abs IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 1100 OF 1997 IN WRIT PETITION NO. 2568 OF 1994 Tata Sports Club ) having its registered office at ) Bombay House, 24, Homi Modi Street, ) Fort, Mumbai-400 001. ) .. Appellant Versus 1. Ratilal B. Ravji ) residing at Dehri Post Umbergaon, ) Dist. Valsad, Gujarat. ) 2. A.B.M. Sheikh ) Presiding Officer, VIIth Labour Court) having his office at Arun Chambers, ) Tardeo, Bombay-400 034. ) .. Respondents Mr.A.V. Bukhari for the appellant. Mr.N.M. Ganguli for the respondent no.1. CORAM : R.M.S. KHANDEPARKAR & D.G. KARNIK, JJ. DATE OF RESERVING THE JUDGMENT : 10TH APRIL 2007 DATE OF PRONOUNCING THE JUDGMENT: 11TH JANUARY 2008 JUDGMENT JUDGMENT JUDGMENT: (Per D.G. Karnik, J.) 1. This appeal is directed against the judgment dated 11th July 1997 of a learned Single Judge in Writ - 2 - Petition No.2568 of 1994. By that judgment, the learned Single Judge allowed the writ petition filed by the respondent no.1 workman and remanded the matter back to the Labour Court for deciding the reference afresh. 2. The appellant - Tata Sports Club - is a sports club. The directors, officers and employees of the Tata Group of companies and associated companies and such other organisations as the Managing Committee may determine from time to time residing in he local area of the Club are only eligible for its membership. The main objects of the Club, inter alia, are to organise, promote and afford facilities for indoor and outdoor games, any form of athletics, sports, recreation, sporting events, social meetings, entertainments, exhibitions or displays, and to organise meetings for the aforesaid purposes. The appellant has employed several employees to carry out its activities and achieve its aims and objects. According to the respondent no.1 (hereinafter referred to as "the respondent"), at the relevant time, there were 25-30 employees working in the Club while according to the Club only 11 employees were employed by the Club. The respondent was appointed as a "Marker" by the Club somewhere in the month of October 1983. According to the appellant, the respondent remained absent unauthorisedly on several occasions between March 1988 - 3 - and October 1988. A charge sheet was served on the respondent some time in November 1988 alleging misconduct of unauthorised absence. The respondent denied the charges. According to him, in March 1988 he suffered injury in his right leg and was under treatment and had intimated about the same to the Club. In April 1988, he met with an accident by fall from a ladder and was immobilised. He could not attend the work due to pregnancy of his wife. This was also communicated to the Club in the month of September 1988. He was under medical treatment in October 1988 and had submitted a medical certificate to the Club to that effect. According to the respondent, he was not absent purposely without any cause. 3. The The appellant found unsatisfactory the explanation given by the respondent and accordingly an enquiry was held. The enquiry officer held that the charges were proved and by an order dated 12th May 1989 the appellant terminated services of the respondent on the alleged ground of misconduct and past record of service. An industrial dispute was raised by the respondent demanding his reinstatement with continuity of service and full back wages which was referred for adjudication to the VIIth Labour Court. The respondent submitted his statement of claim alleging that his services were wrongfully and illegally terminated. - 4 - According to him, the enquiry into his alleged misconduct was not proper and was held without following the principles of natural justice and no opportunity was given to him for explaining his absence. The appellant filed the written statement denying the averments. The appellant contended that it being a private service club was not an industry and, therefore the reference was bad in law. As regards the enquiry, the appellant contended that the enquiry was fair and proper and in case the court held that the enquiry was not proper, the appellant be given an opportunity to prove the charge of misconduct before the court. 4. The respondent examined himself on oath. The appellant examined Mr.Narendra Tamhane, Honorary Secretary of the Club and the conciliation officer as witnesses. The Labour Court, after considering the evidence adduced before it, came to the conclusion that the appellant club was not an industry and, therefore, the reference was not maintainable. On merits, it held that the termination of the services of the respondent was neither illegal nor malafide. After considering the evidence of the Conciliation Officer, the Labour Court came to the conclusion that settlement had taken place between the Club and the respondent before the Conciliation Officer, but subsequently the respondent had refused to accept the amount settled. The appellant - 5 - was ready and willing to pay to the respondent the amount settled (Rs.11,389) but the respondent had refused to accept the same. The Labour Court, therefore, directed the appellant to pay to the respondent a sum of Rs.11,389/- which it had offered and agreed to pay before the Conciliation Officer. Except this direction for payment of Rs.11,389/-, all other claims were rejected by the Labour Court and the reference was dismissed. 5. Aggrieved by the decision of the Labour Court, the respondent filed the Writ Petition No.2568 of 1994 in this court. By his judgment and order dated 11th July 1997, the learned Single Judge (R.M. Lodha, J.) allowed the writ petition holding that the appellant was an industry within the meaning of section 2(j) of the Industrial Disputes Act. He set aside the finding of the Labour Court that the reference was not maintainable as the appellant was not an industry. The learned Single Judge also held that the contention of the respondent that the enquiry into the alleged misconduct was conducted in total violation of principles of natural justice and no opportunity was given to him to properly defend himself was not at all gone into by the Labour Court. The Labour Court was required to decide whether the enquiry conducted against the respondent was fair and proper and that issue was not decided by the - 6 - Labour Court, the learned Single Judge remanded the matter back to the Labour Court for hearing and deciding it afresh in the light of the observations made in his decision. That judgment is impugned in this writ petition. 6. This matter was heard by us before the close of the court for summer vacation. At that time, we were informed by the counsel for the parties that they had learnt that a Larger Bench of the Supreme Court was constituted to consider the correctness of the its decision in Bangalore Water Supply and Sewerage Board v. Bangalore Water Supply and Sewerage Board v. Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978 L.I.C. 467) A. Rajappa (1978 L.I.C. 467) A. Rajappa (1978 L.I.C. 467). However, till today we have not been informed of the decision of the Larger Bench. We, therefore, proceed to decide the matter on the basis of law as it stands today. 7. In Bangalore Water Supply v. A. Rajappa (supra), a seven judges Bench of the Supreme Court has considered whether an enterprise, say an hospital, an university, a library, a service club, a local body, a research institute, a panjrapole, a chamber of commerce, a Gandhi ashram, would be an industry within the meaning of section 2(j) of the Industrial Disputes Act. Paragraphs 137 to 147 of the decision in particular refer to the Clubs. Paragraph 161 of the decision gives the general tests to be applied for determining whether - 7 - an institution is an industry. In sub-para (III) of paragraph 161, the Supreme Court has observed: "III. 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 Act being industrial peace, regulation and resolution of industrial disputes between employees 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 (iv) co-operatives, (v) research institutes (vi) charitable projects and (vii) other kindered adventures, if they fulfil the triple tests listed in I (supra), cannot be exempted from the scope of section 2(j). (b) a restricted category of professions, clubs, co-operatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantially and, going - 8 - 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 cause, 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." 8. The learned Single Judge, in our view, has correctly applied to the facts of the case the tests laid down by the Supreme Court in Bangalore Water Supply - 9 - and has rightly come to the conclusion that the petitioner is an industry. Since we agree with the finding of the learned Single Judge that the petitioner is an industry, it is unnecessary to refer to all the aspects of the evidence in that regard. We would, however, briefly refer to the few circumstances. 9. The members of the appellant Club are directors, officers and employees of Tata Group of concerns. The aims and objects of the Club are to organise, promote and afford facilities for indoor and outdoor games, any form of athletics, sports, recreation, sporting events, social meetings, entertainments, exhibitions or displays and to organise meetings for the said purposes. The Club provides playing fields, grounds, buildings, pavilions and other facilities for the said purposes to its members. The Club employees several employees (even assuming the figure of 11 employees as stated by the appellant to be correct) for the purpose of arranging these activities. The activities of the Club cannot be carried out without the employees. The balance-sheet of the Club for the year 1994-95 (ending 31st March 1995) produced before us shows assets of the Club are more than Rs.45 lacs. Yearly expenses are more than Rs.23 lacs which are met from three sources, viz. subscription from the members, income from investments and reimbursement of expenses by Tata Group of - 10 - companies. The contribution by way of reimbursement from Tata Group of companies is more than Rs.18 lacs. Indeed the members, who are the employees of Tata Group of companies, gain substantial advantage of cheaper subscription on account of very large subsidy or subvention by Tata Group of companies. 10. In paragraph 147 of its decision in Bangalore Water Supply, the Supreme Court has observed: "Indeed the members share in the gains of these adventures by getting money’s worth by cheaper accommodation, free or low priced tickets for entertainment and concessional refreshments.... Do not the members share in the profits through the invisible process of lower charges? When all these services are rendered by hired employees, how can the nature of activity be described as self service, without taking liberty with reality." The activities carried out by the appellant Club are only by a possible cooperation between the management and employees of the Club. Without the employees, it would not have been possible for the appellant to arrange all the sports activities. In our view, the appellant is an enterprise which carries out (i) - 11 - systematic activity, (ii) organised by cooperation between employer and employee, (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes - in the shape of recreation and sports. We, therefore, confirm the finding of the learned Single Judge that the appellant club is an industry within the meaning of section 2(j) of the Industrial Disputes Act. 11. We have perused the judgment of the Labour Court. Before the Labour Court, the respondent had specifically contended that the enquiry was not proper and was in gross violation of principles of natural justice. In para 2 of the judgment, the Labour Court has specifically referred to the case of the respondent that the enquiry was in total violation of principles of natural justice inasmuch as no opportunity was given to him for explaining his absence. We, however, notice that the Labour Court has not dealt with this contention of the respondent. In fact, no issue was even framed whether the enquiry was legal and proper. In the circumstances, the learned Single Judge, in our view, was right in remanding the matter back for deciding the question whether the enquiry conducted by the appellant about the alleged misconduct of the respondent was fair and proper or not. - 12 - 12. In the circumstances, there is no merit in the appeal which is hereby dismissed with costs. (R.M.S. KHANDEPARKAR, J.) (D.G. KARNIK, J.)