclude some activities from section 2j without any difficulty
Negatively stated the activities of the Government which can be properly described as regal or sovereign activities are outside the scope of section 2j
These are functions which a constitutional government can and must undertake for governance and which no private citizen can undertake
This position is not in dispute
An attempt is however made by the appellant to suggest that in view of the Directive Principles enunciated in of the Constitution and in view of the ideal of a welfare state which has been placed before the country Governments both at the level of States as well as at the Centre undertake several welfare activities and the argument is that the field of governmental or regal activities which are excluded from the operation of section 2j should be extended to cover other activities undertaken by the Governments in pursuit of their welfare policies
In our opinion this contention cannot be accepted
The activities which do not fall within section 2j and which are described as governmental or regal or sovereign have been pithily described by Lord Watson as the primary and inalienable functions of a constitutional Government  and it is only these activities that are outside the scope of section 2j
It sounds incongruous and self contradictory to suggest that activities undertaken by the Government in the interests of socio economic progress of the country as beneficial measures should be exempted from the operation of the which in substance is a very important beneficial measure itself
 Applying the stated principles this Court in that case held that the JJ Group of Hospitals came within the definition of industry
Within a couple of weeks from the Hospital Mazdoor Sabha s case supra the same Bench in the case of Corporation of the City of Nagpur vs Its Employees   this time Subba Rao J as he then was speaking for the Court examined the self same question
Before the Court were available two precedents Mukherjee s case 625 supra and Hospital Mazdoor Sabha s case supra and it was stated 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 soveriegn 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  The Court analysed the activities of the various departments of the Corporation and observed 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 slowly 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 summarised thus 1 the definition of industry in the is very comprehensive
It is in two parts one part defines it from the stand point of the employer and the other from the stand point of the employee
If an activity falls under either part of the definition it will be an industry within the meaning of the 
2 The history of industrial disputes and the legislation recognises the basic concept that the activity shall be an orga 626 nised one and not that which pertains to private or personal A employment
3 The regal functions prescribed as primary and inalienable functions of State though statutorily delegated to a corporation or 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 department connected with that service whether financial administrative or executive would be entitled to the benefits of the 
6 If a department of a municipality discharges many functions some pertaining to industry as defined in the and the other non industrial activities the predominant functions of the department shall be the criterion for the purposes of the 
 Applying these tests this Court examined as to whether the various departments of the Corporation came within the definition or not
Then came the decision of a Constitution Bench in the case of Management of Safdarjung Hospital vs Kuldip Singh Sethi  where Chief Justice Hidayatullah spoke for the Court
Referring to the definition of industry
the learned Chief Justice observed 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 includes any calling service employment handicraft or industrial occupation or avocation of workmen   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 Club case 1968 1 SCR 742
The conclusions in that case may be stated Primarily therefore industrial disputes occur when operation undertaken rests upon cooperation between employer and employees with a view to production and distribution of material goods in other 627 words wealth but they may arise also in cases where the cooperation 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 or manufacture   In Safdarjung Hospital s case the decision in Hospital Mazdoor Sabha case was analysed and the Court came to the following conclusion In our judgment the Hospital Mazdoor Sabha s case took the extreme view of the matter which was not justified
 Then came the case of Bangalore Water Supply and Sewerage Board vs A Rajappa  Ors  This time the same point was before a seven Judge Bench of this Court
This judgment undertood a review of the entire law
Krishna Iyer J spoke for himself Bhagwati and Desai JJ
In paragraph 139 of the judgment it was stated Banerjee supra amplified by Corporation of Nagpur supra in effect met with its waterloo in Safdarjung supra
But in this latter case two voices could be herard and subsequent rulings zigzagged and conflicted precisely because of this built in ambivalence
It behoves us therefore hopefully to abolish blurred edges illumine penumbral areas and overrule what we regard as wrong
Hesistency half tones and hunting with the hounds and running with the hare can claim heavy penalty in the shape of industrial confusion adjudicatory quandary and administrative perplexity at a time when the nation is striving to promote employment through diverse strategies which need for their smooth fulfilment less stress and distress more mutual understanding and trust based on a dynamic rule of law which speaks clearly firmly and humanely
If the salt of law lose its savour of progressive certainty where with small it be stalled So we proceed to formulate the principles deducible from our discussion which are decisive positively and negatively of the identity of industry under the 
We speak not exhaustively but to the extent covered by the debate at the bar and to that extent authoritatively until overruled by a larger bench or superseded by the legislative branch
 628 Industry as defined in section 2j and explained in Banerjee supra has a wide import
a Where i systematic activity ii organised by cooperation between employer and employee the direct and substantial element is chimerical iii for the production andor distribution of goods and services calculated to satisfy human wants and wishes not spiritual or religious but inclusive of material things or services geared to celestial bliss eg making on a large scale prasad or food prima facie there is an industry in that enterprise
b Absence of profit motive or gainful objective is irrelevant be the venture in the public joint private or other sector c The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations
d If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking
Although section 2j uses words of the widest amplitude in its two limbs their meaning cannot be magnified to over reach itself
Undertaking must suffer a contextual and associational shrinkage as explained in Banerjee and in this judgment so also service calling and the like
This yields the inference that all organized activities possessing the triple elements in I although not trade or business may still be industry provided the nature of the activity viz the employer employee basis bears resemblance to what we find in trade or business
This takes into the fold of industry undertakings callings and services adventures analogous to the carrying on of the trade or business 
All features other than the methodology of carrying on the activity viz in organizing the cooperation between employer and employee may be dissimilar
It does not matter if on the employment terms there is analogy
629 Application of these guidelines should not stop short of their logical reach by invocation of creeds cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations
The ideology of the being industrial peace regulation and resolution of industrial disputes between employer and workmen the range of this statutory ideology must inform the reach of the statutory definition
Nothing less nothing more
a The consequences are i professions ii clubs iii educational institutions h cooperatives v research institutes vi charitable projects and vii other kindred adventures if they fulfil the triple tests listed in I cannot be exempted from the scope of section 2j
b A restricted category of professions clubs cooperatives and even gurukulas and little research labs may qualify for exemption if in simple ventures substantial and going by the dominant nature criterion substantively no employees are entertained but in minimal matters marginal employees are hired without destroying the non employee character of the unit
c If in a pious or altruistic mission many employ themselves free or for small honoraria or like return mainly drawn by sharing in the purpose or case such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness divinity or like central personality and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship then the institution is not an industry even if stray servants manual or technical are hired
Such eleemosynary or like undertakings alone are exempt not other generosity compassion developmental passion or project
The dominant nature test a Where a complex of activities some of which qualify for exemption others not involves employees on the total undertaking some of whom are not workmen as in 630 the University of Delhi vs
Ram Nath  or A some departments are not productive of goods and services if isolated even then the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur will be the true test
The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status
b Notwithstanding the previous clauses sovereign functions strictly understood alone qualify for exemption not the welfare activities or economic adventures undertaken by government or statutory bodies
c Even in departments discharging sovereign functions if there are units which are industries and they are substantially severable then they can be considered to come within section 2j
d Constitutional and competently enacted legislative provisions may well remove from the scope of the categories which otherwise may be covered thereby
 Beg CJ wrote a separate judgment and prefaced it by saying I am in general agreement with the line of thinking adopted and the conclusions reached by my learned brother Krishna Iyer
 In paragraph 149 of the judgment the learned Chief Justice observed In his heroic efforts my learned brother Krishna Iyer if I may say so with great respect has not discarded the tests of industry formulated in the past
Indeed he has actually restored the tests laid down by this Court in DN Banerjee s case and after that in Corporation of the City of Nagpur vs Its Employees and State of Bombay vs The Hospital Mazdoor Sabha to their pristine glory
 The learned Chief Justice again stated Each of us is likely to have a subjective notion about industry
For objectivity we have to look first to the words 631 used in the statutory provision defining industry in an attempt to find the meaning
If that meaning is clear we need proceed no further
But the trouble here is that the words found there do not yield a meaning so readily
They refer to what employers or workers may do as parts of their ordinary avocation or business in life   Thus in order to draw the circle of industry to use the expression of my learned brother Iyer we do not find even the term workman illuminating
The definition only enables us to see that certain classes of persons employed in the service of the State are excluded from the purview of industrial dispute which the seeks to provide for in the interests of industrial peace and harmony between the employers and employees so that the welfare of the nation is secured
The result is that we have then to turn to the preamble to find the object of the itself to the legislative history of the  and to the socio economic ethos and aspirations and needs of the times in which the was passed
 After quoting the definition of industry the learned Chief Justice proceeded to say in paragraph 158 of the judgment It seems to me that the definition was not meant to provide more than a guide
It raises doubts as to what could be meant by the calling of employers even if business trade undertaking or manufacture could be found capable of being more clearly delineated
It is clear that there is no mention here of any profit motive
Obviously the work manufacture of employers could not be interpreted literally
It merely means a process of manufacture in which the employers may be engaged
It is however evident that the term employer necessarily postulates employees without whom there can be no employers   In paragraph 165 of the judgment the learned Chief Justice added G I have contended myself with a very brief and hurried outline of my line of thinking partly because I am in agreement with the conclusions of my learned brother Krishna Iyer and I also endorse his reasoning almost wholly but even more because the opinion I have dictated 632 just now must be given today if I have to deliver it at all
From tomorrow I cease to have any authority as a Judge to deliver it
Therefore I have really no time to discuss the large number of cases cited before us including those what are known as sovereign functions
 Chandrachud J as he then was on behalf of himself Jaswant Singh and Tulzapurkar JJ added a note by saying We are in respectful agreement with the view expressed by Krishna Iyer J that the appeal should be dismissed
We will give our reasons later indicating the area of concurrence and divergence underlining is ours if any on the various points in controversy on which our learned Brother has dwelt On 7th of April the reasonings were delivered by Chief Justice Chandrachud for himself as by then Jaswant Singh J delivered a separate set of reasonings for himself and Tulzapurkar J
The learned Chief Justice because by then he had assumed that office referred to several authorities and tests and in paragraph 181 of the judgment stated  
These refinements are with respect are not warranted by the words of the definition apart from the consideration that in practice they make the application of the definition to concrete cases dependent upon a factual assessment so highly subjective as to lead to confusion and uncertainty in the understanding of the true legal position
Granting that the language of the definition is so wide that some limitation ought to be read into it one must step at a point beyond which the definition will skid into a domain too rarefied to be realistic
Whether the cooperation between the employer and the employee is the proximate cause of the ultimate product and bears direct nexus with it is a test which is almost impossible of application with any degree of assurance or certitude
It will be as much true to say that the solicitor s assistant managing clerk librarian and the typist do not directly contribute to the intellectual end product which is a creation of his personal professional skill as that without their active assistance and cooperation it will be impossible for him to function effectively
The unhappy state of affairs in which the law is marooned will 633 continue to baffle the skilled professional and his A employees alike as also the Judge who has to perform the unenviable task of sitting in judgment over the directness of the cooperation between the employer and the employee until such time as the legislature decides to manifest its intention by the use of clear and indubious language
Besides the fact that this Court has so held in National Union of Commercial Employees vs MR Meher lndustrial Tribunal Bombay 1962 Supp
3 SCR 157 the legislature will find a plausible case for exempting the learned and liberal professions of lawyers solicitors doctors engineers chartered accountants and the like from the operation of industrial laws
But until that happens I consider that in the present state of the law it is difficult by judicial interpretation to create exemptions in favour of any particular class
 The remaining two learned Judges added their separate opinion and in the concluding part stated In view of the difficulty experienced by all of us in defining the true denotation of the term industry and divergence of opinion in regard thereto as has been the case with this Bench also we think it is high time that the Legislature steps in with a comprehensive bill to clear up the fog and remove the doubts and set at rest once for all the controversy which crops up from time to time in relation to the meaning of the aforesaid term rendering it necessary for larger Benches of this Court to be constituted which are driven to the necessity of evolving a working formula to cover particular cases
 The ultimate position available from the seven Judge Bench decision therefore is that while three learned Judges delivered their view through Krishna Iyer J Beg CJ spoke somewhat differently yet agreed with the conclusion reached by Krishna Iyer J Chandrachud CJ
also agreed with the majority while the remaining two learned Judges looked for legislative clarification to meet the situation
Perhaps keeping in view the observations of the learned Judges constituting the seven Judge Bench the definition of industry as occurring in section 2j of the was amended by 46 of 1982
Though almost six years have elapsed since the amendment came on to 634 the Statute Book it has not been enforced yet
Bare Acts and Commentaries on the have however brought in the new definition by deleting the old one with a note that the new provision has yet to come into force
This situation has further added to the confusion
It is now time to turn to the facts of the case
Judicial notice can be taken of the position that Haryana and Punjab originally constituted one State and Haryana has become separate from 1966
The Irrigation Department of the erstwhile Punjab State was discharging the State s obligations created under the 
The Administration Report of the year 1981 82 of the Public Works Department Irrigation Branch which really deals with the irrigation department has been produced before us with notice thereof to the appellants  learned counsel
We may extract a part of the Report The irrigation department which was set up more than 100 years ago is mainly responsible to provide water supplies for the substance and development of agriculture in the 3036 hectare cultivable area of the State covered by canal command
This requires harnessing of the surface and grounds water resources of the State and their equitable distribution to the beneficiaries within Canal Command area
This task involves construction of multipurposes major medium and minor irrigation projects maintenance of net work of channels regulation of canal supplies enforcement of water laws etc
and levying of crop wise water supply rates on the irrigators for recovery through the state Revenue Department
Extension improvement and modernisation of the age old canal system is also continued to be done simultaneously by the Department
Besides the irrigation the department also provides water for drinking purposes to villages and towns in the State
The canal water supplies are also being made available for the industrial development in areas where no other source for water supplies exists
The State of Punjab was reorganised in the year 1966 and a number of disputes on the sharing of waterpowers with successor States croped up
The issues regarding apportionment of Ravi Beas Waters over the preparation uses falling to the share of erstwhile Punjab 635 apportionment of rights and liabilities of Bhakra Nangal Project retention of control of Irrigation Head Works of Harike Ropar and Ferozepur by Punjab restoration of Bhakra Nangal Project and Beas Project to Punjab etc
are also dealt with by the Department The Irrigation Department is also responsible to provide protection to the valuable irrigated lands and public property from flooding river action and water logging
This requires construction of flood protection river training drainage and anti waterlogging works and their maintenance  The Department has also to plan ahead for irrigation development in the State for which purpose proposal of irrigation schemes are investigated surveyed and prepared in advance
Feasibility of irrigation schemes for hydropower generation from the existing and proposed irrigation schemes is also investigated by the Department and their execution undertaken
The execution of new irrigation schemes extention and improvement of existing schemes requires preparation of detailed designs of channels and their necessary works
This work is also done by the Department During designs execution and maintenance of the irrigation flood control and drainage projects field problems arise for the solution of which research model studies and laboratory experiments have to be conducted
The Department undertakes this work as well Having shared with the neighbouring States almost entire water resources of the rivers flowing through the Punjab water has now become a constraint to keep the tempo of the development of irrigated agriculture in the State
For this purpose it has not only become necessary to evaluate the total water resources of the State but also plan conjunctive use of surface and ground water for the optimum development of this precious resource
Further it has become necessary to conserve irrigation supplies and propogate their use economically through innovative water distribution system like sprinklers drip system etc
 636 The Irrigation Department plans and execute reclamation of salt or thur affected areas within cannal command
Measurements of discharges in the Ravi the Beas and the Sutlej desides the beings and drains in the State is also carried out by the irrigation department
These observations which are being made for the last over 60 years have provided basic data to the design of multipurposes Bhakhra Nangal Beas and Beas Sutlej Link projects which have transformed economies not only of the State of Punjab but also of the State of Haryana and Rajasthan
The fact extracted from the Report apparently give a picture of the activities of the Irrigation Department
There is a full Bench judgment of the Punjab and Haryana High Court in the case of Om Prakash vs Ms Executive Engineers SYL Kurukshetra  Ors1984 Current LJ 349 where the question that came up for consideration before the full Bench was thus stated whether the irrigation department of the State of Punjab comes within the ambit of industry in section 2j of the Industrial disputes Act 1947 The Court took into account the judgment of another full Bench decision of the same Court in the case of State of Punjab vs Kuldip Singh  Anr where the question for consideration was whether the Public Works Department of the State Government was an industry
In Om Prakash s case supra the full Bench barely took note of the decision of this Court in Bangalore Water Supply case supra but did not deal with it
It also took into account the position of the Irrigation Department in Punjab keeping in the background the provisions of the of 1873 and stated The irrigation department is a branch of the public works department
It provides a reasonably assured source of water for crops through the net work of canals
The irrigation department also carries out schemes and takes measures for protecting crops from the menace of floods during the times of abnormal rainfall
In the olden times when there was no canals agriculture was very limited and cultivators depended solely on rainfall
By the passage of time it was thought necessary to build irrigation and drain age works for the purpose of providing better water facilities to the farmers on whom depends the economy of this country
These works could only be built by the Government
637 The western Jamuna canal which serves the State of A Haryana was the first major irrigation work which was initially constructed by Feroze Shah Tuglaq in 1351
It was reconditioned by Akbar in 1568 and was extended in 1626 in the reign of Shahjahan
The canal was constructed in a reasonably serviceable form by the British during 1817 1823
Then the Upper Bari doab canal Sirhind canal Lower Chinah canal and Lower Jhelum canal etc were constructed
Thereafter many other projects have come up and the ones which need mention are Bhakra Nangal project with its network of Bhakra System and the Beas project
All these projects have been carried out by the state at the state expense
It is understandable that such projects could not at all be undertaken by private enterpreneurs or could be left in their hands for execution
Further water is a state subject as per entry 17 in List II of Seventh Schedule of the Constitution
Even before coming into force of the Constitution water of rivers and streams was considered to be belonging to the State  
Thus it would be evident that the water has at all times been a State subject and the State can exercise full executive powers in all matters connected with the water
The State supplies water to the farmers through the network of canals
It is correct that water rates are realised from the farmers but they are not realised for the cost of the water
In other words the State does not sell water to the farmers
As contended justifiably by the learned Advocate General the water charges are not even sufficient to meet the establishment and maintenance expenses of the department
Moreover the water rates have never been realised on the basis of the quantity of the water supplied
These rates are dependant upon the class of crops raised by the farmers and have been fixed in terms of per acre
It may be noted that rates for crops such as wheat sugarcane cotton rice are higher than the other crops such as gram oil seeds bajra and maize etc
In other words the water charges have been linked on the principle of bearability that is paying capacity of the farmer dependant upon his income from the kind of crop raised by him
The water is supplied on the basis of the holding of each farmer in terms of cultivable commanded area that is on the basis of uniform and equitable yardstick
Again the water charges are remitted when the crops are damaged by natural 638 calamities such as locust hailstroms floods or drought etc
Further the construction of canals dams barrages and other projects cannot be entrusted to some private hands
The construction of these works involves compulsory acquisition of land which can also be done by the State
Merely this fact that water is supplied by charging certain rates cannot warrant a finding that the state is indulging in trade or business activity or an activity which is analogous to trade business or economic venture
From what has been stated above there can be gainsaying that the functions of the irrigation department cannot at all be left to private enterprise
The facts which weighed in holding that the construction and maintenance of national and state highways by the State does not come within the ambit of industry in Kuldip Singh s case supra are present so far as the irrigation department is concerned 
In this view of the matter I hold that the functions of the irrigation departments are essentially government functions and that these functions neither partake of the nature of trade and business nor are even remotely analogous thereto and that this department does not come within the ambit of industry as defined in section 2j of the Act Mr Shalma for the appellants placed before us some cases of different High Courts in support of his stand that the Irrigation Department should be considered as industry
The first of these cases is that of Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh  Anr where the Madhya Pradesh High Court found the Chambal Hydel Irrigation Project to be an industry
The facts of that case reveal that the Project therein was a multipurpose one which was used for generating electricity as also for irrigation purposes
On the facts found therein the High Court came to the conclusion that it came within the definition under section 2j of the Act
In State of Rajasthan vs The Industrial Tribunal Rajasthan the question for consideration before the Rajasthan High Court was whether the Survey and Investigation Division of Irrigation Department was an industry
In paragraph 26 the learned Judge came to the conclusion by saying In view of the aforesaid decisions of the Supreme Court I find it difficult to hold that the activities of the 639 State Government by organising its Survey and Investigation
Division in the Irrigation Department through which the State Government rendered services in the matter of supplying water by constructing canals and dams does not fall within the ambit of the sovereign or regal functions of the State
Such service to the people at large in my opinion comes within the ambit of the expression industry as defined in section 2i of the Act
 The finding runs contrary to the conclusion
If in the opinion of the learned Judge it was difficult to hold that the activities did not fall within the ambit of the sovereign or regal functions then the conclusion should have been different
In Dinesh Shanna  Ors
vs State of Bihar  Ors
 1983 Bihar LJR 207 a Division Bench of the Patna High Court was considering if the Public Health Engineering Department of the State of Bihar was an industry
In paragraph 8 of the judgment reliance was placed on the Bangalore Water Supply case supra and the Nagpur Corporation case supra and it was held that the said department of the State Government of Bihar was an industry
In Chief Engineer Irrigation Orissa vs Harihar Patra  Anr a Division Bench of the orissa High Court was considering whether the Salandi Irrigation Project in that State was an industry
The High Court relied upon the earlier full Bench decision of its own Court and some of the decisions of this Court which we have referred to above and came to hold that the irrigation project was an industry
The Administrative Report of the facts found by the High Court in the instant case have attempted to draw out certain special features
The legal position has been indicated in the earlier part of our judgment
On the tests as already laid down in the judgments we do not think these facts found in this case can take out the Irrigation Department outside the purview of the definition of industry 
We have already referred to the Dominant Nature test evolved by Krishna Iyer J
The main functions of the Irrigation Department where subjected to the Dominant Nature test clearly come within the ambit of industry
We have not been able to gather as to why even six years after the amendment has been brought to the definition of industry in section 2j of the Act the same has not been brought into force
This Court on more than one occasion has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court the law was sought to be amended it is 640 appropriate that the same should be brought into force as such or with such further alterations as may be considered necessary and the legislative view of the matter is made known and the confusion in the field is cleared up
For the reasons we have indicated above these appeals succeed
We make it clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation
The appeals are allowed without costs
SL Appeals allowed


Summary:
An Award of an Arbitrator in respect of properties situated mostly at Warora Chandrapur and only a bit of property situated at Nagpur did not mention the place of execution
The arbitrator was resident of Nagpur
The award was filed in the Civil Court at Nagpur
The Civil Judge held that only a bit of property situated at Nagpur and the residence of arbitrator at Nagpur did not give local jurisdiction to the Court at Nagpur and dismissed the application saying that the award ought to have been filed in the Court of Civil Judge Chandrapur
The revision application was summarily rejected by the Bombay High Court
The appeal by special leave is against the judgment of the Bombay High Court
Allowing the appeal this Court  HELD 1
The Court at Nagpur had undoubtedly part of the jurisdiction to entertain the suit as part of the dispute which was the subject matter of the dispute was within the jurisdiction of the Nagpur Court
This view is further corroborated by Section 2c of the 
687F 12 In view of the provisions of Sections 17 and 20 of the Code of Civil procedure the order of the Civil Judge that the award be returned for presentation to the proper Court is erroneous
The High Court was also in error in not entertaining the application and in not setting aside the order of the Civil Judge
687F G H 686 The Court set aside the orders of both the Civil Judge and the High Court and directed the Civil Judge to proceed with the objection to the award filed in his Court at Nagpur and dispose it of as quickly as possible 688A B