THE HON'BLE SRI JUSTICE GHULAM MOHAMMED AND THE HON'BLE SRI JUSTICE SANJAY KUMAR W.A.Nos.265, 538 & 1077 of 2005 COMMON ORDER: (Per Sri G.M,J) 1 Questioning the validity and legality of the common order dated 14.10.2004 passed in W.P.Nos.20729, 20778 and 21139 of 1998 by a learned Single Judge of this Court the appellant filed the present appeal under Section 15 of the Letters Patent Act. 2 For the sake of convenience, parties in this appeal are hereinafter referred to as appellant and Workmen. 3 The facts that are necessary for disposal of all these Writ Appeals, in brief, are that the workmen in all these appeals were engaged in the appellant organisation and they had put in more than five years of service in that capacity and their services were terminated orally with effect from 02.02.1991 without following the procedure as laid down under Section 25-F of the Industrial Disputes Act, 1947 (for short ‘the Act’) and hence they raised the respective Industrial Disputes before the Labour Court – I, Hyderabad under Section 2-A (2) of the Act. 4 Before the Labour Court, on behalf of the Workmen, the Workmen were examined as W.W.1 and Exs.W.1 to W.18 were marked. On behalf of the appellant organisation M.W.1 was examined and Exs.M.Ws.1 to 6 were marked. 5 On appreciation of the evidence available before it, the Labour Court by its award dated 09.03.1998 came to the conclusion that the appellant is an ‘industry’ within the meaning of Section 2 (j) of the Act, that the workmen worked more than 240 days preceding the date of their termination on 02.02.1991 and as such, their termination from service without complying with the provisions of Section 25(F) of the Act was bad in law and therefore allowed the claim petitions filed by the workmen and directed the appellant to reinstate the workmen into service with back wages from the date of removal till the date of reinstatement, and further directed to consider the case of the Workmen for being appointed as ‘regular employees’ provided there are vacancies and subject to eligibility. Aggrieved thereby, the appellant – organisation filed Writ Petitions seeking to set aside the said Award passed in the above Industrial Dispute Cases. Aggrieved thereby the appellant preferred Nos.20729, 20778 and 21139 of 1998. 6 The learned Single Judge, who took up all the said Writ Petitions considered the issue in detail by taking into consideration the various enactments and the precedents of the apex Court and dismissed the Writ Petitions holding that the appellant is an industry within the meaning of Section 2 (j) of the Act. Hence the present appeals. 7 The learned counsel for the appellant in all these appeals would contend that the appellant organisation utilises the results of the research purely for the purpose of Defence services and hence it does not transfer the result of its research to any other organisation whether governmental or otherwise, for monitory benefits and hence the appellant organisation cannot be said to be an ‘industry’ within the meaning of Section 2(j) of the Act. The learned counsel, by placing reliance on the judgment reported in Physical Research Laboratory Vs. K.G. Sharma[1] contended that the appellant organisation discharges some of the functions of the Defence Department and the activities and the functions so carried on by it are ‘sovereign functions’ and further contended that an organisation which discharges the sovereign functions cannot be held to be an ‘industry’. At para No.8 of the said judgment it is observed as follows: Therefore, the question whether PRL is an 'industry' under the I.D. Act will have to be decided by applying the above principles; but, at the same time it has to be kept in mind that these principles were formulated as this court found the definition of the word 'industry' as vague and "rather clumsy, vaporous and tall- and-dwarf". Therefore, while interpreting the words 'undertaking' calling and 'service' which are of much wider import, the principle of 'noscitur a sociis' was applied and it was held that they would be 'industry' only if they are found to be analogous to trade of business. Furthermore an activity undertaken by the Government cannot be regarded as 'industry' if it is done in discharge of its sovereign function. One more aspect to be kept in mind is that the aforesaid principles are not exhaustive either as regards what can be said to be sovereign function or as regards the other aspects dealt with by the court. 8 He also placed reliance on a decision delivered by the Rajasthan High Court in Krishna Ram Vs. Union of India wherein it was also held that the defence laboratory set up for research for defence organisation is not an ‘industry’. 9 On the other hand the learned counsel for the respondent/workman in all the writ appeals contended that the appellant is an industry within the ambit of Section 2 (j) of the Act. He vehemently contended that the Sovereign functions of the State cannot be included in industry, but if there are industrial units severable from the essential functions and possess an entity of their own, it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. In this connection he relied on the decision of a larger bench of the Hon’ble apex Court in Bangalore Water Supply & Sewerage Board Vs. A. Rajappa and Others[2] wherein at paras 50 and 51, the apex Court held as under: 50. The, Court proceeded to carve out the negative factors which, notwithstanding the literal width of the language of the definition, must, for other competing reasons, be kept out of the scope of industry. For instance, sovereign functions of the State cannot be included although what such functions are has been aptly termed 'the primary and inalienable functions of a constitutional government'. Even here we may point out the ineptitude of, relying on the doctrine of regal powers. That has reference, in this context, to the Crown's liability in tort and has nothing to do with Industrial Law. In any case, it is open to Parliament to make law, which governs the State's relations with its employees. Articles 309 to 311 of the Constitution of India, the enactments dealing with the defence Forces and other legislation dealing with employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial Disputes Act, 1947. That is a question of interpretation and statutory exclusion; but, in the absence of such provision of law, it may indubitably be assumed that the key aspects of public administration like public justice stand out of the circle of industry. Even here, as has been brought out from the excerpts of ILO documents, it is not every employee who is excluded but only certain categories primarily engaged and supportively employed in the discharge of the essential functions of constitutional government. In a limited way, this head of exclusion has been recognised throughout. 51. Although we are not concerned in this case with those, categories of employees who particularly come under departments charged with the responsibility for essential constitutional functions of government, it is appropriate to state that if there are industrial units severable from the essential functions and possess an entity of their own it may be plausible to hold that the employees of those units are workmen and those undertakings are industries. A blanket exclusion of every one of the host of employees engaged by government in departmental falling under general rubrics like, justice, defence, taxation, legislature, may not necessarily be thrown out of the umbrella of the Act. We say no more except to observe that closer exploration, not summary rejection, is necessary. At para No.179 of the said case, the apex Court further held as under: 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 Constitution, 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 fulfillment 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 2(j), 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. In deed, 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 establishes run by a Municipality can be industries, so ought to be the manufacture of cons 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 name of the activity is the determining factor and that does not change according to who undertakes it. Items 8, 11, 12, 17 and 18 of the First Schedule read with Section 2(n)(vi) of the Industrial Disputes Act render support to this view. These provisions which were described in Hospital Mazdoor Sabha (supra) 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. 10 The learned counsel further relied on the decision of the apex Court in The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and Others[3] wherein the apex Court at para No.19 held as follows: 19. In this connection it would be relevant to refer to the fact that in the First Schedule to the Act which enumerates industries which may be declared as public utility service under S. 2(n) (vi), three entries have been added by Act 36 of 1956. They are Defence Establishment, services in hospitals and dispensaries, and Fire Brigade service. In other words, by the addition of ‘these three entries the Legislature has clearly indicated its intention that service in hospitals and dispensaries can be declared to be a public utility service under s. 2(n) (vi); and there is no doubt that unless the service in hospitals falls under S. 2(j) and is treated as an industry it cannot be declared to be a public utility service. It is true that this particular entry had not been included in the First Schedule at the time when the present reference wag made, but its subsequent inclusion can be reasonably taken as evidence of legislative intention, and, if on a construction of S. 2(j) we have independently reached the conclusion that service in hospitals is service or the conduct of hospitals is an under-taking, we may reasonably seek to derive corroboration to our conclusion by this subsequent legislative enactment. After the addition of the relevant entry in the First Schedule it would not be open to anybody to suggest that service in hospitals does not fall under S. 2(j). and contended that the appellant is an industry within the meaning of Section 2(j) of the Act and that the respective respondents/workmen have worked more than five years in the service of the appellant and hence the action of the appellant retrenching the workmen from service is bad in law and further contended that the concurrent findings of the Labour Court as well as the learned Single Judge of this court need no interference in this appeal and prayed to dismiss the appeal. 11 Having regard to the precedents relied on by the counsel on either side, now the point for consideration is whether the learned Judge is justified in holding that the appellant is an ‘Industry’ within the meaning of Section 2 (j) of the Act? 12 A perusal of the order impugned in this appeal reveals that the learned single Judge of this court, on facts, held that the appellant is an industry. 13 According to Section 2 (j) of the Act 'industry' is defined 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." 14 The contention of the learned standing counsel for the appellant organisation that the appellant is not an industry within the meaning of section 2 (j) of the Act as held in Physical Research Laboratory case (1 supra) does not hold good since the said finding is vitiated by the decision of the larger bench of the apex court itself in Bangalore Water Supply & Sewerage Board case (2 supra). Hence, in view of the decisions mentioned above, it can safely be held that the appellant is an industry. Apart from that in National Remote Sensing Agency, Hyderabad Vs. Additional Industrial Tribunal -cum-Additional Labour Court, Hyderabad[4] also this court held that the National Remote Sensing Agency, which is similar to that of the appellant in the present case is also an industry within the meaning of Section 2 (j) of the Act. Apart from that the Defence Research Development Organisation (DRDO), which is a sister concern of the appellant was also held as an industry. 15 As far as the second contention of the learned standing counsel for the appellant that the respondent workmen have worked only for 89 days and that they have not worked for a minimum of 240 days for applying the provisions of the Act. However, the appellant failed to disprove the contention of the respondent-workmen that they have put in more than five years of service in the appellant organisation before the Labour Court. In the circumstances, the Labour Court, keeping in view of the documentary evidence such as attendance registers etc, and as the appellant did not adduce any rebuttal evidence, had rightly held that the workmen are entitled for reinstatement. 16 At this juncture, the learned standing counsel contended that the Central Government employees are not workmen and hence the provisions of Section 2 (A) (2) of the Act are inapplicable. In reply, the learned counsel for the workmen contended that Section 2 (A) (2) of the Act came into effect as per the A.P. Amendment Act 32 of 1987 is also applicable to the employees working in the undertaking of the Central Government and in this connection he relied upon the judgment of a Division Bench of this Court in U.Chinnappa Vs. Cotton Corporation of India and others[5] where the Division Bench of this Court held at para Nos.9 & 10 as under: 9. The next aspect is whether the operation of Sub- Section (2) of Section 2-A shall be confined only to the workmen employed in the industrial undertakings of the State Government as interpreted by the Labour Court or it would govern all workmen irrespective of whether he is a workman engaged in an industry run by or under the authority of the Central Government or the State Government or an other industry located in the State. We find no warrant to restrict the scope and amplitude of the wide phraseology ‘any workman’ employed in sub- section (2) of Section 2-A of the Act so as to hamper the right of any workman who was discharged, dismissed, retrenched or terminated from employment or service. We do not think that any incongruity or anomaly would result by applying sub-section (2) to the cases of discharge, dismissal, termination or retrenchment of the workmen employed in an industry run by or under the authority of the Central Government. On the other hand, the purpose of the Act will be better served in placing an interpretation that it would apply to all categories of workmen. It is to be remembered that the State Government is as much concerned as the Central Government with the maintenance of industrial peace and welfare of the workmen. That is why the subject of Labour and Industrial disputes is assigned to the Concurrent List. Within the State, there need not be diversity of approach in the matter of providing remedies to the aggrieved workmen. There is no good reason why the ambit and operation of Section 2-A should be restricted only to the workmen other than those employed in an industry run by or under the authority of the Central Government. 10. Viewed from any angle, we are unable to uphold the order of the Labour Court. We hold that the industrial dispute raised by the petitioner under Sub-Section (2) of Section 2-A is maintainable. Of course, we do not like to express any view on the merits of the case….” 17 Hence, in view of the above decision, the workers working in the Central Government undertaking can also approach the Labour Court under Section 2(A)(2) of the A.P. Amendment Act 32 of 1987. 18 In the result, the appeals are dismissed. In the circumstances there shall be no order as to costs. ---------------------------- GHULAM MOHAMMED, J Date:29.09.2011 ---------------------- SANJAY KUMAR, J Kvsn [1] AIR 1997 SC 1855 [2] (1978) 2 SCC 213 = AIR 1978 SC 548 [3] AIR 1960 S C 610 (1) [4] 2003 LIC-0-1359 [5] 1998 (5) ALD 16 (DB)