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Om Prakash Vs. Executive Engineer, S.Y.L. Canal Division No. 7 - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtPunjab and Haryana High Court
Decided On
Judge
Reported in(1985)ILLJ16P& H
AppellantOm Prakash
RespondentExecutive Engineer, S.Y.L. Canal Division No. 7
Cases ReferredBangalore Water Supply & Sewerage Board v. A. Rajappa
Excerpt:
- - (2) economic adventures clearly partaking of the nature of trade and business undertaken by it as part of its welfare activities. category (2): that where the state enters the field of economic adventures clearly akin to trade and business, such an activity because of its intrinsic nature would remain within the ambit of industry. by the passage of time it was thought necessary to build irrigation and drainage works for the purpose of providing better water facilities to the farmers on whom 3 depends the economy of this country......the construction and maintenance of national and state highways by the state fell within the ambit of industry as defined in section 2(j) of the act. the answer to the said question in that case depended upon the answer to the question as to when governmental functions stricto sensu (as against private enterpreneurs) would also come to fall within the ambit of industry. as a complete and conclusive answer to this question was not available in the latest judgment of the supreme court in bangalore water supply & sewerage board v. a. rajappa 1978-ii l.l.j. 73 the matter was gone into by the bench independently. for that purpose, the state or governmental activity was classified into four categories as under:(1) the sovereign or the regal functions of the state which are the primary.....
Judgment:

P.C. Jain, Acting C.J.

1. Whether the Irrigation Department of the State comes within the ambit of 'industry' in Section 2(j) of the Industrial Disputes Act, 1947 (hereinafter referred to as the 'Act'), is the legal question in this petition, which deserves decision authoritatively by this Bench on a reference by a Division Bench of this Court.

2. The petitioner was appointed as a mate in the year 1979 and was posted in Sub Division VII, Kurukshetra. He continued to work as a mate without any break till 30th June, 1981. He was served with one month's notice dated 28th May, 1981, for termination of his services by way of retrenchment. The dispute between the parties could not be reconciled and ultimately the Government of Haryana referred the dispute for adjudication to the Labour Court, Faridabad. The petitioner filed a statement of claim before the Labour Court specifically taking the plea that his retrenchment was not justified under the law. Respondent No. 1 filed his reply. On the pleadings, the Labour Court framed as many as three issues but the one with which we are concerned leads as under: -

Whether the Irrigation Department is an industry or not, if so, to what effect? O.P.M.

On consideration, the Labour Court decided the aforesaid issue in favour of the management and held that the Irrigation Department is not an industry. Consequently, the reference was not gone into on merits as the Labour Court had no jurisdiction to decide the dispute. Feeling aggrieved by the award given by respondent No. 2, dated 10th May, 1983, annexure P.l, the petitioner filed the present petition in this Court. Alter the issuance of notice of motion, when the petition ultimately came up for hearing on 13th October, 1983, the Bench found that there was an unreported judgment of this Court in Sal Pal v. Stale of Punjab C.W.P'. No. 1191 of 1983 decided on 12th May, 1983, in which a view had been taken that the Irrigation Department was an industry. Finding that the said view was not in consonance with the decision of the Full Bench of this Court in State of Punjab v. Kuldip Singh 1984 65 F.J.R. 74, the Bench decided to refer the matter for decision by a larger Bench. That is how we are seized of the matter.

3. As earlier observed, the only question that needs determination in this case is whether the Irrigation Department of the State is an industry or not. Although the learned Counsel for the parties did make a reference to various judicial decisions, yet ultimately, dining the course of arguments, it was found that the matter would have to be decided in the light of the judgment in Kuldip Singh's case (supra).

Coming to Kuldip Singh's case (supra), I find that the question that arose for determination was whether the construction and maintenance of National and State Highways by the State fell within the ambit of industry as defined in Section 2(j) of the Act. The answer to the said question in that case depended upon the answer to the question as to when governmental functions stricto sensu (as against private enterpreneurs) would also come to fall within the ambit of industry. As a complete and conclusive answer to this question was not available in the latest judgment of the Supreme Court in Bangalore Water Supply & Sewerage Board v. A. Rajappa 1978-II L.L.J. 73 the matter was gone into by the Bench independently. For that purpose, the State or governmental activity was classified into four categories as under:

(1) The sovereign or the regal functions of the State which are the primary and inalienable rights of a constitutional Government.

(2) Economic adventures clearly partaking of the nature of trade and business undertaken by it as part of its welfare activities.

(3) Organized activity not stamped with the total indicia of business yet bearing a resemblance to or being analogous to trade and business.

(4) The residuary organized governmental activity which may not come within the ambit of the aforesaid three categories.

On consideration of the entire matter, the Bench held as follows (pp. 81 to 84 of 65 F.J.R.):

Category (1): That the sovereign and regal functions of state (however much they may tend to come within the wide-ranging words of Section 2{j) of the Act) are to be judicially excluded from the ambit of industry.

Category (2): That where the State enters the field of economic adventures clearly akin to trade and business, such an activity because of its intrinsic nature would remain within the ambit of industry.

Category (3): That the activities falling within this category may come within the most liberal and wide ranging ambit of being analogous to or resemble trade or business or welfare economic venture, is now authoritatively within the ambit of industry notwithstanding the fact that it may be conducted exclusively by the State.

Category (4): That the governmental activity which is neither strictly 'trade or business' in nature nor even remotely resembling or analogous thereto, would be a governmental function outside the ambit of the term 'industry' as defined in Section 2(j) of the Act.

4. The matter has now to be tested on the anvil of the four-fold classification of the Governmental activity. The contention of Mr. S.D. Sharma, learned Counsel for the petitioner, was that the activities of the Irrigation Department fell in categories (2) and (3) inasmuch as the Irrigation Department sells water to farmers, that the Department constructs wells and gets income by supplying water out of those wells and that electricity is sold to the consumers after constructing power-houses. On the other hand, it was contended by the learned Advocate-General that all the functions of the Irrigation Department fell within the fourth category and that, essentially, the working of this Department, by no stretch of imagination, could be held to be an 'industry'.

5. In order to find out a correct answer and judge the plausibility of the contention on either side, it would be necessary to understand the 1 working of the Irrigation Department. It may be observed at the outset that none of the parties placed any material on the file in this respect. However, on our asking, during the course of arguments, the learned Advocate-General has 1 supplied certain information which has been placed on the record.

6. The Irrigation Department is a branch of the Public Works Department. It provides a reasonably assured source of water for crops 2 through the network of canals. The Irrigation Department also carries out schemes and takes measures for protecting crops from the menace of floods during times of abnormal rainfall. In the olden times when there were no canals, 2 agriculture was very limited and cultivators depended solely on rainfall. By the passage of time it was thought necessary to build irrigation and drainage works for the purpose of providing better water facilities to the farmers on whom 3 depends the economy of this country. These works could only be built by the Government.

7. The Western Jamuna canal, which serves the State of Haryana, was the first major irrigation work which was initially constructed by Feroze Shah Tuglaq in 1351. It was reconditioned by Akbar in 1568 and was extended in 1626 in the reign of Shahjehan. The canal was constructed in a reasonably serviceable form by the British during 1817-1823. Then the Upper Bari Doab Canal, Sirhind Canal, Lower Chanab Canal and Lower Jhelum Canal, etc., were constructed. Thereafter, many other projects have come up and the ones which need mention are Bhakra-Nangal Project with its network Bhakra Canal. System and the Beas Project. All these projects have been carried out by the State at State expense. It is understandable that such projects could not at all be undertaken by private enterpreneurs nor could be left in their hands for execution. Further, water is a State subject as per Entry 17 in List II of the Seventh Schedule to the Constitution. Even before coming into force of the Constitution, water of rivers and streams was considered to be belonging to the State. The preamble of the Northern India Canal and Drainage Act, 187-1, reads as under:

Whereas, throughout the territories to which this Act extends, the Provincial Government is entitled to use and control for public purposes the water of all rivers and streams flowing in natural channels, and of all lakes and other natural collections of still water; and whereas it is expedient to amend the law relating to irrigation, navigation, drainage! in the said territories.

Thus, it would be evident that the water has at all times been a State subject and the State can exercise full executive powers in all matters connected with the water. The State supplies water to the farmers through the network of canals. It is correct that water rates are realised from the farmers but they are not realised for the cost of the water. In other words, the State does not sell water to the farmers. As contended justifiably by the learned Advocate-General, the water charges are not even sufficient to meet the establishment and maintenance expenses of the Department. Moreover, the water rates have never been realised on the basis of the quantity of the water supplied. These rates are dependent upon the class of crops raised by the farmers and have been fixed in terms of per acre. It may be. noted that rates for crops, such as wheat, sugarcane, cotton, rice, are higher than for the other crops such as gram, oilseeds, bajra and maize, etc. In other words, the water charges have been linked on the principle of bearability, that is, paying capacity of the farmer dependent upon his income from the kind of crop raised by him. The water is supplied on the basis of the holding of each farmer in terms of cultivable commanded area, that is, on the basis of uniform and equitable yardstick. Again, the water charges are remitted when the crops are damaged, by natural calamities such as locust, hailstorms, floods or drought, etc. Further, the construction of canals, dams, barrages, and other projects cannot be entrusted to some private hands. The construction of these works involves compulsory acquisition of land which can alone be done by the State. Merely this fact that water is supplied by charging certain rates cannot warrant a finding that the State is indulging in a trade or business activity or an activity which is analogous to trade, business or economic venture. From what has been stated above, there can be no gainsaying that the functions of the Irrigation Department cannot at all be left to private enterprise. The factors which weighed in holding that the construction and maintenance of National and State highways by the State does not come within the ambit of 'industry' in Kuldip Singh's case (supra), are present so far as the Irrigation Department is concerned. Thus, the contention of Mr. Sharma that the Irrigation Department falls within the categories (2) and (3), is not at all tenable. In this view of the matter, I hold that the functions of the Irrigation Department are essentially government functions and that these functions neither partake of the nature of trade and business nor are even remotely analogous thereto and that this Department does not come within the ambit of 'industry' as defined in Section 2(j) of the Act.

Coming to the unreported judgment of the Division Bench in Sat Pal's case (supra), we find that the learned Judges have held that subdivision No. 28, Division No. 9. Satlej-Yannma Link Canal of the Irrigation Department of the 2 State of Haryana, is an industry as the nature and activities of this Department are commercial as this Department sells water to the farmers for the purpose of irrigation of the lands. With respect, for the reasons given in the earlier part 3 of this judgment, the view taken in Sat Pals case (supra), cannot be upheld and, consequently, stands overruled. However, it may be observed that the learned Counsel in that case were remiss in their duty in not bringing to the notice of the Bench the judgment of the Full Bench in Kuldip Singh's case (supra), which had been decided on 2nd August, 1982. Otherwise, I am sure, the fate of that case would also have been the same as is going to be of this case.

8. For the reasons recorded above, this petition fails and is dismissed but without there being any order as to costs.


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