A nine-judge Bench of the Supreme Court on Thursday reserved its judgment on a reference questioning the correctness of the Court's seven-judge Bench judgment in Bangalore Water Supply & Sewerage Board (BWSSB) v. R Rajappa & Others which was pronounced in 1978.
In its 1978 verdict, the top court had ruled that the term ‘industry’ used in the Industrial Disputes Act, 1947 (ID Act) has to be given a wide interpretation. However, it came under challenge in subsequent cases.
The nine-judge Bench of Chief Justice of India (CJI) Surya Kant along with Justices BV Nagarathna, PS Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe and Vipul M Pancholi heard extensive arguments on the same for three days before reserving its verdict on Thursday.
As regards background of the case, in 1978, a seven-judge bench had held in the Bangalore Water Supply case that the term ‘industry’ has to be given a wide interpretation in light of the broad definition under the Industrial Disputes Act. Accordingly, every profession regardless of profit motive was included within ‘industry’. However, there has since been a slew of cases calling for a more restrictive interpretation of industry and limiting it to manufacturing units.
A five-judge Constitution Bench in 2005 referred the decision in Bangalore Water Supply for reconsideration and noted that the majority judgment in the Bangalore Water Supply case was not unanimous.In 2017, a seven-judge Bench of the Supreme Court ordered that a nine-judge bench be constituted to hear this 2005 case.
The hearing finally began on March 17 (Tuesday) when the Central government argued that that excessive expansion of the definition of “industry” has serious consequences as it can burden employers and deter private players from entering the market.On Wednesday, the Court had rejected the arguments against maintainability of the reference and made it clear that it will look into the 1978 verdict.
Senior Advocate CU Singh, representing a federation of unions, said governments have the power to exempt industries from the provisions of ID Act but they want to do it through a court order in order to avoid any blame.The Centre and States government have argued against the expansive definition of 'industry'.
Senior Advocate Gopal Sankaranarayanan, representing All India Trade Union Congress, said that in the 1978 judgment, Justice VR Krishna Iyer had carved out an exception on the limited aspect of clubs and Justice YV Chandrachud had agreed with it."Justice Krishna Iyer draws a distinction between clubs like the Madras Gymkhana and similar institutions, and small community clubs formed by individuals for their own recreation. He indicates that only such self-serving, community-based clubs would fall outside the scope," Sankaranarayanan said.
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