Gujarat High Court
Vinodrai N. Ratnotar vs State Of Gujarat on 30 June, 1992
Equivalent citations: [1994(68)FLR165], (1993)2GLR1490, (1995)ILLJ388GUJ
JUDGMENT Bhatt, J.
1. The pertinent facts, in brief, leading to the present petition are as under :
1.1 The petitioner was appointed, on 1st October, 1980 with effect from 11th September, 1980 for a period of three months, as a Work-charge Peon, by an order passed by Deputy Secretary (Department of Industries, Mines & Energy Power). On the expiry of this tenure he was once again appointed by order dated 12th February, 1981 for a period of 29 days. Thereafter he as again appointed by order dated 6th April, 1981 for a period of three months. In a similar manner different orders passed on different dates continued to be issued keeping the petitioner in employment. It is an admitted position that the petitioner was serving as a Work-charge Peon and was required to perform duties of spraying and serving water as a part-time daily wager.
1.2 Again by order dated 3rd August, 1983 he was appointed with effect from 1st August, 1983 till further orders. Similarly, by another order dated 7th September, 1983, he was appointed with effect from 1st August, 1983 till further orders. This order dated 7th September, is at Annexure 'I' to the petition.
1.3 Thereafter by order dated 19th April, 1984 the petitioner was relieved from service with effect from 23rd April, 1984 (as employees had become available through the employment ex-change).
2. The petitioner contends that between the period 1st August, 1983 and 23rd April, 1984, he was in continuous employment for 267 days, and since he has been relieved from service without complying with the provisions of Section 25F of the Industrial Disputes Act, 1947, such termination is clearly illegal and void ab initio and that, therefore, he is required to be reinstated in service with backwages, etc.
3. The main thrust of the submissions of the learned Counsel for the petitioner are that the employer, viz, the State of Gujarat in the Department of Industries, Mines and Power is 'an industry' within the meaning of Industrial Disputes Act, 1947 and for this reason the provisions of Section 25F would apply to the petitioner who is a 'workman' within the meaning of the said Act.
3.1 This contention and proposition is seriously disputed by the respondent-State of Gujarat. The dispute in the petition and the rival contention lead us to the consideration of the basic principles laid down by the Supreme Court as regards the question, viz., what is an 'industry' within the meaning of Industrial Disputes Act, 19487. In the case of Bangalore Water Supply v. A. Rajappa, reported at AIR 1978 SC 548, the Supreme Court has laid down the basic principles as also the various tests in respect of various factors which would govern the determination of the question. We will advert to the observations of the Supreme court in the said case a little later.
3.2 A Division Bench of this Court in the case of P. W. D. Employees' Union v. State of Gujarat & Ors., reported at [1988 (2)] XXIX (2) GLR 1070 has considered the case of Bangalore Water Supply (supra) in considerable depth and detail, and it would be more advantageous at this stage to refer to those observations. Before adverting to the observations, we may point out that it is a well established principle that in order that the activity of the employer should qualify as an 'industry' within the meaning of the Industrial Disputes Act, 1947, it is necessary that the activity should be a systematic activity "for production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature) ". It is also by now a well settled principle that 'any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space cannot be classified as an industrial Disputes Act, 1947.
3.3 Thus, we are required to focus or attention on whether the activity carried out by the employer in the instant case is an activity "for the production, supply or distribution of goods or services, and also the question whether on the facts of the case the employer can be said to be carrying on any commercial or semi-commercial activity or whether it is carrying out any sovereign function.
3.4 It is not in dispute that the petitioner was employed in the Sachivalaya of the State Government, i.e., Government. It is also not in dispute that the Government Secretariat is the site of Government administration. The fact that the petitioner was posted in the Department of Industries, Mines and Power is a mere coincident and of no consequences. As we shall point later on, it is the nature of the activity of the employer which is relevant, and not the site, i.e., the location where the activity is carried on.
4. In this context the learned Counsel for the respondent asserts that the Government Secretariat is engaged in only activity, viz., administration. This must necessarily be regarded to be a sovereign function inasmuch as the administration of the Government is carried out also by the Department of Industries, Mines and Power, and in particular, concerns itself with the regulation and implementation of the policy of the State Government qua industries within the framework of the law and the relevant regulations. It is further asserted that the Government function at Sachivalaya is, in particular, an administrative function and under normal circumstances it can only cannot a sovereign function unless the contrary is pleaded and proved. In this context the learned Counsel for the petitioner submits that the Department of Industries, Mines and Power is either purely, or atleast largely, a commercial activity inasmuch as it is concerned with private industries. To our mind, this is merely an attempt to take a slanted view of the matter. The primary question is whether carrying out the administration, with a view to regulate the industrial policy of the State Government, does not make it a commercial activity merely because the regulation and implementation of the said policy is aimed at and is sought to cover those industries which are themselves occupied in commercial activity. Obviously when commercial activity is being administered, the act of administration does not and cannot by itself become commercial activity. IT may further be added that such administration is not merely confined to regulation of industries, but also extends to monitoring the industrial activity, regulation of industrial activity, expanding and encouraging industrial activity with the ultimate view to industrialise the State and to encourage industrial activity to a maximum extent.
4.1 The learned Counsel for the respondent further submits that the Secretariat is the administrative site of the Government, and carries out its prime function, viz., 'to govern'. It is obvious that such Government function must by its very nature and out of sheer necessity, be carried out through a human agency viz., its employees. The mere fact that the employees are required and must be resorted to, in order to carry out such Government function, cannot lead to any assumption or presumption that such administration can in fact be carried out by any other private agency. It is crystal clear that the administrative function of the Government cannot be entrusted to a private body of individuals.
5. It is the context of this factual situation that the legal position is required to be examined.
6. In the case of P. W. D. Employers' Union (supra), a Division Bench of this Court, after considering the earlier decisions of the Supreme Court, in particular the case of Bangalore Water Supply (supra), and quoting and following certain important observations made in the case of Corporation of City of Nagpur v. Its Employees, (reported in AIR 1960 SC 675) has observed as follows :
"17. The result of the discussion may be summarised thus : (1) The definition of 'Industry' in the Act is very comprehensive. It is in two parts, one part defines it from the standpoint of the employer and the other from the standpoint of the employee. If an activity falls under either part of the definition, it will be an Industry within the meaning of the Act. (2) The history of industrial disputes and the legislation recognise the basic concept that the activity shall be an organised one and not that which pertains to private or personal employment. (3) The regal functions described as primary and inalienable functions of the State though statutorily delegated to a Corporation are necessarily excluded from the purview of the definition. Such regal functions shall be confined to legislative power, administration of law and judicial power. (4) 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. (5) If a service rendered by a Corporation is an industry. the employees in the departments connected with that service, whether financial, administrative, or executive, would be entitled to the benefits of the Act. (6) 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 purpose of the Act."
6.1. In the case of Bangalore Water Supply (supra), Krishna Iyer, J. also referred to the negative factors, of which note had been taken by Subba Rao, J. in the case of Corporation of City of Nagpur (supra) as under :
"73. The Court proceeded to carve out the negative factors which, notwithstanding the literal width of the language of the definition, must, for other compelling reasons be kept out of the scope of Industry. For instance, sovereign functions of the State cannot be included although what such functions has been aptly termed 'the primary and inalienable functions of a constitutional Government'. Even here we may point out the inaptitude of relying on the doctrine of regal powers. That has reference, in this context, to the Crown's liability in tort and has nothing to do with Industrial law. In any case, it is open to Parliament to make law which governs the State's relations with its employees. Articles 309 to 311 of the Constitution of India, the enactments dealing with the Defence Forces and other legislation dealing with the employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial Disputes Act, 1947. That is a question of interpretation and statutory exclusion but, in the absence of such provision of law, it may indubitably be assumed that the key aspects of public administration like public justice stand out of the circle of industry. Even here, as has been brought out from the excerpts of I. L. O. documents, it is not every employee who is excluded but only certain categories primarily engaged and supportingly employed in the discharge of the essential functions of constitutional Government. In a limited way, this head of exclusion has been recognised throughout."
6.2. It would also be pertinent to emphasise at this stage the observations made by Krishna Iyer, J. on the nature of actual function and of the pattern of organised activity as under :
68. ... The International Labour Organisation has had occasion to consider freedom of association for labour as a primary right and collective bargaining followed by strikes, if necessary, as a derivative right. The question has arisen as to whether public servants employed in the crucial functions of the Government fell outside the orbit of industrial conflict. Convention No. 98 concerning the Application of the principles of the right to organise and to bargain collectively, in Art. 6 states :
"This convention does not deal with the position of public servants engaged in the administration of the State, nor shall it be construed as prejudicing their rights or status if any."
Thus it is well recognised that public servants in the key sectors of Administration stands out of the industrial sector. The Committee of Expert of the I. L. O. had something to say about the carving out of the public servants from the general category.
69. Incidentally, it may be useful to note certain clear statements made by I. L. O. on the concept of Industry, workman and industrial dispute not with clear-cut legal precision but with sufficient particularity for general purposes although looked at from a different angle. We quote from 'Freedom of Association', Second edition, 1976, which is a digest of decisions of the Freedom of Association Committee of the Governing Body of the I. L. O. "... The distinction to be drawn, according to the Committee, would appear to be basically between civil servants employed in various capacities in Government Ministries or comparable bodies on the one hand and other persons employed by the Government by public undertakings or by independent public Corporation."
7. It is in the context of this settled legal position what we have to examine the question arising on the facts before us. As observed by the earlier Division Bench in the case of P. W. D. Employees' Union (supra), the true test arrived and approved by the Supreme Court in the case of Bangalore Water Supply (supra) is, what is the nature of the actual functions assigned and performed; is it a service that the State could have left to private enterprise and, if so fulfilled, such a dispute be industrial dispute? As pointed by Krishna Iyer, J. the natural and equal function and the pattern of organised activity is decisive. In the facts of the case, as already discussed hereinabove, it is not possible to hold that the function of Government administration can be left to a private agency or a body of private individuals. This question must necessarily be answered in the negative. Subba Rao, J. in the case of Corporation of the City of Nagpur (supra) has observed that if a service rendered by an industry, it will be an industry in the hands of Corporation, and if service rendered by the Corporation is an industry, the employees working in the departments connected with that service irrespective of whether it may be financial, administrative or executive, would be entitled to the benefits of the Act. No doubt, if the nature of the function is a sovereign function in the sense that the functions which are primary and unalienable functions of the State are necessarily excluded from the purview of the definition. Subba Rao, J. further made it clear that such a function shall ordinarily be confined to legislative administration If law and judicial power. In other words, the aforesaid functions including the function of Government administration are firstly, functions involving or intimately connected with a sovereign function, and secondly, are functions which cannot be alienated by the State in favour of the private individuals or bodies. Thus, well recognised exceptions and\or specific instances of Government functions falling within the category of sovereign functions have also been noted and approved by Krishna Iyer, J. for examination of the coverage of an industrial dispute in the case of Bangalore Water Supply (supra).
7.1. We do not consider it necessary, in the particular facts of the case, to go into the reasons why the earlier Bench of this Court (in the case of P. W. D. Employers' Union) (supra) held that the P. W. D. Department of the State is mainly concerned with welfare activity, or is an economic adventure undertake by the Government, and its employees are, therefore, covered by the Industrial Disputes Act, 1947.
8. In the context of the above we may now summarise the concept of 'industry' as laid down by the decision in the case of Bangalore Water Supply (supra). In para 161 of the said decision, sub-para IV deals with the dominant nature test. By view of sub-para (b) thereof, the sovereign functions of the State, as strictly understood, qualify for exemption, though not the welfare activities or economic adventures undertaken by the Government or statutory bodies.
9. In the facts of the present case we are of the opinion that the Government function of administration cannot possibly be regarded to be a welfare activity or an economic adventure undertaken by the Government. Administration, particularly in the field of implementing the policy of the State Government is relation to industries and with a particular view to monitor, regulate and encourage such industries within the framework of the existing law, is undoubtedly a sovereign function, which is one of the recognised exceptions, as discussed in the various decisions of the Supreme Court referred to hereinabove.
10. We must also turn down the contention of the learned Counsel for the petitioner that even if such an administrative function can be regarded to be a sovereign function, the Department of Industries, Mines and Power, where the petitioner was serving, amounts to forming a petition, and thus, is severable from the notable exception of the sovereign function. We have already discussed hereinabove aimed at the industries of the State does not make such administration an industrial activity. Furthermore, merely because the petitioner was posted at the relevant point of time in the Department of Industries, Mines and Power does not counter the fact that he was part of the administrative staff of the Government Secretariat and, therefore, part of the administration.
11. In the premises aforesaid the contentions raised by the learned Counsel for the petitioner are not sustainable and must fail. We accordingly hold that the Government Secretariat of the respondent-State is not an "industry" within the meaning of the Industrial Disputes Act, 1947 and that, therefore, the petitioner is not entitled to claim the protection or benefit under Section 25F of the said Act. This petition must, therefore, fail and is accordingly dismissed. Rule discharged with no order as to costs.
12. Rule discharged.