ORDER [ENTITY], J.
1. In this batch of writ petitions, the question that arises for consideration is:
"Whether the National Remote Sensing Agency is an 'Industry' as defined in [SECTION] of the [ACT]?"
Factual Matrix:
2. In order to decide the said question, we may have to notice the relevant facts leading to filing of these writ petitions and the events leading to the reference by a Division Bench of this Court to a Larger Bench for resolution of the issue:
3. The respondents in this batch of writ petitions claiming to be the workmen in the petitioner-Management invoked the jurisdiction of the Additional Industrial Tribunal-cum-Additional Labour Court, Hyderabad under [SECTION] of the [ACT] (for short 'the Act') seeking their reinstatement into service on the ground that they were retrenched by the petitioner-Management without following the procedure prescribed under [SECTION] of the Act.
4. The petitioner-Management filed a detailed counter opposing the claim of the workmen for their reinstatement into the service and inter alia pleaded that: (1) the petitioner-Management is not an 'industry' within the meaning of [SECTION] of the Act; and (2) the 'appropriate Government' in respect of the petitioner-Management under [SECTION] is the Central Government and so the petition under [SECTION] of the Act, which is an amendment made and applicable by the State of Andhra Pradesh is not applicable to the workmen of the petitioner-Management.
5. The petitioner-Management insisted that the said two points were required to be decided as preliminary points before entering into the merits of the case. The Tribunal accordingly heard the parties and decided the same as preliminary points. The Tribunal took the view that the petitioner-Management is an 'industry' and the State Government is the 'appropriate Government'.
6. The petitioner-Management filed this batch of writ petitions invoking the extraordinary jurisdiction of this Court under [SECTION] of the [ACT] calling for the records in [CASE NUMBER] and [ENTITY], dated [SECTION]-8-1994 on the file of the additional Industrial Tribunal-cum-Additional Labour Court, Hyderabad and quash the same.
7. It is the case of the petitioner-Management that it is not an 'industry' and the [ACT] has no application. Hence, the workmen cannot file an application before the Labour Court under [SECTION] of [ACT] to [ACT]. It is also contended that the 'appropriate Government' is the Central Government and not the State Government as defined under [SECTION] of the Act and hence the 'appropriate Government' has to constitute a Labour Court for adjudication of Industrial Disputes relating to the matters specified in the Second Schedule and as in this case the Labour Court (first respondent herein) constituted by the State Government has no jurisdiction to entertain the Industrial Dispute.
8. The matters were listed before a learned single Judge of this Court for hearing. The learned single Judge after noticing the earlier judgment of a Division Bench of this court in [CASE NUMBER] and [ENTITY], dated 13-[SECTION]-1992 and the subsequent judgment of the Apex Court in [PRECEDENT], was of the opinion that the view taken by the Division Bench in [CASE NUMBER] and [ENTITY] requires re-consideration and so opining referred the writ petitions to a Larger Bench. The writ petitions were accordingly placed before a Division Bench of this Court. The Division Bench found that the petitioner-Management in this batch of writ petitions is actually seeking an opinion different from the opinion already taken by a coordinate Bench of this Court in [CASE NUMBER] and [ENTITY] and also having regard to the fact that there is no direct decision of the Apex Court on the question whether the activity carried on by the petitioner-Management can be treated as an 'industry' within the meaning of that term as defined under [SECTION] of the Act, felt that it is appropriate that the issues that arise for consideration in this batch of Writ Petitions shall have to be dealt with by a Larger Bench to give a quietus on the issues at this court level. The Division Bench accordingly referred this batch of writ petitions to the Larger Bench. This is how the matters are listed before us for re-consideration and resolution of the issues that are raised in this batch of writ petitions.
9. The first question that falls for consideration is as to whether the National Remote Sensing Agency (NRSA) is an 'industry' within the meaning of that term as defined under [SECTION] of the Act?
10. Sri [ENTITY], learned Senior Counsel appearing on behalf of the petitioner-Management contends that the petitioner-Management is not an 'industry' within the meaning of that term as defined under [SECTION] of the Act and, therefore, the provisions of the Act are not applicable to resolve the disputes, if any, between the petitioner-Management and its employees. The employees working in the petitioner-Management (NRSA) cannot be characterised as workmen within the meaning of the provisions of the Act. It is submitted that the NRSA is a research organisation and all its activities are carried on without any profit motive. The learned Senior Counsel further contends that the petitioner organisation is an extended arm of the Department of Defence, Government of India. The functions and duties entrusted to the petitioner-organisation by the Department of Defence and discharge of the same by it are sovereign in their nature. Sovereign functions cannot be regarded as an industrial activity. It is also submitted that the activities of NRSA are carried on under the authority of the Central Government and in relation to any Industrial Dispute concerning it, the Central Government alone is the appropriate Government. It is the Central Government that has to constitute the Labour Court/Tribunal under [SECTION] of the Act by a notification and all the disputes between the petitioner-Management and its employees may have to be resolved only by such Labour Court/Tribunal constituted by the Central Government. The Additional Labour Court-cum-Additional Industrial Tribunal constituted by the State Government has no jurisdiction to entertain the dispute.
[SECTION]. In order to decide the said two points, which arise for our consideration, we may have to notice the nature and structure of the petitioner-Organisation and its establishment and activities carried on by it.
[SECTION]. The NRSA is a Society registered under the [ACT]). The same has been registered on 2-9-1974. The Minister of Industrial Development, Science and Technology, New Delhi is shown to be the Chairman of the NRSA at the time of registration. All its members are the officials of the Union Government.
13. The objects for which the NRSA is established are:
a) To undertake, aid, promote, guide and coordinate research in the field of remote sensing;
b) To take over the present works and functions of the research flight facility of the Ministry of Defence of the Government of India with all their assets and liabilities and rights and obligations;
c) To provide consultancy services and airborne survey facilities to user agencies in the country;
d) To carry out surveys by using remote sensing technology for various natural resources like agriculture, hydrology, meteorology, fisheries, minerals, oil, soils, environmental monitoring, forestry, ocean resources, topography, land resources and crop disease surveillance;
e) To establish, maintain and manage data banks for acquisition, storage, retrieval, dissemination, evaluation, scrutiny and interpretation of information relating to Remote Sensing technology;
f) To establish, maintain and manage laboratories, workshops, stores and other units for carrying out scientific and technical work in the area of remote sensing;
g) To provide support to research centres for conducting investigations in specified areas of remote sensing technology and for undertaking design, development and construction of special remote sensing instruments;
h) To conduct field experiments connected with the activities of remote sensing;
i) To organise training facilities, lectures, seminars and symposium for advanced study and research in remote sensing and for advancement of science and technology in general;
j) To cooperate and collaborate with other national and/or foreign institutions and international organisations in the field of remote sensing and allied sciences;
k) To publish the disseminate information relating to results of research conducted in the field of remote sensing.
14. The Minister of State in the Government of India dealing with the subject relating to the Department of Space from time to time shall be the President of the NRSA, and the Secretary to Government of India in the Department of Space shall be the Vice-President of the NRSA. The Secretary, Department of Space shall be the Chairman of the Governing Body. The Governing Body is required to carry out and pursue all the objects of the Society, as set forth in the Memorandum of its Association. The management of all the affairs and funds of the Society shall, for this purpose, vest in the Governing Body. The Governing Body exercises all the powers of the Society, subject nevertheless to such limitations as the Government of India may, from time to time, impose in respect of the expenditure from the funds of the society and of grants made by the Government of India; provided always that the Governing Body shall have no greater powers that the Government of India possesses in respect of expenditure from public funds.
15. The Governing Body is clothed with the power, subject to the provisions of the Rules and Byelaws, to:
(i) Consider the annual and supplementary budgets placed before it by the Secretary, from time to time, and pass them with such modifications as the Governing Body may think fit;
(ii) Create and abolish posts; provided that for creation of posts carrying scales, the maximum of which exceeds Rs.1,600/- per month (pre-revised), prior approval of the Government is necessary;
(iii) Appoint various scientific, technical, administrative and other officers and staff of the Society, fix their remuneration and define their duties;
(iv) Enter into arrangements with the Government of India and through them with Foreign and International Agencies and Organisations, the State Governments and other public or private organisations or individuals for securing and accepting grants-in-aid endowments, donations or gifts to the Society, on mutually agreed terms and conditions; provided that such terms and conditions, if any, shall not be contrary to; inconsistent or in conflict with the objects of the Society;
(v) Take over, acquire by purchase, gifts, exchange, lease or hire or otherwise from Government of India and through them from Foreign and International Agencies and Organisations, the State Governments and other public or private bodies or individuals, institutions, libraries, laboratories, immovable properties, endowments or other funds together with any attendant obligations and engagements not inconsistent with the objects of the Society;
(vii)
(viii) With the sanction of the Government of India, frame, amend or repeal bye-laws, for the administration and management of the affairs of the Society and in particular to provide for the following matters:
(c) Terms and tenures of appointments, emoluments, allowances, rules of discipline and other conditions of service of the officers and establishments of the Society;
(d) - (f)
The funds of the Society will consist of lumpsum and recurring grant made by the Government of India; Fee and other charges received by the Agency; and all monies received by the Society by way of grants, gifts, donations or other contributions approved by the Government of India.
[SECTION]. This bird's eye view of the Memorandum of Association of the NRSA and the rules framed by it disclose the nature and structure of the Organisation and its functions and duties and the objects for which it has been established. The predominant object of the NRSA, as is evident, is to undertake, aid, promote, guide and coordinate research in the field of remote sensing and conduct field experiments connected with the activities of remote sensing. From the material available on record, it does not appear to be an extended arm of the Department of Defence, Union of India as is sought to be contended by the learned Senior Counsel for the petitioner-Management.
[SECTION]. No doubt, in terms of para 2 (D) of the Presidential Notification dated 4-[SECTION]-1980; the Department of Space (Antareeksh Vibhag) is responsible for looking after all matters relating to National Remote Sensing Agency. All those matters, which were required to be referred to the Government of India, are directed under the said notification to be referred to the Secretary, Department of Space. The Department of Space is responsible for implementing the policies framed by the Space Commission. The Research and Development activities of the Space Commission are carried out through various organisations including the NRSA. The Space Commission and the Department of Space, no doubt, function under the control of the Prime Minister as is evident from the organizational chart made available by the petitioner-Management. May be so. There is no doubt whatsoever and about which there is no dispute before us that the Government of India through its Department of Space exercises a very deep and pervasive control over the organisation and activities of NRSA.
18. The question that falls for consideration is as to whether on that count; the NRSA can be taken out of the purview of definition of 'industry' as defined under [SECTION] of the Act?
19. From the material made available on record, the NRSA offers its services in the matter of generation and dissemination of standard and special satellite data products; specialised resources surveys using remote sensing data obtained from aircraft/spacecraft; consultancy services for turn-key projects in those areas in India and as well as abroad etc. Under the technology development projects the NRSA has successfully developed many items and productionised the same through licencee industries. The balance sheet of the petitioner-Management made available for our perusal discloses the income realised by it on account of consultancy projects. The receipts and payments account for the year ended 31st March, 1995 would reveal that the Organisation has received a sum of Rs.9,94,63,055/- on consultancy and sale of data products. The Organisation appears to have earned a considerable amount of foreign revenue. The technology developed by it in many areas appears to have been transferred to various private limited industries. The brochure published by it itself speaks about the performance of various industries who have obtained know-how from NRSA.
20. An analysis of the material made available on record and the features noticed would make it clear that NRSA, a Society registered under the [ACT], functions under the direct control of the Department of Space. The Department exercises a deep and pervasive control over its activities. The composition of the organisation mainly and predominantly consists of public servants working under the control of Union of India. But it is not an extended arm of the Defence Ministry/Department. Its operations in no manner whatsoever are exclusively connected with the Defence of India or Defence Services or Defence Research or allied matters. No doubt, it undertakes variety of research programmes. To sum up in its own words:
"The National Remote Sensing Agency (NRSA), an autonomous organisation under the Department of Space (DOS), Government of India, is responsible for providing operational resources survey services to the users by utilising modern remote sensing techniques. The organisation has continued to make significant progress in all the spheres of its activities, viz., acquisition, processing, generation and dissemination of satellite and aerial data products, analysis and interpretation of remotely sensed data for resource management/environmental applications and training of users in various remote sensing and related fields as well as research and development activities
Around 1,[SECTION]9 satellite data products were generated and supplied to the users during the year. Satellite-wise supply of data products from 1988 to March, 1995 is shown in Fig.1."
21. In the process of achieving its objects, for the purposes of which it has been established, the petitioner-Organisation employs and hires the services of various skilled, technical, operational and clerical personnel. The Organisation is empowered to recruit and appoint such personnel subject to various terms and conditions thereof.
22. Whether the petitioner-Organisation is an 'industry' within the meaning of that term as defined under [SECTION] of the [ACT]?
23. [SECTION] of the Act defines 'industry' and the same is as follows:
"Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling service, employment handicraft, or industrial occupation or avocation of workmen."
24. The definition of 'industry' has raised a variety of difficulties of interpretation. There are several explanations offered in the process of interpretation of the definition of 'industry'. The question as to what is the 'industry' has continuously baffled and perplexed the courts. The authoritative pronouncements themselves are characterised as judicial ventures in this rather volatile area of law. It is a difficult piece of exploration.
25. The law on the subject is comprehensively dealt with by the Apex Court in [PRECEDENT], .
The question as to whether the said Judgment delivered by seven learned Judges of the Supreme Court requires any re-consideration is set at rest by the Supreme Court itself in [PRECEDENT], . The Supreme Court ruled that the Judgment in Bangalore Water Supply case (2 supra) does not require any reconsideration. Therefore, we shall examine the question on hand in the light of the principles laid down by the Supreme Court in Bangalore Water Supply case (2 supra). We do not propose to traverse into the matter in detail, but we shall proceed to examine the question as to whether the non-profit making research bodies are excluded from the definition of 'industry'. However, we shall bear in mind the law declared by the Supreme Court in Bangalore Water Supply case (2 supra) that merely because the employer is a government department or a local body (and, a fortiori, a statutory board, society or like entity) the enterprise does not cease to be an 'industry'. What the common man does not consider as 'industry' need not necessarily stand excluded from the statutory concept. It is observed:
"All the indicia of 'industry' are packed into the judgment which condenses the conclusion tersely to hold that 'industries' will cover 'branches of work that can be said to be analogous to the carrying out of a trade or 'business'. The case, read as a whole, contributes to industrial jurisprudence, with special reference to the Act, a few positive facets and knocks down a few negative fixations. Governments and municipal and statutory bodies may run enterprises which do not for that reason cease to be industries. Charitable activities may also be industries. Undertakings, sans profit motive, may well be industries. Professions are not ipso facto out of the pale of industries. Any operation carried on in a manner analogous to trade or business may legitimately be statutory 'industry'. The popular limitations on the concept of industry do not amputate the ambit of legislative generosity in [SECTION]. Industrial peace and the smooth supply to the community are among the aims and objects the Legislature had in view, as also the nature, variety, range and areas of disputes between employers and employees. These factors must inform the construction of the provision."
26. It is held in categorical terms that "the absence of profit motive or gainful objective is irrelevant by the venture in the public, joint, private or other sector".
27. With regard to the research institutions, [ENTITY], J speaking for the majority posed the question: Does, research involve collaboration between employer and employee? It is held that "the research institutes, albeit run without profit motive, are industries." It would be apposite to notice the following paragraph from Bangalore Water Supply Case (2 supra):
"Does, research involve collaboration between employer and employee? It does. The employer is the institution; the employees are the scientists, para-scientists and other personnel. Is scientific research service? Undoubtedly it is. Its discoveries are valuable contributions to the wealth of the nation. Such discoveries may be sold for a heavy price in the industrial or other markets. Technology has to be paid for and technological inventions and innovations may be patented and sold. In our scientific and technological age nothing has more cash value, as intangible goods and invaluable services, than discoveries. For instance, the discoveries of [ENTITY] made him fabulously rich. It has been said that his brain had the highest cash value in history for he made the world vibrate with the miraculous discovery of recorded sound. Unlike most inventors, he did not have to wait to get his reward in heaven; he received it munificently on this gratified and grateful earth, thanks to conversion of his inventions into money aplenty. Research benefits industry. Even though a research institute may be a separate entity disconnected from the many industries which funded the institute itself, it can be regarded as an organisation, propelled by systematic activity, modeled on co-operation between employer and employee and calculated to throw up discoveries and inventions and useful solutions which benefit individual industries and the nation in terms of goods and services and wealth. It follows that research institutes, albeit run without profit-motive, are industries."
28. The view taken by the Supreme Court in The [PRECEDENT], and The [PRECEDENT], that those hospitals were not be the industries because they were non-profit making bodies and their work was in the manner of training, research and treatment has been specifically overruled by the Supreme Court in Bangalore Water Supply case (2 supra).
29. It is thus clear that even the research institutes although run without profit motive are the industries. (i) Professions, (ii) Clubs, (iii) Educational Institutions, co-operatives, (iv) research institutes, (v) charitable projects and (vi) other kindred adventures cannot be exempted from the scope of [SECTION] of the Act, provided they fulfil the triple test, viz., (i) systematic activity, (ii) organised by co-operation between employer and employee (the direct and substantial element is chimerical) and (iii) for the production and/or 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 i.e. making, on a large scale prasad or food).
30. We have already noticed the objects for which the NRSA has been established and its functions. We have no doubt whatsoever in our mind to hold that the petitioner-Organisation carries on a systematic activity with cooperation between itself and its employees, for the production and distribution of material services calculated to satisfy the human wants and wishes.
31. In the circumstances, even if the NRSA is considered to be a non-profit making research institute it cannot be exempted and excluded from the operation of the definition of 'industry' within the meaning of that term as defined under [SECTION] of the Act.
32. However, the learned Senior Counsel for the petitioner-Management would place heavy reliance upon the decision in Physical Research Laboratory (1 supra) in support of his submission that the petitioner-Organisation is not an 'industry' because it is purely a research organisation. The Physical Research Laboratory is stated to be a sister concern of the petitioner-Organisation and it is held to be not an 'industry' and the same analogy would be applicable to hold that the petitioner-organisation to be not an industry. The Supreme Court noticed the nature of Physical Research Laboratory (PRL) and its functions:
33. PRL is a public trust registered under the [ACT]. It is a research institute and was established by Dr. [ENTITY] for research in space and allied sciences. It is financed mainly by the Central Government by making provision in that behalf in the Union Budget and nominally by the Government of Gujarat. It is stated to be virtually an institute falling under Government of India's Department of Space. Its object is to conduct research and is, therefore, engaged in conducting advance research in astronomy and astrophysics, planetary atmosphere and aeronomy etc. It is not directly or indirectly carrying on any trade or business and its activities do not result in production or distribution of goods or services calculated to satisfy human wants and wishes. The knowledge acquired as a result of the research carried on by it is not sold but is utilised for the benefit of the Government The purpose of the research is to acquire knowledge about the formation and evolution of the universe but the knowledge thus acquired is not intended for sale. The Labour Court in this regard recorded a categorical finding that the research work carried on by PRL is not connected with the production, supply and distribution of material goods or services. The material on record further discloses that PRL is conducting research not for the benefit or use of others."
34. In the instant case, we have already noticed the activities of the petitioner-Organisation. It has not only transferred its technology but also received remuneration as a consideration for such transfer. The NRSA carries on systematic activity with cooperation between it and its employees for the production and distribution of material services calculated to satisfy the human wants and wishes. It provides operational resources survey services to the users by utilising modern remote sensing techniques. It had already developed around 15,[SECTION]9 satellite data products and supplied to the users from 1988 to March, 1995. It had undertaken several remote sensing survey projects. Resource maps and action plan maps were prepared and handed over to the concerned District authorities. It had realised a sum of Rs.54,00,000/- by the sale of data projects during 1994-95 through EOSAT Company, United States of America.
35. In the circumstances, we are of the opinion that the decision rendered in Physical Research Laboratory (1 supra) which is stated to be a sister organisation of the petitioner concern has no application whatsoever in order to decide as to whether the petitioner-Organisation falls within the ambit of 'industry' as defined in [SECTION] of the Act.
36. Sri [ENTITY], learned Senior Counsel, however, would contend that the NRSA actually discharges some of the functions of the Defence Department and the activities and functions so carried on by it are 'sovereign functions'. It is submitted that an organisation which discharges the 'sovereign functions' cannot be held to be an 'industry'.
Sovereignty:
37. What sovereign functions are excluded from the definition of 'industry'?
38. This question has been considered by the Supreme Court in Bangalore Water Supply case (2 supra) itself. [ENTITY], C.J., observed that "the term 'sovereign' should be reserved, technically and more correctly, for the sphere of ultimate decisions. 'Sovereignty' operates on a sovereign plane of its own What is meant by the use of the term 'sovereign', in relation to the activities of the State, is more accurately brought out by using the term 'governmental' functions although there are difficulties here also inasmuch as the Government has entered largely now fields of industry. Therefore, only those services which are governed by separate rules and constitutional provisions, such as [SECTION] and [SECTION] should, strictly speaking, be excluded from the sphere of industry by necessary implication."
39. This aspect of the matter has been elaborately dealt with by [ENTITY], J., (as His Lordship then was) in Bangalore Water Supply case (2 supra). The learned Judge concurring with the opinion of the majority specifically adverted to this aspect of the matter in somewhat detail. It is observed: (paragraph [SECTION]2).
"One of the exceptions carved out by the Court is in favour of activities undertaken by the Government in the exercise of its inalienable functions under the [ACT], call it regal, sovereign or by any other name. I see no justification for excepting these categories of public utility activities from the definition of 'industry'. If it be true that one must have regard to the nature of the activity and not to who engages in it, it seems to me beside the point to enquire whether the activity is undertaken by the State, and further, if so, whether it is undertaken in fulfilment of the State's constitutional obligations or in discharge of its constitutional functions. In fact, to concede the benefit of an exception to the State's activities which are in the nature of sovereign functions is really to have regard not so much to the nature of the activity as to the consideration who engages in that activity; for, sovereign functions can only be discharged by the State and not by a private person. If the State's inalienable functions are excepted from the sweep of the definition contained in [SECTION], one shall have unwittingly rejected the fundamental test that it is the nature of the activity which ought to determine whether the activity is an industry. Indeed, in this respect, it should make no difference whether, on the one hand, an activity is undertaken by a corporate body in the discharge of its statutory functions or, on the other, by the State itself in the exercise of its inalienable functions. If the water supply and sewerage schemes or fire fighting establishments run by a Municipality can be industries, so ought to be the manufacture of coins and currency, arms and ammunition and the winning of oil and uranium. The fact that these latter kinds of activities are, or can only be, undertaken by the State does not furnish any answer to the question whether these activities are industries. When undertaken by a private individual they are industries. Therefore, when undertaken by the State, they are industries. The nature of the activity is the determining factor and that does not change according to who undertakes it. [SECTION], [SECTION], [SECTION], [SECTION] and [SECTION] read with [SECTION] of the [ACT] render support to this view. These provisions which were described in Hospital Mazdoor Sabha , as 'very significant' at least show that, conceivably, a Defence Establishment, a Mint or a Security Press can be an industry even though these activities are, ought to be and can only be undertaken by the State in the discharge of its constitutional obligations or functions. The State does not trade when it prints a currency note or strikes a coin. And yet, considering the nature of the activity, it is engaged in an industry when it does so." (Emphasis is of ours).
40. In [PRECEDENT], the Supreme Court observed that "the regal functions described as primary and inalienable functions of State though statutorily delegated to a 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. If a service rendered by an individual or private person would be an industry, it would equally be an industry in the hands of a Corporation."
41. The Tax Department of the Corporation and the General Administration Department of the same Corporation were held to be 'industries' within the meaning of that expression in the [ACT].
42. In [ENTITY] & Co. V. State of A.P., the Supreme Court after making a very detailed analysis of the concept of 'sovereignty' and the distinction between 'sovereign' and 'non-sovereign' powers noted that "the doctrine of sovereignty as propounded by theorists in medieval period has radically changed." It is observed that "in the modern sense the distinction between sovereign or non-sovereign power thus does not exist. It all depends on the nature of power and manner of its exercise The demarcating line between sovereign and non-sovereign powers for which no rational basis survives has largely disappeared. Therefore, barring functions such as administration of justice, maintenance of law and order and repression of crime etc., which are among the primary and inalienable functions of a constitutional Government, the State cannot claim any immunity."
43. The Supreme Court further observed that the "acts such as defence of the country, raising armed forces and maintaining it, making peace or war, foreign affairs, power to acquire and retain territory, are functions which are indicative of external sovereignty and are political in nature. Such actions of the State may not be amenable to the jurisdiction of the ordinary civil court."
44. Can it be said that the National Remote Sensing Agency discharges any such sovereign functions?
45. The emphatic answer would be: 'None'. The functions discharged by the NRSA can never be regarded as regal functions. Nor does it discharge any inalienable functions.
46. In [PRECEDENT], the question as to whether the Forest Department of State of Maharashtra can be said to be an 'industry' as per the ratio in Bangalore Water Supply Case (2 supra) came up for consideration of the Supreme Court.
47. It was urged that the department is not an 'industry' because the function discharged by the Department, more particularly the one relatable to the scheme in question, named Pachgaon Parwati Scheme undertaken in Pune District, is sovereign in nature. The Supreme Court repelled the said contention and held that "as per the Bangalore Water Supply case (2 supra) sovereign functions "strictly understood" alone qualify for exemption, and not the welfare activities or economic adventures undertaken by the Government. Even in the departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to be an industry." The three Judge Bench adopted the decision in [ENTITY] & Co. (7 supra) that a function cannot be regarded as a sovereign function unless such function is a part of inalienable or inescapable function of the State. The Forest Department of State of Maharashtra was held to be an 'industry' within the meaning of that expression in [SECTION] of the Act.
48. We have already referred to the decisions of the Supreme Court in [PRECEDENT], and Nagpur Coproration (7 supra) wherein the Court indicated as to what are the traditional sovereign functions of the State and in both these decisions, the observations of Lord [ENTITY] in [PRECEDENT] "that traditional sovereign functions were the making of laws, the administration of justice, the maintenance of order, the repression of crime, carrying on of war, the making of treaties of peace and other consequential functions," were approved.
49. In [PRECEDENT] the distinction between sovereign and non-sovereign functions was categorised as regal and non-regal functions. The regal functions were confined to legislative power, the administration of the laws and exercise of the judicial power. In respect of non-regal functions, which could be assumed by Legislative power, the State was held as a corporation analogous to a private company. It was held as under:
"Regal functions are inescapable and inalienable. Such are the legislative power, the administration of the 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."
50. This decision has been approvingly referred to in [ENTITY] (7 supra).
51. In [PRECEDENT], the Supreme Court relying upon the dominant nature test propounded in the judgment of Justice [ENTITY] in Bangalore Water Supply Case (2 supra) held that "the Telecommunication Department of the Union of India is an "industry" within that definition because it is engaged in a commercial activity and the Department is not engaged in discharging any of the sovereign functions of the State." The Court accordingly overruled the two-Judge Bench judgment in [PRECEDENT], and [PRECEDENT], .
52. In [PRECEDENT], the Supreme Court declared that "the functions which are carried on by All India Radio and [ENTITY] cannot be said to be confined to sovereign functions as they carry on commercial activity for profit by getting commercial advertisements telecast or broadcast through their various kendras and stations by charging fees. The Court held that "the functions carried on by them are not of a purely sovereign nature."
53. In [PRECEDENT], the question whether the Agricultural Market Committee established under [ACT] is an 'industry' as contemplated under the [ACT] came up for consideration before the Supreme Court. It was contended that the function of the Market Committee is sovereign in nature; hence it could not constitute to be an industry to make its employees as workmen under the [ACT]. The Supreme Court reviewed the entire case law on the subject and held that "every governmental function need not be sovereign. State activities are multifarious, from the primal sovereign power, which exclusively inalienably could be exercised by the sovereign alone, which is not subject to challenge in any civil court. But the other functions of the State including the welfare activity could not be construed as a sovereign exercise of power. What is approved to be "sovereign" is defence of the country, raising armed forces, making peace or war, foreign affairs, power to acquire and retain territory." It is further held that "sovereign function in the new sense may have very wide ramification but essentially sovereign functions are primary inalienable functions which only the State could exercise. Thus, various functions of the State, may be ramifications of "sovereignty" but they all cannot be construed as primary inalienable functions. Broadly it is taxation, eminent domain and police power, which covers its field. It may cover its legislative functions, administration of law, eminent domain, maintenance of law and order, internal and external security, grant of pardon. So the dichotomy between sovereign and non-sovereign function could be found by finding which of the functions of the State could be undertaken by any private person or body; the one which could be undertaken cannot be sovereign function. In a given case even on subjects on which the State has the monopoly may also be non-sovereign in nature. Mere dealing in subject of monopoly of the State would not make any such enterprise sovereign in nature. Absence of profit making or mere quid pro would also not make such enterprise to be outside the ambit of "industry" as also held in State of Bombay case (9 supra)."
54. However, it is brought to our notice that NRSA, is at present, carrying out the following services for defence and DRDO:
"Value added data supply and procurement of data from foreign satellites; Setting up of Data receiving stations, payload programming services; For urgent defence requirements data products supply on priority basis; Range calibration flights; Object identification trials; Identification of submarines; Identification of atomic minerals like uranium, chromium, etc., for Atomic Minerals Division; For flood damage assessment and rehabilitation; Rehabilitation in earthquake affected areas; Flight testing of sensors; Detection and identification of minerals for AMSE, GSI; and Topographical studies for ILS design airports."
55. The question that falls for consideration is as to whether NRSA could be treated as a part of Department of Defence merely because it is carrying on and rendering certain services in the defence related areas?
56. In [PRECEDENT] the Supreme Court held that "even though the Government Company is an agency or instrumentality of the Central Government, it cannot be held to be a department or establishment of the Government in all cases. Such instrumentality or agency has been held to be a third arm of the Government only in the context of enforcement of fundamental rights against the action of Government and its instrumentalities or agencies. It cannot be said that an instrumentality or agency of the Government is essentially a government department for all purposes and such instrumentality or agency will enjoy the same privilege and protection which any government or its establishment or department enjoys in relation to a statute."
57. The Department of Defence may be availing services of NRSA in some form or other. Likewise, the department may be utilising such other services from various organisations and even individuals. The department may be purchasing uniforms, shoes, belts, caps etc., for its soldiers. It purchases food grains, meat and poultry products from various organisations and individuals. The Cantonments have their canteens and restaurants for their own staff. On that count, all those organisations and individuals do not become part of the Department of Defence or establishment of the Government.
58. Thus the crucial test is the nature of the activity and that activity is determining factor and that does not change according to who undertakes it. The fact that some kinds of activities are, or can only be, undertaken by the State does not furnish any answer to the question as to whether those activities carried on by the State or its establishment is an industrial activity. Every activity carried on by the State or its instrumentalities in defence related matters cannot be equated to that of discharge of sovereign function. Even a government company manufacturing arms and ammunition exclusively for the purposes of defence may amount to an industrial activity, even though these activities are, ought to be and can only be undertaken by the State in the discharge of its constitutional obligations or functions. The crucial test is the nature of the activity.
59. We will conclude this discussion by referring to paragraph [SECTION]2 in Bangalore Water Supply case (2 supra), which is extracted supra, and the same should put an end to this controversy.
60. In the light of the discussion, we reach to inescapable conclusion that none of the activities of NRSA could be construed to be 'sovereign' in nature. We have no hesitation to hold that the petitioner-Organisation falls within the definition of 'industry' under [SECTION] of the Act.
61. In [PRECEDENT], the Supreme Court, however, observed that "ordinarily, a department of the Government cannot be held to be an industry and rather it is a part of the sovereign function." Such an observation has been made by the Supreme Court in the said case on the ground that the employee therein failed to give positive facts for coming to a conclusion that the department therein was an 'industry'. The Supreme Court held that "it would be for the person concerned who claims an establishment to be an 'industry' to give positive facts for coming to a conclusion that it constitutes an 'industry'." The observations so made are required to be understood in the light of the background of the facts therein. The judgment is not an authority for the proposition that a government department cannot be held to be an industry. The Supreme Court could not have intended to lay down any such proposition of law in view of the catena of decisions on this subject including the Bangalore Water Supply case (2 supra).
62. The next question that falls for consideration in the instant case is: What is the true and correct import of the expression 'appropriate Government' as defined in [SECTION] of the [ACT]?
63. It is contended that the 'appropriate Government' in respect of the petitioner-Organisation is the Central Government and, therefore, the first respondent-Labour Court has no jurisdiction to entertain the dispute, as it was not constituted by the Central Government under [SECTION] of the Act. The submission is that NRSA is a Central Government undertaking, which falls within the meaning of 'other authority' in [SECTION] of the [ACT] and, therefore, it is an instrumentality of the Central Government functioning under the authority of the Central Government, as such, the Central Government will be the appropriate Government.
64. Reliance is placed upon the decision of this court in Director, [PRECEDENT] in which a Division Bench of this court held that "NRSA is an instrumentality of the State falling within the ambit of 'other authority' and, therefore, amendable to the jurisdiction of this court under [SECTION]. It is held to be defence oriented organisation run by a registered society headed by the Secretary, Government of India, Ministry of Space. Employees of the instrumentalities of the State and public corporations are entitled to the protection of [SECTION] and [SECTION] of the [ACT]."
65. Before embarking upon the said question, it will be apt to advert to the definition of 'appropriate Government' as given in [SECTION] of the Act, which is quoted hereunder:
"(a) "appropriate Government" means, -
(i) in relation to any Industrial Disputes concerning any industry carried on by or under the authority of the Central Government or by a railway company or concerning any such controlled industry as may be specified in this behalf by the Central Government or in relation to an Industrial Dispute concerning a Dock Labour Board established under [SECTION] of the [ACT], or the Industrial Finance Corporation of India Limited formed and registered under the [ACT], or the Employees' State Insurance Corporation established under [SECTION] of the of the [ACT], or the Board of Trustees constituted under [SECTION] of the [ACT], or the Central Board of Trustees and the State Board of Trustees constituted under [SECTION] and [SECTION], respectively, of the [ACT], or the Life Insurance Corporation of India established under [SECTION] of the Life Insurance Corporation Act, 1956 (31 of 1956) of the Oil and Natural Gas Corporation Limited registered under the [ACT] (1 of 1956) or the Deposit Insurance and Credit Guarantee Corporation established under [SECTION] of the [ACT], or the [ACT] or the Unit Trust of India established under [SECTION] of the Unit Trust of India Act, 1963 (52 of 1963), or the Food Corporation of India established under [SECTION], or a Board of Management established for two or more contiguous States under [SECTION] of the [ACT], or the Airports Authority of India constituted under [SECTION] of the [ACT], or a Regional Rural Bank established under [SECTION] of the [ACT], or the Export Credit and Guarantees Corporation Limited or the Industrial Reconstruction Bank of India Limited; or the Banking Service Commission established under [SECTION] of the [ACT], or an air transport service, or a banking or an insurance company, a mine, an oil-field, a Cantonment Board, or a major port, the Central Government, and
(ii) in relation to any other Industrial Dispute, the State Government."
66. The question that falls for consideration is not res integra, but squarely covered by an authoritative pronouncement rendered by a [ACT] Bench of the Supreme Court in [PRECEDENT] .
67. The Supreme Court in the said judgment after an analysis of this provision held that "the Central Government will be the appropriate Government in relation to an industrial dispute concerning:
(1) any industry carried on by or under the authority of the Central Government, or by a railway company; or (2) any such controlled industry as may be specified in this behalf by the Central Government; or (3) the enumerated industries (which form part of the definition quoted above and need not be reproduced here)."
68. It is observed that "the expression 'appropriate Government' combines three alternatives viz., (a) any industry carried on by the Central Government, (b) any industry carried on under the authority of the Central Government, and (c) any industry carried on by a railway company. Alternatives (a) and (c) indicate cases of any industry carried on directly by the Central Government or a railway company. They are too clear to admit of any polemic. In regard to alternative (b), surely, an industry being carried on under the authority of the Central Government cannot be equated with any industry carried on by the Central Government itself. This leaves us to construe the words "under the authority of the Central Government". The key word in them is "authority".
69. It is observed that "any industry carried on under the authority of the Central Government" implies an industry which is carried on by virtue of, pursuant to, conferment of, grant of, or delegation of power or permission by the Central Government to a Central Government company or other government company/undertaking. To put it differently, if there is lack of conferment of power or permission by the Central Government to a government company or undertaking, it would disable such a company/undertaking to carry on the industry in question."
70. The Supreme Court further observed that "the fact of being an instrumentality of a Central/State Government or being "State" within the meaning of [SECTION] of the [ACT] cannot be determinative of the question as to whether an industry carried on by a company/corporation or an instrumentality of the Government is by or under the authority of the Central Government for the purpose of or within the meaning of the definition of "appropriate Government".
72. It is observed:
"We have held above that in the case of a Central Government company/undertaking, an instrumentality of the Government, carrying on an industry, the criteria to determine whether the Central Government is the appropriate Government within the meaning of the [ACT], is that the industry must be carried on by or under the Authority of the Central Government and not that the company/undertaking is an instrumentality or an agency of the Central Government for purposes of [SECTION] of the [ACT]; such an authority may be conferred either by a statute or by virtue of the relationship of principal and agent or delegation of power and this fact has to be ascertained on the facts and in the circumstances of each case. In view of this conclusion, with due respect, we are unable to agree with the view expressed by the learned Judges on interpretation of the expression "appropriate Government" in [PRECEDENT] ."
73. The Supreme Court while concluding the discussion observed that "the determination of the question whether the Central Government or the State Government is the appropriate Government in relation to an establishment, will depend, in view of the definition of the expression "appropriate Government" as stood in the [ACT]. The answer to the question referred to above, has to be found in [SECTION] of the [ACT]; if (i) the Central Government company/undertaking concerned or any undertaking concerned is included therein eo nomine, or (ii) any industry is carried on (a) by or under the authority of the Central Government, or (b) by a railway company; or (c) by a specified controlled industry, then the Central Government will be the appropriate Government; otherwise in relation to any other establishment, the Government of the State in which that other establishment is situated, will be the appropriate Government." (Emphasis is of ours).
74. There is no doubt whatsoever that the NRSA is an instrumentality of the Central Government for the purpose of [SECTION] of the [ACT]. But the same is not a part of either the Department of Defence or Department of Space. It is an autonomous body registered under the [ACT]. It is not a Central Government Company/ undertaking concern or any Central Government undertaking concern included as such eo nomine. Its industrial activity is not carried on by or under the authority of the Central Government. There is no such statute conferring any such authority by the Central Government on the petitioner-Organisation. Nothing is placed before us in order to show that there is a relationship of principal and agent between the Central Government and the petitioner-Organisation. Nor is it a specified controlled industry. It is a society registered under the [ACT] having its own General Body and Managing Committee to manage its affairs. It does not require any specific authority of the Government of India to carry on its day-to-day activities. It is not as if the Central Government granted or conferred or delegated any of its powers to enable the NRSA to carry on its activities. It is, therefore, clear that the NRSA does not carry on its activities under the authority of the Central Government.
75. The establishment is constituted and located in the State of Andhra Pradesh and all its industrial activities are carried on within the State of Andhra Pradesh only.
76. For the aforesaid reasons, we hold that the 'appropriate Government' in relation to the petitioner-Organisation is Government of Andhra Pradesh.
77. For the aforesaid reasons, we are of the view that the view taken by a learned single Judge of this court in [PRECEDENT] as affirmed in [CASE NUMBER] and [ENTITY], dated 13-[SECTION]-1992 by a Division Bench of this court holding the NRSA to be an 'industry' within the meaning of that term as defined in [SECTION] of the Act does not require any reconsideration. We accordingly confirm the view taken by this court in the said decision.
78. In conclusion, we hold that:
(a) the National Remote Sensing Agency is an 'industry' within the meaning of that term as defined in [SECTION] of the [ACT]; and
(b) the "appropriate Government" in relation to any industrial dispute concerning NRSA is the Government of Andhra Pradesh.
79. We do not find any merit whatsoever in this batch of writ petitions. The same shall accordingly stand dismissed. No order as to costs.