C.W.P.No.13439 of 2009 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.W.P.No.13439 of 2009 Date of Decision:- 14.05.2010 Mange Ram ....Petitioner(s) vs. Presiding Officer and another ....Respondent(s) *** CORAM:- HON'BLE MR.JUSTICE AUGUSTINE GEORGE MASIH *** Present:- Mr.Ashwani Bakshi, Advocate, for the petitioner. Ms.Monica Chhibber Sharma, DAG, Punjab, for respondent No.1. Dr.Puneet Kaur Sekhon, Advocate and Mr.Satbir S.Katnoria, Advocate, for respondent No.2. *** AUGUSTINE GEORGE MASIH, J. The petitioner, through this writ petition has challenged the Award dated 2.1.2009 (Annexure P-8) passed by the Labour Court, Amritsar, vide which the reference has been answered against him holding therein that he is not a “workman” as defined under Section 2(s) of the Industrial Disputes Act, 1947 (hereinafter referred to as the Act) and also that the respondent-Radha Soami Satsang Beas Dera Baba Jaimal Singh, Beas Punjab (hereinafter referred to as Dera Beas) is not an “industry” and, thus, entitled to no benefit under the Act. Briefly, the facts of the case are that the petitioner was employed as a Researcher with effect from 1.4.1996 in Research and C.W.P.No.13439 of 2009 -2- Mechanical Workshop and was drawing Rs.2900/- per month as Parshadi. He was also provided with a residential house as well as free langar. It was alleged that vide order 7.10.2001, he was relieved from service with effect from 8.10.2001. The order relieving him from service led to the submission of a demand notice which was referred to the Labour Court for adjudication. It was alleged that the said order was illegal, unlawful, void and tainted with victimization as services of the petitioner-workman were terminated without holding any enquiry or payment of retrenchment compensation or notice pay as also retention of juniors in service. The Management contested the claim of the petitioner raising a preliminary objection that the reference was not maintainable as Dera Beas cannot be termed as an “industry” as defined under the Act. In any case, he was appointed as a Researcher and had many Sewadars working under him and, thus, was supervising their work. Dera Beas is a purely spiritual institution, its principle being spiritual and moral advancement of the people at large irrespective of the caste, creed or colour and the other ancillary activities are subservient to the principal object and needed just to achieve that aim. The permanent residents of the Dera had left their ancestral/original hearths and homes to settle down at the Dera only to receive Satguru's grace. Their services are invariably rendered free of charge. Apart from the permanent residents of the Dera, many devotees visit the Dera from places near and far at scheduled intervals in batches or otherwise, to benefit from the spiritual discourses which is one of the prime activities of the institution. To provide various facilities to the Sangat (Congregation) with missionary zeal, the permanent residents render their free services without any remuneration. There are very C.W.P.No.13439 of 2009 -3- few sewadars, insignificant in comparison, who do not have adequate resources of their own maintenance who also come forward to serve the Satguru only for his grace and he besides granting them spiritual favour, helps them both materially as well as monetarily. The congregation is concerned with no trade or business. The goods and services available at Dera are meant for Satguru's spiritual family (i.e. disciples inhabitating the Dera or visitors from outside), followers, seekers, guests etc. There is no pecuniary consideration involved in the Guru or the Dera and there is no relationship of employer and employee but they are all crusaders. The activities of the Satsang are financed by public donations made by the devotees and in view of the Dera's spiritual and charitable character, it has been granted exemption under Section 11 of the Income Tax Act. Since the object and activities of the Dera Beas are wholly spiritual, non- commercial and non-industrial, as such, it cannot be termed as an “industry”. Thus, the reference was not maintainable as the respondent- Dera Beas was not an “industry”. On merits it was stated that as a matter of policy, it was decided to close down the tile store (maintenance workshop). The petitioner was given an option to perform other duties in other departments but he refused to do so despite the fact that he was assured that his Parshadi (honorarium) and other perks will remain the same but still he refused to do that. Accordingly, he was relieved from sewa with effect from 8.10.2001. The petitioner, thus, could not be reinstated as the tile store (maintenance workshop) was closed down. Accordingly, it was prayed that the reference and the demand notice deserves to be dismissed. The Labour Court accepted the stand of the respondent-Dera C.W.P.No.13439 of 2009 -4- Beas and held it to be not an “industry”. It also came to the conclusion that the petitioner was not a “workman” and, thus, answered the reference against the petitioner holding him entitled to no benefit vide impugned Award dated 2.1.2009 (Annexure P-8), leading to filing of the present writ petition by the petitioner challenging this Award. Counsel for the petitioner submits that the Labour Court has misread the evidence and has not taken into consideration the assertions made by the petitioner. The petitioner submitted an application for appointment of Parshadi Sewadar. The said application form for appointment was a printed application form which was supplied to the petitioner by the Dera Beas. He refers to his application dated 9.7.1996 (Annexure R-2/3) and submits that the various columns provided in the application form dealt with his personal bio-data, educational qualification, experience status, whether retired govt. employee, source of income, whether accommodation wanted or not etc. Not only this, the medical fitness of the applicant was also assessed by the Chief Medical Officer, Dera Beas and security report was also sought for. Not only the post for which the application was submitted was to be mentioned but an undertaking was also to be given by the applicant which related to the terms of appointment, which clearly spells out that there was a relationship of employer and employee between the respondent-Dera Beas and the petitioner. Counsel thereafter refers to the memorandum dated 30.9.2001 (Annexure R-2/4) which was served on the petitioner by the Secretary of the Dera Beas. Therefrom, it was apparent that the services of the petitioner were dispensed with because of the alleged indiscipline and disobedience committed by him as he had refused to render any sewa in any other C.W.P.No.13439 of 2009 -5- department. An explanation was sought from the petitioner within 7 days of the issue of the letter. To this, the petitioner had submitted his reply dated 6.10.2001. The said reply was not considered satisfactory by the Secretary of the Dera Beas and vide notification dated 7.10.2001, the petitioner was relieved from service with effect from 8.10.2001 (Annexure R-2/5). Counsel, on this basis, contends that the petitioner was an employee of the respondent-Dera Beas and his services were admittedly terminated without complying with the provisions of the Act. He refers to the various departments to which copy of order dated 7.10.2001 was circulated i.e. 14 in number. He also refers to the performance report (workout/analysis) dated 20.4.1998 (Annexure P-1) of the petitioner by the Sewadar Incharge, Department of Tile Store, wherein at entry No.1, the nature of work assigned to the petitioner has been mentioned as “mechanical work and fabrication of machines” at entry No.8 where general behaviour and conduct has been assessed as good but little hasty. Referring to the other columns, he contends that the total assessment of the petitioner was done by his immediate superiors and, therefore, the petitioner fulfils the requirement of the Act to declare him a workman. Principally and primarily, the petitioner who was employed as a Parshadi Sewadar was performing the mechanical work of fabrication of machines and never worked in supervisory capacity rather the Supervisor was the Sewa Incharge of the Tile Store, namely, Harnam Dass. He, on this basis, submits that the finding recorded by the Labour Court that the petitioner is not a workman, cannot be sustained. His further contention is that the petitioner had specifically stated before the Labour Court that the respondent-Dera Beas was an “industry” as it was systematically carrying on constructive activities C.W.P.No.13439 of 2009 -6- resulting in material services to public at large with cooperation of the employer and employee. The Dera Beas was spread in an area of 200 acres and is a township in itself which is being run at the Dera with all independent activities such as petrol pumps, fire brigade, gas agency, motor-workshop, tile store, fair price shop, canteen, engineering store, shamiana store, water and sewerage department, advance langar facilities and paid restaurant etc. He had mentioned all the activities which were being performed at the Dera. Dera Beas is a complete self-independent vast establishment having thousands of workers and systematically carrying on constructive activities resulting in providing material services to the public at large with cooperation of the employer and employees. Apart from these, as per the Rules of the Dera Beas, other material services to the people at large were also being provided by the Dera Beas with the cooperation of the employees described as Parshadi like the petitioner i.e. making arrangement for congregation at different places in India, to arrange free and paid eating arrangement at large scale, to arrange lodging for large number of Sangat irrespective of religion, caste, race and colour or creed and to look after their needs, to printing/publication and sale of literature, to establish and run hospital and/or dispensary, to run literary and reading room, to look after, manage, expand and develop Dera Beas Colony and Satsang Ghar as well other properties belonging to the Dera Beas, to manage, possess, acquire and dispose of movable and immovable properties and to utilize produce and income. Apart from this, counsel contends that the Dera Beas is earning profit and the returns submitted by it, show a huge surplus amount which can be termed as income of the Dera Beas. C.W.P.No.13439 of 2009 -7- Counsel for the petitioner relies upon a judgment of the Hon'ble Supreme Court in the case of Bangalore Water Supply and Sewerage Board vs. A.Rajappa and others, 1978 Lab. I.C. 467 (SC) paras 44, 46, 49, 51, 54, 55, 57, 58, 61, 77, 118, 119, 125, 126 and 161 to contend that the respondent-Dera Beas is an industry under the Industrial Disputes Act, 1947 and, therefore, for non-compliance of the provisions of the Act while terminating the services of the petitioner, the reference deserves to be allowed and the petitioner is to be held entitled to reinstatement in service with all consequential benefits. On the other hand counsel for the respondents contends that none of the activities which are being performed by the Dera Beas can be said to be of such a nature as would fall within the definition of Section 2(j) of the Act for terming it to be an “industry”. Counsel has referred to the memorandum of association of the Dera Beas called Radha Soami Satsang Beas (Annexure R-2/1). She has referred to the objects of the Dera Beas and on that basis, contends that none of the activities which are being performed can be termed to be industrial activities. The object of the Dera Beas is to provide and make arrangements for holding Satsang (religious sermons) and Bhandaras at the colonies and other places; to run langar (kitchen for providing free meal) and lodgings for the Sadhus, Sewadars, Satsangis and others and to look after their needs; to arrange for printing, publication, sale as well as the dissemination of literature on Radha Soami faith in India to establish and/or run hospitals and/or dispensaries; to run a library and reading room in the colony and to look after, manage, expand and develop the Radha Soami Colony Beas and Satsang Ghars as well as other properties belonging to the Dera Beas. According to the counsel, the C.W.P.No.13439 of 2009 -8- principal object of the registered Dera Beas, being spiritual and moral advancement of the people at large irrespective of the caste, creed or colour, the ancillary activities are subservient to the said object and are essential and needed just to achieve the main aim. In any case, she submits that the onus to prove that the petitioner is a “workman” and the respondent-Dera Beas is an “industry” was on the workman himself who had asserted in his demand notice these two aspects. The petitioner has utterly failed to discharge the onus which was placed on him. She refers to the cross- examination of the petitioner to contend that the petitioner-workman was drawing Rs.2900/- per month i.e. exceeding Rs.1600/- per month as provided under Section 2(s) of the Act, meaning thereby that he was not a “workman.” On this basis, she contends that the petitioner had admitted before the Labour Court that he was earning Rs.20,000/- per month before he joined the Dera Beas. He became disciple of the Dera Beas in 1993 and applied for Sewa in the Satsang Beas on 9.7.1996 vide an application. Apart from the research job, the petitioner had admitted that he used to supervise the work of Gurbachan Singh, Surender Singh, Vinod Kumar and Sahib Singh, who were working with him and he further used to allot work to them. The petitioner was allowed facility of free food in Bhojan Bhandar. All the machines designed and prepared under the supervision of the petitioner were used in the Satsang Ghars and were not sold in the market. Langar was free for all the visitors and the residents of the Dera free of cost. About 3-4 lacs of people came to Satsang Ghar for hearing Satsang (religious sermons ) when Babaji gave religious discourses to them. He had stated that he did not know who makes arrangements for visitors coming for the Satsang and their sitting, living, food and other necessities' C.W.P.No.13439 of 2009 -9- arrangements. He also admitted that he did not know the number of Sewadars involved in making arrangements for visitors or their needs. He also did not know the activities of the Dera except his work. He also denied that he had any knowledge about any activity or conduct of business of various departments like petrol pump, fire brigade, gas agency, motor- workshop, tile store, fair price shop, canteen, engineering store, shamiana store, water and sewerage department, advance langar facilities and paid restaurant etc. and their mode of operation or its aims and objects and he did not know about the involvement of the Dera Beas in any activity except his own work. She, on this basis, contends that the petitioner had himself admitted that he was appointed as a Researcher and was performing the duties of a Supervisor and, thus, was not a “workman”. He was not aware of any of the activities being performed by Dera Beas and the purpose, the aim, the object, modus operandi or the working thereof, as alleged by him. She contends that there being no evidence on the record which would show that the activities which were being conducted by the Dera Beas were such which could be termed to be covered by the definition of “industry” as provided under Section 2(j) of the Act, the findings recorded by the Labour Court are fully justified and do not call for any interference by this Court in exercise of its writ jurisdiction being based on the pleadings and the evidence on record. In support of her contention, counsel relies upon the observations made by the Hon'ble Supreme Court in para 132 at pg. 504 of the judgment in Bangalore Water Supply's case (supra). She also relies upon the judgment of the Jharkhand High Court in the case of Asit baran Modak vs. Presiding Officer, Labour Court and another, (2008) II LLJ C.W.P.No.13439 of 2009 -10- 550; a judgment of the Allahabad High Court in the case of Radhasoami Satsang Sabha, Dayalbagh, Agra vs. Rashtriya Mazdoor Congress, Lucknow and others, 1987 (55) FLR 849 and a Division Bench judgment of this Court in the case of Jagjit Singh Katara vs. P.O.L.C., Bathinda and others, (2007-3) PLR 9. She, on this basis contends that the Award passed by the Labour Court is fully justified and does not call for any interference by this Court. I have heard counsel for the parties and with their able assistance have gone through the records of the case. Both the counsel have primarily relied upon the judgment of the Hon'ble Supreme Court in Bangalore Water Supply and Sewerage Board's case (supra) wherein the Hon'ble Supreme Court has, after detailed analysis of the definition of “industry” as provided under Section 2(j) of the Act and referring to the earlier precedents, provided the working principles in para 161 of its judgment which reads as follows:- “161. 'Industry' as defined in S.2(j) and explained in Banerji (AIR 1953 SC 58) has a wide import. (a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee (the direct and substantial element is chimerical) (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) prime facie, there is an industry in C.W.P.No.13439 of 2009 -11- 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 organization is a trade or business it does not cease to be one because of philanthropy animating the undertaking. II Although Section 2 (j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself. (a) 'Undertaking' must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment; so also, service calling and the like. This yields the inference that all organized activity possessing the triple elements in I (supra), 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 'industry' undertakings, callings and services, adventures 'analogous to the carrying on of trade of business.' All features, other than the methodology or carrying on the activity viz. in organizing the co-operation between employer and C.W.P.No.13439 of 2009 -12- employee, may be dissimilar. It does not matter, if on the employment terms there is analogy. 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 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 (iv) co-operatives, (v) research institutes (vi) charitable projects and (vii) other kindred 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 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 C.W.P.No.13439 of 2009 -13- 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. IV. 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 the University of Delhi case (AIR 1963 SC 1873) or 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 (AIR 1960 SC 675) will be the true test. The whole undertaking will be “industry” although those who are not “workmen” by definition may not benefit by C.W.P.No.13439 of 2009 -14- 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 S.2(j). (d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby. V. We overrule Safdarjung (AIR 1970 SC 1407), Solicitors' case (AIR 1962 SC 1080), Gymkhana (AIR 1968 SC 554), Delhi University (AIR 1963 SC 1873) Dhanrajgirji Hospital (AIR 1975 SC 2032) and other rulings whose ratio runs counter to the principles enunciated above and Hospital Mazdoor Sabha ( AIR 1960 SC 610) is hereby rehabilitated.” While referring to the aspect as to whether “charitable institutions” are “industries”, the Hon'ble Supreme Court has broadly categorized them, in the context of the industry into three parts, this Court is basically concerned with the third category where economic activities and occupation of altruistic character are being performed by charitable C.W.P.No.13439 of 2009 -15- institutions. In para 132 at page 504 of the said judgment it has been held as follows:- “132. The heart of trade or business or analogous activity is organisation with an eye on competitive efficiency, by hiring employees, systematising processes, producing goods and services needed by the community and obtaining money's worth of work from employees. If such be the nature of operations and employer-employee relations which make an enterprise an industry, the motivation of the employer in the final disposal of products or profits is immaterial. Indeed the activity is patterned on a commercial basis, judged by what other similar undertakings and commercial adventures do. To qualify for exemption from the definition of 'industry' in a case where there are employers and employees and systematic activities and production of goods and services, we need a totally different orientation, organisation and method which will stamp on the enterprise, the imprint of commerciality. Special emphasis, in such cases, must be placed on the central fact of employer-employee relations. If a philanthropic devotion is the basis for the charitable foundation or establishment, the institution is headed by one who whole-heartedly dedicates himself for the mission and pursues it with passion, attracts others into the institution, not for wages but for sharing in the cause and C.W.P.No.13439 of 2009 -16- its fulfilment, then the undertaking is not 'industrial'. Not that the presence of charitable impulse extricates the institution from the definition in Sec. 2(j) but that there is no economic relationship such as is found in trade or business between the head who employs and the others who emotively flock to render service. In one sense, there are no employers and employees but crusaders all. In another sense, there is no