The Corporation of Nagpur vs Its Employees

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

Court: Supreme Court of India

Case Number: Civil Appeal Nos. 143, 144 of 1959 and 545 of 1958

Decision Date: 10 March 1960

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

In this case the matter titled The Corporation of the City of Nagpur versus Its Employees was decided on 10 March 1960 by a bench of the Supreme Court of India comprising Justice P B Gajendragadkar, Justice K C Das Gupta and Justice K C Das. The petitioner was the Corporation of the City of Nagpur and the respondents were its employees. The citation for the judgment is reported as 1960 AIR 675 and 1960 SCR (2) 942, with subsequent citations including R 1963 SC1681 (12), E 1963 SC1873 (15, 18), E 1968 SC 554 (10), RF 1969 SC 530 (2A), R 1972 SC 763 (12), E&R 1978 SC 548 (4, 66, 67, 70, 75, 77, 84, 85, 92, 115), D 1981 SC 2101 (5), RF 1988 SC 782 (65), R 1988 SC 1182 (12), RF 1988 SC 1353 (4), RF 1988 SC 1700 (4), RF 1990 SC 2047 (7). The statutory provisions involved were Section 2(14) of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, and Section 2 of the City of Nagpur Corporation Act, 1948 (Madhya Pradesh Act 2 of 1950). The principal question for determination was whether the municipal activities of the Corporation fell within the meaning of “industry” as defined by Section 2(14) of the 1947 Act. Disputes had arisen between the Corporation and its employees in various departments, and the State Government referred these disputes to the State Industrial Court under Section 39 of the Act. The Industrial Court, by its award, held that the Corporation and all its departments were covered by the definition of industry. The Corporation challenged this award before the High Court under Article 26 of the Constitution. The High Court rejected the Corporation’s contention that it was not an industry within the meaning of the section and remitted the case to the Industrial Court to determine which specific departments fell within the definition and to make a fresh award. Subsequently the Industrial Court found that all departments of the Corporation except five were industries within the meaning of the definition. The five excluded departments were (1) assessment and levy of house‑tax, (2) assessment and levy of octroi, (3) removal of encroachment and pulling down of dilapidated houses, (4) prevention and control of food adulteration, and (5) maintenance of cattle pounds. The Industrial Court issued its award accordingly. The Corporation appealed to this Court by special leave, while no appeal was filed by the employees of the five excluded departments. The Supreme Court held that the decision of the Industrial Court must be affirmed except insofar as it related to the five departments for which there was no appeal. The Court observed that the definition of “industry” in Section 2(14) of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947, although expressed in language somewhat different from Section 2(1) of the Industrial Disputes Act, 1947, is very comprehensive.

The Court observed that the definition of “industry” under Section 2(14) of the C.P. and Berar Industrial Disputes Settlement Act, 1947, consists of two distinct parts. Clause (a) explains the term from the employer’s viewpoint, while clause (b) explains it from the employee’s viewpoint. The Court stated that any activity which satisfies either of these two clauses must be regarded as being “in industry.” The Court then referred to the earlier decisions in D.N. Banerji v. P.R. Mukherjee [1953] S.C.R. 302 and Baroda Borough Municipality v. Its Workmen [1957] S.C.R. 33, indicating that those cases were applied in the present analysis.

The Court further explained that it is not essential for an activity of the Corporation to possess the common characteristics of a private industry before it can fall within the definition of the statute. It noted that the language of Section 2(14) is clear and unambiguous, and that the legal maxim “noscitur a socii” could not be invoked to alter its meaning. The Court recognized that the history of industrial disputes and the legislative scheme both assume that the activity must be organised and must not be merely private or personal employment. In support of this view, the Court cited State of Bombay v. The Hospital Mazdoor Sabha [1960] 2 S.C.R. 866 and the historic authority of Heydon’s Case (1584) 3 Rep. 7 b.

Nevertheless, the Court cautioned that the definition, however wide, does not extend to the regal, primary, and inalienable functions of the State even when those functions have been statutorily delegated to a corporation. The Court held that the scope of such delegated functions must be confined to legislative power, administration of law, and judicial power, and must not be broadened to include the welfare activities of a modern State. The Court referred to a series of authorities, including Richard Coomber v. The Justices of the County of Berks (1883‑84) 9 A.C. 61, The Federated State School Teachers’ Association of Australia v. The State of Victoria (1928‑29) 41 C.L.R. 569, County Council of Middlesex v. Assessment Committee of St. George’s Union (1896) 2 Q.B.D. 143, Verisimo Vasquez Vilas v. City of Manila 220 U.S. 345, and The Federated Municipal and Shire Council Employees’ Union of Australia v. Melbourne Corporation (1918‑19) 26 C.L.R. 508.

The Court explained that the real test for determining whether a service undertaken by a corporation qualifies as an industry is to consider whether the same service, if performed by an individual or a private person, would be regarded as an industry. The Court rejected the view that monetary consideration must be an essential characteristic of industry in a modern State. Consequently, the Court declared it incorrect to assert that only activities analogous to trade or business could fall within Section 2(14) of the Act, reiterating the reasoning in D.N. Banerji v. P.R. Mukherjee [1953] S.C.R. 302. The Court also mentioned The Federated Municipal and Shire Council Employees’ Union of Australia v. Melbourne Corporation (1918‑19) 26 C.L.R. 508, Federated Engine‑Drivey and Firemen’s Association and Ors. v. The Broken Hill Proprietary Company Limited and Ors. (1913) 16 C.L.R. 235, and The Federated State School Teachers’ Association of Australia v. The State of Victoria (1929) 41 C.L.R. 569 as further support.

Finally, the Court concluded that where a service rendered by a corporation is found to be an industry, the employees of the departments connected with that service—whether they are engaged in financial, administrative, or executive functions—are entitled to the benefits prescribed by the Act. The Court cited Baroda Borough Municipality v. Its Workmen [1957] S.C.R. 33 for this principle. The Court further clarified that if a municipal department performs a mixture of functions, some of which fall within the statutory definition of industry and others that do not, the predominant functions of the department will determine the applicability of the Act.

In this case, the Court noted that three connected civil appeals—numbers 143 and 144 of 1959 and 545 of 1958—were filed by special leave against an award dated 14 December 1957 of the State Industrial Court at Nagpur. The appeals arose from Industrial References 18 of 1956 and 1 of 1957. Counsel for the appellants represented the Corporation of the City of Nagpur in all three appeals, while counsel for respondent 2 appeared in appeals 144/59 and 143 of 1959, and counsel for the remaining respondents appeared in appeal 545 of 1958. The judgment was delivered on 10 February 1960.

The Court explained that the central issue presented by the three appeals was whether, and to what extent, the activities of the Corporation of the City of Nagpur fell within the definition of “industry” in section 2(14) of the Central Provinces and Berar Industrial Disputes Settlement Act, 1947 (the Act). The appellant, the Corporation of the City of Nagpur, was created under the City of Nagpur Corporation Act, 1948 (Madhya Pradesh Act No 2 of 1950). Disputes had arisen between the Corporation and employees in a number of its departments concerning wage scales, gratuity, provident fund, house rent, confirmation, allowances and related matters. By an order dated 23 October 1956, the Government of Madhya Pradesh referred these disputes to the State Industrial Court, Nagpur under section 39 of the Act, assigning them the reference number Industrial Reference No 18 of 1956.

The Corporation filed a statement before the Industrial Court challenging the Court’s jurisdiction on the ground that the Corporation did not constitute an industry within the meaning of the Act. On 13 February 1957, the Industrial Court issued a preliminary order holding that the Corporation did constitute an industry and that the question of whether any particular department was an industry would be determined on the evidence. The Corporation appealed this preliminary order by filing a petition under article 226 of the Constitution in the High Court of Bombay at Nagpur; the petition was dismissed because the award had been made before the petition could be heard. Subsequently, on 3 June 1957, the Industrial Court rendered an award affirming that the Corporation was an industry and that all of its departments fell within the statutory definition. The award also revised the employees’ pay scales and accepted their principal demands.

Unconvinced, the Corporation filed another petition in the High Court of Bombay at Nagpur on 15 July 1957, contesting the validity and correctness of the award. A division bench of that High Court, by an order dated 11 September 1957, addressed the Corporation’s contentions, thereby further shaping the procedural history before the matters came before this Court for final determination.

The High Court dismissed the appellant’s argument that the Corporation did not qualify as an industry under the Act. It sent the matter back to the State Industrial Court, directing that court to determine which of the Corporation’s departments fell within the statutory definition of “industry.” The court was also instructed to review the schedules and categories of persons and to limit the award only to those individuals who fell within the meaning of “industry” as provided by the Act.

Upon receiving the case on remand, the State Industrial Court examined the functions of each department of the Corporation. It concluded that every department, except those concerned with (i) assessment and levy of house‑tax, (ii) assessment, levy and demolition of dilapidated houses, (iii) prevention and control of food adulteration, and (iv) maintenance of cattle pounds, was covered by the definition of “industry” under the Act. The court also issued findings on the disputes between the parties and identified the persons entitled to relief. The specific details of those findings or the exact relief awarded were not reproduced, because they were not material to the present appeal.

The appellant subsequently obtained special leave to file Civil Appeal No. 143 of 1959 in this Court, challenging the award made by the Industrial Court. In addition, the appellant filed Civil Appeal No. 144 of 1959, also by special leave, contesting the High Court’s order that the Corporation’s activities fell within the definition of “industry” in the Act and that the matter should be remanded to the Industrial Court for a merits‑based determination of each activity. A third appeal, Civil Appeal No. 545 of 1958, arose from a reference made by the State Government of Madhya Pradesh concerning disputes between the appellant – the Corporation of the City of Nagpur – and the employees of its Fire Brigade Department, who were representing themselves and other staff. This reference was recorded as Industrial Reference of 1957.

Because the disputes raised in Industrial Reference No. 18 of 1956 overlapped with those in Industrial Reference No. 1 of 1957, the Industrial Court decided to hear both references together. By mutual agreement, the evidence presented in Reference No. 18 of 1956 was treated as evidence in Reference No. 1 of 1957. On 14 December 1957, the court issued an award in Reference No. 1 of 1957, basing its decision on the findings previously made in the award of Reference No. 18 of 1956. The Industrial Court held that the Fire Brigade Department constituted an industry within the meaning of the Act and, on that basis, granted the appropriate relief to the employees.

Mr. Aggarwala, counsel for the appellant in the first two appeals, raised before the Court the following submissions: (1) that no service rendered by the Corporation could be classified as an industry under section 2(14) of the Act; and (2) assuming that some services of the Corporation might fall within the definition, they must be analogous to a business or trade to satisfy the statutory test.

The argument advanced by the appellant was that, even if some of the Corporation’s services fell within the definition of “industry” contained in the Act, those services would have to be analogous to a business or trade in order to satisfy that definition. It was further submitted that, apart from this requirement, the activities of the Corporation would still need to possess the common characteristics ordinarily associated with an industry. On the basis of these contentions, the appellant contended that the finding of the Industrial Court, which held that the various departments of the Corporation qualified as industries, was erroneous because the services rendered by those departments failed to meet either of the two tests outlined above. The Court observed that the first question need not be pursued in detail, since it had already been finally decided against the appellant by two earlier decisions of this Court. In the first of those decisions, D. N. Banerji v. P. R. Mukherjee, the chairman of a municipality dismissed two municipal employees, a Sanitary Inspector and a Head Clerk. The Municipal Workers’ Union challenged the dismissals, claiming that the employees should be reinstated, and the matter was referred by the Government to the Industrial Tribunal for adjudication under the Industrial Disputes Act. Before this Court two issues were framed: whether the dispute constituted an “industrial dispute” within the meaning of section 2(j) of the Industrial Disputes Act, and whether the Act was invalid because it authorised the Tribunal to reinstate employees, thereby encroaching on the chairman’s power to appoint and dismiss staff. This Court held that the Act was not invalid, describing it as a law substantively concerned with industrial and labour disputes, and affirmed that the conservancy service provided by the municipality qualified as an industry. Consequently, the disagreement between the municipality and the conservancy‑department employees was an industrial dispute as defined by the Act. The second decision, Baroda Borough Municipality v. Its Workmen, followed the earlier ruling and reiterated its effect at page 38, stating that the earlier judgment had finally settled that a municipal undertaking of the type under consideration was an “industry” within the meaning of section 2(j) of the Industrial Disputes Act, 1947, and that the expression “industrial dispute” in that Act embraced disputes between municipalities and their employees in work that could be regarded as analogous to carrying on a trade or business. In that case the workmen employed in the electricity department of the Baroda Municipality demanded a bonus; the Court held that the electricity undertaking of the municipality was an industry and that the dispute between the municipality and its employees was an industrial dispute. The request for bonus was refused on other grounds, a matter which the Court indicated it was not addressing. These two judgments, therefore, have finally and authoritatively held that municipal undertakings could be

The Court observed that the term “industry” as used in the Industrial Disputes Act had been given a clear meaning in earlier authority. A faint argument was then advanced attempting to draw a distinction between the definition of “industry” in the Industrial Disputes Act and the definition of the same word in the statute that was currently before the Court. Section 2(j) of the Industrial Disputes Act defined “industry” to mean any business, trade, undertaking, manufacture or calling of employers and to include any calling, service, employment, handicraft or industrial occupation or avocation of workmen. Section 2(14) of the present Act divided the definition into three parts, namely (a) any business, trade, manufacturing or mining undertaking or calling of employers, (b) any calling, service, employment, handicraft or industrial occupation or avocation of employees, and (c) any branch of an industry or a group of industries. A comparative examination of the two sections revealed certain differences. While the definition in the Industrial Disputes Act enumerated specific categories and expressly included others, the definition in the present Act embraced the three categories set out in its clause 14. Moreover, the earlier definition placed “undertaking” in a separate category from “manufacturing or mining”, whereas the later definition qualified “undertaking” with the words “manufacturing or mining”. The Court held that these differences were insufficient to warrant a departure from the view expressed in the earlier decisions of this Court. Clause (a) of the definition refers to the employer side, and clause (b) refers to the employee side. Even if the words “manufacturing or mining undertaking” were omitted from clause (a), the remaining words in clauses (a) and (b) were broad enough to encompass all the categories covered by the definition in the Industrial Disputes Act. Furthermore, a review of the decision in D. N. Banerji v. P. R. Mukherjee (1) showed that the Court would not have arrived at a different conclusion merely because the word “undertaking” in the Industrial Disputes Act had been qualified by “manufacturing or mining”. The Banerji judgment was based on a wider approach that considered the legislative history, the comparable definitions in the two Acts, and the inclusive element of section 2(14)(b) of the present Act. Consequently, the Court held that a service rendered by a corporation, if it satisfies the conditions implicit in the definition, would constitute an “industry” within the meaning of the definition in the present Act. The next issue considered was whether the activity of the Corporation could be excluded from the meaning of “industry” unless it possessed the common characteristics of an industry. The Court identified five characteristics that it regarded as implicit in the definition: (i) the activity must concern the production or distribution of goods or services; (ii) it must be performed for the benefit of others and not for the actor’s own use; (iii) it must involve cooperative effort between employer and employee, that is, between capital and labour; (iv) it must be undertaken as a commercial transaction; and (v) it must not be a pure exercise of governmental functions.

The Court identified five conditions that it considered implicit in the definition of “industry”. First, the activity must involve the production or distribution of goods or services for others and not for the individual’s own use. Second, the activity must require cooperative effort between capital and labour, meaning between employer and employee. Third, the activity must be undertaken as a commercial transaction. Fourth, the activity must not be an exercise of purely governmental functions. The Court noted that these principles were earlier examined in State of Bombay v. The Hospital Mazdoor Sabha in relation to the Industrial Disputes Act, and that the present case requires a brief re‑examination of the law concerning a corporation under a different statute. Accordingly, the Court scrutinised the statutory definition of “industry” to determine whether all, or only some, of the identified conditions are embedded within it and whether those conditions form the essential basis of the definition. Emphasising that the true meaning of a provision must be gathered from the Legislature’s expressed intention, the Court cited Maxwell’s observation that when statutory words are clear and unambiguous, they should be given their ordinary meaning, which in this instance appears broad. The Court observed that the definition comprises two parts: clause (a) addresses employers, while clause (b) addresses employees, and clause (c) extends the definition to any branch or group of industries falling within clauses (a) and (b). The Court referred to the rule of construction noscuntur a sociis, explaining that when words of similar meaning are grouped, the broader term is limited by the narrower one. Applying this doctrine, the Court reasoned that the phrase “any business, trade, manufacturing or mining undertaking” imparts to the succeeding words the characteristics of those undertakings, and likewise the phrase “any calling, service, employment, handicraft or industrial occupation or avocation of employees” is confined by the succeeding words “industrial occupation or avocation”. In other words, the general word “calling” in clause (a) is controlled by the preceding words, and the general words “calling, service, etc.” in clause (b) are restricted by the succeeding words “industrial occupation or avocation”. The Court recalled that this approach had previously been addressed in State of Bombay v. The Hospital Mazdoor Sabha.

In this case the Court examined the reach of the noscuntur a sociis rule of construction. The Court explained that this rule is only a method of interpreting words and cannot be applied where it is evident that the legislature deliberately employed broader terms to widen the meaning of the defined term. The Court held that the rule may be used only when the legislative intention in pairing broader words with narrower ones is uncertain. It may also be applied where the meaning of the broader words themselves is doubtful; however, when the legislature’s purpose in using the broader words is clear and unambiguous, the rule cannot be invoked.

The Court further observed that the doctrine must not be used in situations where the legislature’s intention is unmistakable. Referring to the language of clause (b) in the provision cited as (1) [1960] 2 S.C.R. 866, the Court found the phraseology to be plainly clear and not open to any doubt. It noted that the initial part of clause (b) contains unqualified words, and the qualification appears only later in the clause. Consequently, if the words “calling, service, employment, handicraft” were truly meant to be limited by the adjective “industrial”, the legislature would have placed the adjective before the first word “calling” rather than after the final word “occupations”.

The Court described an inclusive definition as a recognised technique for expanding the meaning of a defined term. Accordingly, the term “industry” must be interpreted to include not only what the word naturally denotes but also the items that the definition expressly states it should cover, as explained in Stroud’s Judicial Dictionary, Vol. 2, p. 1416. Under such a construction, every calling, service, or employment of an employee and any business, trade, or calling of an employer would fall within the meaning of “industry”. Nonetheless, the Court warned that this expansive interpretation would exceed the purpose for which the Act was enacted.

Therefore, the Court concluded that the scope of “industry” must be confined on permissible grounds, taking into account the overall aim, breadth, and objective of the Act. To determine the true meaning of the words, the Court referred to the principles set out by Lord Coke in Heydon’s case, which require consideration of (i) the law that existed before the Act, (ii) the mischief or defect that the earlier law failed to address, (iii) the remedy that Parliament intended to provide, and (iv) the reason for that remedy. The Court noted that the presence of the words “employers” in clause (a) and “employees” in clause (b) indicates that the essential basis for applying the definition is the existence of an employer‑employee relationship. The related definitions of “industrial dispute”, “employer”, and “employee” support this interpretation. Finally, the Court pointed out that the long title of the Act and its preamble demonstrate that the legislation was enacted to promote industries and to secure peaceful

The Court explained that the purpose of the statute was to promote the amicable settlement of disputes between employers and employees engaged in organized activities through conciliation, arbitration, and other measures. It observed that, when the preamble is read together with the historical background of the legislation, it becomes clear that the Act represented an important step toward achieving social justice. The legislation was intended to improve the service conditions of workers, to establish a mechanism for resolving their conflicts, and to encourage cooperative effort for the benefit of the community. The Court noted that the evolution of labour law in both England and India demonstrates that the primary aim of such statutes has been to enhance the conditions of service for labour engaged in organized activities, rather than to address any other matters. Accordingly, the Act was not meant to extend to personal services that do not depend on the employment of a labour force. Before examining the positive aspects of the definition of “industry,” the Court turned to what is excluded from that definition. It held that, however broadly the term “industry” might be interpreted, it cannot encompass the regal or sovereign functions of the State. The Court recorded that this exclusion formed the agreed foundation of the arguments presented before it, even though the counsel on each side differed as to the precise scope of those functions. The counsel representing the Corporation sought to broaden the scope so as to include all welfare activities undertaken by a modern State, whereas the counsel for the respondents argued that the term should be confined to what may be described as the primary and inalienable functions of a constitutional government. The Court observed that it is sometimes asserted that, in a modern State, sovereign power extends to every statutory function of the State except the business of trading and industrial transactions carried out in a quasi‑private capacity. Those asserting this position have attempted to support it by citing Holland’s Jurisprudence, where the author divides public law into four sub‑heads and discusses, under “Administrative Law,” a range of topics that include welfare and social activities of the State. The Court found that the treatment of public law by Holland and similar scholars did not aid in determining the scope of regal powers, which have acquired a specific meaning. It referred to Lord Watson’s description in Coomber v. Justices of Berks, where functions such as the administration of justice, the maintenance of order, and the repression of crime were identified as primary and inalienable functions of a constitutional government. The Court also cited Isaacs, J.’s dissent in The Federated State School Teachers’ Association of the Australia v. The State of Victoria, where he warned that regal functions are inescapable and inalienable, encompassing the legislative power, the administration of laws, and the exercise of judicial power. The Court further explained that while non‑regal functions may be taken on through legislative authority, when the State assumes those functions it operates merely as a large corporation whose charter is its legislation, and its actions under that charter are analogous to those of a private company authorized to act in a similar manner.

The Court observed that legislation, to the extent that it does not involve the regal execution of law, is comparable only to the actions of a private company that has been similarly authorised. The quoted passage therefore delineates clearly the scope of regal functions, setting them apart from the other powers that a State may possess. Consequently, the Legislature could not have intended to place the State’s regal functions within the definition of “industry” so as to grant Industrial Courts jurisdiction to entertain disputes arising from those functions. Accordingly, the Court excluded the State’s regal functions from the definition of industry. This exclusion raised the further question of whether a corporate body can be said to exercise regal functions through a delegation of legislative authority. The Court noted that the corporation in question operates under a statutory framework, with its powers, duties and liabilities expressly regulated by that statute. As a juristic person, the corporation is capable of suing and being sued in its own name. The constituting statute may endow the corporation with certain strictly regal functions in addition to other municipal functions.

The Court referred to the decision in County Council of Middlesex v. Assessment Committee of St. George’s Union, where certain premises were employed both for the administration of justice and for ordinary municipal purposes. The issue before that Court was whether the premises should be subject to rating. It was held that the premises were rateable insofar as they were used for municipal purposes, but they were not rateable when occupied for the administration of justice, a function that was characterised as a Crown function. In a similar vein, the Supreme Court of the United States in Verissimo Vasquez Villas v. City of Manila explained the dual character of a municipal corporation. It held that such a corporation exercises powers of a governmental nature as well as powers of a private or business character. In its governmental aspect, the municipality functions as a subdivision of the State, exercising, by delegation, a portion of the State’s sovereignty. In its private aspect, the municipality is a mere legal entity or juristic person that represents the community in the administration of local affairs, activities that lie wholly outside the public purposes for which its governmental powers are conferred. Likewise, Isaacs and Rich, JJ., in The Federated Municipal and Shire Council Employees’ Union of Australia v. Melbourne Corporation, discussed the principle of Crown exemption. They explained that if a municipality is legally empowered and actually performs any function for the Crown, or if it is lawfully empowered and performs a function that is constitutionally an inalienable Crown function—such as the administration of justice—the municipality is deemed, in law, to represent the Crown and the Crown exemption applies. Where the municipality does not fall within that exemption, any implied exemption must be based on a different legal principle. The Court therefore concluded that the making and maintenance of streets by a municipality does not fall within the Crown exemption.

In this case the Court explained that a municipal corporation may perform a dual function. It may be given statutory authority to carry out regal functions, such as law‑making or adjudicating certain matters, and at the same time it may be authorised to undertake welfare activities for the community. The Court held that the regal functions, because they are delegated exercises of sovereign power, must be excluded from the definition of “industry” contained in the Industrial Disputes Act. The next point of exclusion was raised by counsel for the appellant, who argued that a modern municipality is also a trading and industrial corporation. According to that argument, when a municipality operates undertakings that have the character of business or trade, those undertakings fall within the definition of “industry” in the Act, while other statutory activities do not. In other words, the appellant contended that activities which would be regarded as trade or business if performed by a private individual become “industry” when performed by a municipal corporation. To support this contention, counsel relied on observations made by this Court in D .N. Banerji v P R Mukherjee. Justice Chandrasekhar Aiyar, speaking for the Court, observed at page 317 that, taking into account the definitions in the Act, the legislative purpose and the variety of disputes that arise between employees and employers, the definitions must also encompass disputes that may arise between municipalities and their employees in branches of work that can be said to be analogous to the carrying out of a trade or business. The emphasis was placed on the words “analogous to the carrying out of a trade or business,” and the argument was built on the proposition that only those municipal activities that resemble trade or business would qualify as “industry” within the meaning of the statute.

The Court, however, found this interpretation to be a misreading of the Banerji decision. The issue in Banerji was whether the sanitary department of a municipality constituted an “industry” under the Industrial Disputes Act and whether the dispute between the municipality and its employees in that department was an industrial dispute. At page 311, the learned Judge addressed a contention based on the wording of the section and observed that although the term “undertaking” in the definition of “industry” is positioned between “business and trade” on one side and “manufacture” on the other, it might be read as referring only to a business or trade undertaking. Nevertheless, the Judge warned that if that were the case there would be no need to mention the word separately from “business” or “trade.” He pointed out that the broader meaning becomes clearer when the latter part of the definition, which refers to “calling, service, employment, or industrial occupation or avocation of workmen,” is considered. The Court concluded that both “undertaking” in the first part and “industrial occupation or avocation” in the second part signify a scope that extends well beyond the ordinary understanding of trade or business. The definition was evidently intended to include activities that might not strictly be called a trade or business venture. Consequently, the Court held that the words emphasizing “analogous to the carrying out of a trade or business” stress the organised nature of the activity rather than equate all municipal functions with trade or business. The Judge further reserved the Court’s opinion on the wider question, indicating that the matter required separate consideration.

In examining the latter part of the definition, the Court noted that it refers to “calling, service, employment, or industrial occupation or avocation of workmen.” The Court explained that the term “undertaking” appearing in the first part of the definition, together with the phrase “industrial occupation or avocation” in the second part, clearly extends beyond the ordinary meaning of trade or business. According to the Court, the definition was apparently intended to encompass within its reach activities that might not be strictly described as a trade or business venture. This observation leaves no doubt that the Court interpreted the terms of the definition of “industry” in a manner that includes activities which are not strictly labelled as trade or business. Consequently, the expressions “not strictly be called a trade or business venture” and “analogous to the carrying out of a trade or business” were understood by the Court to stress the organized nature of the activity that is characteristic of a trade or business, rather than to equate other activities with trade or business. The Court further clarified this point when it expressly reserved its opinion on a broader issue, stating that it was unnecessary to decide whether disputes arising from purely administrative work fall within the ambit of the definition. Hence, the Court rejected the contention that the earlier decision, which had accepted the comprehensive meaning naturally borne by the statutory words, sought to limit the wide sweep of the section to business or trade and activities akin to trade or business. A fair reading of the section, in the Court’s view, does not support such a narrow construction. The Court reiterated its earlier view on the construction of the section, emphasizing that the clear language used in the provision prevents it from being confined solely to trade, business, or activities analogous to trade or business. The Court then referred to a more workable and reasonable test derived from an Australian decision, noting that this test has also been accepted and applied by the Court. In the case of Federated Engine‑Drivers and Firemen’s Association of Australia and Others v. The Broken Hill Proprietary Company Limited and Others, a distinction was drawn between trading and non‑trading operations, but the question of how far non‑trading operations fall within the definition of “industry” was left undecided. That question was later addressed in The Municipal and Shire Council Employees’ Union of Australia v. Melbourne Corporation, a decision that, in the Court’s opinion, illuminates the issue before the present appeal. The Australian High Court held that the Commonwealth Court of Conciliation and Arbitration possessed authority to determine by award a dispute between an organization of employees registered in connection with “municipal and shire councils, municipal trusts and similar industries” and municipal corporations constituted under State laws. The dispute concerned the operations of municipal corporations related to making, maintaining, controlling, and lighting public streets, and the judges discussed at length the meaning of “industrial dispute” in the relevant section.

Section 51 (XXXV) of the Constitution of Australia provides the statutory basis for the discussion. The Court observed that even when a municipal activity is not of a commercial or trading nature, that activity may still form the subject‑matter of an industrial dispute. In his dissenting judgment in The Federated State School Teachers’ Association of Australia v. The State of Victoria (3), Isaacs, J. expressed this principle concisely at page 587, stating: “The material question is: What is the nature of the actual function assumed is it a service that the State could have left to private enterprise, and, if so fulfilled, could such a depute be ‘industrial’?” The test articulated by Isaacs, J. deliberately avoids the view that an activity must be a trading activity in order to be classified as an industry. He further explained that when a service performed by an individual qualifies as an industry, that classification remains valid even if the service is later undertaken by a corporation. Counsel also suggested an alternative test, which the Court examined. The alternative view proposes that, unless there is a quid pro quo for the service—cited as (1) (1913) 16 C.L.R. 245; (2) (1918‑19) 26 C.L.R. 508, 530; (3) (1929) 41 C.L.R. 569—a service cannot be described as an industry. This argument essentially reiterates the claim that an industry must be disguised trade. The Court, however, rejected this narrow approach.

In D. N. Banerji v. P. B. Mukherjee (1) the Court held that neither the investment of capital nor the existence of a profit‑earning motive is a sine qua non for the modern concept of industry. The Court observed that to assert that a service must be paid for in cash by the public in order to qualify as an industry rests on a “exploded theory.” Chandrasekhara Aiyar, J. echoed this sentiment, noting that “the conflicts between capital and labour have now to be determined more from the standpoint of status than of contract.” Isaac and Rich, JJ., in The Federated Municipal and Shire Council Employees’ Union of Australia v. Melbourne Corporation (2) articulated a contemporary definition of industry at page 554: “Industrial disputes occur when, in relation to operations in which capital and labour are contributed in co‑operation for the satisfaction of human wants or desires, those engaged in co‑operation dispute 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 cooperation.” The learned Judges further explained at page 564 that the question of profit‑making may be relevant for income‑tax purposes, as in many municipal cases in England, but from the standpoint of an industrial dispute it is irrelevant whether the expenditure is met by fares from passengers or by municipal rates. In every case, the municipality is performing a function, albeit with different variations. Isaac, J. later elaborated this theme in his dissenting judgment in The Federated State School Teachers’ Association of Australia v. The State of Victoria (3) at the subsequent pages.

In the passage at page 577 the Court observed that the contention presented resembled an echo from the dark ages of industry and political economy. The Court explained that such disputes are not merely a claim to share the material wealth that is jointly produced and can be recorded in statistics, citing authorities (1) [1953] S.C.R. 302 (2) [1918-19] 26 C.L.R. 508, 539‑531. 122 (3) [1929] 41 C.L.R. 569. The Court further described that at their core these disputes represent a struggle that intensifies continually on the part of the employed group cooperating with the employing group in providing services that are essential to the community and to higher general human welfare, with the aim of sharing that welfare to a greater extent. The Court noted that all industrial enterprises contribute, to varying degrees, to the general welfare of the community, and that this contribution is a material consideration when determining the question before the Court, apart from the specific contention raised at the Bar. Accordingly, the Court held that monetary considerations for service are not an essential characteristic of industry in a modern State. The learned counsel then attempted to categorize municipal activities into three separate groups: (i) the activities of the department that actually performs the services; (ii) the activities of the department that merely imposes taxes, collects them and administers them; and (iii) the activities of departments that are purely administrative in charge of other departments. The Court stated that it saw no justification for such an artificial division of municipal activities. Excluding the regal functions of a municipality, the Court observed that if those activities, when performed by an individual, would constitute industry, then the same activities performed by a municipality would equally constitute industry. The Court argued that it would be unrealistic to draw a line between a department that delivers a service and a department that controls or supports that service, because supervision and the actual performance of the service are integral parts of the same activity. Consequently, whether the three functions are carried out by a single department or divided among three separate departments, the entire organisational activity would be an industry. The Court referred incidentally to a previous decision of this Court in Baroda Borough Municipality v. Its Workmen, quoting the passage at page 49: “We have already pointed out that under the Municipal Act a municipality may perform various functions, some obligatory and some discretionary. The activities may be of a composite nature, some (1) [1957] S.C.R. 33 of the departments may be mostly earning departments and some mostly spending departments. For example, the department which collects municipal taxes or other municipal revenue is essentially an earning department whereas the sanitary department or other service department is essentially a spending department. There may indeed be departments where the earning and spending may almost balance each other.” The Court clarified that this passage was extracted only because its observations are relevant to the present discussion and not to express concurrence with the conclusion reached in that case. The Court further noted that the question of a bonus does not arise for consideration in the present appeal. The Court concluded that these observations support the view that the integrated activities of a municipality cannot be separated to place some under the definition of “industry” and exclude others from it.

In its analysis, the Court explained that it would be improper to pick and choose certain municipal activities as “industry” while excluding others that fall under the same definition. The Court said that a municipal activity could fit within the meaning of “industry” and, if the financial and administrative departments alone managed that activity, those departments could readily be treated as part of the industry. However, the Court observed that there were situations where the same financial and administrative departments also handled activities that did not fall within the definition of “industry.” In such mixed‑function cases, the Court stated that a practical rule could be fashioned to promote social justice in line with the principles of equity. The decisive question, according to the Court, was whether a department was primarily and predominantly engaged in industrial activity or only incidentally connected with it. The Court then summarized its findings as follows. First, the definition of “industry” in the Act was described as very broad and composed of two parts – one from the employer’s perspective and the other from the employee’s perspective – so that any activity meeting either part would qualify as an industry. Second, the historical development of industrial dispute law was noted to recognise that an industry must be an organized activity, not a private or personal employment arrangement. Third, the Court held that the essential sovereign functions of the State, even when delegated to a corporation, were expressly excluded from the definition, limiting those functions to legislative, administrative and judicial powers. Fourth, the Court said that if a service performed by an individual or a private person qualified as an industry, the same service delivered by a corporation would also be an industry. Fifth, the Court concluded that when a corporation carried out an industrial service, the employees working in the related financial, administrative or executive departments were entitled to the benefits conferred by the Act. Finally, the Court explained that when a municipal department performed a mixture of industrial and non‑industrial functions, the dominant nature of its functions should be the test for determining whether the department fell within the Act’s scope. The Court then listed the various departments of the Nagpur City Corporation, namely the General Administration Department, Octroi Department, Tax Department, Public Conveyance Department, Fire Brigade Department, Lighting Department, Water Works Department, City Engineer Department, Enforcement (encroachment) Department, Sewage Pumping Station Department, Sewage Farm Department, Health Department, Market Department, Cattle Pound Department, Public Gardens Department, Public Works Department, Assessment Department, Estate Department, Education Department, Printing Press Department, Workshop Department, and Building Department.

Having set out the complete roster of departments, the Court remarked that the State Industrial Court had held that all of these departments were to be regarded as industries, subject to the qualifications previously discussed. This observation formed the basis for the Court’s further consideration of whether any of the Corporation’s departments satisfied the statutory definition of “industry” under the Act.

The tribunal held that every department of the corporation was an industry except for those dealing with (i) the assessment and collection of house‑tax, (ii) the assessment and collection of octroi, (iii) the removal of encroachments and the demolition of dilapidated houses, (iv) the maintenance of cattle pounds, and (v) the prevention and control of food adulteration. For those departments that the State Industrial Tribunal classified as industries, the tribunal subsequently refused relief to persons who did not fall within the definition of “employees” prescribed by the Act. Because the employees affected by the award have not filed any appeal against the award insofar as it is adverse to them, the tribunal found no further discussion necessary regarding the five excluded departments. Before examining whether any or all of the corporation’s departments satisfy the statutory definition of “industry” under the Act, it is helpful to outline the structure of the City of Nagpur Corporation Act, 1948 (Madhya Pradesh Act No. 2 of 1950). Section 7 declares the corporation to be a body corporate possessing perpetual succession and a common seal. Section 6 enumerates the municipal authorities empowered to implement the Act, namely the corporation itself, the standing committee, and the chief executive officer. Chapter II of Part II contains these sections and also sets out the constitution of the corporation as well as the method of electing its members. Chapter III of the same part prescribes the procedure for conducting the corporation’s business. Chapter IV provides for the appointment, discipline, and removal of municipal officers and servants. Chapter V outlines the powers, duties and functions of the municipal authorities, distinguishing between obligatory and discretionary responsibilities of the corporation. Section 57 obliges the corporation to make adequate provisions, by any lawful means, for lighting public streets, cleaning public streets, disposing of night‑soil and rubbish, maintaining the fire‑brigade and undertaking other welfare activities for the public interest. Section 58 grants the corporation a discretionary power to furnish additional amenities not enumerated in section 57, which, although not absolutely essential, are deemed necessary for the happiness of the people of the State. Chapter VI empowers the municipality to acquire and hold property and to manage public institutions funded from municipal resources. Section 79 requires the municipality to apply its available funds to discharge statutory duties and to pay the salaries and allowances of its various servants. Chapter IX authorises the municipality to raise loans secured on its property for the purpose of meeting debts and capital expenditures. Part IV gives the municipality the authority to impose taxes under the Act and specifies the procedures for tax collection. Part V confers powers and imposes duties on the corporation and its officers concerning public health, safety and convenience, covering matters such as public convenience, drains and privies, conservancy, sanitary provisions, water supply and

In this portion of the judgment, the Court explained that the municipal legislation assigned to the Corporation duties relating to drainage, the regulation of factories and trades, the oversight of markets and slaughter places, and the control of food, drink, drug and other dangerous articles. It also placed upon the Corporation the responsibility for preventing infectious diseases and for disposing of the dead. Under Part VI of the Act, the Corporation was empowered to prepare town‑planning schemes, to regulate the erection and re‑erection of buildings, to close public streets, to remove obstructions in streets, to regulate the laying of new streets, to dispose of mad and stray dogs, to control public begging and to prohibit brothels, among other functions. Part VIII laid down the general provisions for municipal administration and authorised the Corporation to make by‑laws for giving effect to the purposes and intentions of the Act. In brief, the Act created the Corporation as a juristic person capable of holding and disposing of property; it gave the Corporation power to impose and collect taxes and licence fees, to borrow money, and to decide disputes in the first instance concerning those matters. The amounts collected were constituted as the municipal fund from which the Corporation met its liabilities and paid the salaries of its employees. The Act also imposed upon the Corporation duties to carry out various welfare activities for the public interest and conferred powers necessary for the satisfactory performance of those duties, including the power to make by‑laws to regulate its many functions. The Court likened the Corporation to a large public company that performs most activities that a private company might undertake, with the distinction that the Corporation possessed certain statutory powers to enable it to carry out its functions more effectively. With that background, the Court proceeded to examine each department of the Corporation that the State Industrial Court had held to be governed by the Act. The first department considered was the Tax Department. The Court noted that the principal functions of this department were the imposition and collection of conservancy, water and property taxes. No separate staff had been employed for the assessment and levy of property taxes; the same personnel handled the assessment and collection of water rates as well as scavenging taxes. It was not disputed that the work of assessing and levying water rates and scavenging rates for private latrines was substantially heavier than the other tasks entrusted to the department. No effort had been made to allocate a specific proportion of staff to the different functions. Accordingly, the Court accepted the finding of the State Industrial Court that the clerical and manual staff of the department predominantly performed work related to scavenging taxes and water rates. The Court observed that these rates were essentially fees for services rendered, namely scavenging and water supply, which could equally be provided by a private firm or an individual for remuneration. The fact that the municipality performed the same duties did not exclude those services from the definition of “industry.” The Court expressed a preference to sustain that finding on a broader basis, emphasizing that there could be no distinction between property tax and other taxes collected by the municipality for the purpose of classifying the tax department as an industry.

For the purpose of deciding whether the tax department should be regarded as an industry, the Court examined the scheme of the Corporation Act. The Act provides that taxes and fees are collected so that the municipality can perform its statutory duties. The Court observed that if the functions performed with those revenues fall within the meaning of “industry,” it would be unreasonable to exclude the tax department from that definition. The Court contrasted the situation of private persons or firms, who receive cash or other direct payment for services, with that of public bodies, which render services to the public and use the taxes collected as a fund to carry out those services. Since the majority of municipal services fall under the definition of “industry,” the Court concluded that the employees of the tax department are likewise entitled to the benefits guaranteed under the Act.

The Court then turned to the Public Conveyance Department, describing it as the authority that levies a wheel‑cum‑road tax. This department is charged with regulating the use of cycles, rickshaws, bullock‑carts and similar conveyances. It collects registration fees from rickshaws, licence fees from rickshaw drivers, wheel tax from bullock‑carts, and a cycle tax on every bicycle operating within the corporation limits, as shown by the evidence of Witness No 1 for Party 1. The Court held that these levies are effectively fees for the services the corporation provides to the owners of such conveyances, namely the maintenance and construction of roads. Because these services could equally be supplied by a private individual or firm for remuneration, the department satisfies the tests laid down by the Court and therefore qualifies as an industry within the meaning of the definition in the Act.

Regarding the Fire Brigade Department, the Court referred to Exhibit N A 22, which sets out the duties of the driver‑cum‑fitter of the fire brigade. The exhibit demonstrates that the principal function of the department is to respond to fire calls. Witness No 3 for Party 1 explained that the fire brigade also supplies water at weddings and other public events, but employees receive no additional remuneration for this ancillary service. The Court noted that, although the department provides certain extra services, its core responsibility remains attending to fire incidents. It was observed that private bodies could theoretically perform the same core service. However, the Court pointed out that Section 333 of the City of Nagpur Corporation Act empowers designated officers to remove persons interfering with fire‑extinguishing operations, to close streets or passages near a fire, to break into or demolish premises to lay hoses or other equipment, and to take any other measures necessary for preserving life or property. The Court concluded that such statutory powers are essential for the fire brigade’s effective functioning and cannot be satisfactorily exercised by a private individual, reinforcing the view that the fire brigade constitutes an industry under the Act.

The Court observed that the argument advanced was mistaken because it failed to separate the actual services provided from the statutory powers that enable those services to be performed effectively. The Court noted that a private individual or a private firm could supply the same services and that nothing in the legislature prohibited the granting of comparable powers to such private entities. Having examined the services in question against the criteria previously articulated, the Court found that the services satisfied all of the positive and negative tests it had set out. Accordingly, the Court concluded that the department in question fell within the meaning of “industry” under the applicable statute.

The Court then turned to the Lighting Department, which is responsible for arranging street illumination throughout the corporation’s jurisdiction. The Court explained that street lighting is provided by two distinct systems: electric lighting supplied under a contract to Nagpur Light and Power Co., and kerosene‑oil lamp lighting carried out directly by the department. Under the contract, the electricity company must install the lamps according to a programme fixed by the corporation and operate them for the burning hours also prescribed by the corporation. The corporation does not levy any charge on the public for the provision of street lighting, as evidenced by Witness No. 5 for Party No. 1. The Court reiterated that the presence or absence of a quid pro quo payment for a particular service is not a necessary condition for classifying an activity as an “industry.” After reviewing the nature of the services rendered by the Lighting Department, the Court found that they met the definition of “industry” and satisfied both the positive and negative tests previously formulated. Consequently, the Court held that the Lighting Department qualifies as an industry.

Regarding the Water Works Department, the Court described its responsibilities, which include the operation of three head‑works—Kanhan, Gorewara, and Ambazeri—and the management of pumping stations at Kanhan and Gorewara where water is filtered and pumped into the service reservoir at Nagpur. The corporation maintains a distinct staff at each pumping station, a separate distribution staff, and an assessment department tasked with levying water cess for distribution, as shown by the testimony of Witness No. 9 for Party No. 1. The three operational branches each comprise administrative and executive personnel. Whether or not the services involve a manufacturing process, the Court held that they fall squarely within the broad definition of “industry” contained in the Act. The services also passed both the positive and negative tests set out by the Court, and they do not involve any delegated sovereign functions of the State. Moreover, the Court observed that a private individual could equally perform these functions. On this basis, the Court concluded that the Water Works Department is included within the statutory definition of “industry.”

The Court finally examined the City Engineers Department, whose principal function is to exercise supervisory and administrative control over its subordinate departments. The City Engineer heads this department, as corroborated by the evidence of Witness No. 5 for Party No. 1. Since the Court had previously determined that the departments subordinate to the City Engineers Department qualify as “industries,” the Court reasoned that the City Engineers Department, which provides the necessary administrative oversight for those subordinate departments, must likewise be regarded as part of those industries. Accordingly, the Court held that the City Engineers Department is also encompassed within the definition of “industry.”

The Court observed that because the City Engineer’s department exercises supervisory and administrative control over its subordinate departments, the functions of that department must be regarded as part of the functions of the subordinate bodies themselves. Consequently, the Court concluded that the City Engineer’s department falls within the meaning of “industry.” The Court then turned to the Enforcement (encroachment) Department. The function of this department is to remove encroachments, unauthorised constructions and dilapidated houses, and it operates as a section of the Estate Department, as shown by the evidence of Witness No 5 for Party 1. The respondent argued that the department performs only statutory functions and that no private person can carry out those functions. The Court noted that statutory powers are indeed conferred on the Corporation to eliminate encroachments, unauthorised structures and dilapidated houses, powers that are required for the Corporation to protect its own property, to prevent further encroachment and to safeguard the public interest. However, the Court distinguished between the existence of statutory powers and the nature of the services that are actually rendered. It held that the service of detecting encroachment, taking steps to recover possession of the land and protecting property for the public is not peculiar to a municipal corporation. A private firm may be engaged to manage another’s property, it may employ staff to detect encroachments and to seek recovery of possession. The only difference, the Court said, is that the municipal corporation may, by virtue of its statutory authority, physically remove the encroachment, while a private firm must obtain a court order to achieve the same result. The essential character of the service – protecting property, removing encroachments and recovering possession – is therefore the same whether performed by the Corporation or by a private contractor. The Court found that this service satisfies both the definition of “industry” and the tests previously laid down. The respondent further contended that the reasoning could not be applied to the removal of dilapidated houses because that activity is a governmental function that a private individual cannot perform. The Court rejected this view, observing that the argument confuses the incidental statutory power with the service itself. A private firm can be hired to demolish dilapidated houses for its clients; it simply lacks the authority to act against houses owned by persons who have not engaged its services. This limitation does not change the nature of the service. Accordingly, the Court held that the Enforcement (encroachment) Department also qualifies as an industry. Finally, the Court considered the Sewage Department. It explained that the department operates a sewage‑pumping station whose purpose is to pump sewage to the outfall of the underground sewers. The pumped sewage is thereafter used on land that is part of a broad irrigation system, and some crops are cultivated on that farm. This fact was supported by the evidence of Witness No 8 for Party 1.

During the cross‑examination of the witness, the court learned that the sewage remaining after the corporation irrigated its farm was sold to neighbouring farms. On the basis of this fact, the court concluded that the sewage department also constituted an industry. The health department, which was responsible for scavenging, sanitation, epidemic control, food‑adulteration control and the operation of public dispensaries, was considered similarly. Although it was argued that the control of food adulteration and epidemics could not be performed by private parties, the court rejected that view, observing that private medical units could be engaged for a fee to examine purchased food items, to take action against offending merchants, and to provide inoculations and advice to prevent epidemics. Accordingly, the health department satisfied the tests previously articulated by the court and fell within the definition of “industry” in the Act. The market department’s functions included issuing licences, collecting ground‑rent and registration fees, and detecting short weights and measures. Rents were collected to allow persons to conduct business on corporation land, and the detection of short weights and measures protected the public from cheating. These services, the court noted, could equally be performed by private individuals, and the fees collected represented remuneration for the services. Consequently, the market department also met the established tests and was held to be an industry. The public gardens department was tasked with maintaining existing parks and gardens, creating new ones, and planting trees along roadsides. The court observed that any private individual could perform these functions and that the municipal undertaking of these duties did not alter the character of the service; thus the department satisfied the required tests and was deemed an industry. Finally, the public works department oversaw the construction and maintenance of public infrastructure such as roads, drains, buildings, markets and public latrines. For public convenience, the department was divided into zones, each with its own office, and employed outdoor staff—including assistant engineers, overseers, sub‑overseers, time‑keepers, mates, carpenters, masons, blacksmiths and labourers—as well as indoor staff consisting of clerks and peons. The court found that the services rendered by this department could equally be performed by private persons and therefore satisfied both the positive and negative criteria previously set, leading the court to hold that the public works department also qualified as an industry within the meaning of the Act.

Both the administrative and executive functions of the department were examined. The Court observed that the services performed by the department could be carried out equally by private individuals, and therefore these services fall within the definition of “industry”. The Court noted that this satisfies both the positive and negative tests that it has laid down for determining industrial activity. Consequently, the Court held that the department qualifies as an industry. The Assessment Department was considered next. This department is responsible for assessing taxes, fees and rates, and the same staff members undertake assessment work not only for taxes strictly so called but also for other fees and rates. The Court pointed out that the services involved, such as scavenging and water supply, can be performed by private individuals, and the State Industrial Court had previously held that such services constitute “industry”. Accordingly, the department that assesses fees and rates is part of that industry. The Court rejected any distinction between the assessment of taxes and the assessment of fees and rates, observing that taxes are collected only to enable the Corporation to provide services to the public and that most of those services are already characterised as industry. The Court further noted that the State Industrial Court had held that the same staff assess house‑tax as well as other fees and rates, and that the department’s work is predominantly connected with the assessment of scavenging tax and water rate. Applying the test of “paramount and predominant duty”, the Court concluded that the Assessment Department falls within the definition of “industry” under the Act. The Estate Department was then analysed. This department maintains records of property acquired, vested or transferred to the Corporation and of all buildings and roads constructed by the Public Works Department. It also lets out lands and houses belonging to the Corporation by public auction, and the income earned is credited to the common fund. The Court observed that a similar department would be necessary in a private company that carries out functions comparable to those of the Corporation. Maintaining records of acquired properties, constructed buildings, roads and leased properties is a necessary administrative function that is correlated to the corresponding services. Since the construction of buildings and roads is an industry, the Court reasoned that the administrative wing of that service is also an industry. Accordingly, the Court held that the Estate Department, taken as a whole with both its administrative and executive wings, qualifies as an industry for the purposes of the Act.

The Education Department was the next focus of the Court’s analysis. This department is tasked with providing compulsory primary education within the limits of the Corporation, as confirmed by the evidence of Witness No 1 for Party 1. The Court noted that the provision of primary education can equally be performed by private persons, and that the department satisfies the other tests laid down for industrial classification. The Court therefore concluded that the employees of the Education Department fall within the definition of “employees” under the Act and would be entitled to the benefits conferred by the Act. Finally, the Printing Press Department was considered. The Corporation maintains a printing press that is used for printing passes as well as for printing by‑laws, rules and proceedings. The Court indicated that, for the reasons articulated earlier in relation to the Water Works Department, this printing press operation also satisfies the criteria for being an industry. Accordingly, the Court held that the Printing Press Department is an industry within the meaning of the Act.

The Court observed that the Printing Press Department of the Corporation printed various forms, by‑laws and rules, and subsequently sold these printed materials to the public. Relying on the reasoning already set out for the Water Works Department, the Court concluded that the Printing Press Department also qualified as an industry within the meaning of the statute (xvii). Regarding the Building Department, the Court described it as a “building permission department” whose principal function is to regulate the construction of buildings by private persons and to enforce the by‑laws and provisions of the Corporation Act that relate to such construction. The Court noted that the statutory nature of the department’s functions does not automatically preclude performance by private parties; rather, the issue is whether private individuals could carry out the same functions. The Court pointed out that the Corporation Act and the by‑laws prescribe specific requirements for the submission of building plans and for obtaining approval from the relevant authorities before construction begins. It further held that a cooperative society or a private individual could also allocate land for housing and comply with the legal conditions governing such allocations. Consequently, the services provided by the Building Department were likened to those that a private individual could render, the difference being that the Corporation operates under statutory authority while a private party would act under contractual terms. The Court found that the department serves the public interest and satisfies both the positive and negative tests previously articulated, and therefore the Building Department falls within the definition of “industry” (xviii).

The Court further examined the General Administration Department, which coordinates the activities of all other departmental units. The State Industrial Court described this department as comprising a treasury, an accounts section, a records section that maintains the records of the various departments, and a public‑relations section. It also includes a committee section responsible for convening meetings, preparing agendas, recording minutes, and drafting by‑laws, while the records section preserves documents from most departments, including health and engineering. The Court noted that any large enterprise with multiple divisions typically maintains a general administration division. If the various departments that report to this unit are themselves classified as industries, then the general administration unit must likewise be considered part of the industry. The Court emphasized that the effective delivery of services by the Corporation depends on the proper functioning of this department; without it, confusion and disorder would prevail. The State Industrial Court had previously held that, except for five specific departments, all other departments of the Corporation fall within the definition of “industry.” Consequently, the Court affirmed that the General Administration Department, which predominantly deals with industrial departments, is also an industry, and that its employees are entitled to the benefits provided under the Act. The Court reiterated that five departments were found not to be covered by the definition of “industry,” but those departments did not challenge the finding, and the Court declined to revisit that aspect of the Industrial Court’s decision.

In this matter, the Court observed that the statutory definition of “industry” as set out in the Act was at issue. It noted that the employees belonging to the particular departments that had been previously held not to fall within that definition did not lodge any appeal contesting the State Industrial Court’s finding on that point. Because no appeal was filed by those employees, the Court indicated that it did not intend to render a final determination on whether the Industrial Court’s decision concerning those departmental activities was correct. Consequently, the Court concluded that the pending appeals could not succeed and therefore ordered that the appeals be dismissed. In addition, the Court ordered that the costs of the proceedings be awarded against the appellants. The final order therefore read that the appeal was dismissed, with costs, and no further comment would be made on the merits of the Industrial Court’s earlier determination.