w w w . L a w y e r S e r v i c e s . i n


Company & Directors' Information:- RAM INDUSTRIAL CORPORATION LIMITED [Strike Off] CIN = U74900DL1946PTC001081

    Civil 263-D Of 1965

    Decided On, 31 October 1967

    At, High Court of Delhi


    For the Petitioner: ---- For the Respondents: ---

Judgment Text


( 1 ) THE petitioners in this case are the trustees of a body known as Delhi Cloth

Market Trust Committee (hereafter called "the Trust" ). It appears that the Trust has

been maintaining a staff consisting of 16 Chaukidars, 11 sweepers, 2 electricians, 1

clerk and 2 Munims. A dispute relating to certain general demands of these

employees having arisen between the management of the Trust and the emp, the

same was referred for adjudication to the Industrial Tribunal, DelhI. In answer to the

claim of the employees, it was contended on behalf of the Trust, by way of

preliminary objection, that it was not an industry within the meaning of section 2 (j)

of the Industrial Disputes Act. By an interim award, dated 12/1/1965, the Industrial

Tribunal, Delhi, has held that this contention of the Trust was wrong and that it was

an industry falling within the definition of section 2 (j) of the Industrial Disputes Act.

The petitioners in this case are the trustees, who constitute the body of the Trust,

and have come up to this Court with a prayer that a writ in the nature of certiorari

or any other appropriate writ, direction or order may be issued to quash the interim

award of the Industrial Tribunal, on the ground that the Trust is in fact not an

"industry" and the Tribunal therefore, has no jurisdiction over it.

( 2 ) PLACING reliance on Syed Yakoob v. Radhakrishnan, the learned counsel for

the respondent workmen, has urged that this Court is not competent to grant the

writ prayed for because the order of the Industrial Tribunal is one passed by it in

exercise of a jurisdiction conferred on it by valid provisions of law and the

conclusions recorded therein are based on findings of facts, which it is not open to

the petitioners to canvass in these proceedings under Article 226 of the Constitution.

The argument loses sight of the fact that the very jurisdiction of the Tribunal in this

case depended on the correct determination of the preliminary jurisdictional issue

raised before it and it is not disputed before me that if the petitioners are found to

be not an industry within the meaning of section 2 (j) of the Industrial Disputes Act,

the whole reference before the Tribunal will fall through. My attention has not been

drawn to any provision in the Act, which confers any power on the Tribunal to

determine conclusively questions relating to its own jurisdiction. Even though the

Tribunal is entitled to decide whether it has jurisdiction or not, but that does not

take away the power of supervision of the High Court to see that the Tribunal acts

within its own jurisdiction and does not assume jurisdiction by wrongly deciding the

jurisdictional issue. The law is well settled that in such a case this Court is

competent to examine the issue raised. Reference in this connection may, with

advantage, be made to the following passage in United Beedi Workers' Union, Salem

v. S. Ahmed Hussan and Sons and others. "to contend that if the jurisdictional issue

depends on an adjudication on a question of fact, the superior Court will be

powerless, however gross that error might be, is to overlook the distinction that has

always existed between a decision of an inferior tribunal on a collateral fact and of

the actual matter that is within the ambit of its jurisdiction. This matter is placed

beyond doubt in Lilavathi Bai v. State of Bombay (1957 S. C. R. 721) where Sinha,.

(as he then was), referred to the distinction between the jurisdiction of the tribunal

to decide a certain fact as one of the issues in the controversy and the collateral fact

on which the jurisdiction to determine the controversy arose. "

( 3 ) A similar question also came up for consideration in the case of Sir Sobha Singh

v. Delhi Administration, Delhi, and others, where it was held that "if for the purpose

of deciding a question which relates to the special jurisdiction, a special Tribunal

finds. it necessary to decide another matter that matter does not become a matter

of special jurisdiction and a decision on it does not bind the parties. A Tribunal of

limited jurisdiction may be invested with powers to deal with a subject matter only if

certain state of facts exists or it may be entrusted with jurisdiction also to determine

the existence of such facts. In the former case, if the Tribunal wrongly holds or

assumes the existence of those facts on which its jurisdiction depends, then that

decision or assumption is not final or conclusive. Industrial Tribunals do not possess

power to finally and conclusively decide whether or not a particular enterprise is an

industry. "

( 4 ) ACCORDING to the findings of the Tribunal, the Trust came into being some

time in the year 1929. What happened was that, as a result of the shifting of the

capital of India from Calcutta to Delhi, a small group of traders secured a piece of

open land situated near the main market centre of the city, and also near its main

railway station, with a view to build a new big market. The land, thus secured, was

divided into plots and on these plots, a large number of shops and residential flats

were constructed by pooling common resources of the persons, who had acquired

the land, and also of others, who came forward to join hands with them thereafter

(hereafter collectively called "the shareholders ). A spacious and fort-like market residential area was thus brought into being by them with lanes and gangways

properly paved and set up. This building is what is now commonly known as Delhi

Cloth Market. The market had three big gates, and the whole area was bound by

Pucca walls of buildings, which formed part of the market itself. Each separate

building in the market was covered with its appertaining proprietary rights in favour

of individual shareholders, but there remained certain parts of the property, by way

of corners and triangulars and other small common portions, including rooms above

the gates, the common corridors and stair-cases, etc. , which could not be owned

and possessed individually by the co-sharers. These portions were a sort of leftovers'

of this property and the same were, therefore, retained by the share holders

as their common property. With a view to look after this common property, the

shareholders formed themselves into a trust in the year 1929 and appointed a

Committee to manage the some. It is this committee of the Trust, which has filed

this petition through its trustees. All the members of the Trust have their property in

the market. The committee, the award says, drives income from the rents received

by it by the letting out of the common portions or the leftovers' of the joint property,

as described above, and also from interest earned from the amount of the reserves

(which, however, is not considerable) and incurs expenses for the management of

the property out of this income.

( 5 ) ON the basis of evidence adduced before it, the Tribunal has also found that

there are about 120 shareholders of this Market property, who have selected 14

persons to constitute the members of the Trust and to be in-charge of the

management. All these shareholders have their shops within the precincts of the

Cloth Market, though a large number of them have let-out their shops to tenants. In

addition to about 350 to 400 shops in the Cloth Market, there are also residential

flats over these shops, which have, however, been let out by the owners. The three

gates of the market are used by the general public till 7-30 p. m. when they are

closed. The Trust has employed Chowkidars to look after the security of the entire

enclosure. Goods taken out of the market are allowed to pass out of its gates by the

Chowkidars posted there, on the basis of Gate Passes having the seal of the Trust.

Gate Pass Books have been printed by the Trust and are supplied against payment

of Re. 1. 00 each to persons occupying the shops in the Market on no profit no loss

basis. The Chowkidars have also to deal with disturbances of peace, if any, that take

place within the enclosure of the Cloth Market. In case of theft or burglary in a shop

involving the breaking open of a lock, the police holds the Chowkidars responsible

and they are taken to the Thana for interrogation. One Chowkidar is posted for night

duty in every one of the eight bazars of the market. At 7-30 p. m. when the market

is closed, each day, the Chowkidars check locks of every individual shop. The eleven

sweepers, employed by the Trust, sweep the streets of the market, while the two

electricians look after the electric installations in the market, including the shops and

residential buildings. In every case in which the lane pavement or road is to be

broken up for installing water connections or water pipes, the Trust Committee

charges a fee of Rs. 10. 00 per item. The Trust supplies sub-meters for the premises

in the Market enclosure and takes a security deposit of Rs. 25. 00 from the

concerned occupant and charges a sum of Re. 0. 40 P. per month as rent of the

sub-meter. The electricity consumed in the entire Market is supplied by the D. E. S.

U. in the name of the Trust, which, in turn, collects consumption charges from each

consumer in accordance with the reading of the sub-meter installed in the particular

premises occupied by him. This arrangement, again, is on no profit no loss basis.

( 6 ) PLACING reliance on the decisions in Ahmedabad Textile Industry's Research

Association v. State of Bombay and others, 1960 and State of Bombay v. Hospital

Mazdoor Sabha the learned Tribunal came to the conclusion that as the Trust did

not merely look after the property in the common pool of the shareholders or the

property actually owned by the individual members, but was also rendering material

services in one form or the other, through its employees "to what was described by

the award" as the entire business community, which was doing business in the

precincts of the market", and in the words of the learned Tribunal itself, "the fact that

the activities of the Trust are carried on in a systematic manner from day-to-day like

those of a business undertaking" brings it within the definition of an industry.

( 7 ) TO me it appears that the Tribunal did not approach the problem from a

correct angle. The activity and its nature is indeed a very relevant and important

consideration to be taken into account for determining whether it can be considered

to be an industry and it is equally true that the activity to be an industry has to be

distinctly systematic and not casual, but that alone does not settle the question.

"industry" as defined in section 2 (j) of the Industrial Disputes Act, reads as under :-

"2. In this Act, unless there is anything repugnant in the subject or context,- (J)

'industry' means any business, trade, undertaking, manufacture or calling of

employers and includes any calling, service, employment, handicraft, or industrial

occupation or a vocation of workmen. "

( 8 ) THIS definition, very obviously, consists of two parts in the sense that the first

part defines the term with reference to the occupation of the employer in respect of

certain activities, while the second part deals with it from the angle of the employee.

If the activity can be considered to be an industry under the first part, the second

part of the definition would embrace all the different kinds of activities of the

workmen that are mentioned therein. What has essentially to be seen and examined

is the real nature of the activity of the employer and Whether from that point of

view, the activity in question is an industry or not. While dealing with this aspect of

the question in The Secretary, Madras Gymkhana Club Employees Union v.

Management of the Gymkhana Club Civil Appeal No. 572 of 1966, decided on

3/10/1967, their Lordships of the Supreme Court, after taking note of the various

criteria evolved on the facts of the previous cases, for the determination of this

vexed question on pages 1103-1104 of the blue print, observed as under :-"this

proves that what must be established is the existence of an industry viewed from

the angle of what the employer is doing and if the definition from the angle of the

employer's occupation is satisfied, all who render service and "fall within the

definition of workman come within the fold of industry irrespective of what they do.

There is then no need to establish a partnership as such in the production of

material goods or material services. Each person doing his appointed task in an

organisation will be a part of the industry whether he attends to a loom or merely

polishes door handles. The fact of employment as envisaged in the second part is

enough, provided there is an industry and the employee is a workman. The learned

professions are not industry not because there is absence of such partnership but

because viewed from the angle of the employer's occupation, they do not satisfy the

test. A solicitor earns his livelihood by his own efforts. If his work requires him to

take help from menials and other employees, who carry out certain assigned duties,

the character of the solicitor's work is not altered. What matters is not the nexus

between the employees and the product of the employer's occupation. If his work

cannot be described as an industry, his workmen are not industrial workmen and the

disputes arising between them are industrial disputes. The cardinal test is thus to

find out whether there is an industry according to the denotation of the word in the

first part. The second part will then show what will be included from the angle of

employees. "

( 9 ) IN order, therefore, to determine whether a particular activity is an industry, it

is necessary to see whether it is a business, a trade, an undertaking, a manufacture

or a calling of employers, resulting in material goods or material services.

( 10 ) THE learned counsel for the workmen maintained that the activities of the

Trust, though not trade and business, were positively and undertaking involving

rendering of systematic and organised services to the occupants of the various

premises in the Markets, which involved a co-operative effort of the employer-the

Trust on the one hand and the employees, the workmen, on the other. She

maintained that the absence of a profit motive was irrelevant in considering whether

an enterprise was an industry and that the expression has to be construed' in a

wider manner.

( 11 ) RELIANCE is strongly placed on the State of Bombay and others v. The

Hospital Mazdoor Sabha and others', where their Lordships held as under :- * * * *

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 be 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 casual nor must it be for oneself nor for pleasure. Thus the manner

in which the activity in question is organised or arranged, the condition of the cooperation between employer and the employee necessary for its success and its

object to render material service to the community can be regarded as some of the

features which are distinctive of activities to which S. 2 (j) applies. "

( 12 ) A reference to the subsequent decisions of the Supreme Court, however, very

clearly shows that this working principle was never indeed to be the sole and the

final test for determination whether a particular activity was an industry, as indeed

the opening words of this paragraph themselves show.

( 13 ) IN the case of The University of Delhi v. Ram Nath, the respondent was

employed as a bus driver under Miranda House, a College affiliated to Delhi

University, whose predominant activity was the imparting of education. On being

discharged by his employer; he raised an Industrial Dispute and applied to the

Tribunal for the award of retrenchment benefits. The employer resisted the petition

and contended that he was not an Industry. The contention was rejected by the

Tribunal and the matter eventually came up before the Supreme Court with special

leave. While dealing with the question, their Lordships held that the appellants

before them could not be regarded as carrying on an Industry within the meaning of

section 2 (j) of the Industrial Disputes Act and observed-"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. "

( 14 ) THIS aspect of the matter also came up before their Lordships of the Supreme

Court in the Madras Gymkhana Club Employees Union case (supra), where after a

full consideration, their Lordships held-"therefore, the word 'undertaking' must be

defined as 'any business or any work or project which one engages in or attempts as

an enterprise analogous to business or trade. "

( 15 ) IT is, therefore, not possible to accede to the submission that mere rendering

of services involving a co-operative effort of the employer and the employee, even if

they were organized and systematic, was enough to imprint on the activity the

character of an industry.

( 16 ) APPLYING the above principles, let us, therefore, see if viewed from the angle

of the Trust, it is engaged in any business or work or project as an enterprise

analogous to business and trade. The reply to my mind is clearly in the negative.

( 17 ) THE members of the Trust are persons selected by the shareholders or the

owners of the Cloth Market property. They are all persons, who themselves own

different parts of the property in the Market as found by the learned Tribunal itself

and all that has happened is that instead of all the shareholder-owners managing

their properties individually, they have selected 14 persons out of themselves to do

so, who are answerable to them. There is no element of business or trade involved

in it and the provisions of section 2 (j) of the Industrial Disputes Act are hardly

attracted to such a situation.

( 18 ) THE argument that the Trust is rendering services to the business community,

which is doing business within the precincts of the Market, is also not tenable. It is

the finding of the learned Tribunal itself that while some of the owners have their

own shops in the Market, the occupants of the other shops are no other but the

tenants inducted by these owners. There is nothing to show that the services of

Chowkidars or the sweepers have been extended or are being extended to these

occupants as an enterprise involving any element of trade or business. It is certainly

open to the owners of the Market to devise such ways and means as they may

consider proper and expedient to secure the safety and preservation of their

property. This will not convert the dominant purpose of their activities.

( 19 ) THE learned counsel for the petitioners has also drawn my attention to Palace

Administration Board v. State of Kerala and others, where the question as to the

activities of the Palace Administration Board, a body corporate, constituted under a

Royal proclamation to look after the estate and properties of the Royal family and

also to manage the palace fund for the benefit of the junior members of the Royal

family, came up for consideration, and it was held as follows :-"work of looking after

the properties of the estate and administering the palace funds for the benefit of the

junior members of the royal family would be one which might normally be treated as

that done by the owner of properties fetching a surplus income. . If the work of

management done by the owner of an immovable property fetching some surplus

income cannot be treated as industry, it cannot become one merely because there

are a number of properties yielding a substantial income. Now the position would be

different if the board undertakes a business venture such as starting an industry

with the surplus income of the estate or the fund. In such a case the dispute

between the board and the employees of that industry would certainly be an

industrial dispute within the scope of the Act. If the owner of an item of immovable

property invests surplus income in erecting building which he gives on lease, he

cannot be treated as carrying on an undertaking. To hold otherwise would mean

that any person who utilizes his savings for constructing a building which he may

not require immediately for his occupation and which he, therefore, lets out would

be deemed to be carrying on an industry thereafter. However wide a connotation is

given for the expression 'undertaking' such a result would not follow. "

( 20 ) IN the case of Ahmedabad Textile Industry's Research Association (supra),

relied upon by the learned Tribunal, the appellant-association before the Supreme

Court was founded with the object to establish a textile Research Institute for the

purpose of carrying on research and other scientific work in connection with a textile

trade or industry and other trades and industries allied therewith as accessory

thereto. The research to be conducted was for the purpose of investigation into

manufacture and improvement of materials used in the textile industry, utilisation of

the products of the industry, improvement of machinery and appliances used by

industry, improvement of various processes of manufacture with a view to secure

greater efficiency, rationalization and reduction of costs, research into the conditions

of work, time and motion studies, fatigue and rest pauses, standardization of

methods of work, conditioning of factories and diseases and accidents arising out of

employment in a textile mill. In order to carry out these objects, the appellant association was to establish, equip and maintain laboratories, workshops or

factories, etc. After taking note of these facts and the various aspects of the

industries, their Lordships found :-"it will thus be seen that though the object of the

association was research, that research was directed with the idea of helping the

member mills to improve methods of production in order to secure greater

efficiency, rationalisation and reduction of costs. The basis, therefore, of the

research carried on by the appellant was to help the textile industry and particularly

the member-mills in making larger profits and this was to be done primarily by the

employment of technical personnel on payment of remuneration. "

( 21 ) THE conclusion that the association was an industry was based on the finding

that the undertaking as a whole

Please Login To View The Full Judgment!

was in the nature of business and trade organized with the object of discovering ways and business by which the member-mills could obtain larger profits in connection with their industries. ( 22 ) IN view of the above discussion, I have no hesitation in holding that the petitioners, with their present activities, are not an industry within the meaning of section 2 (j) of the Industrial Disputes Act. ( 23 ) THE learned counsel for the workmen then contended that there had been previous disputes between the management and the Trust, which had been referred for adjudication to the Industrial Tribunal, where the petitioners never raised any objection as to its jurisdiction, with the result that the contention now raised should be treated as barred on the principles of res-judicata. The learned Tribunal had noticed one such case of industrial dispute No. 18 of 1960 relating to termination of services of one of the employees of the Trust, Shri Suchet Singh. At the hearing before me, the learned counsel has cited other instances and has filed an affidavit of Shri Badri Narain Tewari, dated 25/10/1967, in support thereof. It is conceded that the question as to whether the petitioners are or are not an industry, was never specifically raised before any Tribunal and was never heard or decided. But it is urged that the failure to raise this objection operates as an estoppel and debars the petitioners from raising this contention at the present stage. I, however, find little substance in this contention. The principles or estoppel can hardly be invoked in a case like this. ( 24 ) WHERE there is no representation, no acting on it, no change of position as a result there of, the doctrine of estoppel is not attracted. Admissions which may have been made under a mistake as to the true legal character of the venture, cannot operate to create an estoppel or acquiescence nor can they be invoked for the purpose of conferring jurisdiction on the Industrial Tribunal, when such a jurisdiction does not vest in it; neither consent nor acquiescence of a party can operate to vest jurisdiction in a Tribunal, where, in fact, none otherwise exists. ( 25 ) FOR the reasons aforesaid, the petitioners with their present activities are held not to be an industry within the meaning of section 2 (j) of the Industrial Disputes Act. In the result, the award of the Industrial Tribunal, Delhi, in reference No. 152 of 1962 is herby quashed, but, in the circumstances of the case, the parties are left to bear their own costs.