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Sheth Motishaw Lalabug Jain Charities v/s Bombay General Employees Association & Another

    WRIT PETITION NO. 1946 OF 1997
    Decided On, 14 December 2001
    At, High Court of Judicature at Bombay
    Shri B.K. Rele with Atul Tungare for Petitioner Shri C.L. Dudhia with H.D. Buch i/b N.D. Buch for Respondents

Judgment Text

One of the contention raised on behalf of the Petitioner Trust is : that the approach of the Tribunal in deciding the core issue as to whether the Petitioner Trust, which is a Religious Charitable Trust, is an Industry or not, cannot stand the test of judicial scrutiny. It is contended that the Tribunal has mingled the contentions of the parties as also its discussion into one - that too without giving a clear finding with regard to the relevant factors which ought to have been addressed having regard to the law enunciated in the celebrated decision of the Apex Court in Bangalore Water Supply case as reported in 1978 LIC 467. To my mind, there is force in this contention. In such a situation, ordinarily I would have been disposed to remand the matter to the Tribunal for reconsideration of the case in accordance with law. However, I am not inclined to do so in this case, as the Respondent Union has placed reliance on atleast two decisions of this Court, both of single Judges - to contend that what is relevant to be considered is only whether the activity of the Trust for which the employee is engaged is a systematic activity for production or distribution of goods calculated to satisfy human wants and has no nexus with the religious performance carried out in the temple of the trust. Undoubtedly, the said decisions of this court would be binding on the Tribunal. To my mind, however, on close scrutiny of the law enunciated by the apex Court in Bangalore Water Supply case, with due respect, such a wide statement of law occurring in the two decisions on which the Respondent Union has relied does not seem to be correct. The first decision relied by the Respondent Union is reported in 1987 - I- LLJ - 81 Shri Cutchi Visa Oswal Derawasi Jain Mahajan Vs. B.D. Borude, I.T. Maharashtra and Ors. The single Judge of this Court has held that the various duties performed by the employee (Watchman, Cashier, Sweeper and clerk) have no bearing or have no nexus to the religious performance carried out in the temple of the trust. The other decision relied by the Respondent Union is reported in 1997 I CLR 338 in the matter of Shri Gajanan Maharaj Sansthan, Shegaon, Buldhana Vs. Industrial Tribunal, Amravati and Ors. In para 10 of this decision the learned single Judge of this Court held that, the only factors, which will have to be considered for deciding whether the Sansthan is an industry or not, are whether there is a systematic activity which is organized by cooperation between the employer and the employees for production or distribution of goods calculated to satisfy human wants. This judgment has relied on the former judgment of this Court which had held that even the Pujari engaged on a monthly salary - where the Trust accepts donation and offerings before the "deity", the Pujari is engaged for giving service to the devotees and the services are not necessarily spiritual in nature: and, therefore, the Pujari is a "workman" and the Trust an "Industry". I have my serious doubts as to whether such hairsplitting is possible merely on the basis of the nature of activity of the employee alone.

2.On the other hand, on close scrutiny of the judgment in Bangalore Water Supply case as reported in AIR 1978 SC 548: 1978 LIC 467, the position seems to be different. The question whether the charitable institute is an Industry or not, has been elaborately discussed in this decision and more particularly in paras 125 to 133 therein. It needs to be mentioned that the apex Court was obviously conscious about the distinction between the "Religious Charitable Trust" and a "Charitable Trust". Before adverting to the observation in those paragraphs, I would first advert to the interpretation employed by the apex Court to the expression "Industry" as occurring in Section 2(j) of the Industrial Disputes Act. The same is found in para 161 of the judgment which is reproduced thus:-

"Para 161. 'Industry', as defined in S.2 (j) and explained in Banerji (AIR 1953 SC 58) has a vide import.

(a) Where (i) systematic activity, (ii) organized by cooperation between employer and employee (the direct and substantial element is commercial) (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e. making, on a large scale prasad or food) prima facie, there is an industry in that enterprise.

(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.

(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.

(d) If the organisation is a trade or business it does not cease to be one because of philanthropy animating the undertaking.

II Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.

(a) "Undertaking" must suffer a contextual and associational shrinkage as explained in Banerji and in this judgment; so also, service, calling and the like. This Yields the inference that all organized activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' provided the nature of the activity, viz. the employer-employee basis, bears resemblance to what we find in trade or business. All features, other than the methodology of carrying on the activity viz. in organizing the cooperation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is analogy.

III Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing less, nothing more.

(a) The consequences are (i) professions, (ii) Clubs (iii) educational institutions (iv) cooperatives, (v) research institutes (vi) charitable projects and (vii) other kindred adventures, if they fulfil the triple tests listed in I (supra) cannot be exempted from the scope of Section 2(j).

(b) a restricted category of professions clubs, cooperatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantially and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees are hired without destroying the non-employee character of the unit.

(c) If, in a view or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose or cause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the binding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired. Such eleemosynary or like undertakings alone are exempt - not other generosity, compassion, developmental passion or project.

IV The dominant nature test;

(a) Where a complex of activities, some of which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not workmen's as in the University of Delhi case (AIR 1963 SC 1873) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (AIR 1960 SC 675) will be the true test. The whole undertaking will be Industry although those who are not 'workmen' by definition may not benefit by the status.

(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by government or statutory bodies .

(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially severable, then they can be considered to come within S.2 (j).

(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.

V. We overrule Safdarjung (AIR 1970 SC 1407), Solicitors case (AIR 1962 SC 1080) Gymkhana (AIR 1968 SC 554), Delhi University (AIR 1963 SC 1873) Dhanrajgirji Hospital (AIR 1975 SC 2032) and other rulings whose ratio runs counter to the principles enunciated above, and Hospital mazdoor Sabha (AIR 1960 SC 610) is hereby rehabilitated."

3.The interpretation given to term "Industry" and more particularly to extricate the Religious charitable Trust will have to be examined in the backdrop of the discussion in paragraphs 125 to 133. According to the apex Court, the paradox can be unlocked only by examining the nature of the activity of the charity. The apex Court has observed that the charity is free, whereas industry is business. The apex court after pondering over the various decisions has observed that : "bedrocked on the groundnorms, we must analyze the elements of charitable economic enterprises, established and maintained for satisfying human wants". The Apex Court has categorised trusts in three broad categories - while making it clear that there can be many more (para 125A). As observed by the Apex Court, the charitable element enlivens the operations at different levels in these patterns and the legal consequences are different viewed from the angle of 'industry'. The Apex Court has observed that the concern is with a beningnant disposition towards workmen and a trichotomy of charitable enterprises run for producing and/or supplying goods and services, organized systematically and employing workmen, is scientific. Out of the three broad categories of the trusts carved out, and more particularly referred to in para 126, it is contended by the Petitioner that the Petitioner Trust would fall in the third category - where the establishment is oriented on a humane mission fulfilled by men who work not because they are paid wages, but because they share the passion for the cause and derive job satisfaction from their contribution. The essence for application of the third category has been further analysed in para 132 and 133 of this decision. To my mind, the apex Court has observed that the heart of trade of business or analogous activity is organization with an eye on competitive efficiency, by hiring employees, systematising processes, producing goods and services needed by the community and obtaining money's worth of work from employees. On the other hand, according to the apex Court, to qualify for exemption from the definition of 'industry' in a case where there are employers and employees and systematic activities and production of goods and services, we need a totally different orientation, organization and method which will stamp on the enterprises, the imprint of commerciality. The apex Court has made it clear that the central fact of employer-employee relations will have to be given special emphasis. But, that does not mean that this is the only factor. For, in the said para the apex Court has observed that if a philanthropic devotion is the basis for the charitable foundation or establishment, the institution is headed by one who wholeheartedly dedicates himself for the mission and pursues it with passion, attracts others into the institution, not for wages but for sharing in the cause and its fulfilment, then the undertaking is not 'industrial'. The Apex Court has further observed that even in such an institution it often happens that some menials and some professional are employed in a vast complex, but that would not make any difference as the Court has to look at the predominant character of the institution and the nature of the relations resulting in the production of goods and services. To wit, the Apex Court observes that, if the substantial number of participants in making available goods and services, if the substantive nature of the work, as distinguished from trivial items, is rendered by voluntary wageless sishyas, it is impossible to designate the institution as an industry, notwithstanding a marginal few who are employed on a regular basis for hire.

4.In the present case, the nature of evidence adduced on behalf of the Petitioner Trust, according to them, supports this proposition and for which reason the Petitioner Trust cannot be held to be an industry. However, to my mind, the Tribunal has not addressed itself to all these aspects of the matter.

5.According to the Petitioner Trust they squarely fall in this third category of Trust notwithstanding having employed forty six employees to take care of trivial items while substantive nature of its work, which is essentially religious as also charitable one, was done by voluntary wageless workers. What is contended is that mere number of employees employed by the trust cannot be the decisive test, for in a given case there can be even hundred employees engaged to take care of trivial items when the properties of the trust are very vast - and as a consequence of which its activities are also vast. Thus the vastness of trust properties would be equally relevant and not the number of employees employed, albeit to do trivial items. In this context reliance has been placed on the observations made in para 132 - where the apex Court has observed that marginal few who are employed on a regular basis in a vast complex are not workman and such institutions are not industries. Thus Apex Court has observed that stray wage-earning employees do not shape the soul of an institution into an industry. On the other hand, the predominant character of the institution and the nature of the relations resulting in the production of goods and services must be pertinent. To my mind, the various tests pronounced by the apex Court have been clearly over looked in the decisions of this Court referred to earlier. Having regard to this position, instead of remanding the matter to the Tribunal for fresh decision, I would think it appropriate that the matter be placed before the Division Bench of this Court to obtain an authoritative pronouncement on the issue that arises for consideration.

6.While parting, I would like to place on record that the Petitioner relies on decisions of other High Courts to contend that Religious and charitable Trust is not an industry, viz.

1)1982 LAB I. C 338 (Division Bench - Gujarat) - Raj Ratna Seth V/s. Ashok Bhasin and Ors.

2)1997 (1) LLJ 155 - (Madras) The Management of K.R.M. Estate, Thanjavur V/s. The I. Additional Labour Court, Madras and Ors.

3)1988 (1) CLR 169 - (Allahabad) Radhasoami Satsang Saba V/s. Rashtriya Mazdoor Congress.

4)1979 (1) I LLJ 398 - (Kerala) Thirumullapulli Devaswom V/s. Commissioner for Workmen's Compensation.

5)1993 (1) CLR 103 - (Division Bench Gujarat) Manager Shri Panchasara Jain Derasar V/s. Mahmadkha Gajikha Baloch.

6)1979 Andhra Weekly Reporter 205 (A.P.) Tirumala Tirupati Devasthanams, Tirupati V/s. Commissioner of Labour.

7)1989 II CLR 28

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6 (Kerala) Kesava Bhatt V/s. Sree Ram Ambalam Trust, and 8)1990 II CLR 656 (Calcutta) Workmen Balkuntha Nath Debasthan Trust. 7.Per contra, the Respondent Union mainly relies on the aforesaid two decisions of this Court besides a decision of the Allahabad High Court reported in 1992 (I) CLR 520 Kshetriya Shri Gandhi Ashram, on the said proposition as to whether Religious Charitable Trust is an Industry. No doubt decisions of other High Courts are not binding on this Court, but as observed earlier, I have some reservation about the wide statement of law made in the said two decisions which I think is not the enunciation of Bangalore Water Supply Case. 8.Be that as it may, it is further brought to my notice that the view taken by the single judge in latter decision in Gajanan Maharaj Sansthan (supra), the same is already pending consideration in appeal before the Division Bench of this Court. Even for this reason I would think it appropriate that the issues that arise for consideration in this case be heard along with the said appeal. It will be open to the parties to make appropriate application for hearing of both the matters together. 9.Office to place the papers before the learned Chief Justice. 10.It is made clear that interim orders directed by this Court shall continue till the disposal of the writ petition or until such time to be modified or varied by this Court. 11.Parties to act on the copy of this order duly authenticated by Associated of this Court.