Case: The National, Union Of Commercial Employees And Another Vs. M. R. Meher, Industrial Tribunal, Bombay And Others

1. This appeal arises out of a dispute between the appellants the National Union of Commercial Employees and Anr., and the respondents Pereira, Fazalbhoy and Desai who constitute an Attorneys firm by name M/s. Pereira Fazalbhoy and Co, it appears that in August, 1957 the appellant wrote to the respondent firm setting forth certain demands on behalf of its employees. These demands related to bonus for the years 1955-56 and 1956-57 and to certain other matters. As the parties could not agree, the dispute was taken before the Conciliation Officer. The Conciliation Officer also failed to bring about a settlement and so he submitted his failure report to the Government of Bombay. Thereafter, the State Government referred the dispute in regard to the bonus for the two years 1956 and 1957 for adjudication before an Industrial Tribunal under S. 12 (5) of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act). Before the Tribunal, the respondents raised a preliminary objection. They urged that the profession followed by them was not an industry within the meaning of the Act, and so the dispute raised against them by the appellants was not an industrial dispute within the meaning of the Act ; the contention was that the dispute not being an industrial dispute under the Act, the reference made by the Government was incompetent and so, the Tribunal had no jurisdiction to adjudicate upon this dispute. The Tribunal upheld the preliminary objection and recorded its conclusion that it had no jurisdiction to adjudicate upon the dispute as it was riot an industrial dispute.2. The order thus passed by the Tribunal was challenged by the appellants before the High Court at Bombay by Special Civil Application No. 2789 of 1958 filed under Arts. 226 and 227 of the Constitution. The High Court considered the rival contentions raised before it by the appellants and the respondents and came to the conclusion that the respondents firm did not constitute an industry and so the dispute between the said firm and its employees was not an industrial dispute which could validly form the subject-matter of a reference under the Act. In that view of the matter, the High Court held that the Industrial Tribunal was right in refusing to make an order on the reference and so the appellants writ petition was dismissed. The appellants then applied for and obtained a certificate from the High Court and it is with the said certificate that the present appeal has come to this Court;

Court's reasoning:
7. In our opinion the distinction sought to be drawn by Mr. Chari between professional service rendered by an individual acting by himself and that rendered by a firm is not logical for the purpose of the application of the test in question. What is true about a firm of solicitors would be equally true about an individual solicitor working by himself. As the firm engages different categories of employees, a single solicitor also engages different categories of employees to carry out different types of work and so the presence of co-operation between the employees working in a solicitors office and their employer, the solicitor, could be attributed to the work of a single solicitor as much as to the work of the firm, and, therefore, if Mr. Chari is right and if the firm of solicitors is held to be an industry under the Act, the office of an individual solicitor cannot escape the application of the definition of S. 2 (j). That is why we think it would not be reasonable to deal with the matter on the narrow ground suggested by Mr. Chari by confining our attention to the organisational or institutionalised aspect of a solicitorsWhen in the Hospital case, 1960-2 S C R 866 : (AIR 1960 S C 610) this Court referred to the organisation of the undertaking involving the co-operation of capital and labour or the employer and his employees, it obviously meant the co-operation essential and necessary for the purpose of rendering material service or for the purpose of production. It would be realised that the concept of industry postulates partnership between capital and labour or between the employer and his employees. It is under this partnership that the employer contributes his capital and the employees their labour and the joint contribution of capital and labour leads directly to the production which the industry has in view. In other words, the co-operation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry, is the cooperation which is directly involved in the production of goods or in the rendering of service. It cannot be suggested that every form or aspect of human activity in which capital and labour co-operate or employer and employees assist each other is an industry. The distinguishing feature of an industry is that for the production of goods or for the rendering of service, co-operation between capital and labour or between the employer and his employees must be direct and must be essential.Let us consider the case of the hospitals. In the hospitals, the service to the patients begins with proper diagnosis followed by treatment, either medical or surgical, according to the requirements of the case. In the case of medical treatment, the patients receive medical treatment according to the prescription and are kept in the hospital for further treatment. In surgical cases, the patients receive surgical treatment by way of operation and then are kept in the hospital for further treatment until they are discharged. During the period of such treatment, all their needs have to be attended to, food has to be supplied to them, nursing assistance has to be given to them, medical help from time to time has to be rendered and all incidental services required for their recovery have also to be rendered. Now, in the case of the activities of an organised hospital, the co-operation of the employees is thus directly involved in rendering one kind of service or another which it is the duty of the hospital to render. It is true that the patients are drawn to the hospitals primarily because of the doctors or surgeons associated with them. But there can be no doubt that the work of the hospital and its purpose are not achieved merely when a surgical operation is performed or medical prescription provided. After medical treatment is determined or a surgical operation is performed, the patient coming to a hospital as an indoor patient needs all kinds of medical assistance until he is discharged and the services rendered to him both initially and thereafter until his discharge are all services which the hospital has been established to render and it is in the rendering of the said services that the employees of the hospital co-operate and play their part. That is how the test of co-operation between the employer and his employees is satisfied in regard to hospitals which are properly organised and maintained. It is, of course, true that the quality, the importance and the nature of the service rendered by different categories of employees in a hospital would not be the same, but never the less, all the categories of service rendered by respective classes of employees in a hospital are essential for the purpose of giving service to the patients which is the objective of the hospital. That is how the hospitals satisfy the test of co-operation between the employer and his employees.11. Does a solicitors firm satisfy that test ? Superficially considered, the solicitors firm is no doubt organised as an industrial concern would be organised. There are different categories of servants employed by a firm, each category being assigned separate duties and functions. But it must be remembered that the service rendered by a solicitor functioning either individually or working together with partners is service which is essentially individual; it depends upon the professional equipment, knowledge and efficiency of the solicitor concerned. Subsidiary work which is purely of an incidental type and which is intended to assist the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor. For his own convenience, a solicitor may employ a clerk because a clerk would type his opinion; for his convenience, a solicitor may employ a menial servant to keep his chamber clean and in order; and it is likely that the number of clerks may be large if the concern is prosperous and so would be the number of menial servants. But the work done either by the typist or the Stenographer or by the menial servant or other employees in a solicitors firm is not directly concerned with the service which the solicitor renders to his client and cannot, therefore, be said to satisfy the test of co-operation between the employer and the employees which is relevant to the purpose. There can be no doubt that for carrying on the work of a solicitor efficiently, accounts have to be kept and correspondence carried on and this work would need the employment of clerks and accountants. But has the work of the clerk who types correspondence or that of the accountant who keeps accounts any direct or essential nexus or connection with the advice which it is the duty of the solicitor to give to his client? The answer to this question must, in our opinion, be in the negative. There is no doubt, a kind of co-operation between the solicitor and his employees, but that cooperation has no direct or immediate relation to the professional service which the solicitor renders to his client. Therefore in our opinion, it is difficult to accept the plea that a solicitors firm carrying on the work of an Attorney is an industry within the meaning of S.2 (j).There is no doubt that the words used in S.2 (j) are very wide, but as has been held by this Court in the case of Hospitals, 1960-2 SCR 866   : (AIR 1960 SC 610  ) it is necessary to draw a line in a fair and just manner putting some limitation upon the width of the said words and a working test has been enunciated in that behalf. The application of the said test to the facts in the present appeal leads to the conclusion that the work of solicitors which the respondents are carrying on as a firm is not an industry under S. 2(j) of the Act. That is the view taken by the Bombay High Court and we think, that view isobservations support the view which we have taken about the character of cooperation between the employer and employees which affords a relevant test in determining whether the enterprise in question is an industry or not. Co-operation to which the test refers must be co-operation between the employer and his employees which is essential for carrying out the purpose of the enterprise and the service to be rendered by the enterprise should be the direct outcome of the combined efforts of the employer and thein their deed of partnership the respondents described the work of partnership as the business of solicitors can hardly assist the appellants in contending that the work carried on by the firm is industry under S. 2 (j). The work of a solicitor is, in a loose sense, of course, business and so if the solicitors entered into an agreement in restraint of trade, its validity would have to be judged on the basis that their work is in the nature of business. That, however, is hardly relevant in determining the question as to whether the said work is an industry under S. 2 (j); as we have already made it clear, the definition of the word "industry" is couched in words of very wide denotation. But that precisely is the reason why a line has to be drawn in a just and fair manner to demarcate the limitations of their scope and that necessarily leads to the adoption of some working test.