Patna High Court
Bihar Relief Commitee vs State Of Bihar And Ors. on 16 May, 1978
Equivalent citations: (1979)IILLJ53PAT
Author: Lalit Mohan Sharma
Bench: Lalit Mohan Sharma
JUDGMENT Brishketu Saran Sinha, J.
1. The prayer of the petitioner, the Bihar Relief Committee through its general secretary, Sri Y.K. Lall, in this application under Articles 226 and 227 of the Constitution, is to quash the order bearing No. 3 DI-100/67/75 Sra Nee 690 dated 27th May, 1975, passed by Sri Lagandeo Singh, Joint Commissioner and Conciliation Officer of the Government of Bihar, respondent No. 2, by which, the petitioner was informed that the retrenchment of some of its employees would be referred as an industrial dispute as the petitioner had not participated in the conciliation proceeding relating to such retrenchment.
2. The petitioner, according to its case, is a humanitarian, charitable and social service institution established with the sole object of rendering relief to the suffering caused by natural calamities like flood, drought, epidemic, etc., to humanity. Its objectives are opening of relief centres, imparting useful knowledge,1 publishing informatory literature relating to relief work and bringing about consciousness of social service in the community.
3. Since its inception in the year 1966-67 when the petitioner was registered, as a society, under the Societies Registration Act, it has rendered charitable relief to the victims of famine, drought and diseases. Relying upon the help and charity of individuals, associations and Government, it participated in rendering succour to the famine stricken people of Bihar caused by unprecedented drought in Bihar in 1967. After conducting such famine operation the petitioner continued its activities so as to provide irrigational facilities in certain selected areas of Bihar as a measure of permanent relief and has opened and organized several relief centres throughout the State. It has organized minor irrigation schemes with the help of Government and voluntary organisations at different places in the State. For the implementation of its programme the petitioner employed a number of employees on a temporary basis with clear indication that services would be terminated without any prior notice. Due to organisational, operational and functional difficulties the executive committee of the petitioner, by its resolution dated 2nd October, 1974, decided to wind up its activities relating to minor irrigation schemes. This resulted in 27 employees becoming surplus and hence by orders dated 3rd January, 1975 and 4th January, 1975, copies of which are Annexures 2 and 3 respectively, the services of those employees were terminated. Respondent No. 4, Udhan Narain Gupta, joint secretary of the Bihar Relief Committee Workers' Union, by a letter dated 4th January, 1975, protested against the retrenchment of the aforesaid employees as being in violation of the Industrial Disputes Act, 1947 (hereinafter referred to as the Industrial Act) and the rules framed thereunder : copy of the letter is Annexure 4. Respondent No. 4 represented to the Labour Department, Government of Bihar, as well against such retrenchment, in pursuance whereof, respondent No. 2 initiated a conciliation proceeding under the Industrial Act of which notice was sent to the petitioner asking it to take part in such conciliation proceeding to be held on 14th February, 1975 : copy of the notice is Annexure 5. Sri Y.K. Lall the joint secretary of the petitioner, requested respondent No. 2 for time and also asked for details of the dispute pending before him by a letter, copy of which is Annexure 6. In reply the respondent No. 2 by a letter dated 20th February, 1975, postponed the conciliation proceeding to 1st March, 1975, and sent the petitioner the demands of the Bihar Relief Committee Workers' Union as contained in their application dated 4th January, 1975. Thereafter, Sri Y.K. Lall asked for time to consider the legal questions involved any by a letter dated 2nd April, 1975, requested the respondent No. 2 to drop the conciliation proceeding on the ground that the provisions of the Industrial Act had no application to the dispute pending before him, copy of which is Annexure 8. It was stated in the letter that the activities of the petitioner are essentially humanitarian in character. It was also pointed out that the petitioner never functional either as an industry or as an enterprise motivated by profit. By a communication dated 27th May, 1975, copy of which is Annexure 9, the respondent No. 2 rejected the contention that the petitioner was not an industry within the meaning of Section 2(j) of the Industrial Act. Thereafter, the petitioner applied for time to move this Court as an important question of law was involved and filed the application.
4. It is urged on behalf of the petitioner that its activities have no commercial character and it does not engage in any business or any trade, undertaking or manufacture nor is there any motive for earning profit in its operation and execution. It essentially conducts charitable and humanitarian work and hence the provisions of the Industrial Act would not apply to it and the respondent No. 2 has no jurisdiction to proceed with the matter.
5. A counter-affidavit has been filed on behalf of the respondents Nos. 3 and 4, the president and general secretary of the Bihar Relief Committee Workers' Union, wherein the position that the petitioner is merely a charitable institution has been disputed and it has been stated that the work of minor irrigation undertaken by the petitioner is on a very large scale with twenty centres from which it earns profit. It is, further, stated that it had other business too. In pursuing irrigational work the petitioner undertake open bore construction, dig wells and tanks, install tube wells, construct dams and perform other irrigational jobs for which it receives payments and makes profit on the plea of supervision charges, rent, storage charges, etc. It is also stated that the petitioner renders material service for payment and carries on sale of pipes on profit and it has a regular workshop which carries on various engineering works of machines and implements and as such the petitioner is engaged in commercial activities and relief work has become a minor part of its activities. It has, therefore, been asserted that the petitioner is an industry and carries on its work by engagement of its officers and workmen on wages and salaries.
6. Some reference is also made in the counter affidavit about the agreement which was arrived at with regard to the rules of retrenchment between the petitioner and its workmen.
7. A rejoinder has also been filed on behalf of the petitioner to the counter-affidavit filed on behalf of the respondents Nos. 3 and 4.
8. The primary question that falls for consideration in this case is whether the petitioner is an industry within the definition of industry as given in Section 2(j) of the Industrial Disputes Act which runs thus:
'industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.
There is no gainsaying that industry, as defined here, has a wide import and has been the subject of various decisions not only by the different High Courts but also of the Supreme Court.
9. The first decision on the point of the Supreme Court is the case of D.N. Banerji v. P.R. Mukerjee . In that case the head clerk and sanitary inspector of the Budge Budge Municipality, who were also the members of the Municipality Workers Union, were dismissed on certain charges, the propriety of which was questioned by the Municipal Workers' Union and the matter was referred by the State of West Bengal to the Industrial Tribunal for adjudication under the Industrial Act, which directed the reinstatement of those persons. One of the questions raised before the Supreme Court was that the Industrial Disputes Act did not apply to disputes with Municipalities as it was not an industry. In dealing with this question Chandrasekhara Aiyar, J., speaking on behalf of the Court, stated that although according to the man in the street industry or business means an undertaking where capital and labour-co-operate with each other with the object of producing wealth in the shape of goods, machines, etc., and for making profits, still there was nothing to prevent statutes from giving the word "industry" and the word "industrial dispute" a wider and more comprehensive import to enable it to meet the requirements of fast industrial progress and bring about a fair and satisfactory adjustment of relations between employers and workmen in a variety of fields of activity in order to promote industrial peace and economy. The result, therefore, is that the word "industry" now connotes an enormously wider concept. It was further laid down in that case at pages 451-452 of (1952) 4 F.J.R. that:
...If the public utility service is carried on by a corporation like a Municipality which is the creature of a statute, and which functions under the limitations imposed by the statute, does it cease to be an industry for this reason? The only ground on which one could say that what would amount to the carrying on of an industry if it is done by a private person ceases to be so if the same work is carried on by a local body like a Municipality is that in the latter there is nothing like the investment of any capital or the existence of a profit earning motive as there generally is in a business. But neither the one nor the other seems a sine qua non or necessary element in the modern conception of industry.
My justification for quoting the above passage is to emphasise that the non-existence of a profit earning motive or the lack of investment of a capital are not necessary elements in considering whether the petitioner is an "industry".
10. It is not necessary to consider, at length, the various other decisions on the point inasmuch as in the case of Bangalore Water Supply and Sewerage Board v. A. Rajappa 1978 I L.L.J. 349 : Section 2(j) of the Industrial Dispute, Act again fell for consideration before a Bench of seven Judges of the Supreme Court in which after a review of all the relevant decisions Krishna Aiyar, J., speaking for the majority, has summarised the law on the point. It has been laid down that for industry three elements are necessary, namely, (1) The enterprise should pursue systematic activity; (2) The systematic activity should be the result of organised co-operation between the employer and the employee, and (3) The activity should lead to the production and/or distribution of goods and services which attempt to fulfil human wants and wishes. Such wishes should not be spiritual or religious but would include material things and services such as making large scale "parshad" or food. Non-existence of profit making motive or any other gainful object is an irrelevant consideration in determining whether an enterprise is an industry or not and the most decisive test for such purpose is the nature of the activity with special emphasis on the employer-employee relations. It has further been laid down that if the enterprise is otherwise a trade or business it does not cease to be so because philanthrophy or charity is the primary object. Where a complex of activities are involved, some of which qualify for exemption while others do not, then the predominant nature of the services and the integrated nature of the department will be the true test.
11. Applying the above principles it will be seen that the petitioner has undertaken minor irrigation schemes in the State for which it opened various centres for constructing open bore wells, tanks and tube wells after obtaining the advice of technical experts. It stores articles for such works and maintains plants and machineries for which depreciation, wear and tear and running charges are charged. In supplying pipes to the farmers it charges them the costs incurred in transportation and storage. All these establish that the activities of the petitioner are systematic.
12. For the execution of its enterprises the petitioner employs a number of employees which points out that its activities are the product of an organised co-operation between it, as the employer and its employees.
13. And such activities lead to the distribution of goods and services which in its turn fulfills human wants and wishes.
14. That the petitioner is not impelled by motives of profit, which is disputed by respondent Nos. 3 and 4, even if assumed to be true, is an irrelevant consideration.
15. For the reasons given, I am of the view that the Bihar Relief Committee is an "industry" within the meaning of the Industrial Act. I would, accordingly, dismiss this petition, but without costs.
Lalit Mohan Sharma, J.
16. I agree.