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PETITIONER: COIR BOARD, ERNAKULAM COCHIN & ANR.

       Vs.

RESPONDENT: INDIRA DEVI P.S. & ORS.

DATE OF JUDGMENT04/03/1992

BENCH: SUJATA V.MANOHAR, D.P. WADHAWA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Mrs. Sujata V.Manohar.J.      In these  appeals from  a judgment of the Full Bench of the Kerala  High Court,  we  have  to  examine  whether  the appellant-Coir Board  is  an  industry  as  defined  in  the Industrial Disputes  Act, 1947.  The  appellant-Coir  Board, Ernakulam, Cochin,  had been set up under the Choir Industry Act, 1953.  In the  Statement of Objects and Reasons for the Act, it is scatted "(1) The Choir Industry has definite role to play  in our  national  economy.  It  is  of  very  great economic  importance   to  Travancore  Cochin  where  it  is concentrated and  also, from  the point  of view  of earning foreign exchange,  of importance  to the  whole country.  It has, however,  been passing  through acute  depression since the middle  of 1952  as a  result of  the marked  decline in experts. With  a view  to controlling  production, improving its quality,  weeding out  the undesirable  elements in  the export trade  and developing  the internal  marked so  as to reduce  the   industry’s  dependence   on  exports,   it  is considered necessary  to establish  a Statutory Board on the lines of Boards set up for other plantation industries.      (2)  In  order  to  finance  the  development  of  this industry it  is proposed  that a duty up to Rs. 1/- per cwt. should be  levied on Choir biro, Choir yarn as well as Choir mats and  matting exported......."  The Preamble  to the Act states that it is an Act to provide for the establishment of a Board  for the  development of  the Choir industry and for that purpose  to leave  a customs duty on Choir fibre, Choir yarn and  Choir products exported from India and for matters connected therewith.  Section 10  of the Choir Industry Act, 1953 lays down the functions of the Board:-      Section 10:      "Functions of  the Board:-  (1)  It      shall be  the duty  of he  Board to      promote  by  such  measures  as  it      thinks fit  the  development  under      the   control    of   the   Central      Government of the Choir industry.      (2)  Without   prejudice   to   the

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    generality  of  the  provisions  of      sub-sec. (1), the measures referred      to therein may related to -      (a) promoting exports of Choir yarn      and Choir products, and carrying on      propaganda for that purpose:      (b)    regulating     under     the      supervision    of    the    Central      Government the production of husks,      Choir yarn  and Choir  products  by      registering  Choir   spindles   and      looms   for   manufacturing   Choir      products as  also  manufactures  of      Choir products, licensing exporters      of  Choir,  Choir  yarn  and  Choir      products  and   taking  such  other      appropriate   steps   as   may   be      prescribed;      (c)   undertaking,   assisting   or      encouraging             scientific,      technological and economic research      and maintaining  and  assisting  in      the  maintenance  of  one  or  more      research institutes;      (d)  collecting   statistics   from      manufacturers of,  and dealers  in,      Choir products  and from such other      persons as  may be  prescribed,  on      any matter  relating to  the  Choir      industry;   the    publication   of      statistics so collected or portions      thereof or extracts therefrom;      (e)  fixing   grade  standards  and      arranging   when    necessary   for      inspection of  Choir  fibre,  Choir      yarn and Choir products;      (f)  improving   the  marketing  of      coconut husk,  Choir  fibre,  Choir      yarn and  Choir products  in  India      and elsewhere and preventing unfair      competition:      (ff) setting up or assisting in the      setting up  of  factories  for  the      production of  Choir products  with      the aid of power.      (g)     promoting      co-operative      organization  among   producers  of      husks, coir fibre and coir yarn and      manufacturers of coir products:      (h) insuring  remunerative  returns      to producers  of husks,  coir fibre      and coir  yarn and manufacturers of      coir products;      (i) licensing of resting places and      warehouses and otherwise regulating      the  stocking   and  sale  of  coir      fibre, coir  yarn and coir products      both for  the internal  market  and      for exports;      (j)   advising   on   all   matters      relating to  the development of the      coir industry;      (k) such  other matters  as may  be      prescribed.      (3) The  Board  shall  perform  its

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    functions  under  this  section  in      accordance with and subject to such      rules as may be made by the Central      Government."      For the  purpose of  improving the  marketing  of  coir products and  for promoting  exports the  Coir Board,  inter alia, maintains show rooms and sales depots. The function of the shirr  rooms is  to exhibit  quality samples of coir and coir products,  and make  intends for  products and, receive consignments from  manufacturers and/or  merchants  of  coir products. The  products are  sold through the show rooms for which the Coir Board charges a commission. The consignors of such products  have to be registered with the Coir Board and these are  private co-operatives  of coir manufacturers. The marketing personnel in each of the slow rooms or sale depots helps in promoting their sale.      The Coir  Board had  employed certain  temporary clerks and typists  who were  discharged.  They  claim  that  their services could  only be  terminated in  accordance with  the provisions of the Industrial Disputes Act, 1947.      A Full  Bench of  the Kerala High Court  considered the question of  application of  the Industrial  Disputes Act to the appellant-Coir  Board  along  with  a  similar  question raised  in   respect  of   a  large   number  of  Government Departments,   Government    Companies,   other    statutory corporations and  local bodies,  in the  impugned  judgment. After extensively dealing with the various decisions of this Court on  what is an ‘industry’ and who is a ‘workman’ under the Industrial  Disputes Act, the High Court has come to the conclusion, inter  alia, that Coir Board is an ‘industry’ as defined in the Industrial Disputes Act. Hence Chapter V-A of the Industrial  Disputes Act  would be applicable in respect of termination  of the  services of its temporary clerks and typists.      ‘Industry’ is defined in Section 2(j) of the Industrial Disputes Act,  1947 as  "any business,  trade,  undertaking, manufacture or calling of employers and includes any calling service, employment  handicraft or  industrial occupation or avocation of  workmen". The  term ‘employer’  is defined  in Section 2(g) to mean "(f) in relation to an industry carried on by  or under  the authority  of  any  department  of  the Central Government  or a  State Government,  the   authority prescribed in  this the  department; (ff)  in relation to an industry carried  on by  or on  behalf of a local authority, the chief  executive officer  of that  authority." The  term ‘workman’ in Section 2(s) is defined to mean "any person any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be  express or  implied; and  for the purposes of any proceeding  under this  Act in relation to an industrial dispute, includes  any such  person who  has been dismissed, discharges, or  retrenched  in  connection  with,  or  as  a consequence of,  that dispute, or whose dismissal, discharge or retrenchment  has led  to  that  dispute,  but  does  not include any such person......"      Thus, while  employer is  defined in  the contact of an industry and  the  workman  is  also  defined  as  a  person employed in  any industry,  the term  ‘industry’ itself  has been  defined  to  mean  business,  trade,  manufacture,  or calling’ are  fairly  clear,  the  term  ‘undertaking  which accompanies these  four words  has given  scope for judicial expansion of  the meaning  of the word ‘industry’. The words ‘service, employment  and avocation  of workmen’  also being somewhat imprecise, like the word ‘undertaking’, have led to varying definitions  of ‘industry’  being given from time to

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time by  judicial pronouncements when the courts were called upon to  decide whether any particular organisation could be considered as an industry or not.      In one  of the  early cases  before  this  Court,  D.N. Banerji v.  P.R. Mukherjee (AIR 1953 SC 58), a Bench of five judges  considered   the  question   whether   a   municipal corporation could  be considered  as  an  industry  and  the dispute of  its employees  with it could be considered as an Industrial dispute.  The Court  observed (para  13) that the words ‘Industrial dispute’ convey the idea of a dispute that would affect   large  groups of workmen and employers ranged on opposite  sides, on  some general questions on which each group is  bound together  by a community of interests - such as wages,  bonus, allowance,  working hours  and so  on.  In branches of  work of a municipality analogous to carrying on of a  trade or business, the dispute can be considered as an Industrial dispute. A similar view was taken  in the case of the The  Corporation of  the City of Nagpur v. Its Employees (1960 (2)  SCR 942).  In the  State of  Bombay & Ors. v. The Hospital Mazdoor  Sabha &  Ors. (AIR  1960 SC  610) the word ‘undertaking; in  the definition  of an industry was held to connote   an   activity   symptomatically   and   habitually undertaken for  production or  distribution of  goods or for rendering material  services to  the community at large or a part of  such community  with the  help of employees. Profit motive was  considered as  not eleventh.  This  view  of  an industry covered organisations which would not have normally been considered  as industries. But this Court observed that the conventional meaning of trade and business had lost some its validity  for the  Industrial Disputes  Act which  was a welfare measure for the benefit of workers.      Thus, by  eliminating  the  purpose  of  an  industrial activity as  earning of  profits or  income or  recurs,  the Court brought into the sweep of an industry, activities such as charities, Government hospitals giving free medicines and medical  care   or  other   philanthropic  activities.  Even activities such  as eduction,  recreation, research  and the like that  benefit the  community as  a whole came under the label of  ‘industry’.  In  fact,  by  considering  the  term ‘undertaking’  in  this  fashion,  all  kinds  of  organised activities which  would ordinarily  not have been considered as industries at all and which would not have been otherwise considered as  industries even under the Industrial Disputes Act were now ‘industries’ under the Industrial Disputes Act. Because if  we look  at the  language of  the definition  of ‘industry’ in  the Industrial Disputes Act and interpret the word ‘undertaking’  appearing along  with the  words ‘trade, business  and   manufacture  or  calling’  by  applying  the principle of  notice a  societies, ‘undertaking;  would cove activities similar  to trade, business, manufacture of goods calling, and not other kinds of activity.      However, the  same non-conventional  interpretation was reiterated in  the case  of The  Workmen on Indian Standards Institution  v.   The   Management   of   Indian   Standards Institution (AIR  1976 SC  145) by  saying that  the  widest possible connotation  should be given to the word ‘industry’ since Industrial  Disputes Act was a welfare legislation for the  welfare   of  workers.   Therefore,  Indian   Standards Institution was held to be an industry.      At the  same, there  has been  another set  of cases of this Court  and a number of High Court where a slightly more restricted and  conventional meaning  has been given top the term ‘industry’  as defined  in he  Industrial Disputes Act. For example,  in National  Union of  Commercial Employees  & Anr. v.  M.R. Meher, Industrial Tribunal, Bombay & Ors, (AIR

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1962 SC  1080) the  case of  State  of  Bombay  v.  Hospital Mazdoor Sabha (supra) was distinguished and it was held that a liberal  profession such  as that of an attorney was to an industry  because  that  attorney  does  not  carry  on  his profession with the active co-operation of his employees. He brings to  bear his  intellectual equipment  on the  work he does. Similarly  in the case of University of Delhi and Anr. v. Ram  Nath and  Ors. ([1963]  2 L.L.J. 335) this Court had held that an educational institution was not an industry.      In the  case of  the Secretary,  Madras  Gymkhana  Club Employees’ Union v. The Management of the Gymkhana Club (AIR 1968 SC  554) this  Court held  that  every  activity  which involves the relationship of an employer and employee is not necessarily an  industry. After  examining the vast range of human activities,  this Court  held that  in an industry co- operation between employers and employees was with a view to production and  distribution of  material goods  or material services. A  club was not an industry since its services wee to  the  members  themselves  for  their  own  pleasure  and amusement and material goods were for their own consumption. It was  a self-serving organisation and was not an industry. Following the same judgment, in the Cricket Club of India v. Bombay Labour  Union and Anr. (AIR 1969 SC 276), the Cricket Club of India was held not to be an industry.      In the  next year,  in the  case of  The Management  of Safdar Jung  Hospital, New  Delhi v. Kuldip Singh Sethi (AIR 1940  SC   1407)  a  Bench  of  six  judges  of  this  Court unanimously followed the ratio of the Madras Gymkhana Club’s case (supra)  and held that the Safdar Jung Hospital was not an industry.  In the case of Safdar Jung Hospital (supra), a Bench of  six judges  unanimously held  that an  industry as defined  in  Section  2(j)  exists  only  when  there  is  a relationship of  employers and employees, the former engaged in business,  trade, undertaking,  manufacture or calling of employers and  the latter  engaged in  any calling  service, employment,   handicraft   or   industrial   occupation   or avocation. There  must, therefore, be an enterprise in which the employers  follow their  avocation as  detailed  in  the definition  and   employ  workmen  who  follow  one  of  the avocations  detailed   for  workmen.   But  every   case  of employment is  not necessarily  productive of  an  industry. Domestic  employment,   administrative  service   of  public officials, service in aid of occupations of professional men also disclose  relationship of  employers and  employees but they cannot  be regarded  as in  the course  of industry. It must bear  the definite  character of  trade or  business or manufacture or calling or must be capable of being described as an  undertaking resulting  in material  goods or material services. If  a hospital,  nursing home or dispensary is run as a  business in  a  commercial  was  there  may  be  found elemental of  an industry there. Hospitals run by Government and even by provide associations not on commercial lines but on  charitable  lines,  or  as  part  of  the  functions  of Government Debatement  of Health  cannot be  included in the definition of  industry. The  first and  second parts of the definition ar  not to  be read  in isolation as if they were different industries  but only  as aspects of the occupation of employers  and employees  in an  industry.  The  are  two counterparts in one industry.      The same  position had  been earlier  reiterated  by  a three judge  Bench of  this Court  in  the  case  of  Madras Gymkhana Club  (supra) where also this Court had interpreted the definition  of industry  as being  in two  parts. In its first  part,  it  means  any  business,  trade,  undertaking manufacture or  calling  of  employers.  This  part  of  the

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definition determines an industry by reference to occupation of  employers   n  respect   of  certain  activities.  There activities are  specified by  five words  and they determine what  an   industry  is  and  what  the  connote  expression "industrial" is  intended to  convey. The  second part views the matter  from the  angle of  employees and is designed to include something  more in  what the term primarily denotes. By the  second part of the definition, any calling, service, employment, handicraft or industrial occupation or avocation of workmen  is included  in the concept of an industry. This part gives  the extended  connotation. This  Court also said that the  word ‘undertaking’ must be defined as any business or any  work or  project which one engages in or attempts as an enterprise  analogous to  business or  trade. It  did not accept as  correct the  extension of  the definition as laid down in  The  Corporation  of  the  City  of  Nagpur  v  Its employees (supra).      However, this  view which was reaffirmed in Safdar Jung Hospital’s case (supra), by a decision of six judges of this Court, as  well as  the University  of Delhi’s  case (supra) were overruled  in 1978  by a  decision of  a Bench of seven judges of this Court in the case of Bangalore Water Supply & Sewerage Board  etc. v.  A.Rajappa & Ors. etc. ([1978] 2 SCC 213) by a majority of five with two dissenting.      The  definition   of  industry   under  the  Industrial Disputes Act  was held  to  cover  all  professions,  clubs, educational    institutions,     co-operatives,     research institutions, charitable  projects and  anything else  which could be looked upon as organised activity where there was a relationship  of   employer  and  employee  and  goods  were produced or  service was rendered. Even in the case of local bodies and  administrative organisations the court evolved a ‘predominant activity’ test so that whenever the predominant activity  could   be  covered  by  the  wide  scope  of  the definition as propounded by the court, the local body or the organisation would  be considered  as an  industry. Even  in those cases  where the  predominant activity could not be so classified, the  court included  in the definition all those activities of  that organisation  which could be so included as industry,  departing from  its own  earlier test that one had to  go by  the predominant  nature of  the activity.  In fact, Chandrachud,  J. (as he then was) observed that even a defence establishment  or a  mint or a security press could, in  a  giver  case,  be  considered  as  an  industry.  Very restricted exemptions  were given  from  the  all  embracing scope of the definition so propounded. For example, pious or religious missions  were considered  exempt even  if  a  few servants were  hired to help the devotees. Where normally no employees were  hired but  the employment  was marginal  the organisation would  not qualify  as an  industry.  Sovereign functions of  the State  as traditionally  understood  would also  not   be  calcified   as  industry  though  Government departments which  could be  served and labelled as industry would not escape the Industrial Disputes Act.      The majority  laid down  the ‘dominant nature’ test for deciding whether  the establishment  is an  industry or  not (see paragraph 143, Krishna Iyer, J.):      "Para  143:   The  dominant  nature      test:      (a)   Where    a    complaint    of      activities, some  of which  qualify      for exemption, others not, involves      employees     of      the     total      undertakings, some  of whom are not      ‘workmen’ as  in the  University of

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    Delhi   case    (supra)   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 whole  undertaking  will  be      ‘industry’ although  those who  are      not  ‘workman’  by  definition  may      not, benefit by the status.      (b)  Notwithstanding  the  previous      clauses,    sovereign    functions,      strictly understood,  alone qualify      for  exemption,   not  the  welfare      activities  or  economic  adventure      undertaken  by  the  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 Section 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."      Two judges  dissented from  this view.  They said  that bearing  in  mind  the  collocation  of  terms  in  which  a definition is  couched and applying the doctrine of notice a socials as  pointed out in the Hospital Mazdoor Sabha’s case (supra), when  two or  more words  are coupled together they have to  be understood  as being used in their cognate sense taking their  color from  each other.  Meaning of a doubtful word may  be ascertained  by reference to the meaning of the words associated with it. Therefore, desire the width of the definition of  ‘industry’ in  Section 2(j) it could not have been the  intention of the legislature that hospitals run on charitable basis  or as  a part  of  the  functions  of  the Government of  local bodies like musicalities, and education and research institutions whether run by private entities or by Government,  and liberal  and  learned  professions  like doctors, lawyers etc, the pursuit of which is dependent upon the individual’s own education, intellectual attainments and special expertise,  should  fall  within  the  pale  of  the definition. There  were of  he view  that the  definition is limited to  those activities  systematically  or  habitually undertaken on commercial lines by private entrepreneurs with the  co-operation   of  employees   for  the  production  or distribution of  goods or  for rendering material service to the community  at large  or a  part of  such community. They observed that this Court had also in previous decisions felt the necessity  of  excluding  some  callings,  services  and undertakings from  the purviews  of the definition. Even the variety was  of  the  view  that  legislative  exercise  was necessary to settle the position.      The subsequent  decisions of  this Court have left some uncertainty on  the question of activities and organisations that can  be labelled  as industries  under  the  Industrial Disputes Act.  To take  only a few recent cases, in the case of Physical Research Laboratory v. K.G. Sharma ([1997] 4 SCC 257)  this   Court,  after   discussing  the  definition  of industry as  propounded in  the Bangalore  Water Supply Case

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(supra) and  other cases  ultimately came  to the conclusion that a Physical Research Laboratory was to an industry. This Court emphasised  that the  principles which were formulated in the  Bangalore Water  Supply Case (supra) and other cases ultimately came  to the  conclusion that a Physical Research Laboratory was  not an  industry. This Court emphasised that the principles  which were formulated in the Bangalore Water Supply Case  (supra) were  formulated in  because this Court found  the   definition  of    the  word  ‘industry’  vague. Therefore, while applying the ‘traditional’ test approved by this Court  in the  Bangalore Water Supply’s Case (supra) to determine what  can be  regarded as sovereign functions of a constitutional Government  which involved  varied  functions had to  be kept in mind. The activity of a Physical Research Laboratory would  not be  covered by  the definition  of  an industry under Industrial Disputes Act.      In an  earlier Judgment  in the  case of Sub-Divisional Inspector of  Post, Vaikam  & Ors.  V. Theyyam Joseph & Ors. ([1996] 8  SCC 489), the establishment of the Sub-Divisional Inspector of  Post was  held not to be an industry but as an exercise of  a showering  function. In  the case  of  Bombay Telephone   Canteen   Employees’   Association,   Prabhadevi Telephone Exchange  v. Union  of India  & Anr. ([1997] 6 SCC 723), this  Court, after  examining the  case law, held that workmen employed  in the  departmental canteen  of Telephone Nigam Limited  and admittedly  holding civil  posts were not workmen within  the meaning  of the Industrial Disputes Act. However, a  Bench of  three judges  of this  Court in  Civil Appeal NO:  7845 of  1779, General  Manager, Telecom  v.  S, Srinivasa Sub-Divisional  Inspector of Post (supra) were not correctly decided  in view of the ratio laid down by a Bench of seven judges of this Court in the case of Bangalore water Supply and Sewerage Board (supra).      Looking to  the uncertainty prevailing in this area and in the  light of  the experience of the last two  decades in applying the  test laid  down in the case of Bangalore Water Supply and  Sewerage Board  (supra) it is necessary that the decision in Bangalore Water Supply and Sewerage Board’s case (supra) is  re-examined. The  experience  of  the  last  two decades down  not appear  to be  entirely happy.  Instead of leading to  industrial peace  and welfare  of the  community (which was  the avowed purpose of artificially extending the definition of  industry), the  application of the Industrial Disputes Act  to organisations  which were,  quite possibly, not intended  to be so covered by the machinery set up under the Industrial  Disputes Act,  might have  done more  damage than good,  not merely  to the  organisations  but  also  to employees by the curtailment of employment opportunities.      Undoubtedly, it  is of  paramount importance  that    a proper law  is framed  to  promote  the  welfare  of  labour employed in  industries. It  is equally  important that  the welfare of  labour employed  in other kinds of organisations is also  promoted and  protected. But  the kind  of measures which may  be different, and may have to be tailored to suit the nature  of such  organisations, their infrastructure and their  financial   capacity  as  also  the  needs  of  their employees.      The  elimination  of  profit  motive  or  a  desire  to generate income  as the  propose of  industrial activity has led to  a  large  number  of  philanthropic  and  charitable activities being  affected the Industrial Disputes Act. In a number of  causes where the organisation is run by voluntary social  workers,   they  are   unable  to   cope  with   the requirements of  Industrial  Disputes  Act.,  This  has  the requirement of  Industrial Disputes  Act. This  has led to a

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cessation of  many welfare  activities previously undertaken by  such   organisations  which  has  deprived  the  general community of considerable benefit and the employees of their livelihood. There  are many  activities which are undertaken not with a view to secure any monetary returns - whether one labels it  as livelihood,  income or  profit, but  for other more gandered  or different  motives. Such  activities would not normally  be labelled  as Industrial activities, but for the  wide   interpretation  given  judicially  to  the  term ‘industry’ in  the Industrial  Disputers Act. For example, a number of  voluntary organisations  used to run workshops in order that the poor, and more particularly poor or destitute women may  earn some income. Voluntary welfare organisations organised activities  like preparation  of species,  nasals, pickles or  they would  secure small  orders from industries for poor  women. A  small number of persons were employed to assist in  the activities.  The income  earned  by  the  see activities was  distributed to the women who were given such work.   Other voluntary organisations organised tailoring or embroidery classes  or similar activities for poor women and provided an  outlet for  the sale  of the  work produced  by them. These persons would otherwise have found it impossible to secure  a market  for their  products. Such organisations are not  organised like  industries and they do not have the means or  manpower to run them as industries. A large number of such  voluntary welfare  schemes have had to be abandoned because  of  the  wide  interpretation  given  to  the  term industry.      Apart  form   such  activities,   there  may  be  other activities also  which  are  undertaken  in  the  spirit  of community service,  such as  charitable hospitals where free medical services  and free  medicines may  be provided. Such activities many  be sustained  by free  services,  given  by professional men  and women and by donations. Sometimes such activities may be sustained by using the profits in the paid section of  that activity  for provided free services in the free section.  Doctors who  work in these hospitals may work for  no   returns  or   sometimes  for  very  nominal  fees. Fortunately, philanthropic instinct is far from extinct. Can such philanthropic  organisations be  called industries? The definition needs  re-examination so  that, while the workers in an  industry have  the benefit of industrial legislation, the community  as such  is not deprived of philanthropic and other vital  services which  contribute so much to its well- being. Educational services and the work done by teachers in educational    institutions,     research     organisations, professional activities, or recreational activities, amateur sports, promotion  of arts  - fine arts and performing arts, promoting crafts  and special  skills, all  these  and  many other similar  activities also  require to  be considered in this context.      In fact,  in 1982,  the Legislature  itself decided  to amend the  definition of  ‘industry’  under  the  Industrial Disputes ACT,  1974 by enacting the Amending Act 46 of 1982. In the  Statement of  Objects and  Reasons for  the Amending Act 46 of 1982, Clause 2 expressly refers to the decision of this Court  in Bangalore  water Supply  and  Sewerage  Board (Supra) and  the wide interpretation given to the definition of the  term industry  in the  Industrial Disputes  Act. The Statement of  Objects and  Reasons states,  inter  alia,  as follows :-      "The Supreme  Court in its decision      in the  Bangalore Water  Supply and      Severage Board  v. Rajappa, [(1978)      2 SCC  213; 1978  SCC (L & S) 215 :

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    AIR  1978   SC  548]   had,   while      interpreting  the   definition   of      "industry"  as  contained  into  he      Act, observed that Government might      restructure  this   definition   by      suitable legislative  measures.  It      is accordingly proposed to redefine      the term  "industry".  While  doing      so, it  is proposed to exclude from      the  scope   of  this   expression,      certain institutions like hospitals      and   dispensaries,    educational,      scientific,  research  or  training      institutes, institutions engaged in      charitable,       social        and      philanthropic  services   etc.,  in      view of  the need  to  maintain  in      such  institutions  an  atmospheres      different from  that in  industrial      undertaking and to meet the special      needs of such organisations., It is      also proposed  to exclude sovereign      functions of  Government  including      activities   relating   to   atomic      energy, space  and defence research      from  the   purview  of   the  term      "industry".  However,   keeping  in      view the special characteristics of      these activities  and the fact that      their workmen also need protection,      it is  proposed to  have a separate      law   for    the   settlement    of      individual grievances  as  well  as      collective disputes  in respect  of      the workmen  of these institutions.      All  these  have  been  taken  into      account and the term "industry" has      been  made   more  specific   while      making the coverage wider......"      Unfortunately,  despite  the  legislative  mandate  the definitions not  been notified  by the  Executive as  having come into force.      Since the difficulty has arisen because of the judicial interpretation given  to the definition of ‘industry’ in the Industrial Disputes  Act, there  is no reason why the matter should not  be judicially  re-examined. In the present case, the function  of the Coir Board is to promote coir industry, open markets  for it  and provide  facilities to  make  coir industry’s products more marketable. It is not set up to run any industry  itself. Looking to the predominant purpose for which it  is set  up we  would  not  call  it  an  industry. However, if  one were  to  apply  the  tests  laid  down  by Bangalore Water Supply and Sewerage Board’s case (supra), it is an  organization where there are employers and employees. The organization  does some  useful work  for the benefit of others. Therefore,  it will  have to  be called  an industry under the Industrial Disputes Act.      We  do   not  think  that  such  a  sweeping  test  was contemplated by the Industries Disputes Act, nor do we think that  every  organization  which  does  useful  service  and employs people  can be  labelled as industry. We, therefore, direct that  the matter  be placed  before the  Hon’ble  the Chief Justice  of India  to consider  whether a larger Bench should be  constituted to  re-consider the  decision of this Court in Bangalore Water Supply and Sewerage Board (supra).

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