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This aspect has been examined in detail by Rajasthan High Court whether Social Welfare Department is an 'industry' or not ? in case of Kanhaiya Lal v. State of Rajasthan & Ors.

reported in 1993 I CLR 929.

The relevant paragraphs 7 to 10 are quoted as under :

7. It is clear from the pleadings of the parties that the Social Welfare Department had treated itself to be an 'industry' in pursuance of the direction given by the Court. In Devi Singh v. State of Rajasthan, 1989 (2) RLR 401, a Division Bench of this Court examined the question as to whether the Department of Women, Child and Nutrition is an 'industry' under section 2(j) of the Industrial Disputes Act, 1947. The Division Bench observed that the functions of the State today are not confined only to what are generally known as the sovereign or regal or governmental function such as enactment of laws, administration of laws and justice, maintaining of law and order etc. The functions of State today include not only the aforesaid activities but also welfare activities such as Irrigation, Education, Medical, Transport, etc. The Court placed reliance on the decision of the Supreme Court in Bangalore Water Supply and Sewerage Board v. A. Rajappa & Ors. (1978) 2 SCC 213. In that case their Lordships of the Supreme Court have considered the concept and scope of the term 'industry' as used in Section 2(j) of the 1947, Act.

Their Lordships observed as under :-

Sovereign functions strictly understood alone qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies.

Even in department 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).

Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.

Similar view has been expressed by their Lordships of the Supreme Court in Desh Raj v. State of Punjab, (1988) 2 SCC 537, wherein their Lordships of the Supreme Court have held that the Irrigation Department of the State of Punjab comes within the scope of the term 'industry' as defined under section 2(j) of the 1947 Act. On the basis of these decisions of the Supreme Court, the Division Bench held that the Department of Women, Child and Nutrition is an 'industry' although it is a government department. The Court held that the sovereign functions alone qualify for exemption from the comprehensive definition of 'industry' given in the Act of 1947. Only regal and sovereign activities are outside the scope of Section 2(j) of 1947 Act. In view of this pronouncement of the Division Bench, I am of the considered opinion that the Social Welfare Department of the Government of Rajasthan also falls within the scope of the term 'industry' under Sec.2(j) of the 1947 Act.