Bangalore Water Supply and Sewage board v. V A Rajappa

 Bangalore Water Supply and Sewerage Board Vs. V.A Rajappa 

Citation: AIR 1978 SC 548

Bench: Beg, M. Hameedullah (Cj), Chandrachud, Y.V., Bhagwati, P.N., Krishnaiyer, V.R. & Tulzapurkar, V.D., Desai, D.A. & Singh, Jaswant.

FACTS:

The dispute that arose in this case was between the employees of the Bangalore Water Supply and Sewerage Board and its management. The employees had been subjected to fines by the board and had approached the Courts. The Board advanced the claim that since it was a government entity providing a public utility, it was performing a regal function and would not come under the Industrial Disputes Act. 

ISSUES:

Whether an entity carrying out the responsibilities of the State would be considered an industry. 

JUDGMENT:

The Supreme Court was of the opinion that a systematic activity which is organised or arranged in a manner in which the trade or business is generally organised or arranged would be an industry despite the fact that it proceeds from charitable motives.

It laid down a test to determine whether an entity would be considered an industry. In order to fit the definition of an industry,

There should be a systematic activity which is carried out through the co-operation between the employer and employee for the production or distribution of goods and services which are calculated to satisfy human wants or wishes. 

It is irrelevant to consider whether there is a profit motive or a gainful objective and there is no distinction between public, joint private or any other ventures. 

The primary focus of the test is the function performed and the decisive test is the nature of the activity and special consideration must be given to the employer-employee relations. 

The entity does not cease to be a trade or a business simply because it is performed with philanthropic intent. 

The Industrial Disputes Act was intended to protect the interests of the workmen and therefore, the court has taken a liberal interpretation of the term industry and included any entity which may be performing an activity that involves workmen.