Pappammal Annachatram vs Presiding Officer, Labour Court, Madurai and Others

(1) This petition for issue of a writ of certiorari or any other appropriate direction raises an interesting question as to whether an Anna Chatram

constituting a public charitable endowment the object of which is to feed poor desantris and afford free boarding and lodging to poor students by

utilising the income from the endowed properties, is an industry within the definition of the term under the Industrial Disputes Act, 1947. On 14-

10-1957, the trustees of the Chatram framed against the third respondent certain charges relating to alleged acts of misfeasance and misconduct on

his part and called upon him to submit his explanation within 24 hours. The third respondent submitted his explanation the next day denying the

charges. After considering the explanation, the trustee passed an order dated 18th October 1957, terminating the services of the third respondent

with immediate effect and directed that he be paid, in lieu of notice, one month''s pay. The third respondent''s appeal to a Board of Supervision

failed. Thereupon, the Tiruchi Hotel Worker''s Union, of which he was a member took up his cause before the Labour court for conciliation. As no

settlement was reached, by their order dated 28th August 1959 u/s 19(1)(c) of the Industrial Disputes Act, the State Government referred to the

Labour court Madurai, for adjudication the question whether the discharge of the third respondent was justified and to what relief he was entitled.

The third respondent claimed that he had served the Chatram as a clerk without any blemish for a period of 7 years and 7 months till the date of his

discharges, that the discharge was illegal and unjust as a case of victimisation, and that there was also no proper and fair enquiry conducted by the

trustee into the charges. The trustee denied the jurisdiction of the labour court to proceed with the reference on the ground that the chatram was

not an industry within the meaning of Section 2(j) of the Act and stated that, in any case, the discharge was justified. The labour court, by its award

dated 17th October 1959 overruled both the objections and found that there had been violation of the principles of natural justice inasmuch as the

trustee gave the third respondent no reasonable or fair opportunity to submit his explanation, took no evidence to substantiate some of the charges

and conducted no enquiry in respect of certain other charges. The labour court, therefore, set aside the order of discharge and directed

reinstatement with 50 per cent of the back wages. It is this award which is now sought to be quashed. The Tiruchi District Hotel Workers Union

represented by its secretary which figured as a party to the industrial dispute for adjudication before the labour court is the second respondent in

this petition.

(2) In support of this petition, it is urged (1) that the Chatram is not an industry and the dispute raised by the third respondent is not an industrial

dispute within the meaning of the Act, (2) that, in any event, the dispute is an individual and not a collective dispute and (3) that the Labour court

was in error in holding that the order of discharge was violative of the principles of natural justice. The first ground involves the determination of a

fine and difficult question. The facts relevant to it are not in dispute. The Pappammal Anna Chatram is a public charitable endowment founded for

the purpose of feeding poor desantris which was later extended to boarding and lodging poor students out of the income from the endowed

properties. At the time of the reference of the dispute for adjudication there were about 225 students in the hostel built for the purpose in 1956

form the funds of the Chatram. No fee is charged, no food is sold and no service or amenities are paid for the Chatram. The Chatram is, therefore,

a place where form the income from the properties endowed, poor people are given free food and poor students both lodging and boarding free.

Under a scheme of management settled by court in about 1922 a descendant of the founder is to be appointed as a trustee and there is to be also a

Board of supervision consisting of three members.

The establishment of the Chatram, at the time when the third respondent was discharged, consisted of three clerks, namely, M. Sivaswami the third

respondent. Sadasivam and Murugesa Pillai, three cooks and a watchman. Of these persons, only the third respondent was a member of the

Tiruchi District Hotel Workers'' Union. On these facts, the contention for the petitioner is that the Chatram has been founded by a private individual

out of a charitable intention and humanitarian objective, that it involves no business commercial or trading enterprise and is totally free from profit

motive, that there is non investment of capital or production of wealth or other material goods by the Chatram, that there is no question of any co-

operation between the trustee and the other employees of the Chatram as in an industry and that in the absence of such attributes the Chatram

cannot be regarded as ''an industry'' within the meaning of the Act.

(3) In dealing with the first ground, certain general observations touching the progressive aspects of socio-economic relations in the context of the

current trends in industrial adjudication will have to be borne in mind. It has to be recognised in an ever increasing measure that employees,

whether skilled or unskilled, should social and economic justice an should to achieve that purpose, have not merely wages but living wages a

legitimate and reasonable share in the creative result produced in co-operation with their toil and application, better terms and conditions of

employment in relation to their general welfare and well being and that, above all, industrial peace and harmony should be maintained and

promoted for attaining the desired economic progress and general good of the country. One of the avowed resolves, which the preamble to the

Constitution resolves, which the preamble to the Constitution proclaims is to secure to all citizens in this country social, economic and political

justice. This lofty ideal also finds expression in the directive principles contained in Part IV of the Constitution, particularly Articles 39 and 43

which state that the citizens men and women equally, have the right to an adequate means of livelihood and that the State shall endeavor to secure

by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise work, a living wage

condition of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities.

These ideas have certainly influenced the trend of and approach to industrial problems and industrial adjudications by tribunals and labour courts in

this country, more especially since 1950. It is but right and necessary, therefore, that notice is taken, from time to time, of the changing concepts,

modified out look and liberal approach in settlement or adjudication of labour disputes in this or other progressive countries of the world. It is in

this background an industry in modern times on longer merely conveys the old limited concept of the term but has come to be understood in a

remarkably wide sense including within its ambit a variety of activities which are far from being commercial or directed or designed to produce

wealth or goods.

(4) The Industrial Disputes Act, 1947 was enacted to make provision for the investigation and settlement of industrial disputes and for certain other

purposes. This object is mainly carried out through special bodies like the conciliation board courts of enquiry, labour courts and Tribunals. By

such set up, the procedure and legalistic approach to rights and liabilities under the ordinary law to which the courts of law in this, as in any other

land are accustomed, are not insisted upon and problems, which require solution thought the machinery set up by the Act, are tackled by just

adjustment between contending interests by conciliation, settlement and adjudication on principles evolved with reference to various factors and

circumstances peculiar to industry and industrial relations. Industrial dispute is defined to mean any dispute or difference between, among others

employers and workmen which is connected with the employment or with the non-employment or the terms of employment or with the conditions

of labour of any person. Section 2(j) states that ""industry"". Means any business, trade, undertaking manufacture or calling of employers and

includes any calling service employment, handicraft or industrial occupation or avocation of workmen. The first part of the definition is in itself very

wide and its scope is further extended by its inclusive part comprehending within its scope activities far removed from those in a commercial sense,

that is to say, investment of capital with a view to produce wealth in any form or make profit with the co-operation of labour.

The different activities brought under the definition of industry suggest that the term covers a far more extensive field than what is normally and

popularly understood by it. For instance, in the popular sense an industry will not normally include calling, or service in which there is employment

of workmen. So too it is not every business, trade or undertaking that would commonly be termed as an industry. Outside the statutory definition,

the word "" Industry"" ordinarily denotes an enterprise in which capital is invested and with the help of labour, goods are produced by mechanical or

other means. But the statutory definition of industry such as it is has extended its limits to spheres of activity where even no capital is invested, no

wealth or goods are produced, no profit is made or aimed at and no commercial venture in any sense is involved or underlined. The definitions of

Public utility services"" ""wages"" and ''workmen'' and also the variety of items mentioned in the first schedule to the Act, particularly the items

relating to service in hospitals and the dispensaries, fire brigade service and defence establishments further confirm the view as to the enormously

wide and comprehensive scope of the statutory definition of industry. Having regard to such a wide scope of the term ""industry"" it naturally

becomes difficult and even perhaps impossible, to evolve, formulate and state clear cut and universally applicable principles and tests with

reference to which a given enterprise or activity may be adjudged to be an industry. The question, therefore, will have to be decided, in each case

with reference to particular facts and circumstances.

(5) There are, however, certain broad considerations which may guide and help in deciding whether an enterprise is an industry or not. Some of

these considerations I have already adverted to and which seem to emerge form the nature of certain kinds of enterprise or activity included in the

statutory definition of industry. Commercial character, investment of capital, the idea of quid pro quo for such investment making a profit or motive

to make profit and production of wealth or goods as a result of co-operation between capital and labour, all or most of which went into the

concept of industry as commonly understood in the old days of laisse-faire and outside the statutory definition of the term, are not of the essence of

an industry as difined in the Act. The absence of any or of all the those elements is not conclusive on the question whether an enterprise or activity

is an industry within the meaning of the Act. This view appears to flow from the fact that the statutory definition of industry includes any calling,

service or employment. Though the first schedule to the Act as it now stand, was introduced only in 1956, some of the items mentioned therein like

service in hospitals and dispensaries and fire brigade service, are in keeping with such wide scope of the legislative intent in defining the term

industry"".

It is apparently on that view that the Supreme Court in The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and Others, has held a

group on hospitals known as J. J. Hospitals at Bombay under the administrative control of the Government of Bombay to be ""an industry"" and the

dispute between the State of Bombay and the workmen of the hospitals to be an industrial dispute. In that case, the Supreme Court has construed

the definition of ""industry"" in the light of the import of the words ''business'' ""rade"", ""undertaking"", calling, ''service'' and observed that the maxim

noscitur and sociis"" has no application in the interpretation of the definition and that the legislature having deliberately used words of such wide

import, it would be necessary to read those words in their wide denotation and so read, the hospitals cannot be excluded from the definition, as the

word ""undertaking"" will include within its scope such an institution as well. A reference to several decisions of the Industrial Tribunals in this country

since 1950 as well as the judgment of the Calcutta High Court in Municipal Commissioner of the Budge Budge Municipality Vs. P.R. Mukherjee

and Another, shows that a similar view of the definition of ""industry"" had been taken even some years ago and institution like a ''university'',

''hospital'', ''a restaurant'', ''a boarding house'' ''a cinema'' ''a circus'', ''a theatre'' ""a zoo"" ""a charitable institution"", and ""an education institution

should also be regarded as an industry within the meaning of the Act. It does not appear whether the tribunals or courts have gone far yet as to

hold ""a church"" ""a temple"" a mosque ""a private dewelling hose"" or ''other domestic concern'' should be viewed as ''an industry'', with reference to

the employees, skilled or unskilled who have worked there. Again the view has been have expressed by Tribunals and in certain cases by courts,

that there is on reason why persons who run a charitable institution cannot be said to employ persons in their service. In V. S. Marwari Hospital,

Calcutta v. Their Workmen 1952 2 L. LJ 327--(LAT-i-Cal), the appellate Tribunal has stated,

The word ""undertaking"" as commonly used means an enterprise or work or project which a person engages in, or attempts to perform. It may

involve some danger or risks. The idea of gain or profit may be present as in commercial undertaking but it is not its essence. Hence, a charitable

institution like this hospital, the university, a free school or college, a public body like a municipal corporation would come within the conception of

undertaking so as to bring it within the definition of ""individual disputes"" as given in the Act, unless the plain meaning of the word be restricted"".

(6) The Tribunal was of the opinion that there was no reason to restrict the meaning. The negative considerations mentioned above, therefore, do

not conclude the question whether a given institution or enterprise is "" an industry"" within the statutory definition.

(7) A positive approach to the broad facts which may generally be applied in deciding the question, is also to be found in certain decided cases.

The Australian High Court in Federated Municipal and Shire Council Employees''s Union of Australia v. Melbourne Corporation, (1918) 26 C. L.

R. 508, formulated the concept of ""industry"" thus :

The concept may thus be formulated--Industrial disputes occur when in relation to operation in which capital and labour are contributed in co-

operation for the satisfaction of human wants or desires, those engaged in co-operation disputes as to the basis to be observed, by the parties

engaged, respecting either a share of the product or any other terms and conditions of their co-operation"".

According to this concept, the essentials are : (1) that there should be co-operation of capital and labour in carrying on an operation and (2) that

labour in carrying on an operation should be for the satisfaction of human wants or desires. In a later case, Federated State School Teachers

Association of Australia v. State of Victoria, (1929) 41 CLR 569, the majority of the learned judges ruled that the educational activities of the

State carried on under certain statutory provisions did not amount to tan industry on the view that the occupation of teachers was not an industrial

occupation. Issacs J. Who struck a dissenting not e reminded the formulation of the concept of industry as quoted above from (1918) 26 CLR

The Supreme Court in D.N. Banerji Vs. P.R. Mukherjee and Others, , pointed out :

There is nothing however to prevent a statute from giving the word ""industry"" and the words ""industrial dispute"" a wide and more comprehensive

import in order to meet the requirements of rapid industrial progress and to bring about in the interests of industrial peace and economy, a fair and

satisfactory adjustment of relations between employers and workmen in a variety of fields of activity. It is obvious that the limited concept of what

an industry meant in early times must now yield place to an enormously wider concept so as to take in various and varied forms of industry, so that

disputes arising in connection with them might be settled quickly without much dislocation and disorganisation of the needs of society and in a

manner more adapted to conciliation and settlement than a determination of the respective rights and liabilities according to strict legal procedure

and principles"".

In that case, the dispute related to dismissal from service of a head clerk and a sanitary inspector of the Budge Municipality whose case was taken

up by the Municipal Workers Union. It was held that the dispute, which arose between the municipality and the workmen in a particular branch of

its work constituted an industrial dispute. In one sense what was held to be an industry in this case may not be regarded as an operation in which

there was co-operation between capital as such and labour. In another sense, all perhaps that is meant by capital in the context is the employer. I

have already referred to the case of The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and Others, , in which the J. J. Group of

hospitals were held to be an industry within the meaning of the Act. The Supreme Court after stating that it is the character of the activity which

decides the question whether the activity attracts the provisions of Section 2(j); and that who conducts the activity and whether it is conducted for

profit or not do not make a material difference, went on to express the view that the hospitals came within the ambit of an ""undertaking"" and the

pointed out the possible attributes of an ""undertaking"" to be.

As a working principle it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for

the rendering of material service to he community at large or a part of such community with the help of employees is an undertaking. Such an

activity generally involves the co-operation of the employer and the employees; and its object is the satisfaction of material human needs. It must be

organised or arranged in a manner in which trade or business is generally organised or arranged. It must not be casual, nor must it be for oneself

nor for pleasure. Thus the manner in which the activity in question is organised or arranged the condition of the co-operation between employer

and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features

which are distinctive of activities to which sec. 2(j) applies.

(8) The following principles may, therefore, furnish a guide, it being understood that their application will have to be flexible and may depend on

particular facts and circumstances: (1) there should be co-operation between employer and the employee; (2) such so-operation should be in

carrying on an operation or activity; (3) the operation or activity should be directed with a view for the satisfaction of material human needs of or

rendering material service to the community at large or a section thereof; and (4) operation or activity should not be casual but systematically or

habitually carried on an organised basis. It is implied in the third requirement that an activity merely designed for satisfying one''s own pleasure or

needs whether in the form of material or service will not fall within the scope of S. 2(j) nor will an activity which for producing results, wholly

depends on and proceeds from the intellectual work or skill of a person as in the case of a profession like that of a lawyer be within its ambit.

Apart from this, the nature of the particular enterprise or activity in the context of its purpose or result may be a consideration which in itself may be

of considerable assistance in deciding whether it can be regarded as an industry, within the meaning of the Act. For instance, and activity, which

may spring from pious or religious considerations and which is not designed to render service in any material sense, as for instance a religious

society whose object is to propagate and enlighten particular faiths and tenets, cannot be regarded as an industry in the statutory sense.

(9) In the instant case, it is plain that the Annadanam charity is certainly not a business or a trade. But can it be regarded as an undertaking? The

word ""undertaking"" is of wide import and has many shades. Its meaning includes any work or project or enterprise. In order to render it an

industry within the meaning of the Act, it must, of course bear at least the more important attributes which distinguish it form a non-industrial activity

or enterprise. The Chatram here is the employer which employs workmen of whom the third respondent was one and there is co-operation of the

employer and the employees in the only activity of the chatram which is to feed the poor desantris without charging anything therefore and also

afford to poor students free boarding and lodging out of the income from the Immovable properties endowed for the purpose. Although for the

purpose of lodging poor students, in a sense, no so-operation of employer and the employees may perhaps be essential that element appears to be

indispensable for feeding the students as well as the desantries. There is no doubt that the purpose of the activity, namely, affording the free

boarding and lodging is not commercial in the sense that motive to make profit is wholly absent. It is also true that the activity of the Chatram is not

to produce material wealth or goods. But can it be denied that the object of the Chatram in providing free boarding and lodging to the students and

free food for desantries is to satisfy their needs and thus render material service to them? Boarding and lodging are obviously among the essential

human needs and an activity designed to satisfy them renders material service. A hotel with the co-operation of workmen produces food and sells

the same for profit. It will, hence be a business undertaking and, therefore, an industry.

If so much is granted and once it is held that a motive to make profit is not an essential requisite of an industry or an industry to be that need not

necessarily carry on an activity in a commercial sense. It is difficult to see why the activity of the Chatram in this case should not be regarded as

industry within the meaning of the Act. The Chatram''s activity of feeding poor desantries and students doubtless springs from a pious and

charitable motive but such motive, in itself, in my opinion, is not a sound or sufficient reason to render the Chatram any the less an industry under

the Act. I hold agreeing with the Labour Court, that Papammal Anna Chatram is an industry within the meaning of S. 2(j) of the Act. Surprising as

this conclusion may seen at first sight, that clearly, on a deeper consideration, is the position in the eye of law. My attention has been invited to

Employers of the Osmania University, Hyderabad Vs. Industrial Tribunal, Hyderabad now Andhra Pradesh and Another, , where a Division

Bench of the Andhra Pradesh High Court held that the Osmania University was not an industry. The test applied by the learned Judges for so

holding was to ascertain whether a particular dispute was between capital and labour whether they were engaged in co-operation or whether the

dispute had arisen in activities connected strictly with, or attended upon the production or distribution of wealth. In propounding the tests in that

form the court had not the benefit of the decision of the Supreme Court in The State of Bombay and Others Vs. The Hospital Mazdoor Sabha and

Others, . It is however, not necessary to consider in this case whether a university or an enterprise or activity the object of which is entirely to teach

or provide teaching or education can be regarded as an enterprise under the statute. The Management of Madras Pinjarapole Vs. The Presiding

Officer, Labour Court, Madras and Another, related to a Pinjarapole society which Ramachandra Iyer J. As he then was, held to be not an

industry. This decision proceeded on the basis that the object of the society was not to provide satisfaction of human needs and does not,

therefore, assist the present petitioner.

(10) The second ground, namely, that the dispute is an individual dispute and in any case, not an industrial dispute because only the third

respondent was a member of the Trichi District Hotel Workers Union and his cause had not been taken up by the other workmen of the Chatram

has not been urged in that form before the Labour court. It is true that in the counter affidavit filed on behalf of the Union in this court it has not

been denied that only the third respondent was a member of the Union in this court it as not been denied that only the third respondent was a

member of the Union and not the other workmen of the Chatram. For a dispute to have the status of an industrial dispute, it is undeniable that it

should have the backing of a considerable or a substantial section of the workmen. It is also true that the workmen forming a considerable or a

substantial section of the body of workmen, who backed up the dispute, should belong to the particular undertaking and not be outside workmen

who have no substantial and direct interest in the dispute. All the same as the Labour Court had no opportunity to deal with the second ground

because it was not raised before it. I am not disposed to upset the award on a new ground.

(11) On the third ground, the labour court has clearly found that the third respondent had no fair opportunity to defend himself because of the

brevity of the time he was allowed to offer his explanation and that in any case, there was no evidence let in at all to substantiate charges 1 to 5. On

these findings the labour court has concluded that the impugned order of the trustees violated the principles of natural justice. The question is one of

fact and the findings of the labour court thereon cannot in a petition like this, be interfered with.

(12) The writ petition is dismissed but there will be no order as to costs.

(13) Petition dismissed.