NEW DELHI, March 12: The Supreme Court has called for a ``judicial re-examination'' of an earlier Constitution bench judgment which had held that every organisation having employers and employees was an industry.``We do not think that such a sweeping test was contemplated by the Industrial Disputes Act, nor do we think that every organisation which does useful service and employs people can be labelled as an industry'', a division bench comprising Justice Sujata V Manohar and Justice D P Wadhwa ruled in a 24-page judgement.
The judges directed that the matter be placed before the Chief Justice of India to consider whether a larger bench (a minimum of nine judges) be constituted to reconsider the decision of a seven-judge bench in the Bangalore Water Supply and Sewerage Board case way back in 1978.
``Instead of leading to industrial peace and welfare of the community (which was the avowed purpose of artificially extending the definition of industry), the application of the Industrial Disputes Act toorganisations which were, quite possible, not intended to be so covered by the machinery set up under the Act, might have done more damage than good, not merely to the organisations but also to employees by the curtailment of employment opportunities'', the judges said.
The judges said consequent to the 1978 judgment, the elimination of profit motive or a desire to generate income as the purpose of industrial activity had led to a large number of philanthropic and charitable activities being affected by the Industrial Disputes Act.
In a number of cases where the organisation was run by voluntary social workers, they were unable to cope with the requirements of the Act leading to the cessation of many welfare activities previously undertaken by such organisations.
This had deprived the general community of considerable benefit and the employees of their livelihood, the judges said, adding that there were many activities which were undertaken not with a view to secure monetary returns -- whether onelabels it as livelihood, income or profit -- but for other more generous and different motives. The court held that such activities would not normally be labelled as industrial activities, but for the wide interpretation given judicially to the term ``industry'' in the Act. ``For example, a number of voluntary organisations used to run workshops in order that the poor, and more particularly poor or destitute women may earn some income'', the judges said.
The court said voluntary welfare organisations had activities like preparation of spices, masalas, pickles or they would secure small orders from industries for poor women. A small number of persons were employed to assist in the activities. The income by these activities was distributed to the women who were given such work, the judges said. Other voluntary organisations held tailoring or embroidery classes or similar activities for poor women and provided an outlet for the sale of the work produced by them. These persons would have otherwise found itimpossible to secure a market for their products. The court held that such organisations were not organised like industries and they did not have the means or manpower to run them as industries. But due to the wide interpretation given by the apex court in the 1978 judgment a large number of such voluntary welfare schemes had to be abandoned.
The court said apart from such activities, there may be other activities also undertaken in the spirit of community service, such as charitable hospitals where free medical services may be provided.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
