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University of Delhi vs.

Ramnath: Case Analysis


-Jasmine Singh

Keywords: ‘industry’, ‘employer’, ‘employee’, ‘workmen’, ‘educational institution’,


and ‘the act’.

Abstract
The term Industry has been defined in Sec. 2(j) The Industrial Disputes Act, 1947.
Over the years, the Indian judiciary has interpreted this term to include and exclude
various establishments. The following case deals with the question of whether
educational institutions form part of the definition of Industry. Various contentions
were presented along with previous landmark cases to determine the question at hand.
The following research project will look closely at the facts and arguments and
present an opinion on the same.

Facts
The University of Delhi and Principal Miranda House, University College for Women
filed a Special Leave petition before the Supreme Court which was a result of the
petitions filed by Ramnath and Asgar Masih, Respondent 1 and 2 respectively, under
Sec, 33C(2) of the Industrial Disputes Act, 1947. The section basically says that any
workmen who is entitled to receive any money from the employer, and there is a
conflict with regards to the money due, shall appear before the Labor Court within a
period of three months. Both the Respondents underwent the same circumstances in
the situation. Appellant 2 employed Respondent 1 and 2 on October 1, 1949. Later
Appellant 1 discovered the running of the busses for college girl students was
resulting in a loss therefore both the Respondents were terminated by notice on May
1, 1961 on payment of one month's salary in advance in lieu of notice. The
Respondents through separate petitions applied before the Industrial Tribunal for the
Retrenchment awards. The Tribunal rejected preliminary objections and passed an
order in favor of the Respondents directing the Appellants to pay Rs. 10,50/- to each
one of the respondents as retrenchment compensation.
Issue
The question that arose before the Hon’ble Court was whether ‘educational
institutions’ would come within the ambit of ‘industry’ under Sec. 2(j) of the
Industrial Disputes Act, 1947 and if the Appellants come within the scope of
‘employers’ within Sec. 2(g) of the Act.

Contentions
Appellants:
a) It was contended that the Tribunal was in error by construing the word
‘industry’ in a wide ambit by adopting mechanical and literal rule of
construction.
b) That the policy of the Act clearly was to leave education and educational
institutions out of the purview of the Act.

Respondents:
a) The respondents contended that Sec. 2(j) has defined the word 'industry' is
deliberately defined in a wide ambit and no artificial restraint should be put on
the word.
b) The leading case of State of Bombay v. The Hospital Mazdoor Sabha was
relied upon, which basically said 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.” It was argued that the concept of
'service' which is expressly included in the definition of 'industry' need not -be
confined to material service and ought to be held to include even educational
or cultural service, and in that sense educational work carried on by the
University of Delhi held to be an industry.
c) The Respondents also argued that in the case of Hospital Mazdoor Sabha, the
Court has approved of the minority judgment if Isaacs J. in The Federated
State School Teachers' Association of Australia v. The State of Victoria where
he held that the dispute raised by the teachers in that case amounted to an
industrial dispute
Precedents

a) Ahmedabad Textile Industry's Research Association v. The State of Bombay


In this case the Court discussed the question as to the character of the work
undertaken by the Research Association, the Court took the view that the
activities of the Association had little in common with the activities of what
may be called a purely educational institution. It would thus be noticed that in
holding that the Research Association was carrying on an industry, this Court
emphasized the fact that its work was distinct and separate from the work of
an institution which carries on purely educational activities.

b) The Federated State School Teachers' Association of Australia v. The State of


Victoria
The dispute in this case was with regard to the wages and conditions of service
and it had been raised by teachers employed by the States in their various
schemes of national education and a point which arose for decision was
whether the educational activities of the States carried on under the
appropriate statutes and statutory regulations of each State relating to
education constituted an industry within the meaning of section 4 of the
Commonwealth Conciliation and Arbitration Act, 1904-28. The majority
decision was that the occupation of the teachers so employed was not an "
industrial" occupation, and that the dispute existing between the States and the
teachers employed by them was, therefore, not an "industrial dispute". Rich J.,
who concurred with the majority opinion, observed that "teaching does not,
like banking and insurance, play a part in the scheme of national industrial
activity" and he rejected the view expressed by Isaacs, J., that education
played a direct part in the promotion of industry, because he thought that an
industrial system could exist without national education.

c) In The Corporation of the City of Nagpur V. Its Employees


The question that arose before the Court in this case was whether and to what
extent the municipal activities of the Corporation of Nagpur City fell within
the term "industry" as defined by Sec. 2(14) of the C.P. and Berar Industrial
Disputes Settlement Act, 1947. The dispute arose between the Corporation
and its employees in various departments and in an adjudication by the State
Industrial Court it was held that the Corporation and all its departments were
covered by the definition of "industry" prescribed by Sec. 2(14). The award
was challenged by the Corporation before the High Court by a writ petition
under Art. 226 of the Constitution. The High Court rejected the Corporation's
plea that its activities did not constitute an-industry-, but remanded the case to
the Industrial Court for determining which of the departments of the
Corporation fell within the definition. After remand, the Industrial Court
found all the departments of the Corporation to constitute an industry, except
five. Against the said award, the Corporation came to this Court by special
leave. No appeal was, however, preferred by the employees in respect of the
five departments which were excluded from Sec.2(14) by the award. The
appeal preferred by the Corporation failed and the Court added that the finding
of the Industrial Court excluding five departments from the definition under
s.2(14) need not be examined, since it had not been challenged by the
employees. The Court further concluded that if a service rendered by an
individual or a private person would be an industry, it would equally be an
industry in the hands of a corporation, and it held that if a department of a
municipality discharges many functions, some pertaining to industry as
defined in the Act and other non-industrial activities, the predominant
functions of the department shall be-the criterion for the purposes of the Act.

Ratio Decidendi
The Supreme Court observed the issue at great depths and relied upon various
precedents to form its opinion. The Supreme Court on addressing the case of State of
Bombay vs. The Hospital Mazdoor Sabha came to the conclusion that the Act should
have excluded education from its scope, because the distinctive purpose and object of
education would make it very difficult to assimilate it to the position of any trade,
business or calling or service within the meaning of s. 2(j). Moreover if education are
included in the ambit of industry, then would the teachers and their work of imparting
education draw a parallel to the workmen. On this the Supreme Court was of the
opinion that education seeks to build up the personality of the pupil by assisting his
physical, intellectual, moral and emotional development. The Court also took the
view that teaching and teachers are assigned a high place of honor and should receive
the respect and social justice that is due to them in the form of proper emoluments and
other amenities. However, the remedy available for their better financial prospects do
not fall under the act since under Sec. 2(s) that defines ‘workmen’, deliberately
excludes teachers from its scope. The Court opined that any problems connected with
teachers and their salaries are outside the purview of the Act, and since the teachers
from the sole class of employees with whose co-operation education is imparted their
exclusion from the purview of the Act necessarily corroborates the conclusion that
education itself is not without its scope and that it could not have been the policy of
the Act that education should be treated as industry for the benefit of a very minor and
insignificant number of persons who may be employed by educational institutions to
carry on the duties of the subordinate staff.

Judgment
The Supreme Court set aside the orders passed by the Industrial Tribunal and
dismissed the petitions filed by the respondents under Sec. 33 C (2) of the Act on the
basis that the question of educational institutions coming under the ambit of industry
has neither been raised nor any previous judgments. In the case of the Corporation of
the City of Nagpur, it cannot be said to have been decided even incidentally only by
reason of the fact that amongst the departments, which were held to have been
properly included in the award, was the education department of the Corporation. The
Court noted that if the said judgment had decided this point, it would either have
followed the said decision, or would have referred the question to a larger Bench. The
Court further noted that in the case of the Hospital Mazdoor Sabha, the question about
educational institutions was deliberately and expressly left open, and if the said
question was intended to be decided in the case of the Corporation of the City of
Nagpur, naturally more specific arguments would have been urged and the problem
would have been examined in all its aspects which was not the case.

Therefore, it was decided that the University of Delhi and the Miranda College for
Women run by it cannot be regarded as carrying on an industry under Sec. 2(j), and
so, the applications made by the respondents against them under s. 33C (2) of the Act
must be held to be incompetent.

Critical Analysis
In this case the Supreme Court based its judgment based on the two main case laws.
The first decision to which reference was made was the case of Hospital Mazdoor
Sabha. The Court countered the arguments presented by the Respondent on the
ground that, in this case, the Court considered somewhat elaborately the implications
of the definition prescribed by Sec.2 (j), but it was expressly stated by the Court that it
was not expressing any opinion on the question as to whether running an educational
institution would be an industry under the Act.

The Court also countered the dissenting opinion of Isaacs J. in the case of Federated
State School Teachers' Association of Australia by pointing that the Court in Hospital
Mazdoor Sabha, though approving the social philosophy, specifically mentioned that
no concurrence be drawn with the decision of Isaacs J. with regards to the educational
activities carried on by educational institutions. The Court further pointed that Under
the Commonwealth Conciliation and Arbitration Act, 1904-34, the definition of the
word "'employee" is wider than that of the definition of the word "'workman" under
Sec. 2 (s) of the Act. The "employee' under the Australian Act means any employee in
any industry and includes any person whose usual occupation is that of employee in
any industry. It is clear here that teachers would fall under the definition . of
employees' and so, the definitions of the words "industry", "industrial disputes" and
"industrial matters" would naturally be wide enough to take in the cases of disputes
raised by teachers in regard to industrial matters, such as wages, hours relating to
work, retrenchment and others. Therefore, a clear distinction arose from the definition
of workman prescribed by Sec. 2(s) in the Act and the definition of employee in the
Australian Act.

The Court finally relied on The Corporation of the City of Nagpur Case and noted that
the question as to whether educational work carried on by educational institutions like
the University of Delhi which have been formed primarily and solely for the purpose
of imparting education amounts to an industry, was not argued before the Court and
was not really raised in that form. The Court further opined that a test laid down in
this case was that if a department was carrying on predominantly industrial activities,
the fact that some of its activities may not be industrial did not matter. Applying the
same test to the Corporation as a whole, the question was examined and the inclusion
of the education department in the award was upheld. It would thus be clear that if
this test is applied to the University of Delhi, the answer would be against the
respondents. The predominant activity of the University of Delhi i.e. teaching is
outside the Act, and do not come within its purview, and so, the minor and incidental
activity carried on by the subordinate staff which may fall within the purview of the
Act cannot alter the predominant character of the institution.

The Court thus applied the facts, contentions and test laid down in previous cases to
come to the conclusion that educational institution solely for the purpose of teaching
and imparting knowledge will not come under the definition of ‘industry’ and as such
the appellants are not ‘employers’ under the act.

Bibliography

Books:
• Labour & Industrial Laws, By S.N.Mishra

Statutes Referred:
• Industrial Disputes Act, 1947.

Database Referred:
• SCC online
• Westlaw