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Asiatic Society's Employees Union Vs. Asiatic Society and Ors. (15.07.1969 - CALHC) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtKolkata High Court
Decided On
Case NumberAppeal No. 74 of 1967
Reported inAIR1970Cal170,[1970(20)FLR54]
ActsIndustrial Disputes Act, 1947 - Section 2
AppellantAsiatic Society's Employees Union
RespondentAsiatic Society and Ors.
Appellant AdvocateK.K. Maitra and ;N.K. Bhattacharya, Advs.
Respondent AdvocateSubimal Roy and ;B. Sarkar, Advs.
DispositionAppeal dismissed
Cases ReferredFitzwilliams Wentworth Estates Co. v. Minister of Housing and Local Government
- .....basu, j. 1. the appellant before us is the union of the employees of respondent no. 1, the asiatic society, a society registered under act xxi of 1860 (hereinafter referred to as 'the society'). there was a dispute between the society and its employees, which was referred by the state of west bengal for adjudication to the first industrial tribunal (respondent 3), by the order of 23-12-63, which is at p. 9 of the paper-book. when the reference came up before the tribunal, the society raised the preliminary objection to the jurisdiction of the tribunal on the ground that the reference was ultra vires since the society did not carry on any 'industry' and its employees were not 'workmen' within the meaning of those terms as defined by the industrial disputes act, 1947. 2. the tribunal.....

D. Basu, J.

1. The appellant before us is the Union of the Employees of Respondent No. 1, the Asiatic Society, a society registered under Act XXI of 1860 (hereinafter referred to as 'the Society'). There was a dispute between the Society and its employees, which was referred by the State of West Bengal for adjudication to the First Industrial Tribunal (Respondent 3), by the order of 23-12-63, which is at p. 9 of the Paper-book. When the reference came up before the Tribunal, the Society raised the preliminary objection to the jurisdiction of the Tribunal on the ground that the reference was ultra vires since the Society did not carry on any 'industry' and its employees were not 'workmen' within the meaning of those terms as defined by the Industrial Disputes Act, 1947.

2. The Tribunal rejected the said objection by its order of 28-6-64 (p. 11 of the Paper-book), holding that the Society was not an educational institution, but an 'undertaking', coming within the definition of 'industry' and that, accordingly, the parties were governed by the Industrial Disputes Act and the reference was competent.

3. Thereupon the Society came to this Court with a Petition under Article 226 (p. 1 of the Paper-book), challenging the validity of the order of reference of 1963 and the order of the Tribunal of 28-6-64 rejecting the Society's objection as to jurisdiction. On 16-9-66. B. C. Mitra, J. allowed that petition and quashed the two impugned orders, holding that the Society was not an undertaking or industry within the purview of the Industrial Disputes Act (pp. 57-66).

4. It is against the aforesaid decision of Mitra, J. that the instant appeal has been preferred.

5. The question involves the interpretation of several definitions of the Industrial Disputes Act, as applied to the established objects of the Society.

6. The Industrial Disputes Act, 1947, provides for the investigation and settlement of 'industrial disputes'. The machinery set up by the Act, therefore, cannot be used unless there is an 'industrial dispute' as defined in Section 2(k) of the Act,

'(k) 'industrial dispute' means any dispute ..... between employers and workmen . . . which is connected with the employment or non-employment ....'

7. The definition of 'employer' and 'workman' import the concept of an 'industry'. Thus,

(s) ' 'Workman' means any person ... employed in the industry... '

8. We have, therefore, to turn to the definition of 'industry' in Section 2(j) -

' 'industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling service, employment, handicraft, or industrial occupation or avocation of workmen.'

9. According to the Tribunal, the Society, in the instant case, is an 'undertaking' as explained by the Supreme Court in the case of State of Bombay v. Hospital Mazdoor Sabha, : (1960)ILLJ251SC , in these words -

'... 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 or a part of such community with the help of employees is an undertaking.'

10. We have, therefore, to determine whether the Society's activities fall under the description of an 'undertaking' as given by the Supreme Court in the cited decision.

11. Before proceeding further, it must be noted that the above definition of 'industry' is an artificial definition, which is wider than the ordinary connotation of the term when it is used to denote activities other than agriculture and similar other occupations. In interpreting this definition, therefore, Courts have been guided by a twofold consideration, namely, that unless the definition is given a liberal interpretation, the beneficial object of the legislation, namely, to secure peace and amicable relations between capital and labour may be defeated; on the other hand, if a too wide interpretation be given, the carrying on of intellectual and other pursuits which are beneficial to society at large may be hampered by interference from external agencies. Naturally, therefore, the decisions of our Supreme Court, on this subject, have proceeded along these two apparently opposite directions, and it will be seen that the wide observations in the Hospital case, : (1960)ILLJ251SC have by this time been qualified and limited by exceptions acknowledged in favour of various institutions, with more or less similar features.

A. In the Hospital group of cases, the following have been held to be 'undertakings.'-

(i) A hospital giving medical relief to citizens. The Hospital case. : (1960)ILLJ251SC

(ii) An Ayurvedic College Pharmacy, manufacturing medicines for sale, and for the benefit of the students in the college (L. H.A. College Pharmacy v. Worker's Union, : (1960)ILLJ250SC .)

(iii) A research Association which is an adjunct of a textile industry, whose object is to discover ways and means by which the member-mills may obtain larger profits in connection with the industry (A. T. L Research Association v. State of Bombay, : (1960)IILLJ720SC .)

(iv) A company formed for the purpose of producing agricultural products for sale as a trader (Harinagar Cane Farm v. State of Bihar. : (1963)ILLJ692SC .)

B. In the other group of cases, the following have been held not to be undertakings. -

(i) A solicitor's firm (N. U. C. Employees v. M. R. Meher Industrial Tribunal, : (1962)ILLJ241SC .)

(ii) Educational Institutions like a college. University. (University of Delhi v. Ram Nath, : (1963)IILLJ335SC .)

(iii) A members' club (as distinguished from a proprietary club) providing a venue for sports, recreation and entertainment (Madras Gymkhana Club Employees' Union v. Management of the Gymkhana Club, : (1967)IILLJ720SC .)

(iv) A members' club promoting sports including cricket, having residential arrangements on payment. (Cricket Club v. Bombay Labour Union. : (1969)ILLJ775SC .)

Though in this sphere it is difficult to hazard general propositions, the following propositions may be gathered from, the observations made in the foregoing cases:

(a) The definition of 'industry' in Section 2(j) contains two parts. The first part determines an industry by reference to the activities of the employer and the second part looks at it from the angle of employees. But the second part, standing alone, cannot define 'industry', It is only if an activity of the employer comes within the first part of the definition, then it will be an 'industry' and thereupon any kind of activity carried on by the employees of such employer will also be included within the concept of industry, as applied to that establishment, : (1967)IILLJ720SC .

(b) An activity will constitute an industry only if it caters to the material needs (as distinguished from intellectual or cultural needs of the society, : (1960)IILLJ720SC ; : (1963)IILLJ335SC and that is done as part of trade or business or as analogous to trade or business : (1967)IILLJ720SC .)

(c) The concept of 'industry' postulates partnership between capital and labour but any activity in which there is cooperation between the employer and the employee is not an industry. It will be an industry only if the co-operation is directly and necessarily involved in the production of the goods or in the rendering in the service which is the object of the establishment concerned, : (1962)ILLJ241SC , and the contribution made by the employer is of capital as distinguished from 'intellectual and educational equipment' (p. 1085, ibid).

(d) When an institution, carries on activities of different kinds, it is its dominant purpose, which will determine its character as an 'industry' or otherwise : (1963)IILLJ335SC . It may not be out of place to mention in this context that in the modern world, pure organisms are rarely available and that is why the test of 'dominant purpose' has been introduced even in the sphere of ultra vires in administrative law (vide R. v. Brighton Corporation, (1907) 96 LT 762 (764); Fitzwilliams Wentworth Estates Co. v. Minister of Housing and Local Government ((1952) AC 362).

12. Applying the foregoing principles to the Society before us, it is evident at once that the object and activities of this Society are to cater to the intellectual as distinguished from the material, needs of men. According to its Rules -

'The bounds of its investigations will be the geographical limits of Asia, and within these limits its enquiries will be extended to whatever Is performed by Man, or produced by Nature.'

13. The Tribunal indeed came to this conclusion in unequivocal terms (p. 13) -

'In my opinion it is a cultural institution, the aim is to promote the general knowledge of the country by conducting research and by publishing various journals and books'.

The Tribunal, nevertheless, as observed in the Hospital decision had held that if a hospital could be an 'undertaking' a research institution could not be otherwise. But the Tribunal failed to notice how the Hospital decision had been explained and distinguished in later decisions of the Supreme Court. The distinction, primarily, is that while a Hospital caters to the material needs of men, a research institution caters to their intellectual needs. The Tribunal's finding cannot, accordingly, be upheld.

14. It was argued by Mr. Maitra on behalf of the Appellants that the Society should nevertheless be held to be an undertaking because it publishes books for sale in the market and the employees contribute their labour in that production. It must be noted however that the Society has no press of its own, and the employees are not engaged in any such industrial establishment. The selling of its publications is only an ancillary activity and the employees are engaged in rendering clerical assistance in this matter just as the employees of a solicitor's firm help the solicitors in giving legal advice and service. The test of 'dominant' purpose, as explained above, wipes out the contention raised by Mr. Maitra.

15. It was argued, as a matter of last resort, that the Court below should have remanded the case to the Tribunal for taking evidence on facts. But the Rules of the Society as well as other facts as appear from the statements of the parties were already before the Court, together With the affidavits. The Court did not travel beyond these materials nor was it necessary to collect other evidence.

16. The judgment of the Court below was correct The appeal is accordingly dismissed with costs.

Ajay K. Basu, J.

17. I agree.

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