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Industry- Definition and Analysis

Coir Board,Ernakulam v. Indira Devi

(1998)3 SCC 259


The case comes under the purview of Labour Laws and analyses the definition of "Industry" under the Industrial Disputes Act, 1947.



Facts

The appellant Coir Board was set up under the Coir Industry Act, 1953. The preamble to the Act provides for the establishment of a Board for the development of the coir industry. To promote exports of coir products, the Board decided to maintain showrooms and sales depots and also employed certain temporary clerks and typists. They were later discharged from their duties and claimed that their services could only be terminated as per the provisions of the Industrial Disputes Act.


Issue

Whether the coir Industry comes under the term " industry" defined as per Section 2(j) of the Industrial Disputed Act, 1947.


Contentions

The ex-employees contended that the Coir Board is an industry as defined under the Industrial Disputes Act. It also implies that they could be discharged from service only as provided under chapter V-A of the Industrial Dispute Act. They relied on the BSSW case which stated that an organization where the employers and employees do some useful work for the benefit of others qualifies as an industry.


Reasoning

The definitions of both an “employer” and a “workman” deliver meaning in the context of an “industry”. However, the interpretation of industry gets complex because an “undertaking” which also forms a part of an industry is quite vague to comprehend. Under the principle of Noscitur, a Sociis “undertaking” has to be read along with trade, business, manufacture, or calling. This gives enough scope for judicial expansion of the meaning of the word industry.


Furthermore, with the elimination of a profit motive as a purpose of industrial activity, the definition of the industry now includes cooperatives, charitable projects, educational institutions, etc. Such organizations weren’t even organized like industries. The court was of the view that the BWSS case provides a weeping definition for the “industry.” A few exceptions were made in the case of pious or religious missions and sovereign functions. But even in the departments discharging sovereign functions, if there are units which are industries and are substantially severable, then they can be considered to come within section 2(j). Moreover, in the case of Safdar Jung Hospital, the court held that not every case of employment is productive in an industry. It must always bear the definite character of trade or business etc.


Post-BWSS case in 1978, the Legislature decided to redefine the “industry” in 1982. It tried to exempt certain institutions like charitable institutions, hospitals, research institutes, sovereign functions. It also proposed to have a separate law for the settlement of individual and collective grievances of the workmen of these institutions. However, this amended law has not come into force.


The function of the Board is to promote and ensure the marketability of the coir products. The Board isn’t a set up to run any industry itself. The predominant purpose for which it is set up wouldn’t qualify to be called an industry. However, if the test laid down in the BWSS’ case is followed strictly, then the Board would qualify to be an industry.


Judgment

The Supreme Court held that the Coir Board falls under the definition of an industry due to the BWSS judgment. But it shouldn’t be categorized as an industry because of the reason that not every organization which does useful service and employs people can be labelled as an industry. The court also maintained that the matter must be placed before the Chief Justice of India to consider whether a larger Bench should be constituted to re-examine the decision of the BWSS case.

ABOUT THE AUTHOR

Saumya Bajpai is currently pursuing Law at Indian Law Institute, New Delhi.

You can contact them on https://www.linkedin.com/in/saumya-bajpai-754744141/

Edited by: Swathi Ashok Nair

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