1. The employers of the Osmania 'University are the writ petitioners and seek a writ of certiorari to quash the award by the Industrial Tribunal, Hyderabad in Case No. 15 of 1955. The Government through the Notification No. 1/24/55/72 of 17-8-1955 had referred to the aforesaid Tribunal the dispute between, some of the employees and the Osmania University. Thereby the following two issues had been referred :
'Whether the following demands of the workmen are justifiable?
(1) Conversion of the existing consolidated wages of O. S. Rs. 26 per month into the grade of O. S. 26-1-30 with retrospective effect from April 1952.
(2) Payment of Dearness allowance of O. S. Rs. 21 per month to workmen in receipt of a pay upto O. S. Rs. 50 per month.'
2. The general Secretary of the Osmania University Mazdoor Sangh had filed before the Tribunal the written statement stating that the University had agreed to implement the minimum wage of Rs. 26 but bad not given the wage scale of Rs. 26-1-30 to some of the workers which was discriminatory; and that the University had denied to the workmen concerned the minimum standard of living wage. In respect of the second issue it was stated therein that the University had agreed to the payment of dearness allowance to the low-paid workmen drawing between Rs. 26-50 at the rate of Rs. 26; but it had denied it to certain workers and that it should be raised to Rs. 26 in the case of all workmen drawing less than Rs. 50.
The University apart from the written statement disputing the merits of the workers' demands had in a separate statement raised four legal points. In this additional written statement of 13-3-1956 it was urged that the University was not an industry within the meaning of the terms as defined in the Industrial Disputes Act XIV of 1947 so that the Tribunal had no jurisdiction to deal with the dispute and dispose of the reference. The other legal point raised was that the University was covered by List II of the VIIth Schedule of the Constitution and therefore was not governed by the Industrial Disputes Act XIV of 1947. which is legislation by the Centre.
The Tribunal's decision on the first legal issue is that Section 2(j) of the Industrial Disputes Act XIV of 1947 has defined 'industry' in wide terms and having regard to the inclusion of the word 'undertaking' in the aforesaid definition the University was an industry for the purposes of the Act. As regards the objection of the enactment not being applicable to the University due to the latter's being included in the State List, the Tribunal has held that item No. 24 of the concurrent list of the Seventh Schedule covered the legislation and therefore the Act governed the dispute between the University and its employees.
Having so found the Tribunal has decided that it had jurisdiction to entertain the dispute and that the workmen can be properly represented by their General Secretary. On the merits of the two questions referred by the then Government, it has decided the first issue in the following words :
'In view of this financial position and grades existing in the counter-parts in the Government departments and in view of the fact that the University is not a profit-making concern, I reject the workers' demands for increase in basic wages.''
3. Dealing with the second issue it has found that it the workmen were mazdoors, they would be entitled to O. S. Rs. 26 as Dearness allowance and nine categories of the employees were mazdoors, who were therefore entitled to get O. S. Rs. 21 from April, 1952 as Dearness allowance in addition to their basic wage. These are chaprasi, cycle, orderly, head-ayahs, ayahs, sweepers, washer-men, telephone operators, khakrob (scavengers) and gowlis (milkmen).
4. Before us the main ground taken against the award is that an educational institution like the University is not an industry so as to justify a dispute arising between the institution and its employees being referred under the Industrial Disputes Act, 1947 (XIV of 1947). In this connection it is necessary to state that on the date the reference was made the Osmania University was governed by a Charter that was issued on Zilhijja 16, 1336 H. The aforesaid document states the object of the University to be one for imparting higher education and of promoting research in religion, morals, literature, philosophy, science, history, medicine, law, agriculture, commerce and other branches of knowledge, arts and industry.
The Charter has also conferred powers on the University to provide for instruction in all such branches of learning as it may decide, to take, purchase and hold property; and generally to exercise all such powers as well as to do an such acts as may be required to further the object. The document requires the University to be open to all persons of either sex and of whatever race, creed or class, and its officers were to be the Chancellor, the Vice-Chancellor, the Registrar and such other officers as may be declared by the statute. The instrument then enumerates the several authorities, which are eight in number, the first being the 'University Council, the next being the Senate, the third being the academic council and so on.
The Council was then vested with the powers among which was one to appoint, suspend or dismiss in accordance with the statutes officers, teachers and other servants of the University, to define their duties and the condition of their service. The Charter further provided for charging fees from the students, and all the grants made by the Government from time to time, all sums paid, or endowments by private persons together with fees received were to form the University fund, which were to he disposed of for the purposes set forth in the Charter.
5. From the aforesaid summary it is clear that the Osmania University is an institution organised for the purposes of affording instruction in arts and sciences and the issue arising for the decision in this petition in whether a dispute between such an institution and its employees can be governed by the Industrial Disputes Act. For this purpose the following definitions in Section 2 of the Act are relevant:
'(j) 'industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, hand-craft, or industrial occupation or avocation of workmen;
(k) 'industrial dispute' means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person;
(s) 'workman' means 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, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person,.....'
The Tribunal has in deciding the dispute to be industrial been very much influenced by the following passage of Halder in his book 'Evolution of Labour Management Relations and the Indian Law of Industrial Disputes'', Part II, page 19, para 3 :
'Hence, a charitable institution like this hospital, the University, a free school or college, a public body like a municipal corporation would come within the conception of undertaking so as to bring it within the definition of 'industrial disputes' as given in the Act, unless the plain meaning of the word be restricted. The only question, on this part of this case, therefore, is whether its meaning is to be restricted.'
With respect we would differ, for though there are judicial pronouncements holding charitable hospitals to be industry as defined in the Act, there is none going so far as to hold University to be also governed by the enactment Nor do we think the decision in D. N. Banerji v. P. R. Mukherjee, AIR 1953 SC 58, supports the view that the educational institution is covered by the definition of industry in the Act. There the Head-clerk and the Sanitary Inspector of the Budge-Budge Municipality were suspended by the Chairman on receipt of complaint against them for negligence and indiscipline.
After their explanations were received the majority of the Commission considered the entire complaint and confirmed the order of suspension. The Municipal Workers' Union of which the aforesaid employees were member questioned the propriety of the dismissal and the matter was referred to the Tribunal under the Industrial Disputes Act, which found the case to be of victimisation and directed their re-instatement. The application under Article 226 was dismissed by Calcutta High Court, and the order was affirmed by the Supreme Court. Chandrasekhar Aiyar, J., dismissing the appeal observes that the definitions of the Act included disputes that might arise between Municipalities and their employees in branches of work that can be said to be analogous to the carrying out of a trade or business. In this connection his Lordship has earlier at page 60 observed as follows :
'It is obvious that the limited concept of what an industry meant in earlier times must now yield place to an enormously wider concept so as to take in various and varied forms of industry, so that disputes arising in connection with them might be settled quickly without much dislocation and disorganisation of the needs of society and in a manner more adapted to conciliation and settlement than a determination of respective rights and liabilities according to the strict legal procedure and principles. The conflict between capital and labour has now to be determined more from the standpoint of status than of contract. Without such an approach the numerous problems that now arise for solution in the shape of industrial disputes cannot be tackled satisfactorily and this is why every civilised 'Government has thought of machinery of Conciliation Officers, Boards and Tribunals for the effective settlement of disputes.'
It is clear that his Lordship while liberally construing industry and industrial dispute in the case has not discarded the essence of the definition of industry to be of co-operation between capital and labour, however varied the co-operation be. Indeed the learned Judge quotes the following passage of what Isaacs and Rich JJ., have held in the Federated Municipal and Shire Council Employees' Union of Australia v. Melbourne Corporation, 26 Com WLR 508 :
'Industrial disputes occur when, in relation to operations in which capital and labour are contributed in co-operation for the satisfaction of human wants or desires, those engaged in co-operation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the product or any other terms and conditions of their cooperation.'
6. This formula excludes two extreme contentions. It excludes all such institutions and professions as are not carried on in any intelligible sense by the co-operation of capital and labour and it includes all undertakings where the aforesaid cooperation exists without any profits being earned.
7. It would follow that if the co-operation bo not of capital and labour, a dispute between employer and employees would not be an industrial dispute, It would further follow that a dispute between a lawyer and his employee would not be covered by the Act, because the employer there depends entirely on his intellectual attainment and skill. Therefore the Calcutta High Court has in Brij Mohan v. N. C. Chatterjee, AIR 1958 Cal 400, rightly held that as the business or profession of the solicitor is not an industry, a dispute between him and his employee would not constitute an industrial dispute. The learned Judge while so deciding observes at page 464 :
'Previously it was thought that an industry must be connected directly or indirectly with theproduction or distribution of wealth and there must be co-operation of capital and labour. It has now been modified to the extent that the profit motive has been eliminated and the expression 'capital' is to be used in an extended sense.....In my opinion, however extended themeaning be given to the expression 'industry' or 'industrial dispute' or to the expression 'undertaking' or 'calling', we cannot include within their concept the case of an individual who carries on a profession dependent upon his own intellectual skill.'
Another Judge of the same High Court has in Dunderdele v. Mukurjee, : (1958)IILLJ183Cal , also held that a firm of solicitors is not an industry within the meaning of the Act. At page 469 this learned Judge observes as follows :
'Industry is a partnership between labour and capital and the industrial product is the result of that co-operation and partnership. They each have a share in building the product of industry. Both capital and labour are impressed on the product of industry. That is the basic and distinctive test of industry for the settlement of whose industrial disputes the Constitution of India as well as special statutes like the Industrial Disputes Act and many other Statutes have made jealous provisions for the industrial welfare of the country.'
8. The co-operation between labour and capital being the significant and distinctive test it follows that any educational institution where that cooperation does not exist would not be covered by the definition of industry and this Is what has been decided in Federated State School Teachers' Assn. of Australia v. State of Victoria, 41 CLR 569. There it was held that the educational activities of the States carried on under the appropriate statutes and statutory regulation of each State relating to education did not constitute an industry. The test applied by the majority in the case is in these words at page 575:
'Testing this case, therefore, by the other suggested criteria or badges of industrialism can it be said that the education activities of the State constitute an industry? So far as the matter is one of fact, we would say that they cannot. They bear no resemblance whatever to an ordinary trade, business or industry. They are not connected directly with, or attendant upon, the production or distribution of wealth; and there is no co-operation of capital and labour in any relevant sense, for a great public scheme of education is forced upon the communities of the State by law'.
Applying the aforesaid test to the institution like the Osmania University we have no hesitation in holding it not to be an industry; for here is neither cooperation of capital and labour, nor its activities are directly connected with, or attendant upon, production or distribution of wealth.
9. We would now examine the several cases relied upon for treating the University to be 'industry' as defined by Section 2(j) of the Act. In BombayProvince v. W. I. Automobile Association, AIR 1949 Bom 141 the dispute was between the Western India Automobile Association and its workers. The learned Judges have held the dispute to be covered by the Act, because they found that activities would be covered by the definition of 'industry' in Section 2(j) of the Act even if carried with no profit motive. The case is no authority for the proposition that educational institutions are covered by the definition. In Vishuddananda Saraswati Marwari Hospital v. Its Workmen, 1952-53-4 FJR 296 (LATI), it has been stated that charitable institutions like hospitals, Universities, free schools or colleges or public bodies would come within the concept of 'undertaking'.
We doubt the correctness of the grounds on which the educational institutions have been included in the list. It is well settled that the definitions In a statute must be read in its context, with the scheme of the statute and what the enactment intended to remedy. It follows that all these control the definitions, Now it is well known that when the Industrial Disputes Act was passed, labour disputes had assumed big proportions and there were clashes between workmen and employers in several instances.
It follows that the definition of 'industry' in a statute to prevent the evil would not be intended to include within its scope only what might be strictly called a trade or business venture. Yet the definition in the enactment would not be intended to cover what would not be disputes between capital and labour, nor disputes where activities are neither directly connected with, or attendant upon, the production or distribution of wealth. For these reasons we do not think the law has been correctly stated in 1952-53-4 FJR 296 (LATI).
The next case relied upon in support of the award being within jurisdiction is National Union of Commercial Employees v. Meher, 1959-2 Lab LJ 38: (AIR 1960 Bom 22). It has been held there that the basic concept of industry has always been that there must be co-operation between the employer and the employees either in producing wealth or in rendering services. If the test be the correct one, we do not see how a lawyer or a private doctor running a clinic can be excluded from the Act, for there also is the service to the community which is the outcome of the combined efforts.
We therefore think that the correct test for ascertaining whether the Act would be applicable is to ascertain whether the particular dispute is between the capital and labour, whether they be engaged in co-operation, or whether the dispute has arisen in activities connected directly with, or attendant upon, the production or distribution of wealth.
As the dispute between the University and its employees was not of the aforesaid kind, it is not an industrial dispute and therefore the reference to the Tribunal was not covered by the Act. It follows that the Tribunal because of the reference acquired no jurisdiction to give the award, which being without jurisdiction is void, and must be set aside. The Writ petition is accordingly allowed and the award is vacated: but having regard to the circumstances of the case the parties will bear their costs.