PETITIONER: UNIVERSITY OF DELHI & ANR. Vs. RESPONDENT: RAM NATH DATE OF JUDGMENT: 01/04/1963 BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS CITATION: 1963 AIR 1873 1964 SCR (2) 703 CITATOR INFO : E 1968 SC 554 (16,21) E 1970 SC1407 (1) R 1972 SC 763 (12) F 1976 SC 145 (9) O 1978 SC 548 (79,112,117,124,159,161) RF 1988 SC1182 (6) R 1988 SC1700 (5) ACT: Industrial Dispute-Bus drivers in employ of university- Whether "workers"-Education institution, if an industry' -Industrial Disputes Act, 1947 (14 of 1947), ss. 2 (g), 2 (j) 2 (s), 33c (2). HEADNOTE: Appellant No. 1, the University of Delhi and Appellant No. 2 Miranda House, a college affiliated to the University, are institutions for education, the predominant activities of these being the imparting of education. At the material time respondent No. 1 was employed as bus driver under appellant No. 2. Both the respondents were discharged from service by giving separate notices and on payment of one month's salary each in lieu of notice. The respondents by separate petitions applied before the industrial Tribunal for the award of retrenchment benefits. The appellants resisted the petitions on the preliminary ground that they did not constitute an "industry" under S. 2 (j) of the Industrial Disputes Act, 1947, and that they were not "employees" under s. 2 (g) of the said Act and therefore the application made by the respondents under S. 33 (c) (2) of the Act were incompetent. The Tribunal rejected this contention and after considering the merits passed an order in favour of the respondents directing the appellants to pay Rs. 1050/- to each one of respondents as retrenchment compensation. The appellants appealed to this Court with special leave. They contended in the appeal that the Tribunal was in error in giving the definition of the word "industry" under s. 2 (j) its widest denotation by adopting a mechanical and literal rule of construction and it was urged that the policy of the Act clearly is to leave educational Institutions out of the purview of the Act. The respondents' contention was that s. 2 ( j ) had defined the word "industry" in words of widest amplitude and there is no justification for putting any artificial restraint on the meaning of the said word as defined. 704 Held that having regard to the fact that the work of education is primarily and exclusively carried on with the assistance of the labour and co-operation of teachers, the non-inclusion of the whole class of teachers from the definition prescribed by 3. 2 (s) has an important bearing and significance in relation to the problem under consideration. It could not have been the policy of the Act that education should be treated as industry for the benefit of a very minor and insignificant number of persons who may be employed by educational institutions to carry on the duties of the subordinate staff. Reading s. 2(g), (j) and (s) together it is reasonable to hold that the work of education carried on by an educational institution like the University of Delhi is not an industry within the meaning of the Act. In the main scheme of imparting education, the subordinate staff with function like those of the respondents play such a minor, subsidiary and insignificant part that it would not be reasonable to allow the work of this subordinate staff to lend its industrial colour to the principal activity of the University which is imparting education. From a rational point of view it would be regarded as inappropriate to describe education even as a profession. Education in its true aspect is more of a mission and a vocation rather than a profession or trade or business, however wide may be the denotation of the two latter words under the Act. The appellants cannot be regarded as carrying on an industry under s. 2 ( j ) and so the -application made by the respondents against them under s. 33c (2) of the Act are held to be incompetent. State of Bombay v. The Hospital Mazdoor Sabha [1960) 2 S. C. R. 866, Lalit Hari Ayurvedic College Pharmacy Pilibhit. v. Lalit Hari Ayurvedic College Pharmacy Workers Union, Pilibhit, A. I. R. 1960 S. C. 1261, The Ahmedabad Textile Industry a Research Association v. The State of Bombay, [1961] 2 S. C. R . 481, The Federated State School Teachers' Association of Australia v. State of Victoria' [1929] 41 _C. L. R. 569 and The Corporation of the, City of Nagpur v. Its Employees, [1960] 2 S. C. R. 942, Case-law reviewed. JUDGMENT:
CIVIL APPFLLATE JURISDICTION : Civil Appeals Nos. 650 and
651 of 1962.
Appeals by special leave from the order dated
September 22, 1961 of the Labour Court, Delhi, in
L C. A No. 479 of 1961.
705
M.C. Setalpad, K. K. Raizada. B. K. Jain -and A. G.
Ratnaparkhi, for the appellants.
Janardan Sharma, for the respondents.
S. P. Verma, for Intervener No. 1.
T. R. Bhasin, S. C. Malik Sushma Malik
and Bhejalal Malik, for intervener No. 2.
1963. April 1. The judgment of the Court was delivered by
GAJENDRAGADKAR J.-These two appeals by special leave arise
out of two petitions filed against the University of Delhi
and Principal, Miranda House, University College for Women,
appellants 1 and 2, by two of their employees Ram Nath and
Asgar Masih, respondents 1 & 2 respectively, under section
33C (2) of the Industrial Disputes Act, 1947 (14 of 1947)
(hereinafter called ‘the -Act’). Appellant No. 2 which is
the University College for women is run by appellant No. 1,
and so, in substance, the claim made by the two employees
was mainly against appellant No. 1. Ram Nath’s case was that
he had been employed as driver by appellant No. 2 in
October, 1949 and was served with a notice on May 1, 1961,
that since his services were no longer required, he would be
discharged from his employment on payment of one month’s
salary in lieu of notice. Asgar Masih made substantially
similar allegations. He bad been employed in the first
instance, by appellant No. 1 as driver but was then
transferred to appellant No. 2 on October 1, 1949. His
services were similarly terminated by notice on May 1, 1961
on payment of one month’s salary in advance in lieu of
notice. It is common ground that appellant No. 1 found that
running the buses for the convenience of the girl students
attending the college run by appellant No. 2 resulted in
loss, and so, it was
706
decided to discontinue that amenity. Inevitably, the
services of the two drivers had to be retrenched, and so,
there is no dispute that the retrenchment is genuine and
there is no element of mala fides or unfair labour practice
involved in it. It is also common ground that if the
employees are workmen within the meaning of the Act, and the
work carried on by the appellants is an industry under s.
2(j), section 25F has not been complied with and
retrenchment amount payable under it has not been paid to
the respondents. The petitions made by the respondents were
resisted by appellant No. 1 on the preliminary ground that
appellant No. 1 was not an employer under s. 2(g), that the
work carried on by it was not an industry under s. 2(j), and
so, the applications made under section 33C(2) were
incompetent. The Tribunal has rejected this preliminary
objection and having considered the merits, has passed an
order in favour of the respondents directing the appellants
to pay Rs. 10,50/- to each one of the respondents as
retrenchment compensation. It is the validity of this award
that is challenged before us by the appellants, and the only
ground on which the challenge is made is that the work
carried on by appellant No. 1 is, not an industry under
s.2(j).
Though the question thus raised by these two appeals lies
within a narrow compass, its importance is very great. If
it is held that the work of imparting education conducted by
educational institutions like the University of Delhi is an
industry under s. 2(j), all the educational institutions in
the country may be brought within the purview of the Act and
disputes arising between them and their employees would be
industrial disputes which can be referred for adjudication
under section 10 (1) of the Act and in appropriate cases,
applications can be made by the employees under s. 33C(2).
The appellants contend that the Tribunal was in error in
giving the definition of the word ‘industry’ under s. 2 (j)
its widest
707
denotation by adopting a mechanical and literal rule of
construction and it is urged that.the policy of the Act
clearly is to leave education and educational. institutions
out of the purview of the Act.
On the other hand, the respondents contend that s. 2(j)
has defined the word ‘industry’ deliberately in words of
widest amplitude and there is no justification for putting
any artificial restrain on the meaning of the I said word as
defined. In support of this argument, reliance is placed or
the decision of this court in the State of Bombay v. The
Hospital Mazdoor Sabha (1). In that case, this Court
observed that “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 services to the 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 causal nor
must it be for oneself, nor for pleasures.” The argument is
that the concept of ‘service’ which is expressly included in
the definition of ‘industry’ need not -be confined to
material service and ought to be held to include even educa-
tional or cultural service, and in that sense educational
work carried on by the University of Delhi held to be an
industry.
Having regard to the fact that the word -,industry’ as
defined in the Act takes within its sweep any calling or
service or employment, it cannot be denied that there is
prima facie some force in the argument urged by the
respondents, but in testing the validity of this argument,
it will immediately become necessary to enquire whether the
work
(1)[1960] 2 S. C. R. 866, 879.
708
carried on by an educational institution can be said to be
work carried on by it with the assistance of labour or co-
operation of teachers. The main function of educational
institutions is to impart education to students and if it is
held that the impartings education’ is industry in reference
to which the educational institution is the employer, it
must follow that the teachers who co-operate with the
institution and assist it with their labour in imparting
education are the employees of the institution, and so,
normally, one would expect that the teachers would be
employees who would be entitled to the benefits of the Act.
The co-operation of the employer and the employees, or, in
other words, the co-operation between capital and labour to
which reference is always made by industrial adjudication
must, on the respondents’ contention, find its parallel in
the co-operation between the educational institution and its
teachers. It would, DO doubt, sound somewhat strange that
education should be described as industry and the teachers
as workmen within the meaning of the Act, but if the literal
construction for which the respondents contend is accepted,
that consequence must follow. If the scheme of the Act and
the other relevant considerations necessarily lead to the
said consequence, the Court will have to accept the
respondents’ contention notwithstanding the fact that it
does not fit in with the generally accepted sense of the
word industry’.
Does the concept of co-operation between teachers and their
institution being treated as similar to the co-opration
between labour and capital fit in with the scheme of the Act
? That is inevitably the next question which we must
consider and in doing so, three definitions will have to be
borne in mind. Section 2 (g) (i) defines an ’employer’ as
meaning in relation to an industry carried on by or – under
the authority of any department of the Central
709
Government or a State Government, the authority prescribed
in this behalf, or where no authority is prescribed, the
head of the department; and S. 2(g)(ii) provides that an
employer means in relation to an industry carried on by or
on behalf of a local authority,, the chief executive officer
of that authority. If the work of imparting education is an
industry., the University of Delhi may have to be regarded
as an employer within the meaning of s. 2 (g). Section 2
(j) defines an ‘industry’ as meaning any business, trade,
undertaking, manufacture or calling of employers and
includes ‘any calling,service, employment, handicraft, or
industrial occupation or avocation ‘of workmen. It is un-
necessary to comment on this definition, because the precise
scope of this definition is the very subject matter of the
dispute which we are, considering. ‘That takes us to the
definition of “workman” prescribed by s. 2 (s). A workman
under the said definition means., inter alia, any person,
including an apprentice, employed in any industry to do any
skilled or unskilled manual, supervisory,, technical or
clerical work for hire or reward. It is common ground that’
teachers employed by educational institutions, whether the
said institutions are imparting primary., secondary,
collegiate or postgraduate education, are not workmen under
s. 2(s), and so, it follows that the whole body of
employees with whose co-operation the work of imparting
education is carried on by educational institutions do not
fall within the purview of s. 2(s), and any disputes between
them and the -institutions which employed them are outside
the scope of the Act. In other words, if imparting
education is an industry under s. 2(j), the bulk of the
employees being outside the purview of the Act, the only
disputes which can fall within the scope of the Act are
those which arise between such institutions and their
subordinate staff, the members of which may fall under s.
2(s). In our
710
opinion, having regard to the fact that the work of
education is primarily and exclusively carried on with the
assistance of the labour and co-operation of’ teachers, the
omission of the whole class of teachers from the definition
prescribed by s. 2(s) has an important bearing and
significance in relation to the problem which we are
considering. It could not have been the policy of the Act
that education should be treated as industry for the benefit
of a very minor and insignificant number of persons who may
be employed by educational institutions to carry on the
duties of the subordinate staff. Reading ss. 2(g), (j) and
(s) together, we are inclined to hold that the work of
education carried on by educational institutions like the
University of Delhi is not an industry within the meaning of
the Act.
Having reached this conclusion, it may be legitimate to
observe that it is not surprising that the Act should have
excluded education from its scope, because the distinctive
purpose and object of education would make it very difficult
to assimilate it to the position of any trade, business or
calling or service within the meaning of s. 2(j). Education
seeks to build up the personality of the pupil by assisting
his physical, intellectual, moral and emotional development.
To speak of this educational process in terms of industry
sounds so completely incongruous that one is not surprised
that the Act has deliberately so defined workman under s.
2(s) as to exclude teachers from its scope. Under the sense
of values recognised both by the traditional and con-
servative as well as the modern and progressive social
outlook, teaching and teachers are, no doubt, assigned a
high place of honour and it is obviously necessary and
desirable that teaching and teachers should receive the
respect that is due to them. -A proper sense of values would
naturally hold teaching and teachers in high esteem, though
power or wealth may not be associated with them. It cannot
be denied
711
that the concept of social justice is wide enough to include
teaching and teachers, and the requirement that teachers
should receive proper emoluments and other amenities which
is essentially based on social justice cannot be disputed;
but the effect of excluding teachers from s. 2(s) is only
this that the remedy available for the betterment of their
financial prospects does not fall under the Act. It is well
known that Education Departments of the State Governments as
well as the Union Government, and the UniversitY Grants
Commission carefully consider this problem .and assist the
teachers by requiring the payment to them of proper scales
of pay and by insisting on the fixation of other reasonable
terms and conditions of service in regard to teachers
engaged in primary and secondary education and collegiate
education which fall under their respective jurisdictions.
The position nevertheless is clear that any problems
connected with teachers and their salaries are outside the
purview of the Act, and since the teachers from the sole
class of employees with whose co-operation education is
imparted by educational institutions, their exclusion from
the purview of the Act necessarily corroborates the
conclusion that education itself is not without its scope.
In this connection, it would be material to examine the
composition of the University of Delhi. This University has
been established and incorporated as a teaching and
affiliating University under the Delhi University Act, 1922
(No. 8 of 1922). The Organization of this University
consists of the Officers of the University, such as the
Chancellor, the ProChancellor, the Vice-Chancellor, the
Treasurer, the Registrar, the Deans of Faculties and others,
and its authorities, such as the Court, the executive
Council, the Academic Council, the Finance Committee, the
Faculties and others vide sections 8 and 17. These
authorities are composed of the teachers in the University
who are classified as Professors, Readers
712
and Lecturers and other persons interested in education. In
other words., it is the officers of the University and its
respective authorities that constitute the Organization of
the University of Delhi. It is well known that this
Organization does not contribute capital of itself in
carrying out its work of imparting higher education. It
receives grants from the Central Government, from the
University Grants Commission and from charitable donors and
charitable institutions. It also receives some income from
tuition fees. But then it seems very difficult to postulate
thatin the work of imparting education, the Universityof
Delhi contributes any capital as such. This workis carried
on by the University with the co-operation of all its
teachers and it would sound inappropriate to hold that this
work is in the nature of a trade or business, or it amounts
to rendering of service which can be treated as an industry
under the Act. What we have said about the University of
Delhi, would be equally true about all educational
institutions which are founded primarily for the purpose of
imparting education.
It is true that like all educational institutions the
University of Delhi employs subordinate staff and this
subordinate staff does the work assigned to it; but in the
main scheme of imparting education, this subordinate staff
plays such a minor, subsidiary and insignificant part that
it would be unreasonable to allow this work to lend its
industrial colour to the principal activity of the
University which is imparting education. The work of
promoting education is carried on by the University and its
teachers and if the teachers are excluded from the purview
of the Act, it would be unreasonable to regard the work of
imparting education as industry only because its minor,
subsidiary and incidental work may seem to partake of the
character of service which may fall under s . 2(j).
713
It is well known that the University of Delhi and most other
educational institutions are not formed or conducted for
making profit; no doubt, the absence of profit motive would
not take the work of any institution outside s. 2 (j) if the
requirements of the said definition are otherwise satisfied.
We have referred to the absence of profit motive only to
emphasis the fact that the work undertaken by such
educational institutions differs from the normal concept of
trade. or business. Indeed, from a rational point of view,
it would be regarded as inappropriate to describe education
even as a profession. Education in its true aspect is more
a mission and a vocation rather than a profession or trade
or business, however wide may be the denotation of the two
latter words under the Act. That is why we think it would
be unreasonable to hold that educational institutions are
employers within the meaning of s. 2 (g), or that the work
of teaching carried on by them is an industry under s. 2(j),
because, essentially, the creation of a well-educated,
healthy young generation imbued with a rational progressive
outlook on life which is the sole aim of education, cannot
at all be compared or assimilated with what may be described
as an industrial process. Therefore, we are satisfied that
the University of Delhi and the Miranda College for Women
run by it cannot be regarded as carrying on an industry
under s. 2(j), and so, the applications made by the
respondents against them under s. 33 C(2) of the Act must be
held to be incompetent.
It still remains to consider some of the decisions which
have been cited at the Bar before us in these appeals. The
first decision to which reference must be made is the case
of the Hospital Mazdoor Sabha (1). In that case, this Court
considered somewhat elaborately the implications of the
definition prescribed by s. 2 (j), but it was expressly
stated that the Court was not then expressing any opinion
(1) L1960] 2 S. C. R. 866, 879.
714
on the question as to whether running an educational
institution would be an industry under the Act. A similar
statement was made in the case of Lalit Hari Ayurvedic
College Pharmacy Pilibhit v. Lalit Hari Ayurvedic College
Pharmacy Workers Union, Pilibhit (,). Having held that on
the broad facts proved in -that case, there was no doubt
that the activity of the appellant was an undertaking under
s. 2(j), the Court proceeded to add that it was not called
upon to decide whether running an educational institution
would be an industry under the Act.
In the Ahmedabad Textile Industry’s Research Association v.
The State of Bombay (2), while discussing the question as to
the character of the work undertaken by the Research
Association, this Court took the precaution of observing
that the activities of the Association had little in common
with the activities of what may be called a purely
educational institution. It would thus be noticed that in
holding that the Research Association was carrying on an
industry, this Court emphasized the fact that its work was
distinct. and separate from the work of an institution which
carries on purely educational activities. The question thus
left open has been raised by the present appeals for our
decision.
It is, however, argued by the respondents that in the
Hospital Mazdoor Sabha case (3), this Court in terms, has
approved of the minority judgment of Isaacs j. in The
Federated State School Teachers’ Association of Australia v.
The State of Victoria (4), and since Isaacs J. held that the
dispute raised by the teachers in that case amounted to an
industrial dispute, it would follow that this Court by
implication, has expressed its concurrence with the
conclusion of Isaacsj. This argument is not
(1) A.I.R. 1960 S.C. 1261.
(3) [1960] 2 S.C.R. 866,879.
(2) [1961] 2 S.C.R. 48 1.
(4) (1929) 41 C. L.R. 569.
715
well founded. It is true that in the Hospital Mazdoor Sabha
case (1), this Court expressed its general approval with the
social philosophy to which Isaacs J. gave expression in his
dissenting judgment in dealing with the scope and effect of
the definition prescribed by s. 2 (j) in our Act ; but it
deliberately took the precaution of making a specific
statement that though the general views expressed by Isaacs
J. appeared to the Court to be acceptable, the Court should
not be understood as having concurred in his final
conclusion in, regard to the character of educational
activities carried on by educational institutions. The
observation made in the judgment leaving open that question
was not a casual or an accidental observation ; it was made
deliberately to avoid a possible argument in future that the
said judgment impliedly accepted the conclusion of Isaacs J.
Therefore, the approval given to the general views expressed
by Isaacs, J. in that case does not necessarily mean that
his final conclusion was accepted.
Let us then briefly notice the effect of the decision of the
Australian High Court in the case of the Federated State
School Teachers’ Association of Australia (2). The dispute
in that case was in regard to the wages and conditions of
service and it had been raised by teachers employed by the
States in their various schemes of national education and a
point which arose for decision was whether the educational
activities of the States carried on under the appropriate
statutes and statutory regulations of each State relating to
education constituted an industry within the meaning of
section 4 of the Commonwealth Conciliation and Arbitration
Act, 1904-28. The majority decision was that the occupation
of the teachers so employed was not an ” industrial”
occupation, and that the dispute which existed between the
States and the teachers employed by them was, therefore, not
an “industrial dispute”
(1) E1960J 2 S.C.R. 866, 879.
(2) [1929] 41 C.L.R. 569.
716
within section 51 of the Constitution. According to the
majority decision, “If the carrying on a system. of public
education is not within the sphere of industrialism, those
who confine their efforts to that activity cannot be engaged
in an industry or in an industrial occupation or pursuit.”
(pp. 575-576). The argument that if the said activity was
carried on by a private person, it would be described as a
business, trade or industry, was repelled with the answer
that “‘a private person could no more carry on this system
of public education that he could carry on His Majesty’s
Treasury or any of the other executive departments of
Government; and if he were authorized to do So, which was
almost inconceivable, then he would no more carry on an
industry than the State does now.” (p. 575). Rich J., who
concurred with the majority opinion, observed that “teaching
does not, like banking and insurance, play a part in the
scheme of national industrial activity” (p. 591) and he
rejected the view expressed by Isaacs, J., that education
played a direct part in the promotion of industry, because
he thought that an industrial system could exist without
national education. “The existence of human beings,”
observed the learned judge, –‘is no doubt necessary but it
is absurd’ to suggest that everything that goes to make the
man forms a part of the community industrially organised
with a view to the production and distribution of wealth.”
(p. 592). Isaacs, J., however, struck a strong note of
dissent. With the general observations made by Isaacs, J.,
in regard to the scope of industrial disputes this Court has
already expressed its concurrence., but, with respect, it is
not easy to accept the theory of the learned judge that
education provided by the State in that case constituted in
itself an independent industrial operation as a service
rendered to the community (p. 588). Similar comment falls
to be made in regard to another observation of the learned
judge that there is at least as much reason for including
the educational
717
establishments in the constitutional power as labour
services, as there is to include insurance companies as
capital services. The learned Judge thought that “in that
compound process, two facts emerge with respect to
education. One is that industrial education is less and
less left to apprenticeship systems and the other is that
the efficiency of the worker is generally directly affected
by his education.” (pp. 588 & 589). We are inclined to
think that the comment made by Rich, J., on this _reasoning
of Isaacs, J., is not without force.
There is, besides, another point which has to be borne in
mind in appreciating the effect of this Australian decision.
Under the Commonwealth Conciliation and Arbitration Act,
1904-34, the definition of the word “’employee” is wider
than that of the definition of the word “‘workman” under s.
2 (s) of our Act. The “employee’ under the Australian Act
means any employee in any industry and includes any person
whose usual occupation is that of employee in any industry.
It would appear that teachers would fall under the
definition . of employees’ and so, the definitions of the
words “industry”, “industrial disputes” and “industrial
matters” would naturally be wide enough to take in the cases
of disputes raised by teachers in regard to industrial
matters, such as wages, hours relating to work, retrenchment
and others. Thus, it is clear that the main difficulty
which arises from the definition of workman prescribed by s.
2(s) in our Act did not arise under the definition of
employee in the Australian Act, and that is undoubtedly one
important point of distinction. Therefore, we do not think
that much assistance can be drawn from the minority decision
of Isaacs, J., in answering the problem which the appellants
have raised before us in the present appeals..
The respondents, however, contend that there is a recent
decision of this Court which supports
718
the view taken by the Tribunal that the work carried on by
the appellants amounts to an industry under s. 2(j). In The
Corporation of the City of Nagpur V. Its Employees, (1) the
question which arose for the decision of this Court was
whether and to what extent the municipal activities of the
Corporation of Nagpur City fell within the term “industry”
as defined by s. 2(14) of the C.P. and Berar Industrial
Disputes Settlement Act, 1947. It appears that disputes has
arisen between the Corporation and its employees in various
departments and in an adjudication by the State Industrial
Court it was held that the Corporation and all its
departments were covered by the definition of “industry”
prescribed by s.2(14). The award thus passed by the State
Industrial Court was challenged by the Corporation before
the High Court by a writ petition under Art. 226 of the
Constitution. The High Court rejected the Corporation’s
plea that its activities did not constitute an-industry-,
but remanded the case to the Industrial Court for
determining which of the departments of the Corporation fell
within the definition. After remand, the Industrial Court
found all the departments of the Corporation to constitute
an industry, except five. Against the said award, the
Corporation came to this Court by special leave. No appeal
was, however, preferred by the employees in respect of the
five departments which were excluded from s.2(14) by the
award. The appeal preferred by the Corporation failed and
this Court added that the finding of the Industrial Court
excluding five departments from the definition under s.2(14)
need not be examined, since it had not been challenged by
the employees. That, in substance, is the decision of this
Court.
It would be noticed that the main argument which was urged
on behalf of the Corporation was that its activities were
regal or governmental in Character, and so, it was entirely
outside the purview of the
(1) [1960] 2 S.C.R. 942.
719
Berar Act. This argument was carefully examined. It was
conceded that the regal functions described as primary and
inalienable functions of the State are outside the purview
of the Berar Act and if they are delegated to a Corporation,
they would be excluded from s. 2 (14), but the Court held
that these, regal functions must be confined to legislative
power, administration of law and judicial power. That is
how the broad and main argument urged by the Corporation was
rejected. Dealing with the work carried on by the several
departments of the Corporation, this Court observed that if
a service rendered by an individual or a private person
would be an industry, it would equally be an industry in the
hands of a corporation, and it held that if a department of
a municipality discharges many functions, some pertaining to
industry as defined in the Act and other non-industrial
activities, the predominant functions of the department
shall be-the criterion for the purposes of the Act. Amongst
the departments which were then examined was the education
department under which the corporation looked after the
primary education of the citizens within its limits. In
connection with this department, it was observed that the
service rendered by the department could be done by private
persons, and so, the subordinate menial employees of the
department came under the definition of employees and would
be entitled to the benefits of the Act.
Reading the judgment as a whole there can be no doubt that
the question as to whether educational work carried on by
educational institutions like the University of Delhi which
have been formed primarily and solely for the purpose of
imparting education amounts to an industry within the
meaning of s.2 (14), was not argued before the Court and was
not really raised in that form. The main attack against the
award proceeded on the basis that what the
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Corporation was doing through its several departments was
work which could be regarded as regal or governmental, and
as such, was outside the purview of the Act, and that
argument was rejected. The other point which is also
relevant is that one of the tests laid down by this Court
was that if a department was carrying on predominantly
industrial activities, the fact that some of its activities
may not be industrial did not matter. Applying the same
test to the Corporation as a whole, the question was
examined and the inclusion of the education department in
the award was upheld. It would thus be clear that if the
test of the character of the predominant activity of the
institution which was applied to the Corporation is applied
to the University of Delhi, the answer would be plainly
against the respondents. The predominant activity of the
University of Delhi is outside the Act, because teaching and
teachers connected with it do not come within its purview,
and so, the minor and incidental activity carried on by the
subordinate staff which may fall within the purview of the
Act cannot alter the predominant character of the
institution.
It would be recalled that in the case of the Hospital
Mazdoor Sabha (1), the question about educational
institutions was deliberately and expressly left open, and
if the said question was intended to be decided in the case
of the Corporation of the City of Nagpur (2), naturally more
specific arguments would have been urged and the problem
would have been examined in all its aspects. Incidentally,
we may add that the Bench that left the question open in the
case of Hospital Mazdoor Sabha (1) was the same Bench which
heard the case of the Corporation of the City of Nagpur and
the two matters were argued soon after each other, though
the judgment in the first case was delivered on January 29,
1960, and that in the latter case on
(1) [1960] 2 S.C.R. 866, 879.
(2) [1960] 2 S.C. R. 942.
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February 10, 1960. We are making these observations with a
view to emphasize the fact that the question which has been
raised for our decision in the present appeals was not
raised, nor argued, in the case of the Corporation of the
City of Nagpur and cannot, therefore, be said to have been
decided even incidentally only by reason of the fact that
amongst the departments which were held to have been pro-
perly included in the award was the education department of
the Corporation. If we had been satisfied that the said
judgment had. decided this point, we would either have
followed the said decision, or would have referred the
question to a larger Bench.
In the result, the appeals are allowed,, the orders passed
by the Industrial Tribunal arc set aside and the petitions
filed by the respondents under s. 33 C (2) of the Act are
dismissed. There would be no order as to costs.
Appeals allowed.
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