judgement:
Civil Appeal No. 1702 of 1987.
648 from the Judgment and order dated 31.3.1987 of the Allahabad High Court in Civil Misc.
Writ Petition No. 5702 of 1985.
Petitioner in person (Lt. Col. K.D. Gupta) Kuldeep Singh, Additional Solicitor General, C.V. Subba Rao and Pramod Swarup for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal is by special leave and is directed against the judgment of the Allahabad High Court dismissing the writ application of the appellant.
He was granted a permanent Commission in the Indian Army in 1958 and was initially appointed as a Second Lieutenant.
He obtained successive promotions to the ranks of Lieutenant, Captain and Major.
In December, 1974, he was selected for promotion to the rank of acting Lt. Colonel and was so promoted with effect from 27th February, 1975.
From the following year, the appellant came to face a series of set backs in his service.
On March 22, 1976, his Brigade Commander directed the appellant to report to the Officer Commanding, Military Hospital, Kirkee for his psychiatric examination.
He was examined by Lt. Colonel Mukherjee, specialist in psychiatry on 23rd March, 1976 and by Surgeon Commodore D 'netto, Psychiatry Consultant to the Indian Navy on the 26th March, 1976.
On the basis of their reports, the appellant 's medical classification was reduced from Shape I to Shape III by order dated August 13, 1976.
By order dated November 16, 1976, the appellant was posted as GLO (Major/Captain) 152, G.L. Sec.
Type Vice Captain I.K. Bedi, a post ordinarily held by a Major or Captain.
Though there was no specific order reducing the appellant in rank from Acting Lt. Colonel to that of Major, he was treated as Major.
On December 10, 1976, appellant 's classification was upgraded to Shape II and on a second medical review on September 2, 1977 to Shape I.
His authorities, however, decided the appellant to be subjected to 'Special Review ' before restoration of the rank of Acting Lt. Colonel and on October 31, 1977, required the Brigadier Commander to initiate a special report and submit it to the Headquarters.
The Brigade Commander recorded appreciation of the appellant 's work and recommended his promotion as Lt. Colonel.
Yet, the Army Headquarters by letters dated October 12 and November 27, 1978, directed the appellant to be sent to the Military Hospital at Pune for further examination by the psychiatry consultant.
It was indicated by way of 649 justification for such requirement that when the appellant was graded as Shape I, an earlier incident of 1963 had been overlooked.
On such examination the appellant was permanently downgraded as Shape II.
The appellant filed an application under Article 32 being Writ Petition No. 5302 of 1980 challenging these actions and his downgrading.
A two Judge bench of this Court by judgment dated August 10, 1983, allowed the same.
This Court stated: "According to the petitioner, this was done entirely without any basis and that even the clinical reports would reveal that the petitioner was perfectly fit.
We do not desire to go into these claims of the petitioner since we are satisfied on the material placed before us that even the very reduction of the petitioner 's rank in 1976 from Acting Lieutenant Colonel to Major was bad.
Shri Abdul Khader, learned counsel for the respondents explained to us that the petitioner had been reverted from the rank of Acting Lieutenant Colonel to Major for three reasons: (i) Reduction in rank had to follow as a matter of course on placement of the petitioner in a lower medical category; (ii) After the latest medical examination in 1978, he was not eligible to be considered for promotion for one year; his earlier reduction in rank was, therefore, justified; and (iii) He performed no duty for six months from March 22, 1976 when he was admitted in the hospital and under the rules, he stood automatically reduced in rank".
This Court examined all the three points and ultimately ended by saying: "As stated by us earlier, we find no substance in any one of the reasons mentioned by Shri Abdul Khader on behalf of the respondents for the reversion of the petitioner from the rank of Acting Lieutenant Colonel to Major.
The reversion or reduction in rank cannot be justified and it is 650 accordingly quashed.
The petitioner is directed to be re stored to the rank of Acting Lieutenant Colonel with effect from the date he was reverted and stripped off the badges indicating his rank.
As a result of the restoration of the rank of the Acting Lieutenant Colonel to the petitioner, other consequences, such as, consideration of the petitioner 's further claims to advancement, pay, arrears of pay, etc., will have to be considered by the authority and it is directed that these claims may be considered and disposed of within a period of six months from today.
" The appellant waited for a reasonable time after lodging his claim and ultimately went before the Allahabad High Court by filing an application under Article 226 of the Constitution being Writ Petition No. 5702 of 1985.
Before the High Court he asked for quashing of the proceedings of the Review Medical Board dated 11th January, 1984, and for a declaration that he should be treated as belonging to medical category Shape I for all purposes without interruption since 2nd September, 1977.
He also asked for an appropriate posting considering his entitlement and other service benefits.
The claim was resisted by the respondents on the ground that there was nothing wrong in the recategorisation and the directions of the Supreme Court had been fully complied with and the appellant has no subsisting grievance.
On 31st March, 1987, the High Court dismissed the petition.
This appeal has been filed after obtaining the special leave.
The appellant as on the earlier occasion argued the appeal in person and began his arguments by contending that the respondents were guilty of not giving effect to the directions contained in the judgment of this Court.
When we heard the appellant, we realised how very correct the observation of Chinnappa Reddy, J., where he re corded in the judgment of this Court were: "As usual with parties, who argued their cases themselves, he was so full of his facts and grievances, big and small, that we experienced, for quite a while, difficulty in getting a picture of the case in its proper frame.
" After the matter was heard at length, we found that there was absolutely no merit in the contention of the appellant that the respondents were guilty of not complying with the directions of this Court.
Learned Additional Solicitor General was, therefore, right in taking the stand that full effect had been given to the directions contained in 651 the judgment of this Court.
We would like to recall here that there were several other contentions made in the writ petition which this Court did not go into by saying that even without considering them the appellant was entitled to his relief.
The appellant had moved this Court on the earlier occasion under Article 32 of the Constitution but on this occasion he went before the High Court under Article 226.
Some of his allegations had already been made in the writ petition before this Court and others related to subsequent events.
It is unnecessary to go into several aspects which the appellant in his anxiety had pleaded and even canvassed at the hearing.
It is sufficient to indicate that the main grievance of the appellant has been against recategorisation from Shape I to Shape II.
We have already pointed out that the appellant enjoyed Shape I until 1976 when he was reduced to Shape 3 in August 1976.
In 1977, he was brought back to Shape I.
According to the appellant, there was absolutely no justification for the direction made in March, 1976 to subject the appellant for psychiatric examination.
Similarly when the appellant had been recategorised in September, 1977, as Shape I, there was no necessity to require him to be subjected to further examination at Pune.
He denied the allegation that the incident of 1963 had not been taken into account while recategorising him as Shape I.
According to the appellant, a prejudicial approach developed against him in the Headquarters establishment without any justification and he has been unduly subjected to psychiatric examination from time to time and on the basis of the records built up against him, adverse opinion has been forthcoming.
To meet this objection of the appellant and remove apprehension of bias from his mind, in course of hearing, we suggested to learned Additional Solicitor General appearing on behalf of the respondents that the appellant may be examined by a board consisting of three experts specially constituted with an outsider as Chairman.
Respondents ' learned counsel after obtaining instructions accepted the suggestion.
By order made on January 25, 1988, this Court directed: "In course of hearing of the appeal, we suggested to learned Additional Solicitor General appearing on behalf of the respondent to have a fresh psychiatric evaluation of the appellant by a competent body of psychiatrists by including in the board some in service and retired Army psychiatrists and some from outside.
This was initially opposed by learned Additional Solicitor General by contending that it would be against the discipline of the Defence Department and would create in unwholesome 652 precedent.
We adjourned the matter and gave him the opportunity to take instructions from Government and we are happy to note that on the basis of instructions, he has agreed.
as a special case, to the constitution of such a board of psychiatrists.
Appellant has also been heard in person in the matter.
He has made writ submissions by way of an application we have taken into consideration.
We direct that a board of psychiatrists consisting of three experts be constituted with the Professor and Head of the Psychiatrist wing of the All India Institute of Medical Sciences, New Delhi, Air Com.
K. Sethi Consultant of the Army Hospital at Delhi and Colonel M.A. Bhasin, Senior Advisor in Psychiatry, Southern Command Hospital, Pune.
The Head of the Department of the All India Institute of Medical Sciences, as referred to above, shall act as the convenor and chairman of the Board.
The Board shall meet at Delhi at such place, date and time as may be fixed by the convenor in consultation with the two other members.
The Board shall peruse all the records relevant for the purpose of making psychiatric evaluation of the appellant and the respondents shall produce all such records as may be necessary and required for such purpose by the Board including the relevant instructions of the Defence Department in the matter of such assessment.
The appellant shall appear before the Board when directed and the respondents shall take steps to ensure his availability before the Board.
The report should be made available to this Court within six weeks from today.
The expenses including payment, if any, necessary to be made to any of the experts shall be borne by respondent No. 1.
The evaluation shall inter alia indicate whether there was any justification to categorise the appellant as Shape II after he had been adjudged as Shape I and as to whether the present categorisation as Shape II permanent is justified.
We place on record that this shall not be treated as a precedent.
" The Board sent its report dated March 8, 1988, after examining the appellant between 22nd February, 1988 and 8th March, 1988.
It evolved the following procedure: 653 "(a) Each of the experts to examine the patient, independently at least twice.
(b) Each expert to maintain his own observations.
(c) Daily observations reports of the patient to be recorded by the Senior Resident Psychiatry.
(d) Psychometeric evaluation (e) Perusal of old records of hospitalisation by the three consultants, after the current examination.
(f) Maintenance of confidentiality of observation by the experts, Sr.
Resident and the Psychologist.
(g) Review of the unit reports after current examination.
(h) Joint review and report by the board on 7th and 8th March, after examining all the material collected above".
In paragraph 5 of the Reports the Board observed. "(a) During September 1977, when he was recommended to be upgraded to medical category S I Lt. Col.
K.D. Gupta was a symptomatic as per the medical histories examined by the board.
The old medical records do not show any evidence of a psychiatric disorders between September 1977, when he was upgraded to S I and the review board which took place in November 1978 following which he was recategorised to permanent S II as per the opinion of that review board on the ground that a relapse could occur in future.
(b) The current A043/78 and DG Memorandum 97 (extract attached as appendics 'A ' & 'B '), precludes such an individual to be upgraded from medical category S II to S I. (c) The natural history of affective psychosis (MDP) ICD 9, is strongly supported of the fact that relapse without 654 any precipitating cause and remission without any medical intervention can take place.
" We felt that certain elucidation was necessary and requested the presence of the Chairman Professor Mohan in Court.
Prof. Mohan appeared in due course and with reference to what was stated in paragraph 5(a), he stated: "We were of the view that there was no material in the Medical reports justifying the recategorisation to S II from S I apart from apprehensions of relapse." In answer to a question posed by learned Additional Solicitor General, Dr. Mohan stated: "During September 1977, when he was recommen ded to be upgraded to medical category S I Lt.
Colonel K.D. Gupta was a symptomatic as per the medical histories examined by the board.
We meant that there was no record in the history of medical papers to suggest that Lt. Col. Gupta was unwell. " Upon the suggestion of the learned Additional Solicitor General, Dr. Mohan was asked as to whether he was of the view that the appellant was at the time of the present examination entitled to be categorised as S I and he answered.
"If you take the natural history of the illness, it is difficult to say one way or the other, because it is self limiting and phasic and after the phase is over there is no residual deficit left.
The individual is as normal as anybody else is.
The period between attacks varies from one individual to another from months to year . . " The report and the statement made by Professor Mohan make it clear that there was no justification for the appellant to be subjected to phychiatric test in 1978 following which he was recategorised as S II.
We agree with the learned Additional Solicitor General that the subject is technical and ordinarily should be left to experts available in the Defence Department and the guidelines indicated by the Department should be followed.
This Court has no intention to disturb the discipline of the Defence Department but on the basis of material 655 available on the record which had been partly dealt with by this Court on the earlier occasion while disposing of the writ petition, and what we have now found on the basis of the report of examination by the Committee of Experts the appellant has become entitled to limited relief.
Though there was no order reducing him from the rank of acting Lieutenent Colonel to Major, he was treated to have been so reduced.
Then followed the frequent psychiatric examinations without any real justification.
These have constituted the foundation of the appellant 's grievance.
His recategorisation as S II in 1978, in these circumstances, was without justification.
He is, therefore, entitled to a reconsideration of his claim for promotion on the basis of his medical categorisation continuing as S I.
In a petition dated 2nd April, 1988, the appellant had asked for certain directions and reliefs.
The application is confused one inasmuch as arguments, pleadings and prayers have been jumbled up.
The appellant, inter alia, has asked for entitlements of promotion in view of promotions earned by his batchmates.
We do not think that would be a safe guide but we do hope and trust that the respondents should consider his case for promotion with an open mind on the basis of his continuity in shape I.
He has also indicated in paragraph 8 of that petition that he is prepared to be released from service after his promotional entilement is finalised and he is given his dues on such basis as may be determined.
The appellant has claimed compensation which we see no basis to grant.
The appeal is allowed in part and to the extent that the appellant 's medical category shall be taken as being continued to be S I from 1977 and on that basis his promotional entitlement shall be finalised by the respondents within three months hence.
We make it clear that it is open to the respondents to release the appellant from service after this has been done.
This case may not be taken as a precedent and we reiterate that this Court would like the discipline of the Defence Department to be maintained by itself in the interest of the nation Parties are directed to bear their own costs.
G.N. Appeal partly allowed.

summary/full:
The appellant was granted a permanent Commission in the Indian Army in 1958 and appointed as a Second Lieutenant.
He rose to the level of Lt. Colonel on 27th February, 1975.
In March, 1976 he was directed to report to the Military Hospital for his psychiatric examination, where his medical classification was reduced from shape I to shape III, and he was posted as GLO and treated as Major.
There was however no specific order reducing him in rank.
In December, 1976, appellant 's Classification was upgraded to shape II and in September, 1977 to shape I.
But it was decided that he should be subjected to special review before restoration of his rank.
In a special report the Brigade Commander recorded appreciation of the appellant 's work, and recommended his promotion as Lt. Colonel.
But the Army Headquarters directed the appellant to the Military Hospital for further examination on the ground that an earlier incident of 1963 had been overlooked when the appellant was graded as shape I.
On this examination, the appellant was permanently downgraded as shape II.
In 1980, the appellant filed a writ petition in this Court, challenging the action of Army Headquarters and his downgrading.
This Court directed that he should be restored to the rank of Acting Lieutenant Colonel from the date he was reverted and that his claims to advancement, pay, arrears of pay, etc. should be considered and disposed of within six months (See After lodging his claims, the appellant waited for a reasonable time and then filed a writ petition in the High Court.
The respondent contended that there was nothing wrong in the recategorisation and the directions of the Supreme Court had been fully complied with.
The High Court dismissed the writ petition.
647 In this appeal by special leave, the appellant contended that a prejudicial approach developed against him in the Headquarters establishment without any justification and he had been unduly subjected to psychiatric examination from time to time, and on the basis of the records built up against him adverse opinion had been forthcoming which resulted in recategorisation from shape I to shape II.
To remove the apprehension of bias, this Court directed that the appellant may be examined by a Board consisting of three Experts with an outsider as Chairman.
After considering the report of the Experts Committee this Court allowed the appeal in part and, ^ HELD: 1.
The appellant 's medical category shall be taken as being continued to be shape I from 1977 and on that basis his promotional entitlements shall be finalised by the respondents within three months hence.
It is open to the respondents to release the appellant from service after this has been done.
[655F] 2.
The report of the Expert Committee makes it clear that there was no justification for the appellant to be subjected to psychiatric test in 1978 following which he was recategorised as shape II.
[654G] 3.
This subject of categorisation on the basis of psychiatric test is technical and should ordinarily be left to experts available in the Defence Department and the guidelines indicated by the Department should be followed.
This Court has no intention to disturb the discipline of the Defence Department, but on the basis of material available on the record and on the basis of the report of the Committee of Experts, the appellant is entitled to limited relief.
Though there was no order reducing him from the rank of Acting Lieutenant Colonel to Major, he was treated as having been so reduced.
Then followed the frequent psychiatric examinations without any real justification.
This recategorisation, in these circumstances, was without any justification.
[654H; 655A B] [Reiterating that it would like the discipline of the Defence Department to be maintained by itself in the interest of the nation, this Court observed that this case may not be taken as a precedent.] [655F G]


judgement:
Civil Appeal Nos.
392 95 of 1988.
Appeal under Section 130E(b) of the Central Excise and Salt Act, 1944 from the order dated 15.12.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal Nos.
C/2130 to 2132/86 C & 1027/83 and order No. 757 760/86.
B. Datta, ASG, Mrs. Indira Sawhney and P. Parmeshwaran for the Petitioners.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
These appeals under Section 643 130E(b) of the (hereinafter called the Act) are against the order dated 15th December, 1986 passed by the Customs, Excise and Gold (Control, Appellate Tribunal (hereinafter called CEGAT).
These appeals are related to a dispute regarding the duty of custom imposed on the respondent.
The department had levied duty on the product known as 'Sancticizer 429 ' imported by the respondent.
The respondent had contested this duty and filed a claim for the refund.
The Assistant Collector of Customs rejected this claim.
The Assistant Collector on test found it to be organic compound (easter type) inform of colourless viscose liquid and as per 7.0.046m should be considered as polymeric plasticizer.
The Appellate Collector found that Chapter 38 of the was residuary in nature.
According to him, if the item was not covered by any other chapter of the then it would fall under Chapter 38.
The Appellate Collector further found that linear polysters were covered by CCCN 39.01(E).
The Appellate Collector held that the impugned goods are formed by the condensation of diabasic acid within dihydric alcohols and were similar to the poly condensation product of terphthalic acid or Adipic acid with ethanediel covered by above mentioned CCCN headings.
The Appellate Collector held this CCCN headings corresponds to 39.01/06 of the .
The Appellate Collector upheld the decision of the Assistant Collector.
The respondent challenged the aforesaid order of the Appellate Collector before the Tribunal.
The Tribunal allowed the appeals relying on the two decisions of the Tribunal one being Bhor Industries Ltd. vs Collector of Customs, Bombay, and the other Collector of Customs, Bombay vs Bhor Industries Ltd. and another, The Tribunal was of the view that the product was classifiable under the heading 38.01/19(6) of the .
The decision of the Tribunal was later on followed by the subsequent decision referred to hereinbefore.
In Bhor Industries Ltd. vs Collector of Customs, Bombay (supra), the Tribunal observed that these are ordinarily liquids and, in rare instances, solids, as simple high boiling solvents for the polymers.
These are neither resins nor do they seem to be plastic materials; on the other hand, these are added to resins to impart better flexibility or plastic properties to them.
It was further observed that there was no evidence had been produced before the Tribunal to show that Sancticizer was a resin or plastic material as defined in Explanatory Notes to C.C.C.N.
It was neither similar to resols or polysiobutylene to attract the mischief of Note 2(c) to Chapter 39 nor a separately defined Chemical Compound so as to fall within Chapters 28 or 29 of 644 .
Hence, it was classifiable not under Heading 39.01/06 as it stood before its amendment in 1978 but under 38.01/19(6) of as "plasticizer, not elsewhere specified".
The Tribunal in its decision considered the technical leaflet on the product.
Sancticizer 429 was described as a medium high molecular polyester plasticizer made from a glycol reacted with a dibasic acid.
Among the properties claimed for the product are good low temperature flexibility, excellent electrical properties, outstanding migration resistance, humidity, stability and resistance to oil and solvant extraction.
It is said to be an excellent plasticizer for making oil resistant high temperature PVC wire and cable compounds.
It is also stated to be useful for plasticizing ethyl cellulose, mitrocellulose, acrylic caulking compunds, and adhesive systems based upon polyvinyl accetate, styrene butadiene, and acrylic latices.
Reference was also made to Kirk othmer 's "Encyclopaedia of Chemical Technology" 3rd edition page 111, where it was observed as follows: "A plasticizer is incorporated in a material to increase its workability, flexibility, or distensibility.
Addition of a plasticizer may lower the melt viscosity, the second order transition temperature, or the elastic modulus of the plastic.
For effectiveness with polymeric materials, a plasticizer needs to be initially mixed with the polymer either by dissolution of the resin in the plasticizer or the plasticizer in the resin, by heat or dissolving both in a common solvent and subsequent evaporation of the solvent.
In "Plastics materials" (4th edition, page 80), J.A. Brydson refers to plasticizers ordinarily liquids and in rare instances solids as simply high boiling solvents for the polymer.
The action is explained by saying that plasticizer molecules insert themselves between polymer molecules reducing but not eliminating polymer polymer contacts and generating additional free volume; also as some interaction between polymers and plasticizers off setting the spacing effect; or both.
" The Tribunal came to the conclusion that plasticizers were not resins; these are added to resins to impart better flexibility or plastic properties to the latter.
Nor did they seem to be plastic materials by themselves.
The Tribunal found that Sancticizer 429 which is admitedly a plasticizer would, therefore, not have fallen for classification 645 under Heading No. 39.01/06 of the Customs Tariff Schedule as it stood prior to its amendment in 1978.
The said reasoning was reiterated by the Tribunal in the decision of Collector of Customs, Bombay vs Bhor Industries Ltd. and another.
There, the Tribunal observed that as per various technical authorities, plasticizers are not resins.
Rather, these are added to resins to impart better flexibility or plastic properties to them.
These are not plastic materials by themselves either.
Further, goods under reference are not similar to resols or polysiobutylenes.
Therefore, their classification under Heading 30.01/106 of the , prior to and even after its amendment in 1978, should not be applicable.
Furthermore, not being separately defined chemical compounds, these would also not fall within Chapter 28 or 29 of the Act.
Since these are not specified elsewhere, their appropriate classification would be under Heading No. 39.01/19(6) as "Plasticizers, not elsewhere specified".
It is well settled in these matters how a good is known in the trade and treated in the trade literature is relevant and significant and often decisive factor.
In that view of the matter, the Tribunal was right in the view it took.
These appeals fail and are accordingly dismissed.
N.V.K. Appeals dismissed.

dataset_name: IN-Abs

summary/full:
The respondents who imported 'Sancticizer 429 ', contested the levy of duty by the Department and filed a claim for refund, which was rejected by the Assistant Collector on the ground, that on ted the product was found to be organic compound (easter type) of colourless viscose liquid and as per 7.0.046 should be considered a polymeric plasticizer.
On appeal, the Appellate Collector came to the conclusion that Chapter 38 of the was residuary in nature and that if the item was not covered by any other Chapter of the Tariff Act only then it would fall under the said Chapter.
He also found that linear polysters were covered by CCCN 39.01(E) and that the goods in question are formed by the condensation of diabasic acid within dihydric alcohols and were similar to the polycondensation products of terphthalic acid or adipic acid with ethanediel covered by the aforesaid CCCN headings, which corresponds to 39.01/06 of the .
The Appellate Collector upheld the decision of the Assistant Collector.
The respondent appealed to the Customs Excise and Gold Control Appellate Tribunal which allowed the appeals taking the view that plasticizers were not resins, but are added to resins to impart better flexibility of plastic properties to the latter, that 'Sancticizer 429 ' is admittedly a plasticizer and would therefore not have fallen for classification under Heading No. 39.01/06 of the Customs Tariff Schedule as it stood before amendment in 1978 and that the product was classifiable 642 under heading 38.01/19(6) of the Tariff Act.
Dismissing the Appeals of the Revenue, this Court, ^ HELD: 1.
As per various technical authorities, plasticizers are not resins.
These are added to resins to impart better flexibility or plastic properties to them.
These are not plastic materials by themselves either.
[644H] 2.
The goods under reference in the instant case, are not similar to resols or polysiobutylenes.
Their classification under Heading 39.01/06 of the , prior to and even after its amendment in 1978, should not be applicable.
Not being separately defined chemical compounds, these would also not fall within Chapter 28 or 29 of the Act.
Since these are not specified elsewhere their appropriate classification would be under Heading No. 38.01/19(6) as "Plasticizers, not elsewhere specified".
[645C] 3.
In these matters how a good is known in the trade and treated in the trade literature is relevant and significant and often decisive factor.
[645D] "Encyclopaedia of Chemical Technology" 3rd Edition page 111 referred to.
Bhor Industries Ltd. vs Collector of Customs, Bombay, and Collector of Customs, Bombay vs Bhor Industries Ltd. and another, approved.


judgement:
Civil Appeal No. 1538 of 1988.
From the Judgment and Order dated 8.9.86 of the High Court of Bombay in Nagpur Bench at Nagpur in C.R.A. No. 100/86.
Y.S. Dharmadhikari, Dr. N.M. Ghatate and S.V. Deshpande for the Petitioners.
S.S. Khanduja, Y.P. Dhingra and B.K. Saluja for the Respondents.
(Not Present).
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J.
In this case notice had been issued indicating that the matter would be disposed of at the notice stage.
The respondents have not appeared.
Special leave granted and the appeal is disposed as hereunder.
The only question involved in this appeal is whether the High Court of Bombay, Nagpur Bench, was right in rejecting the revision application summarily when the learned Civil Judge had held that the award was wrongly presented in his Court and he had no jurisdiction to go into the question of validity of the award.
The facts are that there was a reference to an arbitrator.
The award was filed in the Civil Court at Nagpur and objection was filed against the said award.
The short question upon which the learned District Judge dismissed the application was that Nagpur was not the Court which had jurisdiction to entertain application.
He held in his order, inter alia, as follows: "Most of the parties to the agreement of reference are the residents of Warora in the District of Chandrapur.
On the careful scrutiny of agreement of reference, the place of execution of the said agreement seems to have been omitted.
I am quite unable to understand as to how the glaring mistake in respect of omission of place of execution of the agreement has been committed.
It seems that the place of 687 execution of the agreement is deliberately omitted with intend to file the award in the Civil Court at Nagpur as the arbitrator is the resident of Nagpur.
For his convenience to file the award in the Civil Court at Nagpur, the place of execution of the agreement seems to have been omitted.
Moreover, it appears that the agreement for reference appears to have been prepared and drafted at Nagpur as stamp paper was purchased at Nagpur.
It does not mean that the parties executed agreement for reference at Nagpur as the most of the parties are the residents of Warora and most of the property except the house on plot No. 94, at Shiwaji Nagar, Nagpur, is situated at Warora in Chandrapur District.
An adverse inference can be drawn that the agreement of reference was executed at Warora in Chandrapur District which comes within the local jurisdiction of the Civil Judge, Senior Division, Chandrapur.
" The learned Civil Judge held that the award passed by the arbitrator ought to have been filed in the court of Civil Judge, Senior Division, Chandrapur.
The learned Civil Judge held that only a bit of property situated at Nagpur and the residence of arbitrator at Nagpur did not give local jurisdiction to the Court at Nagpur.
He accordingly dismissed the application with the order that award be returned for presentation to the proper Court having legal jurisdiction.
We are of the opinion that the learned Civil Judge was in error in view of the provisions of Sections 17 and 20 of the Code of Civil Procedure, in holding as he did.
In view of the facts mentioned undoubtedly part of the dispute which was the subject matter of dispute was within the jurisdiction of the Nagpur Court.
This view is further corroborated by the Section 2(c) of the .
The Court at Nagpur had undoubtedly part of the jurisdiction to entertain the suit.
The High Court had summarily rejected the revision application against the said order of the learned Civil Judge.
The High Court, in our opinion, also was in error in not entertaining the application and in not setting aside the order of the learned Civil Judge.
In the premises and in the facts of this, we are of the opinion, that the High Court and the learned Civil Judge were in error.
Their orders are therefore set aside.
688 The appeal is allowed.
Let the learned Civil Judge proceed with the objection to the award filed in his Court at Nagpur.
The said objection may be disposed of as quickly as possible.
There will be no order as to costs.
G.N. Appeal allowed.

summary/full:
An Award of an Arbitrator in respect of properties situated mostly at Warora, Chandrapur and only a bit of property situated at Nagpur, did not mention the place of execution.
The arbitrator was resident of Nagpur.
The award was filed in the Civil Court at Nagpur.
The Civil Judge held that only a bit of property situated at Nagpur and the residence of arbitrator at Nagpur did not give local jurisdiction to the Court at Nagpur and dismissed the application saying that the award ought to have been filed in the Court of Civil Judge, Chandrapur.
The revision application was summarily rejected by the Bombay High Court.
The appeal by special leave is against the judgment of the Bombay High Court.
Allowing the appeal, this Court, ^ HELD: 1.
The Court at Nagpur had undoubtedly part of the jurisdiction to entertain the suit, as part of the dispute which was the subject matter of the dispute was within the jurisdiction of the Nagpur Court.
This view is further corroborated by Section 2(c) of the .
[687F] 1.2 In view of the provisions of Sections 17 and 20 of the Code of Civil procedure, the order of the Civil Judge that the award be returned for presentation to the proper Court is erroneous.
The High Court was also in error in not entertaining the application and in not setting aside the order of the Civil Judge.
[687F, G H] 686 [The Court set aside the orders of both the Civil Judge and the High Court and directed the Civil Judge to proceed with the objection to the award filed in his Court at Nagpur and dispose it of as quickly as possible.] [688A B]


judgement:
Civil Appeal No. 5415 of 1985 etc.
From the Order dated 7.1.1985 of the Presiding officer, Labour Court, Amritsar in Application No. 547 of 1979.
619 Jitendera Sharma, P. Gaur, D.K. Garg, K.K. Mohan and R.C. Kaushik for the Appellants.
S.C. Mohanta, Mahabir Singh and C.M. Nayar for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
Each of these appeals is by special leave and is directed against the Award made in different disputes by the Labour Court.
The common justification for ignoring the High Court and approaching this Court directly by way of special leave, according to Mr. Jitendra Sharma for each of the appellants, is that there are a couple of Full Bench decisions of the Punjab and Haryana High Court holding that the Irrigation Department of the State Government of Punjab is not an 'industry ' and no useful purpose would have been served by routing the matters through the High Court as the Full Bench decision would have been followed.
The appellant in Civil Appeal No. 5415 of 1985 was a Foreman in the Mechanical Construction Division under the Irrigation Department and had applied under Section 33 C 2 of the , (hereinafter referred to as 'the ') before the Labour Court for recovery of arrears of annual increments.
The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division.
When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court.
The appellant in the remaining appeal was an operator in the Mechanical Division, Rohtak under the Irrigation Department of Haryana State.
His services were terminated and thereupon he approached the Labour Court disputing the validity of the said order.
In each of these cases challenge was advanced by the governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply.
The Labour Court by different orders made in each of these cases upheld the objection and declined relief to the employees.
The common question in these appeals, therefore, is as to whether the Irrigation Department of either Government is an 'industry '.
The definition of 'industry ' occurring in Section 2 of the has now to be seen.
The defines 'industry ' in Section 2(J) to mean: 620 "any business, trade undertaking, manufacturer or calling of employers and includes any calling service, employment, handicraft, or industrial occupation or avocation of workmen.
" By Section 2(c) of the Amending (46 of 1982), this definition has been amended but the amendment has not yet been brought into force.
The amended definition of "industry" is as follows: "Industry means any systematic activity carried on by co operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not, (i) any capital has been invested for the purpose of carrying on such activity; or (ii) such activity is carried on with a motive to make any gain or profit, and includes (a) any activity of the Dock Labour Board established under Section 5A of the ; (b) any activity relating to the promotion of sales or business or both carried on by an establishment, but does not include (1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one, Explanation: For the purposes of this sub clause, 'agricultural operation ' does not include any activity carried on in a 621 plantation as defined in clause (f) of Section 2 of the ; or (2) hospitals or dispensaries; or (3) educational, scientific, research or training institutions; or (4) institutions owned or managed by organisation wholly or substantially engaged in any charitable, social or philanthropic service; or (5) khadi or village industries; or (6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space; or (7) any domestic service; or (8) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or (9) any activity, being an activity carried on by a cooperative society or a club or any other like body of individuals, if the number of persons employed by the cooperative society, club or other like body of individuals in relation to such activity is less than ten;" Since the amended statutory definition is not yet in force, the parent definition and judicial pronouncements have to be referred to for finding the law.
The field is covered by pronouncements of this Court and it is not necessary to go beyond these precedents.
In case the Irrigation Department is accepted to be "industry", there is no dispute that each of the appellants would be a "workman" and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) respectively.
A five Judge Bench in D.N. Banerji vs P.R. Mukherjee & Ors., 622 ; considered the scope of the definition of industry.
Chandrashekhara Aiyer, J. speaking for the Court stated: "It is therefore incumbent on us to ascertain what the statute means by industry and industrial dispute, leaving aside the original meaning attributed to the words in a simpler state of society, when we had only one employer perhaps, doing a particular trade or carrying on a particular business with the help of his own tools, material and skill and employing a few workmen in the process of production or manufacture, and when such disputes that occurred did not go behind individual levels into acute fights between rival organisations of workmen and employers; and when large scale strikes and lock outs throwing society into chaos and confusion were practically unknown.
Legislation had to keep pace with the march of times and to provide for new situations.
Social evolution is a process of constant growth, and the State cannot afford to stand still without taking adequate measures by means of legislation to solve large and momentous problems that arise in the industrial field from day to day almost .
When our came to be passed, labour disputes had already assumed big proportions, and there were clashes between workmen and employers in several instances.
We can assume therefore that it was to meet such a situation that the was enacted, and it is consequently necessary to give the terms employed in the referring to such disputes as wide an import as reasonably possible.
Do the definitions of industry, industrial dispute and workman take in the extended significance or exclude it? Though the word undertaking in the definition of industry is wedged in between business and trade on the one hand and manufacture on the other, and though therefore it might mean only a business or trade undertaking, still it must be remembered that if that were so, there was no need to use the word separately from business or trade.
The wider import is attracted even more clearly when we look at the latter part of the definition which refers to calling, service, employment or industrial occupation or avocation of workmen.
Undertaking in the first part of the definition and industrial occupation or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business.
The definition was apparently intended to 623 include within its scope what might not strictly be called a trade or business venture.
" The ratio in Mukherjee 's case was relied upon by a three Judge Bench in State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors., ; and Gajendragadkar, J. who spoke for the Bench observed: "There is another point which cannot be ignored.
Section 2(j) does not define industry in the usual manner by prescribing what it means: the first clause of the definition gives the statutory meaning of industry and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way.
It is obvious that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense.
Where we are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation." "Besides, it would be relevant to point out that too much reliance cannot be placed on what are described as the essential attributes or features of trade or business as conventionally understood.
The conventional meaning attributed to the words trade and business has lost some of its validity for the purpose of industrial adjudication.
Industrial adjudication has necessarily to be aware of the current of socio economic thought around; it must recognise that in the modern welfare State healthy industrial relations are a matter of paramount importance and its essential function is to assist the State by helping a solution of industrial disputes which constitute a distinct and persistent phenomenon of modern industrialised States in attempting to solve industrial disputes, industrial adjudication does not and should not adopt a doctrinaire approach.
lt must evolve some working principles and should generally avoid formulating or adopting abstract generalisations.
Nevertheless it can 't harp back to old age notions about the relations between employer and the employee or to the doctrine of laissez faire which then governed the regulation of the said relations.
That is why, we think, in construing the wide words used in section 2(j) it would be erroneous to attach undue importance to the attributes 624 associated with business or trade in the popular mind in days gone by.
" The Bench thereafter adverted to the negative side and stated: "It would be possible to exclude some activities from section 2(j) without any difficulty.
Negatively stated the activities of the Government which can be properly described as regal or sovereign activities are outside the scope of section 2(j).
These are functions which a constitutional government can and must undertake for governance and which no private citizen can undertake.
This position is not in dispute.
An attempt is, however, made by the appellant to suggest that in view of the Directive Principles enunciated in of the Constitution and in view of the ideal of a welfare state which has been placed before the country, Governments, both at the level of States as well as at the Centre undertake several welfare activities; and the argument is that the field of governmental or regal activities which are excluded from the operation of section 2(j) should be extended to cover other activities undertaken by the Governments in pursuit of their welfare policies.
In our opinion, this contention cannot be accepted.
The activities which do not fall within section 2(j) and which are described as governmental or regal or sovereign have been pithily described by Lord Watson as 'the primary and inalienable functions of a constitutional Government '; and it is only these activities that are outside the scope of section 2(j).
It sounds incongruous and self contradictory to suggest that activities undertaken by the Government in the interests of socio economic progress of the country as beneficial measures should be exempted from the operation of the which in substance is a very important beneficial measure itself.
" Applying the stated principles, this Court in that case held that the J.J. Group of Hospitals came within the definition of industry.
Within a couple of weeks from the Hospital Mazdoor Sabha 's case (supra), the same Bench in the case of Corporation of the City of Nagpur vs Its Employees, ; , this time Subba Rao, J., as he then was, speaking for the Court examined the self same question.
Before the Court were available two precedents Mukherjee 's case 625 (supra) and Hospital Mazdoor Sabha 's case (supra) and it was stated: "Before considering the positive aspects of the definition, what is not an industry may be considered.
However wide the definition of industry may be, it cannot include the regal or soveriegn functions of State.
This is the agreed basis of the arguments at the Bar though the learned counsel differed on the ambit of such functions.
While the learned counsel for the Corporation would like to enlarge the scope of these functions so as to comprehend all the welfare activities of a modern State, the learned counsel for the respondents would seek to confine them to what are aptly termed the primary and inalienable functions of a constitutional Government " The Court analysed the activities of the various departments of the Corporation and observed: "We can also visualize different situations.
A particular activity of a municipality may be covered by the definition of industry.
If the financial and administrative departments are slowly in charge of that activity, there can be no difficulty in treating those two departments also as part of the industry.
But there may be cases where the said two departments may not only be in charge of a particular activity or service covered by the definition of industry but also in charge of other activity or activities falling outside the definition of industry.
In such cases a working rule may be evolved to advance social justice consistent with the principles of equity.
In such cases the solution to the problem depends upon the answer to the question whether such a department is primarily and predominantly concerned with industrial activity or incidentally connected therewith. " "The result of the discussion may be summarised thus: (1) the definition of industry in the is very comprehensive.
It is in two parts one part defines it from the stand point of the employer and the other from the stand point of the employee.
If an activity falls under either part of the definition it will be an industry within the meaning of the .
(2) The history of industrial disputes and the legislation recognises the basic concept that the activity shall be an orga 626 nised one and not that which pertains to private or personal A employment.
(3) The regal functions prescribed as primary and inalienable functions of State though statutorily delegated to a corporation or necessarily excluded from the purview of the definition.
Such regal functions shall be confined to legislative power, administration of law and judicial power.
(4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation.
(5) If a service rendered by a corporation is an industry, the employees in the department connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the .
(6) If a department of a municipality discharges many functions some pertaining to industry as defined in the and the other non industrial activities, the predominant functions of the department shall be the criterion for the purposes of the .
" Applying these tests, this Court examined as to whether the various departments of the Corporation came within the definition or not.
Then came the decision of a Constitution Bench in the case of Management of Safdarjung Hospital vs Kuldip Singh Sethi; , where Chief Justice Hidayatullah spoke for the Court.
Referring to the definition of industry.
the learned Chief Justice observed: "This definition is in two parts.
The first part says that it means any business, trade, undertaking, manufacture or calling of employers and then goes on to say that includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen . ". "Therefore, an industry is to be found when the employers are carrying on any business, trade, undertaking, manufacture or calling of employers.
If they are not, there is no industry as such.
What is meant by these expressions was discussed in a large number of cases which have been considered elaborately in the Gymkhana Club case [1968] 1 SCR 742.
The conclusions in that case may be stated: 'Primarily, therefore, industrial disputes occur when operation undertaken rests upon cooperation between employer and employees with a view to production and distribution of material goods, in other 627 words, wealth, but they may arise also in cases where the cooperation is to produce material services.
The normal cases are those in which the production or distribution is of material goods or wealth and they will fall within the expressions trade, business or manufacture. ' " In Safdarjung Hospital 's case the decision in Hospital Mazdoor Sabha case was analysed and the Court came to the following conclusion: "In our judgment, the Hospital Mazdoor Sabha 's case took the extreme view of the matter which was not justified.
" Then came the case of Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors ; This time the same point was before a seven Judge Bench of this Court.
This judgment undertood a review of the entire law.
Krishna Iyer, J. spoke for himself, Bhagwati and Desai, JJ.
In paragraph 139 of the judgment it was stated: "Banerjee (supra) amplified by Corporation of Nagpur (supra), in effect met with its waterloo in Safdarjung (supra).
But in this latter case two voices could be herard and subsequent rulings zigzagged and conflicted precisely because of this built in ambivalence.
It behoves us, therefore, hopefully to abolish blurred edges, illumine penumbral areas and overrule what we regard as wrong.
Hesistency, half tones and hunting with the hounds and running with the hare can claim heavy penalty in the shape of industrial confusion, adjudicatory quandary and administrative perplexity at a time when the nation is striving to promote employment through diverse strategies which need, for their smooth fulfilment, less stress and distress, more mutual understanding and trust based on a dynamic rule of law which speaks clearly, firmly and humanely.
If the salt of law lose its savour of progressive certainty where with small it be stalled? So we proceed to formulate the principles, deducible from our discussion which are decisive, positively and negatively, of the identity of industry under the .
We speak, not exhaustively, but to the extent covered by the debate at the bar and, to that extent, authoritatively, until overruled by a larger bench or superseded by the legislative branch.
" 628 "Industry as defined in section 2(j) and explained in Banerjee (supra) has a wide import.
(a) Where (i) systematic activity, (ii) organised by cooperation between employer and employee (the direct and substantial element is chimerical) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss e.g. making, on a large scale prasad or food), prima facie, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer employee relations.
(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.
Although section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to over reach itself.
Undertaking must suffer a contextual and associational shrinkage as explained in Banerjee and in this judgment; so also, service, calling and the like.
This yields the inference that all organized activities possessing the triple elements in I, although not trade or business, may still be industry provided the nature of the activity, viz. the employer employee basis, bears resemblance to what we find in trade or business.
This takes into the fold of industry undertakings, callings and services, adventures 'analogous to the carrying on of the trade or business '.
All features, other than the methodology of carrying on the activity viz. in organizing the cooperation between employer and employee, may be dissimilar.
It does not matter, if on the employment terms there is analogy.
629 Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations.
The ideology of the being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition.
Nothing less, nothing more.
(a) The consequences are (i) professions, (ii) clubs, (iii) educational institutions, (h) cooperatives, (v) research institutes, (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I cannot be exempted from the scope of section 2(j).
(b) A restricted category of professions, clubs, cooperatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantial and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or case, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired.
Such eleemosynary or like undertakings alone are exempt not other generosity, compassion, developmental passion or project.
The dominant nature test: (a) Where a complex of activities, some of which qualify for exemption others not, involves employees on the total undertaking, some of whom are not workmen as in 630 the University of Delhi vs
Ram Nath; , or A some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur, will be the true test.
The whole undertaking will be industry although those who are not workmen by definition may not benefit by the status.
(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 categories which otherwise may be covered thereby.
" Beg, CJ., wrote a separate judgment and prefaced it by saying: "I am in general agreement with the line of thinking adopted and the conclusions reached by my learned brother Krishna Iyer.
" In paragraph 149 of the judgment, the learned Chief Justice observed: "In his heroic efforts, my learned brother Krishna Iyer, if I may say so with great respect, has not discarded the tests of industry formulated in the past.
Indeed, he has actually restored the tests laid down by this Court in D.N. Banerjee 's case, and, after that, in Corporation of the City of Nagpur vs Its Employees, and State of Bombay vs The Hospital Mazdoor Sabha to their pristine glory.
" The learned Chief Justice again stated: "Each of us is likely to have a subjective notion about industry.
For objectivity, we have to look first to the words 631 used in the statutory provision defining industry in an attempt to find the meaning.
If that meaning is clear, we need proceed no further.
But, the trouble here is that the words found there do not yield a meaning so readily.
They refer to what employers or workers may do as parts of their ordinary avocation or business in life . " "Thus, in order to draw the circle of industry, to use the expression of my learned brother Iyer, we do not find even the term workman illuminating.
The definition only enables us to see that certain classes of persons employed in the service of the State are excluded from the purview of industrial dispute which the seeks to provide for in the interests of industrial peace and harmony between the employers and employees so that the welfare of the nation is secured.
The result is that we have then to turn to the preamble to find the object of the itself, to the legislative history of the , and to the socio economic ethos and aspirations and needs of the times in which the was passed.
" After quoting the definition of industry, the learned Chief Justice proceeded to say in paragraph 158 of the judgment: "It seems to me that the definition was not meant to provide more than a guide.
It raises doubts as to what could be meant by the calling of employers even if business, trade, undertaking or manufacture could be found capable of being more clearly delineated.
It is clear that there is no mention here of any profit motive.
Obviously, the work manufacture of employers could not be interpreted literally.
It merely means a process of manufacture in which the employers may be engaged.
It is, however, evident that the term employer necessarily postulates employees without whom there can be no employers . " In paragraph 165 of the judgment, the learned Chief Justice added: G "I have contended myself with a very brief and hurried outline of my line of thinking partly because I am in agreement with the conclusions of my learned brother Krishna Iyer and I also endorse his reasoning almost wholly, but even more because the opinion I have dictated 632 just now must be given today if I have to deliver it at all.
From tomorrow I cease to have any authority as a Judge to deliver it.
Therefore, I have really no time to discuss the large number of cases cited before us, including those what are known as sovereign functions.
" Chandrachud, J., as he then was, on behalf of himself Jaswant Singh and Tulzapurkar, JJ. added a note by saying: "We are in respectful agreement with the view expressed by Krishna Iyer, J. that the appeal should be dismissed.
We will give our reasons later indicating the area of concurrence and divergence, (underlining is ours) if any, on the various points in controversy on which our learned Brother has dwelt." On 7th of April, the reasonings were delivered by Chief Justice Chandrachud for himself as by then Jaswant Singh, J. delivered a separate set of reasonings for himself and Tulzapurkar, J.
The learned Chief Justice (because by then he had assumed that office) referred to several authorities and tests and in paragraph 181 of the judgment stated: ". .
These refinements are, with respect, are not warranted by the words of the definition, apart from the consideration that in practice they make the application of the definition to concrete cases dependent upon a factual assessment so highly subjective as to lead to confusion and uncertainty in the understanding of the true legal position.
Granting that the language of the definition is so wide that some limitation ought to be read into it, one must step at a point beyond which the definition will skid into a domain too rarefied to be realistic.
Whether the cooperation between the employer and the employee is the proximate cause of the ultimate product and bears direct nexus with it is a test which is almost impossible of application with any degree of assurance or certitude.
It will be as much true to say that the solicitor 's assistant, managing clerk, librarian and the typist do not directly contribute to the intellectual end product which is a creation of his personal professional skill as that, without their active assistance and cooperation it will be impossible for him to function effectively.
The unhappy state of affairs in which the law is marooned will 633 continue to baffle the skilled professional and his A employees alike as also the Judge who has to perform the unenviable task of sitting in judgment over the directness of the cooperation between the employer and the employee, until such time as the legislature decides to manifest its intention by the use of clear and indubious language.
Besides the fact that this Court has so held in National Union of Commercial Employees vs M.R. Meher, lndustrial Tribunal, Bombay, [1962] Supp.
3 SCR 157 the legislature will find a plausible case for exempting the learned and liberal professions of lawyers, solicitors, doctors, engineers, chartered accountants and the like from the operation of industrial laws.
But until that happens, I consider that in the present state of the law it is difficult by judicial interpretation to create exemptions in favour of any particular class.
" The remaining two learned Judges added their separate opinion and in the concluding part stated: "In view of the difficulty experienced by all of us in defining the true denotation of the term industry and divergence of opinion in regard thereto as has been the case with this Bench also we think, it is high time that the Legislature steps in with a comprehensive bill to clear up the fog and remove the doubts and set at rest once for all the controversy which crops up from time to time in relation to the meaning of the aforesaid term rendering it necessary for larger Benches of this Court to be constituted which are driven to the necessity of evolving a working formula to cover particular cases.
" The ultimate position available from the seven Judge Bench decision, therefore, is that while three learned Judges delivered their view through Krishna Iyer, J., Beg CJ spoke somewhat differently, yet agreed with the conclusion reached by Krishna Iyer J. Chandrachud, CJ.
also agreed with the majority while the remaining two learned Judges looked for legislative clarification to meet the situation.
Perhaps keeping in view the observations of the learned Judges constituting the seven Judge Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982.
Though almost six years have elapsed since the amendment came on to 634 the Statute Book, it has not been enforced yet.
Bare Acts and Commentaries on the have, however, brought in the new definition by deleting the old one with a note that the new provision has yet to come into force.
This situation has further added to the confusion.
It is now time to turn to the facts of the case.
Judicial notice can be taken of the position that Haryana and Punjab originally constituted one State and Haryana has become separate from 1966.
The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the .
The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the irrigation department has been produced before us with notice thereof to the appellants ' learned counsel.
We may extract a part of the Report: "The irrigation department which was set up more than 100 years ago is mainly responsible to provide water supplies for the substance and development of agriculture in the 30.36 hectare cultivable area of the State covered by canal command.
This requires harnessing of the surface and grounds water resources of the State and their equitable distribution to the beneficiaries, within Canal Command area.
This task involves construction of multipurposes, major, medium and minor irrigation projects, maintenance of net work of channels, regulation of canal supplies, enforcement of water laws etc.
and levying of crop wise water supply rates on the irrigators for recovery through the state Revenue Department.
Extension, improvement and modernisation of the age old canal system is also continued to be done simultaneously by the Department.
Besides the irrigation the department also provides water for drinking purposes to villages and towns in the State.
The canal water supplies are also being made available for the industrial development in areas where no other source for water supplies exists".
"The State of Punjab was reorganised in the year 1966 and a number of disputes on the sharing of water/powers with successor States croped up.
The issues regarding apportionment of Ravi Beas Waters over the preparation uses falling to the share of erstwhile Punjab, 635 apportionment of rights and liabilities of Bhakra Nangal Project, retention of control of Irrigation Head Works of Harike, Ropar and Ferozepur by Punjab, restoration of Bhakra Nangal Project and Beas Project to Punjab etc.
are also dealt with by the Department." "The Irrigation Department is also responsible to provide protection to the valuable irrigated lands and public property from flooding, river action and water logging.
This requires construction of flood protection, river training, drainage and anti waterlogging works and their maintenance. " "The Department has also to plan ahead for irrigation development in the State for which purpose proposal of irrigation schemes are investigated, surveyed and prepared in advance.
Feasibility of irrigation schemes for hydropower generation from the existing and proposed irrigation schemes is also investigated by the Department and their execution undertaken.
The execution of new irrigation schemes, extention and improvement of existing schemes requires preparation of detailed designs of channels and their necessary works.
This work is also done by the Department." "During designs, execution and maintenance of the irrigation, flood control and drainage projects, field problems arise for the solution of which research, model studies and laboratory experiments have to be conducted.
The Department undertakes this work as well." "Having shared with the neighbouring States almost entire water resources of the rivers flowing through the Punjab water has now become a constraint to keep the tempo of the development of irrigated agriculture in the State.
For this purpose it has not only become necessary to evaluate the total water resources of the State but also plan conjunctive use of surface and ground water for the optimum development of this precious resource.
Further it has become necessary to conserve irrigation supplies and propogate their use economically through innovative water distribution system like sprinklers, drip system, etc.
" 636 "The Irrigation Department plans and execute reclamation of salt or thur affected areas within cannal command.
Measurements of discharges in the Ravi, the Beas and the Sutlej desides the beings and drains in the State is also carried out by the irrigation department.
These observations which are being made for the last over 60 years have provided basic data to the design of multipurposes Bhakhra Nangal, Beas and Beas Sutlej Link projects which have transformed economies not only of the State of Punjab but also of the State of Haryana and Rajasthan.
The fact extracted from the Report apparently give a picture of the activities of the Irrigation Department.
There is a full Bench judgment of the Punjab and Haryana High Court in the case of Om Prakash vs M/s Executive Engineers, SYL, Kurukshetra & Ors.[1984] Current L.J. 349 where the question that came up for consideration before the full Bench was thus stated; whether the irrigation department of the State (of Punjab) comes within the ambit of industry in section 2(j) of the Industrial disputes Act, 1947? The Court took into account the judgment of another full Bench decision of the same Court in the case of State of Punjab vs Kuldip Singh & Anr., where the question for consideration was whether the Public Works Department of the State Government was an industry.
In Om Prakash 's case (supra), the full Bench barely took note of the decision of this Court in Bangalore Water Supply case (supra) but did not deal with it.
It also took into account the position of the Irrigation Department in Punjab keeping in the background the provisions of the of 1873 and stated: "The irrigation department is a branch of the public works department.
It provides a reasonably assured source of water for crops through the net work of canals.
The irrigation department also carries out schemes and takes measures for protecting crops from the menace of floods during the times of abnormal rainfall.
In the olden times when there was no canals, agriculture was very limited and cultivators depended solely on rainfall.
By the passage of time it was thought necessary to build irrigation and drain age works for the purpose of providing better water facilities to the farmers on whom depends the economy of this country.
These works could only be built by the Government.
637 The western Jamuna canal which serves the State of A Haryana was the first major irrigation work which was initially constructed by Feroze Shah Tuglaq in 1351.
It was reconditioned by Akbar in 1568 and was extended in 1626 in the reign of Shahjahan.
The canal was constructed in a reasonably serviceable form by the British during 1817 1823.
Then the Upper Bari doab canal, Sirhind canal, Lower Chinah canal and Lower Jhelum canal etc., were constructed.
Thereafter, many other projects have come up and the ones which need mention are Bhakra Nangal project with its network of Bhakra System and the Beas project.
All these projects have been carried out by the state at the state expense.
It is understandable that such projects could not at all be undertaken by private enterpreneurs or could be left in their hands for execution.
Further, water is a state subject as per entry 17 in List II of Seventh Schedule of the Constitution.
Even before coming into force of the Constitution, water of rivers and streams was considered to be belonging to the State . .
Thus it would be evident that the water has at all times been a State subject and the State can exercise full executive powers in all matters connected with the water.
The State supplies water to the farmers through the network of canals.
It is correct that water rates are realised from the farmers but they are not realised for the cost of the water.
In other words, the State does not sell water to the farmers.
As contended justifiably by the learned Advocate General, the water charges are not even sufficient to meet the establishment and maintenance expenses of the department.
Moreover, the water rates have never been realised on the basis of the quantity of the water supplied.
These rates are dependant upon the class of crops raised by the farmers and have been fixed in terms of per acre.
It may be noted that rates for crops, such as wheat, sugarcane, cotton, rice are higher than the other crops such as gram, oil seeds, bajra and maize etc.
In other words, the water charges have been linked on the principle of bearability, that is, paying capacity of the farmer dependant upon his income from the kind of crop raised by him.
The water is supplied on the basis of the holding of each farmer in terms of cultivable commanded area, that is, on the basis of uniform and equitable yardstick.
Again, the water charges are remitted when the crops are damaged by natural 638 calamities such as locust, hailstroms, floods or drought etc.
Further, the construction of canals, dams, barrages, and other projects cannot be entrusted to some private hands.
The construction of these works involves compulsory acquisition of land which can also be done by the State.
Merely this fact that water is supplied by charging certain rates cannot warrant a finding that the state is indulging in trade or business activity or an activity which is analogous to trade, business or economic venture.
From what has been stated above, there can be gainsaying that the functions of the irrigation department cannot at all be left to private enterprise.
The facts which weighed in holding that the construction and maintenance of national and state highways by the State does not come within the ambit of industry in Kuldip Singh 's case (supra) are present so far as the irrigation department is concerned .
In this view of the matter, I hold that the functions of the irrigation departments are essentially government functions and that these functions neither partake of the nature of trade and business nor are even remotely analogous thereto and that this department does not come within the ambit of industry as defined in section 2(j) of the Act." Mr. Shalma for the appellants placed before us some cases of different High Courts in support of his stand that the Irrigation Department should be considered as industry.
The first of these cases is that of Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., where the Madhya Pradesh High Court found the Chambal Hydel Irrigation Project to be an industry.
The facts of that case reveal that the Project therein was a multipurpose one which was used for generating electricity as also for irrigation purposes.
On the facts found therein, the High Court came to the conclusion that it came within the definition under section 2(j) of the Act.
In State of Rajasthan vs The Industrial Tribunal, Rajasthan, the question for consideration before the Rajasthan High Court was whether the Survey and Investigation Division of Irrigation Department was an industry.
In paragraph 26, the learned Judge came to the conclusion by saying: "In view of the aforesaid decisions of the Supreme Court, I find it difficult to hold that the activities of the 639 State Government by organising its Survey and Investigation.
Division in the Irrigation Department through which the State Government rendered services in the matter of supplying water by constructing canals and dams does not fall within the ambit of the sovereign or regal functions of the State.
Such service to the people at large, in my opinion, comes within the ambit of the expression industry as defined in section 2(i) of the Act.
" The finding runs contrary to the conclusion.
If in the opinion of the learned Judge, it was difficult to hold that the activities did not fall within the ambit of the sovereign or regal functions, then the conclusion should have been different.
In Dinesh Shanna & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207, a Division Bench of the Patna High Court was considering if the Public Health Engineering Department of the State of Bihar was an industry.
In paragraph 8 of the judgment, reliance was placed on the Bangalore Water Supply case (supra) and the Nagpur Corporation case (supra) and it was held that the said department of the State Government of Bihar was an industry.
In Chief Engineer, Irrigation, Orissa vs Harihar Patra & Anr., a Division Bench of the orissa High Court was considering whether the Salandi Irrigation Project in that State was an industry.
The High Court relied upon the earlier full Bench decision of its own Court and some of the decisions of this Court which we have referred to above, and came to hold that the irrigation project was an industry.
The Administrative Report of the facts found by the High Court in the instant case have attempted to draw out certain special features.
The legal position has been indicated in the earlier part of our judgment.
On the tests, as already laid down in the judgments, we do not think these facts found in this case can take out the Irrigation Department outside the purview of the definition of 'industry '.
We have already referred to the Dominant Nature test evolved by Krishna Iyer, J.
The main functions of the Irrigation Department where subjected to the Dominant Nature test clearly come within the ambit of industry.
We have not been able to gather as to why even six years after the amendment has been brought to the definition of industry in section 2(j) of the Act the same has not been brought into force.
This Court on more than one occasion has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court, the law was sought to be amended, it is 640 appropriate that the same should be brought into force as such or with such further alterations as may be considered necessary, and the legislative view of the matter is made known and the confusion in the field is cleared up.
For the reasons we have indicated above, these appeals succeed.
We make it clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation.
The appeals are allowed without costs.
S.L. Appeals allowed.

summary/full:
Each of these appeals by special leave was directed against the award made by the Labour Court.
The appellant in Civil Appeal No. 5415 of 1985, a foreman in the Mechanical Construction Division under the Irrigation Department, had filed an application under Section 33C 2 of the ( 'the ') before the Labour Court for the recovery of arrears of annual increments.
The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division.
When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court.
The appellant in the remaining appeal was an operator in the Mechanical Division, under the Irrigation Department of Haryana State.
His services were terminated and thereupon he approached the Labour Court challenging the order of termination.
In each of these cases, challenge was advanced by the Governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply.
The Labour Court upheld the objection and declined relief to the appellants.
Allowing the appeals with observations, the Court, ^ HELD: The common question in these appeals was whether the Irrigation Department was an 'industry '.
The definition of 'industry ' is given in Section 2(j) of the .
By Section 2(c) of the Amending (46 of 1982) this definition had been amended but the amendment has not 617 yet been brought into force.
Since the amended statutory definition was not yet in force, the parent definition and the judicial pronouncements thereon had to be referred to for finding the law.
The field is covered by pronouncements of this Court and is not necessary to go beyond the precedents such as decisions in D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay and Ors.
vs The Hospital Mazdoor Sabha & Ors ; ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; and the decision of a seven Judge Bench in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; [621F G] In case the Irrigation Department was accepted to be an "industry", there was no dispute that each of the appellants would be a 'workman ' and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) of the , respectively .
[621G] Judicial notice could be taken of the position that Haryana and Punjab originally constituted one State and Haryana became separate from 1966.
The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the .
The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the Irrigation Department, was produced before the Court.
[634B C] Counsel for the appellants placed before the Court some cases of different High Courts in support of his stand that the Irrigation Department should be considered as an industry, i.e. Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharma & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, Irrigations Orissa vs Harihar Patra & Anr., [638E F] On the tests, as already laid down in the judgments, the Court did not think the facts found in this case could take the Irrigation Department outside the purview of the definition of 'Industry '.
The main functions of the Irrigation Department where subjected to the Dominant Nature test evolved by Krishna Iyer J. in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; , decided by a seven Judges Bench, clearly come within the ambit of industry.
618 Perhaps keeping in view the observations of the learned Judges of the seven Judges Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982.
However, the Court could not gather as to why even six years after the amendment to the definition of industry in section 2(j) of the came on the statute book, the same had not been brought into force.
The court on more than one occasion had indicated that the position should be clarified by an appropriate amendment, and, when keeping in view the opinion of this Court, the law was sought to be amended, it was appropriate that the same should be brought into force as such or with such further alterations as might be considered necessary and the legislative view of the matter, made known and the confusion in the field, cleared up.
Bare Acts and Commentaries on the had brought in the new definition, deleting the old one with a note that the new provision had yet to come into force.
This situation had further added to the confusion.
[639F H; 640A B] The appeals succeeded.
It was made clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation.
[640B C] D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors., ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors.
, ; ; om Prakash vs M/s Executive Engineer, SYL, Kurukshetra & Ors.
[1984] Current L.J. 349; State of Punjab vs Kuldip Singh & Anr., ; Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharrna & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, lrrigation, Orissa vs Harihar Patra & Anr., , referred to.