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As the cleavage of opinion between the two Benches of this Court seems to have been on the basis of seven judges' Bench decision of this Court in the case of Bangalore Water, the present case along with the other connected cases, in which correctness of the decision in the case of Bangalore Water is doubted, has been placed before this Bench.

Various decisions rendered by this Court prior to and after the decision in Bangalore Water, (supra) on interpretation of the definition of the word `industry' under the Industrial Disputes Act, 1947 have been cited before us. It has been strenuously urged on behalf of the employers that the expansive meaning given to the word `industry' with certain specified exceptions carved out in the judgment of Bangalore Water, (supra) is not warranted by the language used in the definition clause. It is urged that the Government and its Departments while exercising its `sovereign functions' have been excluded from the definition of `industry'. On the question of `what is sovereign function', there is no unanimity in the different opinions expressed by the judges in the Bangalore Water case. It is submitted that in a constitutional democracy where sovereignty vests in the people, all welfare activities undertaken by the State in discharge of its obligation under the Directive Principles of State Policy contained in Part IV of the Constitution are `sovereign functions'. To restrict the meaning of `sovereign functions' to only specified categories of so called `inalienable functions' like Law and Order, Legislation, Judiciary, Administration and the like is uncalled for. It is submitted that the definition of `industry' given in the Act is, no doubt, wide but not so wide as to hold it to include in it all kinds of `systematic organized activities' undertaken by the State and even individuals engaged in professions and philanthropic activities.

(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies.
(c) Even in departments 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).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.
Beg CJ clearly seems to have dissented from the opinion of his other three brethren on excluding only certain State - run industries from the purview of the Act. According to him, that is a matter purely of legislation and not of interpretation. See his observations contained in paragraph 163:
``163. I would also like to make a few observations about the so-called ``sovereign'' functions which have been placed outside the field of industry. I do not feel happy about the use of the term ``sovereign'' here. I think that the term `sovereign' should be reserved, technically and more correctly, for the sphere of ultimate decisions. Sovereignty operates on a sovereign plane of its own as I suggested in Keshavananda Bharati's case supported by a quotation from Earnest Barker's Social and Political Theory. Again, the term ``Regal'', from which the term ``sovereign'' functions appears to be derived, seems to be a misfit in a Republic where the citizen shares the political sovereignty in which he has even a legal share, however small, inasmuch as he exercises the right to vote. What is meant by the use of the term ``sovereign'', in relation to the activities of the State, is more accurately brought out by using the term ``governmental'' functions although there are difficulties here also inasmuch as the Government has entered largely new fields of industry. Therefore, only those services which are governed by separate rules and constitutional provisions, such as Articles 310 and 311 should, strictly speaking, be excluded from the sphere of industry by necessary implication.'' [Emphasis supplied] Since Beg CJ was to retire on 22.2.1978, the Bench delivered the judgment on 21.2.1978 with its conclusion that the appeal should be dismissed. The above conclusion was unanimous but the three Hon. Judges namely Chandrachud J on behalf of himself and Jaswant Singh J. speaking for himself and Tulzapurkar JJ., on the day the judgment was delivered i.e. as on 21.2.1978, had not prepared their separate opinions. They only declared that they would deliver their separate opinions later. This is clear from paragraph 170 of the judgment which reads thus:
We also wish to enter a caveat on confining `sovereign functions' to the traditional so described as `inalienable functions' comparable to those performed by a monarch, a ruler or a non-democratic government. The learned judges in the Bangalore Water Supply and Sewerage Board case seem to have confined only such sovereign functions outside the purview of `industry' which can be termed strictly as constitutional functions of the three wings of the State i.e. executive, legislature and judiciary. The concept of sovereignty in a constitutional democracy is different from the traditional concept of sovereignty which is confined to `law and order', `defence', `law making' and `justice dispensation'. In a democracy governed by the Constitution the sovereignty vests in the people and the State is obliged to discharge its constitutional obligations contained in the Directive Principles of the State Policy in Part -IV of the Constitution of India. From that point of view, wherever the government undertakes public welfare activities in discharge of its constitutional obligations, as provided in part-IV of the Constitution, such activities should be treated as activities in discharge of sovereign functions falling outside the purview of `industry'. Whether employees employed in such welfare activities of the government require protection, apart from the constitutional rights conferred on them, may be a subject of separate legislation but for that reason, such governmental activities cannot be brought within the fold of industrial law by giving an undue expansive and wide meaning to the words used in the definition of industry.