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A CRITICAL ANALYSIS OF BANGALORE WATER SUPPLY DECISION: A

BUGABOO OF AN ONE-SIDED JUDICIAL INTERPRETATION CONCERNING THE
MEANING OF "INDUSTRY"

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 A CRITICAL ANALYSIS OF BANGALORE WATER SUPPLY DECISfON: A
BUGABOO OF AN ONE-SIDED JUDICIAL INTERPRETATION CONCERNING
THE MEANING OF "INDUSTRY"

Anubhav Khamroi and Anujay Shrivastava

0.P. Jindal Global University

ABSTRACT

The 1978 judgement in Bangalore Water Supply & Sewerage Board, by a

seven-judges bench of the Supreme Court, is a classic melange of statutory
interpretation, constitutional law and public policy concerning industrial
relations. The judgement is focused on the interpretation of the expression
"industry " under Section 20) of the Industrial Disputes Act, 1947. Unlike the
customary practice in judicial decision making, the aforesaid judgement is a
peculiar culmination of different opinions drafted and pronounced at different
times. Furthermore, the judgement has been widely criticized for judicial over-
reach and making the definition of "indust1y " over-inclusive. Accordingly, the
Paper attempts at bringing out the inconsistences in judicial interpretation and
points out the primary deficiencies and limitations in Bangalore Water Supply
decision, as has also been recognized in several subsequent decisions of the
Supreme Court. The Paper highlights the need for · predictability and
consistency in judicial decision making, especially by the Supreme Court,
which has gradually become a 'sine qua non' for any matured jurisdiction. The
Paper concludes with two interesting modes of evaluation - (!) as evaluated by
foreign courts with similar labour laws and; (2) a Statistical evaluation.

Key Word§: Industry, Employer, Labour Laws, Sovereign Function, Dominant Nature.

I. Introduction
This Paper shall attempt to analyse the I 978 judgement in Bangalore Water Supply &
Sewerage Board v. A. Rajappa ("BWS") , 1 whereby seven-judges' bench of the Supreme
Court considered the scope and meaning of the expression "industry" under Section 20) of
the Industrial Disputes Act, 1947. The judgement has been subject to several criticisms, the
most forceful of them is that BWS construed expression "industry" extremely liberally and
made the definition unnecessarily over-inclusive.

At this juncture, it is imperative to mention that before B WS, the doctrinal history of Section
2(j) consisted of - Hospital Mazdoor Sabha, 2 Gymkhana Club, 3 Safdarjung Hospital, 4
Dhanrajg irji Hospital. 5 Indeed, the aforesaid cases have played a 'mentionable ' role in the
evolution of labour law in India, however, a discussion on them might not hold much
relevance for the present analysis. Interestingly, BWS had overruled many of these decisions
in its attempt to clarify the existing state of law and strengthen industrial peace and labour
relatio ns.

BI V, has al o been criticised by subsequent benches of the Supreme Court, including the
Con titution bench in Jai Bir Singh. 6 While the future of BWS rests in the hands of a Nine-
j udge · ben h (yet to be constituted), let us consider both its merits and demerits. 7

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II. Peculiar Case Of Majority In BWS
Whenever, multiple separate opinions constitute the maJonty of a judgement, it is a
convention in the Supreme Court that judges read the opinions of others in order to maintain
a certain level of consistency in the majority stance. However, B WS had a very peculiar and
unprecedented majority stance, with 3 concurring opinions and most of them neither had the
time nor opportunity to substantively consider the other opinions. To elaborate, let us break
down the BWS majority in 3 parts:

Opinion 1: Justice Krishna Iyer, pronounced an opinion on his behalf and on behalf of
Justices Bhagwati and Desai, without getting an opportunity consider the opinion written by
Justice Chandrachud.

Opinion 2: Chief Justice Beg, . while "generally" 8 agreeing with Justice Krishna Iyer' s
opinion, delivered a separate opinion. However, the judgement was being delivered on the
last day of his tenure as a judge and therefore, he naturally had to rush through his opinion
and did not get much time to consider his brother judge's opinion in detail. He observed:

"I have contended myself with a very brief and hurried outline of my line of
thinking partly because I am in agreement with the conclusions of my learned
brother Krishna Iyer and I also endorse his reasoning almost wholly, but even
more because the opinion I have dictated just now must be given today if I have
to deliver it at all." 9 [Emphasis Added]

Opinion 3: Justice Chandrachud had not prepared his separate opmton on the date of
pronouncement of the judgement. Therefore, while he agreed with the conclusions of Justice
Krishna Iyer, he gave a separate opinion at a later date. 10 Simply put, neither Justices Jyerand
Beg had no opportunity consider Chandrachud J's opinion while writing their own.

From the aforesaid discussion, it is amply clear that the majority decision in BWS has its own
imperfections, even at the basic stage of judgement writing.

III. What ls An "Industry" As Per BWS?

Justice Krishna Iyer had laid down two tests to determine what activities would fall within
the definition of " industry" , namely - (l) the Triple test, and (2) Dominant Nature test. 11

The Triple Test consists of the following elements: 12

(a) Systematic activity;

(b) Co-operation of employers and employees; and
(c) Production and/or distribution of goods and services for satisfaction of material
requirements of the people (and not spiritual).
Profit motive is irrelevant for the purposes of the Triple test and its primary focus is on true
nature of concerned activities and employer-employee relations. 13 Moreover, professional
services, such as medicinal and educational services, was brought within the meaning of
"material services", which was a clear deviation from the past decisions of the Supreme
Court.

The Dominant Nature test, briefly speaking, assists us to determine if an 'establishment' falls
within the definition of"industry", ifone of its activities satisfy the Triple test and othersdoes
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not. In that case, BWS directs us to consider the " predominant nature of the services and the
integrated nature of the departments". 14

However, as a concluding remark, Justice Krishna Iyer had observed that the BWS judgement
should only serve as a "workable solution'· until the law is changed through a legislative
amendment.

IV. Criticism OffiwsinJai Bir Singlt

Justice Dharmadhikari, in Jai bir Singh, while writing a unanimous opinion, had observed
that there were "compelling reasons" for the interpretation of " industry" given by BWS, to be
reconsidered by a larger bench. 15 The following are the major criticisms of Justice lyer's
opinion:

(!.)Justice Iyer had incorrectly assumed that as Articles 38, 39 and 43 of the Constitution
demonstrate concern for workers/labourers, the ID Act must also necessarily be a
"worker-oriented" statute which must receive only constructions that support the workers'
rights. 16 The main purpose of ID Act is clear from its Preamble, which is to "regulate"
and " harmonize'" the relationships between employers and employees for maintaining
"industrial peace" and "social harmony". Any interpretation of the definitions and
provisions of the Act must take into consideration both the interests of the employer 17 , the
workers, 18and the people. 19

(2.)It is the duty of labour laws to not only keep a check on exploitation of the workers, but
exploitation of employers by the workers also needs to be checked. Industrial law has to
be interpreted in such a manner that neither the employers nor the workers are able to
dominate the other. A "worker-oriented" approach in construing the definition of
"industry" can often be unmindful of the interests of the "employers" or of the "general
public".

(3.)lnterestingly, the Supreme Court in Jai Bir Singh, had cited Justice Iyer himself to
criticize his judgment in BWS, by reiterating that courts must be "cautious" enough to not
fall into the trap of"definitional expansionism".20

(4.)The Supreme Court also criticized the interpretation of "sovereign functions", as laid
down in BWS. which had construed sovereign functions to strictly be the " inalienable"
constitutional functions of three organs of the State. However, the concept of sovereignty
in a constitutional democracy cannot be compared to the traditional non-democratic
sovereignty that is confined only to ' law and order', 'defence', 'law .making ' and 'justice
dispensation '. 2 1Wherever the state undertakes public welfare activities in discharge of its
constitutional obligations. such activities should be treated as activities in discharge of
sovereign functions, falling outside the purview of"industry".22

V. Foreign Evaluation Of BWS

Interestingly, a Three-Judges ' bench of the Supreme Court of Pakistan, in the unanimous
decision of Agriculture Workers' Union,had heavily relied and agreed with the decision BWS,

75
for the definition of "industry". 23 However, a Two-Judge Decision by the Supreme Court of
Bangladesh (High Court Division) in Chittagonghad disagreed with BWS and instead adopted
the decisions of the cases overruled by BWS. 24

VI. In Conclusion: A Stastical Evaluation

Additionally, we have researched on the count of citations of BWS by the Indian and Foreign
courts. The statistical data collected from our research is encapsulated in the following table:

This shows that even though the Republic of India, Republic of Pakistan and Bangladesh had
all emerged from the common law rule of Great Britain, the Apex Courts of each country
have developed their own understanding of the term "industry''.

References:

*The authors are grateful to Ms. Shireen Moti, British FCO Chevening Scholar and Research
Associate (Law) at J.indal Global Law School, 0.P. Jindal Global University, Sonipat.
However, r'espo~sibility for the ideas expressed or/and any mistakes in the present Article are
entirely ours.

l. Bangalore Water Supply &Sewarage Board etc. v. A. Rajappa and Ors. etc., (1978) 2 SCC
213.
2. State of Bombay v. Hospital Mazdoor Sabha, [1960] I LLJ 251.
3. Madras Gymkhana Club Employees' Union v. Gymkhana Club, (1967) II L.L.J . 720.
4. Management ofSafdarjung Hospital v. Kuldip Singh Sethi, [1970] II LLJ 266
5. Dhanrajgiri Hospital vs. The Workmen, AIR 1975 SC 2032.
6. State ofU.P. v. Jai Bir Singh, (2005) 5 SCC I.
7. The reference order to a Nine-Judges' bench, to be constituted by the Chief Justice of
India, can be found in a 2017 order passed by a seven-judges ' bench in State ofUttar Pradesh
v. Jai Bir Singh, Civil Appeal No(s).897/2002.
8. State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, ~I I.
9. Bangalore Water Supply &Sewarage Board etc. v. A. Rajappa and Ors. etc., (1978) 2 SCC
213 , ~165.
IO. State ofU.P. v. Jai Bir Singh, (2005) 5 SCC I, ~13 , 14.
11. O.P. MALHOTRA , LAW OF INDUSTRIAL DISPUTES (5'h ed., Universal Publishers 1999).
12. Bangalore Water Supply &Sewarage Board etc. v. A. Rajappa and Ors. etc., (1978) 2
sec 213 , ~140.
13 . ~· Kalpakam, Meaning of "Industry": The Bangalore Water Supply and Sewerage Board
VA. Rajappa, 20(3) JOURNAL OF THE INDIAN LAW INSTITUTE 4 71-481 ( 1978).

76
 14. Bangalore Water Supply &Sewarage Board etc. v. A. Rajappa and Ors. etc., (1978) 2
sec 213 , ii14o.
15. State of U.P. v. Jai Bir Singh, (2005) 5 SCC I, para. 35.
16. State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, para. 36-7.
17. State ofU.P. v. Jai Bir Singh, (2005) 5 SCC 1, para. 37. Refer, "who has put his capital
and expertise into the industry''.
18. State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, para. 37. Refer, "who by their labour
equally contribute to the growth of the industry".
19. State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, para. 37. Refer, "who are the ultimate
beneficiaries of the industrial activities".
20. State ofU .P. v. Jai Bir Singh, (2005) 5 SCC I , para. 41.
21. StateofU.P. v. Jai Bir Singh, (2005) 5 SCC I, para. 43 .
22. State ofU.P. v. Jai Bir Singh, (2005) 5 SCC I, para. 44-5.
23. Agriculture Workers' Union v. The Registrar of Trade Unions and Others, Civil Appeals
Nos. 889of1994 and 532of1995 (Supreme Court of Pakistan): LEX/SCPK/0153/ 1996, ii
23 .
24. Chittagong City Corporation, represented by its Mayor and 3 others vs. Md Afzal Hossain
and others, Writ Petition No. 2935 of 2003 (Supreme Court of Bangladesh (High Court
Division)): 57 DLR (2005) 741 , ii 31.
25 . These statistics have been obtained with the assistance of Manupatra Databaseupdatedtill
June 05, 2019.

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