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(b) Notwithstanding the previous clauses, sovereign function, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaking by government or statutory bodies.
(c) Even in departments discharging sovereign function, 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."

Therefore, the question whether PRL is an 'industry' under the I.D. Act will have to be decided by applying the above principles; but , at the same time it has to be kept in mind that these principles were formulated as this court found the definition of the word 'industry' as vague and "rather clumsy, vapourous and tall-and-dwarf". Therefore, while interpreting the words 'undertaking' calling and 'service' which are of much wider import, the principle of 'noscitur a sociis' was applied and it was held that they would be 'industry' only if they are found to be analogous to trade of business. Furthermore an activity undertaken by the Government cannot be regarded as 'industry' if it is done in discharge of its sovereign function. one more aspect to be kept in mind is that the aforesaid principles are not exhaustive either as regards what can be said to be sovereign function or as regards the other aspects dealt with by the court.

In this context, it is useful to chief Conservator of Forests and another vs. Jagannath Maruthi Kondhare , 1969(2) SCC 293 wherein this court, while rejecting the contention that as sovereignty vests in the people the concept of sovereign functions would include all welfare activities on the ground that talking of such a view would erode the ratio in Bangalore water supply, case. Observed that "the dichotomy of sovereign and non-sovereign function does not really exit - it would all depend on the nature or the power and manner of its exercise" After referring to the three traditional sovereign function namely legislative power the administration of laws and the exercise of the judicial power and also the decision of the exercise of the judicial power and also the decision of the Gujarat High court in J.J. Shrimali vs. District Development Officer 1989(1) GLR 396, wherein famine and drought relier works undertaken by the state Government were held not to and 'industry' this court observed that "what really follows from this judgment is that apart from the aforesaid three functions there may be some others functions also regarding which a view could be taken that the same too is a sovereign function".

In sub-Divisional Inspector of Post, Vaikam and others vs. Theyyam Joseph and others, 1996 (8) SCC 489, this court had to sub-Divisional Inspector of post at Vaikam is an 'industry'. Therein this court has observed that "India as a sovereign, socialist, secular, democratic republic has to establish an egalitarian social order under rule of law. The welfare measures partake the character of sovereign function and the traditional duty to maintain law and order is no longer the concept of the state. Directive principles of state policy enjoin on the state diverse duties under part IV of the constitution and the performance of the duties are constitutional functions. One of the duties of the state is to provide telecommunication service to the general public and an amenity and so is an essential part of the sovereign functions of the state as a welfare state. It is not , therefore, an industry" . While taking this view this court was also influenced by the fact that, the method of recruitment, the conditions of the Extra-Departmental Agents employed said establishment are governed by the statutory rules and regulations and that those employees are civil servants Therefore, while applying the traditional test, approved by this court in Bangalore water supply case to determine what can be regarded as sovereign function the change in the concept of sovereign function of a constitutional government has to be kept in mind. Relying upon these two in chief conservator of Forests vs. Jagannath Maruthi Kondhare (supra ) and sub-Divisional Inspector of post vs. Theyyam Joseph and others (supra), it was contended by the learned work carried on by PRL should be regarded as a sovereign or governmental function.