Lalit Hari Ayurvedic Pharmacy vs Lalit Hart Ayurvedic Pharmacy

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 29 January, 1960

Coram: P.B. Gajendragadkar, K. Subba Rao, K.C. Das Gupta

In the case titled Lalit Hari Ayurvedic College Pharmacy versus Lalit Hart Ayurvedic College Pharmacy, decided on 29 January 1960, the Supreme Court of India delivered a judgment authored by Justice P B Gajendragadkar, with Judges K Subba Rao and K C Das Gupta forming the bench. The matter came before the Court on a petition for special leave to appeal an award that arose out of an industrial dispute between the appellant, Lalit Hari Ayurvedic College Pharmacy located in Pilibhit, and the respondent, L H Ayurvedic College Pharmacy Workers’ Union, also based in Pilibhit. The dispute originated when the appellant terminated the employment of Mr Mahesh Chandra Sharma, who had been working as a clerk. The respondent contested the termination on the ground that it was unjustified and illegal. The grievance was referred by the parties to the State Government of Uttar Pradesh for adjudication. The tribunal appointed by the State Government examined the dispute and held that it fell within the definition of an industrial dispute. In doing so, the tribunal rejected the appellant’s objection that the activity carried on by the pharmacy did not constitute an “industry” within the meaning of Section 2(j) of the Industrial Disputes Act. Upon further examination, the tribunal found that the dismissal of Mr Sharma was unlawful and consequently ordered that he be reinstated to his former position.

The appellant subsequently challenged the tribunal’s award before the Labour Appellate Tribunal. The appeal was dismissed and the award was confirmed. The record indicates that the appellant raised only a single substantive question before the appellate body, namely whether the matter in controversy qualified as an industrial dispute; the merits of the award itself were not contested. The Labour Appellate Tribunal evaluated the nature of the appellant’s operations and observed that the pharmacy administered by the appellant sold Ayurvedic medicines in the open market, generating revenue of approximately one lakh rupees per year. It further noted that the hospital operated by the appellant consumed about thirty percent of the medicines produced in the pharmacy, while the remaining seventy percent were sold commercially. The Tribunal rejected the appellant’s contention that the hospital activity did not amount to an industry and also dismissed the argument that both the pharmacy and the hospital were operated solely for the benefit of the students. Although the Tribunal acknowledged that students might occasionally be taken to the pharmacy to observe large‑scale production processes, it held that the primary purpose of the pharmacy was the manufacture of Ayurvedic medicines for sale, not for instructional purposes. On the basis of these findings, the Tribunal affirmed the earlier tribunal’s conclusion that the pharmacy constituted an industry under Section 2(j). The Court further referred to the precedent set in State of Bombay v The Hospital Mazdoor Sabha, Civil Appeal No 712 of 1957, which declared that the operation of hospitals is an industry within the meaning of the same provision.

In this case the Court observed that the decision rendered in 1957, which was pronounced today, held that the operation of hospitals falls within the meaning of an industry under Section 2(j) of the Industrial Disputes Act. The learned Solicitor‑General, who appeared on behalf of the appellant, admitted that if the Court accepts that proposition, there is nothing further that can be argued in the present appeal. Nevertheless, the Solicitor‑General sought to contend that the Labour Appellate Tribunal, in reaching its ultimate conclusion, had relied upon evidence that originated in a separate arbitration proceeding and that such evidence was not part of the record of the current proceedings. The Court considered that even assuming the contention about the extraneous evidence were correct, it would not alter the ultimate outcome of the appeal. On the basis of the material facts that have been established, there is no doubt that the appellant’s activity constitutes an “undertaking” within the meaning of Section 2(j). The Court further clarified that it is not required in these proceedings to decide whether the operation of an educational institution, in itself, would qualify as an industry under the Industrial Disputes Act. Consequently, the Court dismissed the appeal, ordered that it fail, and awarded costs to the respondent.