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(a) Where a complex of activites, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not 'workmen' as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the departments as explained in the Corporation of Nagpur case 1960-I L.L.J. 523 will be the true test....

This dominant nature test has to be applied because many departments of the Government which at one time were concerned only with administrative functions have now to carry on systematic activities organized by co-operation between Department and employees, sometimes for production or distribution of goods; on other occasions for services calculated to satisfy the wants of the citizen. It is not always very easy to say as to what is the dominant nature of the undertaking or the department. The matter may be simple when a particular department is discharging functions which have been described as the sovereign functions like legislative, law and order and administration of justice. In the case of the State of Bombay (supra) it was observed (at p.258):

...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 definitions....
In the Bangalore Water Supply case (supra), also the departments dealing with such sovereign functions were held to be outside the purview of the Act.

37. But what are the primary and inalienable functions of a constitutional Government so as to be included in the sovereign functions? It has been held that legislative, judicial functions and administration of law are the inalienable functions of constitutional Government, on the basis of the observation of Lord Watson in the case of Coomber v. Berks Justices (1883) 9 AC 61 : 53 LJ QB 239, But do the three functions which were described as primary and inalienable functions of the constitutional Government by Lord Watson in 19th Century, still continue to be the only primary and inalienable functions of a constitutional Government? It cannot be disputed that in the areas where-the Government was not required to act, now, by the mandate of the Constitution, the Government is required to function even in those fields which have been described as "fundamental in the governance of the country." Article 37, which is under the directive principles of the State policy says while referring to part IV of the Constitution that "the principles therein laid down are nevertheless fundamental in the governance of the country." Articles 45, 48 and 48A enjoin the State to make effective provisions for education, to organise agriculture, animal husbandry on modem and scientific lines, to improve and preserve the breeds of cows, to conserve forests. The contention that in view of different Articles of the Constitution the primary and inalienable functions of Government have been enlarged was not accepted in the case of the State of Bombay (supra) but in the Bangalore Water Supply case (supra) Justice Krishna Iyer on that question observed (at p.375):

For instance, sovereign functions of the State cannot be included although what such functions are 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, the enactments dealing with the Defence Forces and other legislation dealing with employment under statutory bodies may, expressly or by necessary implication, exclude the operation of the Industrial Disputes Act, 1947.

38. However, even in departments discharging sovereign functions there may be a unit severable which can be said to be "industry" within the meaning of the Act. The department of police, discharging sovereign functions may run a gun and ammunition factory. Can that unit be excluded from the definition of industry'? Legislative Department may run a Press. That unit has to be included within the ambit of 'industry'. As such, in my view, whenever a question arises as to whether a particular department of Government is an 'industry', the functions of the whole department should be examined in the light of the guidelines laid down by the courts for answering the question as to whether the whole department or any unit thereof can be held to be an 'industry' within the meaning of the Act. In many cases, the dominant nature test pointed out by the Supreme Court in the Bangalore Water Supply case (supra) may prove to be the useful test in view of the complex nature of the activity of a department. First on the material produced before the court it should be examined as to whether the department concerned or any unit thereof has the triple elements mentioned above. If it is found that there is systematic activity, organized by cooperation between employer and employee, for the production and/or distribution of goods, then there should not be any difficulty in holding that the department concerned or unit thereof shall be deemed to be an 'industry'. If, however, there is systematic activity, organised co-operation between employer and employee, for services to satisfy the human wants, then whether the services are in the nature of trade or business has to be examined. If services are analogous to the trade and business, then the department or unit thereof shall be deemed to be an 'industry'. In cases, where a part of the department is exercising administrative function or soverign function and the other part is engaged in activity analogous to trade or business, then the dominant nature of the department has to be ascertained. If on materials it is held that primary object of the department is to carry on activity which are in the nature of trade and business, then whole department can be held to be an 'industry'. On the other hand if primary activity of the department is administrative in nature and incidentally some activities are analogous to trade or business then the whole department cannot be held to be 'industry'. Even in such cases if a severable unit is primarily concerned with trade or business or engaged in activities analogous to trade and business then that unit can be held to be 'industry'.