Case: State 0F Bombay &amp; Others Vs. The Hospital Mazdoor Sabha &amp; Others

Respondents 2 and 3 were employed as Ward servants in the J. J. group of Hospitals. The Superintendent of this said group of Hospitals informed the said respondents by notices issued respectively against them that their services would be terminated with effect from the dates mentioned in the said notices and in accordance with the said notices their services were in fact terminated; subsequently in their place two State servants who were discharged from the Civil Supplies Department were appointed. The writ petition filed by the respondents alleged that the retrenchment of respondents 2 and 3 was void as it did not comply with the mandatory provisions of Ss. 25F and 25H of the Industrial Disputes Act, 1947 (14 of 1947) (hereinafter called the Act) and it claimed to reinstate them in their posts. This petition was resisted by the appellant on several grounds. It was urged that the orders terminating the services of respondents 2 and 3 were not void and so the respondents claim for a writ was unjustified on the merits and it was argued that the writ application was wholly misconceived inasmuch as the J. J. group of Hospitals did not constitute an industry and so the relevant provisions of the Act were inapplicable to the respondents case.2. This writ petition was heard by Tendolkar J. The learned Judge did not think it necessary to consider what he called the somewhat ticklish question as to whether the group of Hospitals constitutes an industry because he held that even assuming that the relevant provisions of the Act were applicable and could be invoked by the respondents it was not shown that the impugned orders were void. In his opinion non-compliance with the provisions of S. 25F did not invalidate the said orders, and it was open to the respondents to seek for an appropriate remedy under s. 251 of the Act. He also held that the question about the application of S. 25H did not arise. On these finding the writ petition filed by the respondents was dismissed.3. The matter was then taken before the Court of Appeal. The Court of Appeal held that the impugned orders had not complied with the mandatory provisions of S. 25F and so they were invalid and inoperative. That is why the questions as to whether S. 25H applied was not considered by it. The finding that the impugned orders were invalid for contravention of the mandatory provisions of S. 25F made it necessary to decide the larger issue as to whether the Act applied to the Hospitals. The Court of appeal has observed that it was first inclined to send the matter back to Tendolkar J. but it was requested by the learned counsel appearing for both the parties that it would be better if the said question was decided by it as it was a question of law and the decision of the said issue by the Court of Appeal would avoid a remand and a further appeal. That is how the issue was considered by the Court of Appeal and answered in favour of the respondents. In the result the decision of Tendolkar J. was reversed, the writ petition was allowed and a writ in the nature of mandamus was issued against the appellant.4. The appellant then applied for and obtained a certificate of fitness from the Bombay High Court and with the said certificate it has brought the present appeal before us.

Court's reasoning:
6. Now, turning to the first point, it may be stated that the facts on which the respondents plea is based are not in dispute. It is conceded that the services of respondents 2 and 3 have been retrenched though it may be for the purpose of making room for other Government servants with a longer record of service who had to be retrenched owing to the closure of the appellants Civil Supplies Department. It is also not disputed that the said respondents had not been paid at the time of retrenchment compensation as prescribed by S. 25Fa plain reading of S. 25F (b) it is clear that the requirement prescribed by it is a condition precedent for the retrenchment of the workman. The section provides that no workman shall be retrenched until the condition in question has been satisfied. It is difficult to accede to the argument that when the section imposes in mandatory terms a condition precedent, non-compliance with the said condition would not render the impugned retrenchmentour opinion, this view is untenable. Having regard to the fact that the words used in S. 25F (b) are mandatory and their effect is plain and unambiguous it seems to us that the Court of Appeal was right in holding that S. 25-I covered cases of recovery of monies other than those specified in S. 25F (b), and it is obvious that there are several other cases in which monies become due from the employers to the employees under Ch. V; it is for the recovery of these monies that S. 25-I had been enacted. Therefore, we see no substance in the argument that the Court of Appeal has misconstrued S. 25F (b). That being so, failure to comply with the said provision renders the impugned orders invalid andis why, we think, in construing the wide words used in S. 2(j) it would be erroneous to attach undue importance to attributes associated with business or trade in the popular mind in days gone by.12. It is clear, however, that though S. 2(j) uses words of every wide denotation, a line would have to be drawn in a fair and jut manner so as to exclude some callings, services or undertakings. If all the words used are given their widest meaning, all services and all callings would come within the purview of the definition; even service rendered by a servant purely in a personal or domestic matter or even in a casual way would fall within the definition. It is not and cannot be suggested that in its wide sweep the word "service" is intended to include service howsoever rendered in whatsoever capacity and for whatsoever reason. We must, therefore, consider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the whole words used in S. 2(j); and that no doubt is a somewhat difficult problem to decide.It is not disputed that under S. 2(j) an activity can and must be regarded as an industry even though in carrying it out profit motive may be absent. It is also common ground that the absence of investment of any capital would not make a material difference to the applicability of S. 2 (j).It would be possible to exclude some activities from S. 2(j) without any difficulty. Negatively stated the activities of the Government which can be properly described as regal or sovereign activities are outside the scope of S.2(j). These are functions which a constitutional Government can and must undertake for governance and which no private citizen can undertake.This position is not inour opinion, this contention cannot besounds incongruous and self-contradictory to suggest that activities undertaken by the Government in the interests of socio-economic progress of the country as beneficial measures should be exempted from the operation of the Act which in substance is a very important beneficial measurewe are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of widerdefinition clearly indicates that the Legislature intended the application of the Act to activities of the Government which fall within S.is no doubt that if a hospital is run by private citizens for profit it would be an undertaking very much like the trade or business in their conventional sense. We have already stated that the presence of profit motive is not essential for bringing an undertaking within S. 2(j). If that be so, if a private citizen runs a hospital without charging any fees from the patients treated in it, it would nevertheless be an undertaking under S. 2(j). Thus the character of the activity involved in running a hospital brings the institution of the hospital within S.our opinion, the answer to this question must be in the negative.It is the character of the activity which decides the question as to whether the activity in question attracts the provision of S. 2(j), who conducts the activity and whether it is conducted for profit or not do not make a materialis difficult to state these possible attributes definitely or exhaustively; as a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the co-operation of the employer and the employees; and its object is the satisfaction of material human needs. It must be organised or arranged in a manner in which trade or business is generally organised or arranged. It must be casual nor must it be for oneself nor for the pleasure. Thus the manner in which the activity in question is organised or arranged, the condition of the co-operation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which S. 2(j) applies.Judged by this test there would be no difficulty in holding that the State is carrying on an undertaking when it runs the group of Hospitals inthis argument is put in a slightly different from in substance it is really based on the idea that profit motive is necessary to make any activity an undertaking analogous to trade orour opinion, in deciding the question as to whether any activity in question is an under taking under S. 2(j) the doctrine of quid pro quo can have no application. Therefore, we are satisfied that the High Court was right in coming to the conclusion that the conduct and running of the group of Hospitals by the appellant amounted to an undertaking under S. 2(j) and the relevant provisions of the Act werewe may add that quite apart from the relevant considerations which we have already discusses it would be difficult to suggest that though the sanitary deprtment of a local body is an undertaking under S. 2(j) a hospital run by a Government isin the present appeal we are not concerned with the claim for bonus and it is not necessry for us to refer to the said comment or to deal withhas not been suggested before us that this view has ever been doubted or dissented from in any subsequent industrialto the learned Judge, the question must always be decided by determining the true character of the activity in question. It is these tests which the High Court has applied in deciding the present dispute and we are in general agreement with the decision of the High Court. We ought to make it clear that in the present appal we are not expressing any opinion on the question as to whether running an educational institution would be an industry under the Act; that question does not arise in the presentwith the question of the attorney or doctor or the lawyer we are not directly concerned in the present appeal. We have, however, referred to this decision because, in the course of discussion, the larned judge has expressed his dissent from the view taken by the Bombay High Court in regard to hospitals, and we with to make it clear that, in our opinion, the criticism mae by the learned judge against the inclusion of hospitals within S. 2(j) is not well-founded.We would accordingly hold that the High Court was right in holding that the dispute between the appellant and the respondents was an industrial dispute to which S. 25F of the Act