# A SECRETARY; MADRAS GYMKHANA CLUB EMPLOYEES' UNION v. MANAGEMENT OF THE GYMKHANA CLUB

- **Citation:** [1968] 1 S.C.R. 742
- **Court:** Supreme Court of India
- **Decided:** 1967-10-03
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/a-secretary-madras-gymkhana-club-employees-union-v-management-of-the-gymkhana-4284
- **Pages:** 19

## Headnote

A SECRETARY; MADRAS GYMKHANA CLUB EMPLOYEES'
UNION
B
v.
MANAGEMENT OF THE GYMKHANA CLUB
October 3, 1967
[M. HIDAYATULLA\f, V. BHARGAVA AND C. A. VAIDIALINGAM, JI.)
Industrial Disputes Act (14 of 1947), s. 2(j)-'Industry', what iaMeaning of the word 'undertaking' in the definition of 'indtlStTfl' -
Members' Club, if industl'y.
The respondent is a non-proprietary members' club. It Is oreani.
C ed on a vast scale with multifarious activities providing a venue for
sports and games, and facilities for recreation, entertainment and
for catering of food and refreshment. Guests are admitted but on
the invitatipn of members. It has 194 employees with a wage bill
between one lakh and two laks rupees. For the year 1962, the employees claimed bonus but the Industrial
Tribunal held that the
club was not an 'industry' within the meaning of the Industrial
D Disputes Act, 1947, and rejected the claim of the employees.
In appeal to this Court.
Held: (1) The definitions of industrial dispute 'employer' and
'workman' show that an industrial dispute can only arise In relation
to an 'industry'. The definition of 'industry' is !n two parts, the first,
from the point of view of employers and the second, from the angle
of employees. In its first part it means any 'trade, business, under-
!! taking. manufacture or calling of employers'. This part detertl)ines
an industry by reference to occupation of employers in reopect of ·
those activities specified by the five words and they_ determine what
an 'industry' is, and what the cognate expression 'industrial' Is Intended to convey .. But the second part standing alone cannot define
'industry'. If the existence of an industry viewed from the angle of
what the employer is doing is established, all who render service
F and fall within the definition of 'workman' come within the fold
of industry, irrespective of what they do. Thus, the cardinal teet is
to find out whether there is an industry according to the denotation
of the word in the first part. (753 A-754 HJ.
Taking the words in the definition of 'industry' the word 'trade'
means exchange of goods for goods or goods for money, or, any
bus_iness carried on with a view to profit, whether manual or merG canti!e as distinguished from the liberal arts or learned professit>ns
and from agriculture. The word 'business'
means an enterPl'ile
which is an occupation as distinguished from pleasure. and 'manufacture' is a kind of productive industry In which the making of
articles or material, often on a large scale, is by physical labour or
mechanical power. The word 'calling' denotes the following of a pro-
·fess;on or trade. [756 F-H].
The word 'undertaking' has figured In the cases of this Court.
H In D. N. Banerjee v. P. R. Mukherjee, (1953] S.C.R. 302 it was observed that the word is not to be Interpreted by association with the
words that precede or follow it in· the definition of 'industry', But
the settled view of this Court is: that primarily Industrial disputes
occur, when the operation undertaken rests upon cooperation between employers and employees with a. view to production and distribution of material goods, in other words, wealth, but they may
742
GYlfKllANA CLUB UNION 11,· MANAGJIMENT (Hidayatullah, J,)
748
arise also in cases where the cooperation is to produce material aerA
vices. For an ·undertaking' to be an industry, it is not necessary that
it must be carr;ed on with capital by private enterprise or that it
must be commercial or result in profit but there must be systematic activity and it must be analogous to the carrying on of a trade
or business involving co-operation between employers and employees. But every human activity in which the relationship of employers and employees enters, is not necessarily creative of an industry. Personal se.rvices rendered by domestic and other servants, administrative services of public officials, services in aid of occupations of professional men such as doctors and lawyers etc., employment of teachers an

## Text

_Characters 0–39,896 of 54,075. This is a partial read: ask again with offset=39896 for what follows._

A SECRETARY; MADRAS GYMKHANA CLUB EMPLOYEES'
UNION
B
v.
MANAGEMENT OF THE GYMKHANA CLUB
October 3, 1967
[M. HIDAYATULLA\f, V. BHARGAVA AND C. A. VAIDIALINGAM, JI.)
Industrial Disputes Act (14 of 1947), s. 2(j)-'Industry', what iaMeaning of the word 'undertaking' in the definition of 'indtlStTfl' -
Members' Club, if industl'y.
The respondent is a non-proprietary members' club. It Is oreani.
C ed on a vast scale with multifarious activities providing a venue for
sports and games, and facilities for recreation, entertainment and
for catering of food and refreshment. Guests are admitted but on
the invitatipn of members. It has 194 employees with a wage bill
between one lakh and two laks rupees. For the year 1962, the employees claimed bonus but the Industrial
Tribunal held that the
club was not an 'industry' within the meaning of the Industrial
D Disputes Act, 1947, and rejected the claim of the employees.
In appeal to this Court.
Held: (1) The definitions of industrial dispute 'employer' and
'workman' show that an industrial dispute can only arise In relation
to an 'industry'. The definition of 'industry' is !n two parts, the first,
from the point of view of employers and the second, from the angle
of employees. In its first part it means any 'trade, business, under-
!! taking. manufacture or calling of employers'. This part detertl)ines
an industry by reference to occupation of employers in reopect of ·
those activities specified by the five words and they_ determine what
an 'industry' is, and what the cognate expression 'industrial' Is Intended to convey .. But the second part standing alone cannot define
'industry'. If the existence of an industry viewed from the angle of
what the employer is doing is established, all who render service
F and fall within the definition of 'workman' come within the fold
of industry, irrespective of what they do. Thus, the cardinal teet is
to find out whether there is an industry according to the denotation
of the word in the first part. (753 A-754 HJ.
Taking the words in the definition of 'industry' the word 'trade'
means exchange of goods for goods or goods for money, or, any
bus_iness carried on with a view to profit, whether manual or merG canti!e as distinguished from the liberal arts or learned professit>ns
and from agriculture. The word 'business'
means an enterPl'ile
which is an occupation as distinguished from pleasure. and 'manufacture' is a kind of productive industry In which the making of
articles or material, often on a large scale, is by physical labour or
mechanical power. The word 'calling' denotes the following of a pro-
·fess;on or trade. [756 F-H].
The word 'undertaking' has figured In the cases of this Court.
H In D. N. Banerjee v. P. R. Mukherjee, (1953] S.C.R. 302 it was observed that the word is not to be Interpreted by association with the
words that precede or follow it in· the definition of 'industry', But
the settled view of this Court is: that primarily Industrial disputes
occur, when the operation undertaken rests upon cooperation between employers and employees with a. view to production and distribution of material goods, in other words, wealth, but they may
742
GYlfKllANA CLUB UNION 11,· MANAGJIMENT (Hidayatullah, J,)
748
arise also in cases where the cooperation is to produce material aerA
vices. For an ·undertaking' to be an industry, it is not necessary that
it must be carr;ed on with capital by private enterprise or that it
must be commercial or result in profit but there must be systematic activity and it must be analogous to the carrying on of a trade
or business involving co-operation between employers and employees. But every human activity in which the relationship of employers and employees enters, is not necessarily creative of an industry. Personal se.rvices rendered by domestic and other servants, administrative services of public officials, services in aid of occupations of professional men such as doctors and lawyers etc., employment of teachers and so on, may result in relationships in which
there are employers on the one side and employees on the other, but
they have been excluded because they do not come within the connotation of the term 'industry' as the service rendered is liot a
material service. Therefore, the word 'undertaking', though elastic,
must take its colour from other expressions used in the definition
of 'industry', and must be defined as any business or any work or
project resulting in material goods or material services and which
one engages in or attempts as an enterprise analogous to busin.c.~s tJr
trade. L 740 D; 756 D-F; 758 D-E; 757 JH:; 758 IH:J.
In the present case, the activity of the club is conducted with
B
c
the aid of employees who follow callings or avocations. But taking the D
first part of the definition and the essential character of the club, the
activity of the club cannot be described as a 'trade' business or manufacture' and the running of clubs is not the 'calling' of the respondent club or its managing committee. Also, the club has no existence
aPart from its members. It exists for its members though occasionally
strangers also take benefit from its services. Even with the admis'o
sion of guests, the club remains .a members' self-serving inStitution. E
Though the material needs or wants of a section of the community
is catered for it is not done as part of trade or business or as an
undertaking analogous to trade or business. Therefore, the Tribunal
was right in holding that the respondent club was not an industry.
[760 A-H].
Barodo Borough Municipalitv v. Workmen [1957] 1 L.L.J. 8, referred to
F
Observations contra in Bengal Club Ltd. v. Shantiranjan Sommaddar & Anr. A.I.R 1956 Cal. 545 and Royal Calcutta Golf Ma"door
U.llion v. State of We•t Bengal, A.I.R. 1956 Cal. 550, disapproved.
(2) The case of State of Bombay v. Hospital Mazdaor Sabha, [1960]
2 S.C.ll 866-in so far as it relied on the test, namely; could the activity· be carried on by a private individual or group of Individuals
for .the purpose of holding that running a Government hospital was G
an mdustry-must be held to have taken an extreme view of what
is an industry. This test is not enlightening because there is hardly
any activity which private enterprise cannot carry on [751 D-E·
761 A; 750 E-F).
· .
'
(3). In Corpora~on of City of Nagpur v. Employees, p9601 .. 2 S.C.R.
942, this Court relied upon the same test with an unfortunate result
The ,Court h~ld that ,the municipal functions of the Corporation, in:
cludmg !Wlll,1~g a pnmary school, were covered by the words 'trade B
and bl!smess m C.P. ~ Berar Industrial Disputes Settlement Act,
1947, Sl~ce those functions were not regal, the activity was organised, se~c~ i:vas rendered, and the functions could not be performed
by a~ md1v1dual or firm for remuneration, while, in Univerrity of
f!elh.1 . v .. Ra!71nath, P9641 ~ S.C.R. 703, this Court held that educational mstitutions were not 'mdustry'. [750 B-G; 758 A-Bl.
BUPUJIB COUllT UPOJITS
[1968] 1 e.c.B.
A
(4) The fresh teat laid down In Ahmedabad Textile lndUltl'll Re·
aearch Aasocicition v. State of Bomba11, [1961] 2 S.C.R. 480 that, to be
an ·industry', the employees therein must not share In the proouct of
their labour cannot be regarded as univenal, because, there are
occasions w11en the workmen receive a share of the produce as part
of their wages or as bonus or as a benefit. [759 CJ.
(5) The additional test laid down In National Union of Comlll8t'·
B cia! Emp!o11ees v. Meher (Tbe Solicitor case) [1962] Supp. 3 S.C.R.
157, that, to be an 'Industry' the aS10Ciation of capital and labour
must Ile direct and essential, cannot also be regarded as univenal,
because, what partnership can exist between the Board of Directors
of a Company on the one hand and the menial staff employed to
sweep floors on the other? [753 A].
(6) In Hari!llJ{lar Cane Fanri v. State of Bihar, [1964] 2 S.C.R.
O 458 and In the UnitJet"situ case this Court observed that It must ref.
rain from laying down unduly broad or categorical propositions. But
the attempt to avoid generalizations has one disadvantage, because,
taking each operation by itself and determining on the basis of facts
whether it is an industry without attempting to pin point whether
it is a 'business, or a trade, or an undertaking or manufacture. or
calling of employers' is to Ignore the guidance afforded by the staD tute through its dictionary and to rely upon decisions dealing with
the problem without a definition. [755 H; 756 A-CJ.
CIVIL APPELLATE JURISOJcnON: Civil Appeal No. 572of1966.
Appeal by special leave from the Award dated ~ptember
• 2, I 964 of the Industrial Tribunal, Madras in Industrial Dispute
No. 19 of 1964.
B. R. Dolai, E. C. Agarwala, Champat Rai, Kartar Singh Suri,
Ambrish Kumar and P.C. Agrawala, for the appellant.
H. R. Gokhale, M.R. Narayanaswamy Iyer and R. Ganapathy
r Iver, for the respondent
The Judgment of the Court was delivered by
Hlda,......., 1..-The. Industrial Tribunal, Madras by
its
award. September 2, 1964, has held that the management of the
Gymkhana Club, Madras is not liable to pay bonus to its work·
men for the year 1962 as the Club is not 'an industry'. The Mildras
G Gymkhana Club Employees Union now appeals to this Court by
special leave.
The Madras Gymkhana Club is admittedly a members' club
and not a proprietary club. On December 31, 1962 its membership
was about 1200 with 800 active members. The object Of the club IS
11 to provide a venue for sports and games and facilities for recreation and entertainment. For the former, it maintains a golf course,
tennis courts. rugby and football grounds and has made arrangement for billiards, pingpong and other indoor games. As part of the
latter activities it arianges dance, dinner and other parties and runs
a catering department, which provides food and refreshments n1>t
.. .
GYMKHANA CLUB UNION V, MANAGEMENT (Hidayatu/lak, J,)
'f(ll
only generally but also for dinners and parties on special occasiom. A
The club employs six officers (a Secretary, a Superintendent and
four Accountants and Cashiers), twenty clerks and a large num·
ber of peons, stewards, butlers, gate-attendants, etc. Its catering
department has a separate managerial, clerical and other stall.
Altogether there are 194 emploYees. The affairs of the club are
managed by a Committee elected annually. Two of the members of
the Committee work as Hony. Secretary and Hony. Treasurer res- B
pectively.
The membership of the club is varied. There are residentmembers, non-resident members, temporary members, garrison members,
independent lady members, etc. The resident members pay an en·
trance fee of Rs. 300 and Rs. 20 per month as subscription. Gar- 0
r'ison members and independent lady members do not pay any entrance fee and their subscription is Rs .. 10 per month. Guests, both
local and from outside, are admitted subject to certain restrictions
as to the number of days on which they can be invited to the club.
The club runs tournaments for the benefit of members and for exhibition to non-members. The income and expenditure of the club D
are of the order of four and a quarter lakh rupees, its movable and
immovable properties are worth several lakh rupees and its wage
bill is between one and two lakh rupees. The question in this appeal is whether the respondent club can be said to be an industry
for the application of the Industrial Disputes Act, 1947. The Tri·
bunal, after considering many decisions rendered by this Court
and also by the High Courts m India, came to the conclusion that I
the club was not an industry and the claim for bonus on behalf of
its employees was therefare unsustainable. The appellant union
contends that the decision of the Tribunal is not correct and that
the club must be treated as an industry for the application of the
Act.
r
As we are concerned primarily with the question whether the
club comes within the definition of 'industry' as given in the In·
dustrial Disputes Act, we may begin by reading that definition and
other provisions which have a bearing upon the question. The
Industrial Disputes Act was passed to make provision for the in- G
vestigation and settlement of industrial disputes and for certain
other purposes appearing in the Act. The emphasis in the Act is
primarily upon the investigation and settlement of industrial dilputes. The expression "industrial dispute" is defined by s. 2(k) as
follows:-
"industrial dispute" means any dispute or difference betB
ween 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".
146
SUPRSMB COURT REPORTS
(1968] 1 s.c.n.
A "Industry" is defined in cl. ij) as follows:-
"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".
The word "employer" is defined by cl. (g) of the section as: -
B
"employer means--
(i) in relation to an industry carried on by or under
the authority of any department of the Central Government or a State Government, the wthority prescribed in
this behalf, or where no authority is prescribed, the, head
c
of the department;
D
F
G
B
(ii) in relation to any industry carried on by or on
behalf of a local authority, the chief executive officer t>f
that a<Uthority;"
"Workman" is defined by cl. (s) of the section and
"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 expressed or implied,
and for the purpose of any proceeding under this Act in
relation to an industrial dispute, includes any 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-
(i) who is subject to the Army Act, 1950, or the Air
Force Act, 1950, or the Navy (Discipline) Act,
1934; or
(ii) who is employed in the police service or as an
officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supj:l'Visorv cari•city,
draws wages exceeding five hundred rupees per
mensem or exercises, either by the na.u • ., 01 the
duties attached to the office or by reason of the
powers vested in him, functions mainly of a
managerial nature."
These definitions have been before this Court on many occasions and we have reached a point when one can say that at least
some attributes of "industry" and "industrial disputes" may be
taken as well-established. These cases concerned such diverse instituti~ and establishments as municipalities, hospitals, solicitor's.
GYJIKllANA CLUB l'NION v. MANAGEMENT (Hidayatullah, ,/,)
747
firm and university. Any enquiry to determine the application of A
the definitions to new establishments cannot overlook the settled
view. We find it convenient to say a few words about the earlier
decisions of this Court, before embarking upon 1111 analysis of the
defimtions in relation to a members' club.
The earliest case in this Court involved a dispute between a
Municipality and its employees (D.N. Banerjee v. P.R. Mukherjee 8
& Ors.)('). The Municipality was held to be an industry and the
dispute was held to be an industrial dispute. This Court observes
that the non-technical or ordinary meaning of 'industry' is "an undertaking where capital and labour co-operate with each other for
the purpose of producing wealth in the shape of goods, machines,
tools, etc." and for making profits, and an industry in this sense 0
includes agriculture, horticulture etc. The Court points out that
this is too wide and that every aspect of employer-employee connection does not result in an industry. Holding, however, that municipal activity cannot be truly regarded as business or trade, this
Court cbnsiders whether it can be an 'undertaking'. The suggestion that the word 'undertaking' takes its colour from the other D
four words in the first part of the definition is not accepted. It is
said that this interpretation renders the word superfluous and the
latter part of the definition unnecessary. Therefore, this Court includes non-profit undertakings in the concept of industry even if
there is no private enterprise. Referring to the inclusion of public
ut!lity services in the scheme of the Act it is held that a: dispute in a E
public utility service is an industrial dispute, and the fact that the
enterprise is financed by taxation and not by cap1tal is considered
irrelevant In formulating these dicta the Court is obviously influ·
enced by the analysis of an industrial dispute by Isaacs 1md Rich,
JJ. in Federated Municipal & Shire Council Employees of
Australia v. Melbourne Corporation(').
F
"Industrial disputes occur when, in relation to operations
in which capital and labour are contributed in co-operation for the satisfaction of human wants and desires, those
engaged in co-operation dispute as to the basis to be observed, by the parties engaged, respecting either a share
of the produce or any other terms and conditions of their
cooperation
.
.
.
. The question of profit.
making may be important from an income-tax point of
v'ew, as.in many municipal cases in England; but, from an
industrial dispute point of view, it cannot matter whether
the expenditure is met by fares from passengers or from
rates."
In the second case (Baroda Borough Municipality v. Workmen(') a cla'm for bonus by municipal employees was rejected on
(') [1953) s.c R. 302.
(') 26 C.L.R. 508.
(') [1957) I L.L.J .. 8.
G
H
748
A
B
ilUPRIJIJI COUllT l\JIPOBTS
[1968] 1 s.0.11.
the ground that the bonus fonnula was inapplicable. The Court,
however, went on to observe :
"It is now finally settled by the decision of this Court in
1953 S.C.R. 302, that a municipal undertaking of the
nature we have under consideration is an "industry" with·
in the meaning of the word in s. 2(j) of the Industrial
Disputes Act and that the expression "industrial dispute"
in that Act includes disputes between the municipality and
their employees in branches of work that can be regarded
as analogous to the carrying 011 of a trade or business."
(emphasis added).
c
These two cases lay down that for an activity to be an industry it is not necessary that it must be carried on by private enterprise or must be commercial or result in profit. It is sufficient
1f the activity is analogous to the carrying on of a trade or busi·
ness and involves cooperation between employers and employees.
This result is reached by extending the meaning of 'undertaking'
D to cover adventures not strictly trade or business but objects very
similar.
The defini~on of 'employer' in our Act clearly shows that 11
local authority may become an employer if it carries on an indus·
try. This means that a municipality, if it indulges in an activity
which may be properly described as industry, may be involved in
E an industrial dispute. Local bodies are primarily subordinate
branches of governmental activity. They function for public pur ..
poses but some of their activities may come within the oalling of
employers although the municipalities may not be trading corporations. Local authorities take away a part of the affairs of Government in local areas and they exercise the powers of regulation
r and subordinate taxation. They are political sub-divisions and
agencies for the exercise of governmental functions. But if they
indulge in municipal trading or business or have to assume the
calling of employers they are employers whether they carry on or
not business commercially for purposes of gain or profit.
G
The activity of the municipality in the first two cases was not
attempted to be brought within the expressions business and trade.
The tenn 'undertaking' was held to cover it. In the third case
(Corporation of City of Nagpur v. Employees(') the need to consider 'trade and' business' arose directly. The question then was
whether and to what extent the Corporation of Nagpur was an industry under the C.P. & Berar Industrial Disputes Settlement Act,
B 1947? That Act included a definition of industry which was different. It included
"(a) any business, trade, manufacturing or mining undertaking or calling of employers
(1) [1960] 2 S.C.R. 942.
I
. ,
GYMKHANA CLUB UNION V, MANAGEMENT (Hidayatullah, J.)
749
(b) any calling. service, employment, handicraft t>r indusA
trial occupation or avocation of employees and
(c) any branch of an industry or a· group of industries."
In this definition the qualifying words 'manufacturing or mini~g·
limited the word 'undertaking' and it could not be given the wide
meaning given earlier. This Court did not attempt to bring muni- B
cipal activity within the word 'undertaking' but brought it within
the expression 'trade and business'. The Court observed that there
was nothing in the earlier cases to show that a municipal activity
was held excluded from those words. As a matter of fact it did
(see p. 308). Of course, there was nothing to show that this Court
on the earlier two occasions thought it even remotely possible. In 0
the Nagpur Corporation's(') case the Court proceeded to consider
whether a corporation could be legitimately said to be carrying
on business or trade or calling. It found the definition to be "very
clear" and "not susceptible of any ambiguity", and observed that
all the words were very wide and that even if the meaning could
be cut down by the aiims and objects of the C.P. & Berar Act as
disclosed in the preamble, the main object, namely, social justice
D
demanded a wide meaning. The Court distinguished between (a)
regal and (b) municipal functions t>f the corporation and found
the latter analogous to business or trade because they were not
regal and the activity was organised and service was rendered. To
distinguish• .:>etween a regal function and a• municipal function the E
test applied was: Can the service be performed by an individual
or firm for remuneration? This test was not applied in one later
case but is not enlightening because there is hardly any activity
which private enterprise cannot oarry on. As Mr. Gomme in bis
Principles of Local Government (1897) observes: ."Any municipal
service can be made to pay dividends on private capital if only I'
the means of levying a revenue are granted to private owners." Even
war can be financed and waged by commercial houses. They manufacture ammunition and war equipment and can carry t>n war with
~ercenaries: Even the i~a·structures of Adam Smith can be pro-
~1ded by pnvate en~e.rpnse. The Eas~ India Company ~id both. It
1s not a little surpnsmg that except m one case m which there is
a passing reference to it, the Corporation of City of Nagpur case(')
G
bas not been referred to in the later cases of this Court.
The later cases of this Court view the matter a little differently
a~d formulate furt~er tests. <?f the tests, the first is that the activity ~ust be orgam8ed. as busmess. or trade is ordinarily organised
ThlS IS to be taken with the earher test that 'undertaking' must
be analogous to business, trade or calling. It will be seen that B
these do not widen the meaning of 'undertaking' but tend to narrow it. The second is that the a~ivity need not necessarily be preceded by procurement of capital in the business sense nor must
(1) (1960] 2 $.C.R. 942.
750
SUPBmO OOUJIT llJi:POBTS
(1968] l S.O.B.
A profit be a motive. So long as relationship of employer and work·
men is established with a view to production of material goods
or material services, the activity must be regarded as an undertak·
ing analogous to trade or business. We shall now review the cases
in which these tests are established'.
In the State of Bombay v. Hospital Mazdoor Sabha(') it is
held that a hospital run by government is included in the definiB tion of 'industry'. It is recognised that the first part of the definition contains the statutory meaning and. the second part means
"an enlargement of it by including other items of industry".
As a matter of fact these are not other items of industry but
aspects of occupation of employees which are intended to be
an h;itegral part of an industry for purposes of industrial disputes.
C It is, however, recognised in the case that a line must be drawn
to exclude. some callings, services and undertakings. It is held
that domestic, personal or casual services are not included and
examples are given of such services. The meaning of industry a~
'an economic activity' involving iuveslment of capital and systematically carried on for profit for the production or sale of goods by
D the employment of labour is again discarded because profit motive
and investment of capital are considered unessential. Another test
reaffirmed is to enquire 'can such activity be carried on by pri·
vate individual or group of individua'1s? Answering that a hospital
can be run by a private party for profit, it is held that a hospital
is an industry even if it is run bY. Government without profit Who
E conducts the activity or whether. it is for profit, are considered irrelevant questions. It is, however, again emphasised that an undertaking to be an industry must be analogous to trade or business.
It is, therefore, laid down that an activity systematically or habitually undertaken for the production or distribution of goods or
for rendering material services to the community at large or a
r part of such community with the help of employees is an undertaking. In this way, the connection between trade and business on
the one hand and undertaking on the other is established which
seems to indicate that the expression 'undertaking' must take its
colour from fhe other expressions. An industry is thus said to involve cooperation between employer and employees for the object
G of satisfymg material human needs but not for oneself nor for
pleasure nor nect:ssarily for profit These dicta are based on the·
observations of Isaacs, 1. quoted earlier and in a later case (The
Federated State School Teachers' Association of Australia v. The
State of Victoria and Others(').
ln the next case Ahmedabad Textile Industry Resear<!h AsR sociation v. State of Bombay(') the question was whether an Association for research maintained by the textile industry and· employing technical and other staff was industry. The case repeated the
tests stated in the Hospital(') case and applied them. It was held
(') [1960] 2 S.C.R. 866.
(') [1961] 2 S.C.R. 480.
(') 41 C.LJt. l!eD.
)-
GYMKHANA CLUB UNION V. MANAGEMENT (HidayatuUah, J.)
751
that the Association was providing material services to a part of A
the community, was carried on with the help of employees, was
organised in a manner in which trade or business is organised and
there was co-operation between employers and employees. For the
first time a fresh test was added that as the employees had no
rights in the results of t'beir labour or in the nature of business
and trade the partnership is only as1ociation between the employer
and employee.
B
However, in the next case of Nationar Union of Commercial
Employees v. M. R. Meher(') where the employees of a firm of solicitors demanded bonus and the case satisfied the tests so far enumerated, a new test was added that the association of capital and
labour must be direct and essential. The service of a ·solicitor was
regarded as individual depending upon his personal qualifications C
and ability. to which the employees did not contribute directly or
essentially. Their contribution, it was held, had no direct or essential nexus with the advice or services. In this way learned professions were excluded.
In the next two cases the difficulty of laying down tests from D
case to case was felt. In Harinagar Cane Farm v. The Stale of
Bilzar(') a cane farm was purchased by a suga'r factory and worked
as a department for supply of sugar cane. The agricultural operations were held to be an industry on the facts but it was held that
agriculture under all circumstances could not be called an industry.
This Court reversed its method of looking for the tests from other E
cases and referred to them only after it had reached its conclusion
observing that the Court must refrain from laying down unduly
broad or categorical propositions.
In the next case (University of Delhi and Anr. v. Ramnath('\
the question was whether bus drivers employed by the University
F
were workmen. The concept of service was narrowed and it
was held that the educational institutions were not an industry.
Their aim was education and the teachers' profession was not to
be assimilated to industrial workers. This Court again stated that
it must not be understood as laying down a general proposition.
The changes made in the meaning of the expressions used in G
the definition of industry in the Act. disclose a procrustean ap'
proach to the problem. The words must mean something definite.
but some of the tests were found unsatisfactory to cover new cases
as ~e creation of new tests clearly shows. For example, the emphasis resulting from the extension of the definition in its latter
part to include services of e~p~oyee~, received little recognition
m the later cases. Too much ms1stence upon partnership between H
employers and employees is evident in the Solicitor's(') case and
--------·-
(') (1962] Supp. 3 S.C.R. 157.
(') [1964] 2 S.C.R. 458.
(') [1964] 2 S.C.R. 703.
752
SlJl>l\ElUI OOURT RBPORTS
[196b) I s.c.R.
A too little in the Association(') case. And yet it is impossible to
think that this test is universal. What partnership can exist
between the Company and I or Board of Directors on the
one hand and the menial staff employed to sweep floors on the
other? What direct and essential nexus is there between such em·
ployees and production? This proves that what must be established
is the existence of an industry viewed from the angle of what the
B employer is doing and if the definition from the angle of the employer's occupation is satisfied, all who render service and fall
within the definition of workman come within the fold of industry
irrespective of what they do. There is then no need to establish a
partnership as such in the production of material goods or material
services. Each person doing his appointed task in an organisation
C will be a part of the industry whether he attends to a loom or merely polishes dopr handles. The fact of employment as envisaged in
the second part is enough provided there is an industry and the
employee is a workman. The learned professions are not industry
not because there is absence of such partnership but because viewed from the angle of the employer's occupation, they do not satisfy
D the test. A solicitor earns his livelihood by his own efforts. If his
work requires him to take help from menials and other employees
who carry out certain assigned duties, the character of the solicitor's work is not altered. What matters is not the nexus between
the employee and the product of the employer's efforts but the
nature of the employer's occupation. If his work cannot be describE ed as an industry his workmen are not industrial workmen and
the disputes arising between them are not industrial disputes. The
cardinal test is thus to find out whether there is an industry according to the denotation of the word in the first part._ The second part
will then show what will be included from the angle of employees.
We shall now apply this approach to the definition in the light of
F the earlier decisions of this Court in so far as they a~e consistent
and then determine whether the club in this case can come within
the meaning of 'industry' as determined by us.
The definitions have been set out by us ear)ier in this judgment. The definitions are inter-related and are obviously knit toG gether. Stated broadly the definition of 'industrial dispute' contains
two limitations. Firstly, the adjective 'industrial' relates the dispute to an industry as defined in the Act and, secondly, the definition expressly states that not disputes and differences of all sorts
but only those which bear upon the relationship of employers and
workmen and the terms of employment and conditions of labour
are contemplated. As such dispute may arise between different
H parties, the Act equally contemplates disputes between employers
and employers or between employers and workmen or between
workmen and workmen. The definition of the expression 'indust·
rial dispute' further shows ·that certain disputes can never be considered under the Act. For example, disputes between Government
(') [1961] 2 S.C.R. 480.
GYMKHANA CLUB UNION v. MANAGEMENT (HidayatuUah, J.)
753
and an industrial establishment or between workmen and non-workA
men are not the kind of disputes of which the Act take notice.
The word 'employer' is not specifically defined but merely
indicates who is to be considered an employer for purposes of an
industry carried l>n by or under authority of a department of Government and by or on behalf of a local authority. This definition
gives little assistance because it is intended to operate in relation B
to an activity properly describable as an industry and this takes one
back to the definition of 'industry'. The definition of 'workman' is
a little better. Although it again refers one back to an industry,
it gives some guidance. Workman means any person employed to
do skilled or unskilled manual, supervisory, technical or clerical
work for hire or reward. The expression, however, does not include C
persons employed in some named services of Government. Even
in an industry those employed mainly in a managerial or administrative capacity and supervisors drawing more than five hundred
rupees as wages or exercising functions mainly of a managerial
nature, are also to be left out of the definition. In this way the
general nature of the dispute, the parties to the dispute and the D
contents of the dispute are. therefore, reasonably clear. A dispute
must however be an industrial dispute or, as the several definitions
already noticed say, must arise in relation to an industry. This is
where the difficulty begins because the statutory definition of 'industry' has led to some divergence of views in the Labour Tribunals, the High Courts and even in this Court.
E
The definition of 'industry' is in two parts. In its first part it
means any business, trade, undertaking, manufacture or calling of
employers. This part of the definition determines an industry by
reference to occupation of employers in respect of certain activities. These activities are specified by five words and they deterF
mine what an industry is and what the cognate expression 'industrial' is intended to convey. This is the denotation of the term or
what the word denotes. We shall presently discuss what the words
"business, trade, undertaking manufacture or calling" comprehend.
The second part views the matter from the angle of employees and
is designed to include something more in what the term primarily
G
denotes. By the second part of the definition any calling, service,
employment, handicraft or industrial occupation or avocation of
workmen is included in the ooncept of industry. This part gives
the extended connotation. If the activity can be described as an
industry with reference to the occupation of the employers, the
ambit of the industry, under the force of the second part, takes in.
the different kinds of activity of the employees mentioned in the H
second part. But the second part standing alone cannot define 'industry'. An industry is not to be found in every case of employment or service. An individual who employs a cook gets service
from his employee whose avocation is ti> serve as a cook but as
the activity of the individual is neither business, nor trade, nor an
754
SUPllElll! COURT llJIPORTS
(1968] l 8.C.R.
A undertaking. nor manufacture, nor calling of an employer, there
is no industry. By the inclusive part of the definition the- labour
force employed in an industry is made an integral part of the in·
dustry for purposes of industrial disputes although industry is ordi·
narily something which employers create or undertake.
The definitions in the industrial Disputes Act are borrowed
}I from other statutes. The definition of 'industrial dispute' is taken
from an Act of 1906 (6 Edw. VII c. 47) and slightly modified.
There the definition ran0
"any dispute between employers and workmen, which is
connected with the employment, or non-employment, or
the terms of the employment or with the conditions of
labour, of any person".
Our definition only adds to the list of disputes one between em·
ployers and employers. Similarly, the latter part of the definition :>f
'industry' which has caused us some trouble is taken from s. 4 of
the Commonwealth Conciliation and Arbitration Act which inclu·
D des in the concept of industry-
"any calling, service, employment, handicraft or industrial
occupation or avocation of employers on land and water."
Decisions rendered on these definitions (and
some others very
similar) have naurtally influenced opinion-making in this Court.
E The Australian cases in particular have been subrosa all the time.
The difficulty in using Australian cases with a text-book approach
is perhaps not quite noticed. The term 'industrial dispute' which
the Australian High Court was defining was from s. 51 (XXXV) of
the Constitution Act. There was no definition of the expression and
it was recognised that the co)Ilmon understanding of that expres·
•
sion was not what was meant but something different. In a great
body of cases the problem presented its many facets and the approach was prwgmatic. Higgins, J. in 26 Com. L. R. cautioned
against giving a crystallised meaning to the expression. He observ·
ed:
G
"It is not necessary'--Or, as I think, desirable-that we
should, in answering the specific question asked of us,
commit ourselves to a final, exhaustive definition of a
popular phrase as that in question." (p. 574).
In the Harinagar Cane Farm(') and the University(') cases this
Court also made a ,similar observation. In the former it was
observed:
·
B
"We have referred to these decisions only to emphasise
the point that this Court }las consistently refrained from
laying down unduly broad or categorical propositions ... ".
(') [1964] 2 S.C.R. 458
(') 2 S.CR 703.
GYMKHANA CLUB UNION v. MANAGEMJliN'r (HiJayatullah, J.)
'
7M
The attempt to avoid generalisations (however commen<iable) A ·
has one disadvantage. In Australia the Courts wer~ dealing with
the problem without a definition and thought that they should
move cautiously to avoid hardening any particular view too far.
We have all the terms except 'employer' defined by the statute. Our
task is to give meanings to the words which are intended to lay
down the full connotation. Taking each operation by itself and
determining on the basis of facts whether it is an industry without B
attempting to pin-point whether it is a business, or a trade, or an
undertaking, or manufacture. or cal1¥tg of employers, is to ignore
somewhat the guidance afforded by the statute through its own die>
tionary. Therefore, while we a~cept the views expressed uniformly
we think any view which seems contradicted by later decisions because it was unrelated to the words of the definitions should not C
be allowed to harden. We also take the opportunity of relying a
little more on the guidance frr,m the Act.
The principles so far settled come to this. Every human activity in which enters the relationship of employers and employees,
is not necessarily creative of an industry. Personal services renD
dered by domestic and other servants.