# NAGPUR v. ITS EMPLOYEES

- **Citation:** [1960] 2 S.C.R. 942
- **Court:** Supreme Court of India
- **Decided:** 1960
- **Case number:** Civil Appeals Nos. 143 & 144 of 1959
- **Bench:** P. I3. Gajendragadkar, K. Subba Rao, K.C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/nagpur-v-its-employees-1809
- **Pages:** 33

## Headnote

Industrial Dispute-Services undertaken by City Corporation-If
and when industry-Test-'Inditstry'. Meaning of--Central Provinces and Berar Industrial Disputes Settlement Act, r947 (C.P. &
Berar XXIII of r947). s. 2 (r4)-City of Nagpur Corporation Act.
r948 (Madhya Pradesh 2 of Ig50).
The question for determination in these appeals was whether
and to what extent the municipal activities of the Corporation of
'
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-
-
,.
S.C.R.
SUPREME COURT REPORTS
943
Nagpur City fell within the term 'industry' as defined bys. 2 (14)
z960
of the C.P. and Berar Industrial Disputes Settlement Act, 1947·
Disputes having arisen between the said Corporation and its
February ro
employees in its various departments, ·the State Government
referred them for adjudication to the State Industrial Court
under s. 39 of the Act and that Court by its award held that the
Corporation and all its departments were covered by the said
definition. Against that award the Corporation made an application to the High Court under Art. 226 of the Constitution. The
High Court rejected its contention that the Corporation was not
an industry within the meaning of the said section and remanded
the case to the Industrial Court for determination as to which of
its departments fell within the definition and making an award
accordingly. Thereafter The Industrial Court found all the
departments of the Corporation except those dealing with
(1) assessment and le'1y of house-tax (2) assessment and levy of
Octroi, (3) removal of encroachment and removal and pulling
down of dilapidated houses, (4) prevention and control of food ,
adulteration, and (S) maintenance of cattle pounds, to be industries within the meaning of the definition and passed its award
accordingly. The Corporation appealed to this Court by special
leave, but there was no appeal on behalf of the employees of the
five departments excluded from the definition. ,
Held, that the decision of the Industrial Court except so far
as it related to the five departments in respect of which there
was no appeal, must be affirmed.
The definition of the word 'industry' in s. 2 (14) of the C.P.
and Berar Industrial Disputes Settlement Act, 1947, although in
a language somewhat different from that of s. 2 (j) of the Industrial
Disputes Act, 1947, is very comprehensive. It is in two parts,
cl. (a) defines it from the standpoint of employers and cl. (b)
from that of the employee. An activity that falls within any of
the two clauses must be an industry.
D.N. Banerji v. P. R. Mukherjee [1953] S.C.R. 302 and Baroda
Borough Municipality v. Its Workmen. [1957] S.C.R. 33, applied.
It is not necessary that an activity of the Corporation must
share the common characteristics of an industry before it can
come within the section.
The words of s. 2 (14) of the Act are
clear and unambiguous ,and the maxim noscitur a socii can have
no application. · The history of industrial disputes and the
legislation, however, recognises the basic concept that the activity
must be an organised one and not one that pertains· to private or
personal employment.
State of Bombayv. The Hospital Mazdoor Sabha. [1960] 2 S.C.R.
866 and Heydon's Case (1584) 3 Rep. 7 b., referred to.
· But the definition, however wide, cannot include the regal,
primary and inalienable, functions of the State though statutorily
delegated to a corporation and the ambit of such functions cannot
be extended so as to include the welfare activities of a modern
state and must be confmed to legislative power, administration
of law and judicial power.
I20
•
•
•
Ig60
Corporation of the
City of .J.Vagpur
v.
Its Employees
•
•
944
SUPREME COURT REPORTS [1960 (2)]
Richard Coomber v. The Justices of the County of Berks, Berks.
(1883-84) 9 A.C. 6r and The Federated State School Teachers' Association of Australia v. The State of Victoria. (1928-29) 41 C.L.R. 569,
Cou.nty Council of Middlesex v. Asscssntent Coinniittee of St. George's
Union. (1896) 2 Q.B.D. 143, Verisimo Vasquez Vilas v. City of
Manila, 220

## Text

_Characters 0–39,984 of 76,417. This is a partial read: ask again with offset=39984 for what follows._

•
I960
942
SUPREME COURT REPORTS [1960(2)]
"terminal charges" means "for the provision of"
and not" for the user of".
S. S. Light
Railway Co. Ltd.
The necessary conclusion that follows is that
v.
irrespective of the fact of the actual user by any
Upper Doob Sugar particular consignor of the stations sidings and other
Mills Ltd.
things mentioned in s. 3(14) "term'inal charges" are
Das Gupta 1.
leviable by reason of the mere fact that these 'things
have been provided by the Railway Administration.
The conclusion that necessarily follows therefrom is
that the charges of Rs. 4·11 at either end sought to
be levied by the Railway Administration in addition
to the charges for carriage was " terminal charges"
within the meaning of the Railways Act and the proposed levy being in accordance with Government
Notification under s. 32 of the
0Act was nothing more
than the application of standardized terminal charges.
The Tribunal had therefore no jurisdiction to investigate the reasonableness or otherwise of the same and
had no jurisdiction to reduce the same. The order
made by the majority of the Tribunal cannot therefore be allowed to stand.
Februa,ry. IO
•
The order made by the Tribunal is therefore set
aside. The application made under s. 41 in respect
of this levy of Rs. 9·6 per 4 wheeler truck in addition
to the carriage is rejected. The appeal is allowed
with costs.
Appeal allowed.
THE CORPORATION OF THE CITY OF
NAGPUR
v.
ITS EMPLOYEES
(P. I3. GAJENDRAGADKAR, K. SUBBA RAO AND
K.C. DAS GUPTA, JJ.)
Industrial Dispute-Services undertaken by City Corporation-If
and when industry-Test-'Inditstry'. Meaning of--Central Provinces and Berar Industrial Disputes Settlement Act, r947 (C.P. &
Berar XXIII of r947). s. 2 (r4)-City of Nagpur Corporation Act.
r948 (Madhya Pradesh 2 of Ig50).
The question for determination in these appeals was whether
and to what extent the municipal activities of the Corporation of
'
-
-
-
-
,.
S.C.R.
SUPREME COURT REPORTS
943
Nagpur City fell within the term 'industry' as defined bys. 2 (14)
z960
of the C.P. and Berar Industrial Disputes Settlement Act, 1947·
Disputes having arisen between the said Corporation and its
February ro
employees in its various departments, ·the State Government
referred them for adjudication to the State Industrial Court
under s. 39 of the Act and that Court by its award held that the
Corporation and all its departments were covered by the said
definition. Against that award the Corporation made an application to the High Court under Art. 226 of the Constitution. The
High Court rejected its contention that the Corporation was not
an industry within the meaning of the said section and remanded
the case to the Industrial Court for determination as to which of
its departments fell within the definition and making an award
accordingly. Thereafter The Industrial Court found all the
departments of the Corporation except those dealing with
(1) assessment and le'1y of house-tax (2) assessment and levy of
Octroi, (3) removal of encroachment and removal and pulling
down of dilapidated houses, (4) prevention and control of food ,
adulteration, and (S) maintenance of cattle pounds, to be industries within the meaning of the definition and passed its award
accordingly. The Corporation appealed to this Court by special
leave, but there was no appeal on behalf of the employees of the
five departments excluded from the definition. ,
Held, that the decision of the Industrial Court except so far
as it related to the five departments in respect of which there
was no appeal, must be affirmed.
The definition of the word 'industry' in s. 2 (14) of the C.P.
and Berar Industrial Disputes Settlement Act, 1947, although in
a language somewhat different from that of s. 2 (j) of the Industrial
Disputes Act, 1947, is very comprehensive. It is in two parts,
cl. (a) defines it from the standpoint of employers and cl. (b)
from that of the employee. An activity that falls within any of
the two clauses must be an industry.
D.N. Banerji v. P. R. Mukherjee [1953] S.C.R. 302 and Baroda
Borough Municipality v. Its Workmen. [1957] S.C.R. 33, applied.
It is not necessary that an activity of the Corporation must
share the common characteristics of an industry before it can
come within the section.
The words of s. 2 (14) of the Act are
clear and unambiguous ,and the maxim noscitur a socii can have
no application. · The history of industrial disputes and the
legislation, however, recognises the basic concept that the activity
must be an organised one and not one that pertains· to private or
personal employment.
State of Bombayv. The Hospital Mazdoor Sabha. [1960] 2 S.C.R.
866 and Heydon's Case (1584) 3 Rep. 7 b., referred to.
· But the definition, however wide, cannot include the regal,
primary and inalienable, functions of the State though statutorily
delegated to a corporation and the ambit of such functions cannot
be extended so as to include the welfare activities of a modern
state and must be confmed to legislative power, administration
of law and judicial power.
I20
•
•
•
Ig60
Corporation of the
City of .J.Vagpur
v.
Its Employees
•
•
944
SUPREME COURT REPORTS [1960 (2)]
Richard Coomber v. The Justices of the County of Berks, Berks.
(1883-84) 9 A.C. 6r and The Federated State School Teachers' Association of Australia v. The State of Victoria. (1928-29) 41 C.L.R. 569,
Cou.nty Council of Middlesex v. Asscssntent Coinniittee of St. George's
Union. (1896) 2 Q.B.D. 143, Verisimo Vasquez Vilas v. City of
Manila, 220 U.S. 345, and The Federated Municipal and Shire
Coundl Employees' Union of Australia v. Melbo11rne Corporation.
(1918-19) 26 C.L.R. 508, referred to.
The real test as to \vhcther a service undertaken by a
corporation is an industry must be \vhether that service, if
performed by an individual or a private person, \vould be an
industry.
lVIonetary cosideration cannot be an essential characteristic of industry in a modern State.
~It \vas, therefore, incorrect to say that only such activities as were analogous to trade
or business could come within s. 2 (r4) of the Act.
D. N. Banerji v. P.R. Mu.kherjee, [1953] s:c.R. 302, explained.
The Federated Mu.nicipal and Shire Council Employees' Union
of Australia v. Melbourne Corporation. (r9r8-r9) 26 C.L.R. 508,
Federated Engine-Driver and Firenien's Association and Ors. v. The
Broken Hill Proprietary Company Limited and Ors. (1913) 16 C.L.R.
235 and The Federated State School Teachers' Association Australiav.
The State of Victoria, (1929) 41 C.L.R. 569, referred to.
Where a service rendered by a Corporation is an industry,
the employees of the departments connected with that service,
whether financial, administrative or executive, \vould be entitled
to the benefits of the Act.
Baroda Borough Municipality v. Its Workmen. [1957] S.C.R. 33,
referred to.
If a department of a municipality discharges many functions,
some \Vithin and some without the definition of industry given
by the Act, the predominant functions of the department shall
be the criterion for the purposes of the Act.
CIVIL APPELLATE
JURISDICTION: Civil
Appeals
Nos. 143 & 144 of 1959 and 545 of 1958.
Appeals by special leave from the Award dated
December 14, 1957, of the Seate Industrial Court at
Nagpur in Industrial References Nos. 18 of 1956 and 1
of 1957 respectively.
O. B. Aggarwala, S. N. Andley, J. B. Dadachanji,
Rameshwar Nath and P. L. Vohra, for the appellants
(in all the appeals}.
A. V. ViswanathaSastri, W.S.Barlingay,S.W.Dhabe,
Shanker Anand and A. G. Ratnaparkhi, for respondent
No. 2 (in C. A. No. 144/59 and respondent (in C. A.
No. 143 of 1959).
H. R. Kha.nna and R. H. Dhebar, for respondent
No. 3 (in C.A. No. 144/59.)
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SUPREME COURT REPORTS
945
A. V. Viswanatha Sastri, W. S. Barlingay, Shankar
x960
Anand and A. G. Ratnaparkhi, for the respondents (in c
-.- 1
h
CA N
r:45 f 1958)
orporation o t e
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O. 0
0
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City of Nagpur
1960 Feb. 10. The Judgment of the Court was
v.
delivered by
,
Its Employees
SuBBA RAO, J.-This batch of three connected
appeals raises the question whether and to what
Subba Rao J.
extent the activities of the Corporation of the City of
Nagpur come under the definition of "industry" in
s. 2(14) of the C.P. & Berar Industrial Disputes Settlement Act, 1947 (hereinafter called the Act).
The appellant is the Corporation of the City of
Nagpur constituted under the City of Nagpur Corporation Act, 1948 (Madhya Pradesh Act No. 2 of 1950).
Disputes aro.se between the Corporation and the
e_mployees in various departments of the Corporation
in respect of wage scales, gratuity, provident fund,
house rent, confirmation, allowances etc. The Government of the State of Madhya Pradesh by its order
dated October 23, 1956, referred the said disputes
under s. 39 of the Act to the State Industrial Court,
Nagpur and the reference w.as numbered as Industrial
Reference No. 18 of 1956. The appellant filed a statement before the Industrial Court questioning the
jurisdiction of that Court, inter alia, on the ground
that the Corporation was not an industry as defined
by the Act. On February 13, 1957, the Industrial
Court made a preliminary order holding that the
Corp.oration was an industry and that the further
question whether any department of the Corporation
was an industry, or not, ·would be decided on the
evidence. The appellant challenged the correctness
of that order by filing a petition under Art. 226 of
the Constitution in ·the High Court of Bombay at
Nagpur, but that petition was dismissed, as the award
was made before its hearing. On June 3, 1957, the
Industrial Court made an award holding that the
Corporation was an industry and further that all
departments of the Corporation were covered by the
said definition. It also revised the pay scales of the
employees and accepted the major demands made by
them.· On July 15, 1957, the appellant again filed a
petition in the High Court of Bombay at Nagpur,
•
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•
946
SUPREME COURT REPORTS [1960 (2)]
r960
questioning the validity and the correctness of the
-
said award. A division bench of the said High Court,
CMporntion of the b
•
d
d
d S
l
11 19"7
'
d th
c·t i N. P
y its or er
ate
eptem ier
,
o , reJecte
e
'Y
0
''· ag "' contention of the appellant that the Corporation was
Its Employees
not an industry as defined by the Act and remanded
the case to the State Industrial Court to decide the
Subba Raa J.
activities of which departments of the Corporation
fell within the definition of "industry" given in the
Act and to re-examine the schedules and categories of
persons and to restrict the award to the persons
concerned within the definition of the word "industry"
in the Act.
On remand, the said Industrial Court
scrutinized the activities of each of the departments
of the Corporation and held that all the departments
of the Corporation, except those dt'aling with (i) assessment and levy of house-tax, (ii) assessment and levy
of octroi, (iii) removal of encroachment and removal
and pulling down of dilapidated houses, (iv) prevention and control of food adulteration, and (v) maintenance of cattle pounds, were covered by the definition of "industry" under the Act. It further gave
findings in regard to the d·isputes between the parties
and also as to the persons entitled to the reliefs. It
is not necessary to give the particulars of the findings
arrived at or the reliefs given by the Industrial Court,
as nothing turns upon them in this a.ppeaL
The
appellant by special leave filed in this Court Civil
Appeal No. 143 of 1959 against the award of the
Industrial Court. It also filed in this Court by special
leave Civil Appeal No. 144 of 1959 agaii1st the order
of the High Court holding that the activities of the
Corporation came under the definition of "in<lust1·y"
in the Act and remanding the case to the Industrial
Court for decision on merits in respect of ea.ch of the
activities of the Corporation.
•
Civil Appeal No. 545 of 1958, the third appeal in
this batch, arises out of o, reference made by the State
Government of Madhya Pradesh in regard to the
disputes between the appellant, i.e., the Corporation
of the City of Nagpur, and the employees of the
Corporation in the Fire Brigade Department, representing themselves· and other employees:
The said
reference ,;ias numbered as Industifal Reference No. 1
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S.C.R.
SUPREME COURT REPORTS -
947
of 1957. As there was overlapping· of, the disputes
I96o
. raised ~n Industrial Reference No. 18 of 1956 a~d Corporation of the
Industrial Reference No. 1 of 1957, the Industnal City of Nagput
Court heard both the references together and, by
v.
consent, the evidence in Reference No. 18 of 1956 was
Its Employees
treated as evidence in Reference No. 1 of 1957. On
December 14, 1957, an award was made in Reference
Suuba Rao J.
No. 1 of 1957 and it was based on 'the findings in the
award made in Reference No. 18 of 1956. The·Industrial Court held that the Fire Brigade Department
was an industry within the meaning of the Act and,
on that basis, gave the necessary reliefs to ~he
employees.
Mr. Aggarwala, learned counsel appearing for the
appellant in the first two appeals, raised before us the
following points: (1) No service rendered by the
Corporation would be an industry as defined by
s. 2(14) of the Act. (2) Assuming that some of the
•
services of the Corporation are .comprehended by the
definition of'.' industry " in the Act, the said services,
in order to satisfy the definition, must be analogous
to a business or trade. (3) Even otherwise, the
activities of the Corporation to be called industry
must partake the common characteristics of an
industry. (4) The finding of the Industrial Court
holding that the various departments of the Corporation ·are industries is not correct, as the services
rendered by the said departments do not satisfy either
of the aforesaid two tests.
The first question need not detain us, for it has
now been finally decided by two decisions of this
Court against the appellant. In D. N. Banerji v.
P.R. Mukherjee (1), the chairman of a municipality
dismissed two of its employees, namely, the Sanitary
Inspector and the Head Clerk, and the Municipal
Workers' Union q1rnstioned the propriety of the
dismissal and claimed that they should be re-instated
and the matter was referred by the Government to
the Industrial Tribunal for adjudication under the
Industrial Disputes Act. In that case two questions
were raised before thi8 Court-one was· whether the
said dispute was industrial dispute within ' the
(I) iI953] S.C.R. 302'.
•
Corporation of the
City of Nagpur
v.
Its Employees
Subba Rao].
•
948
SUPREME COURT REPORTS
[1960(2)]
meaning of s. 2(j) of th.e Industrial Disputes Act and
the other was whether th~ Industrial Disputes Act
was invalia inasmuch as it allowed the Tribunal to•
re-instate employees and to that extent trenched on
the power of the chairman to appoint and dismiss
employees. This Court held that the Act was not
invalid, as it was in pith and substance a law in
respect of industrial and labour disputes and that the
conser.vancy service rendered by the municipality·
was an industry and the dispute b<;Jtween the municipality and the employees of the conservan!)y department was an industrial dispute within the meaning of
the Industrial Disputes Act.
This decision was
followed by this Court in Baroda Borough Municipality
v. Its Workmen (1). In that case the effect of the
earlier decision was summarized th us, at p. 38 :
" It is now finally settled by the decision of this
Court in D. N. Banerji v. P. R. Mukherjee(') that
a municipal undertaking of the nature we have
under consideration here is an " industry" within
the meaning of the definition of that word in s. 2(j)
of the Industrial Disputes Act, 1947, and that the
expression "industrial dispute" in that Act
includes disputes between municipalities and their
employees in branches of work t.hat can be regarded
as analogous to the carrying on of a trade or
business."
In that case the workmen employed in the electricity
department of the Baroda Municipality demanded
bonus. The electricity undertaking of the Baroda
Municipality, was held to be an industry and the
dispute between the Municipality and it8 employees
an industrial dispute. Bonus was refused on other
grounds and we are not concerned wi~h that aspect
of the case here. These two cases, therefore, have
finally and authoritatively held that municipal
undertakings could be " industry "
within the
meaning of the Industrial Disputes Act.
A faint argument is attempted to sustain a distinction between the definition of an "industry" in the
Industrial Disputes Act and the definition of the same
word in the Act in question.
Section 2(j) of the
(1) [1957] S.C.R. 33.
(2) [1953] S.C.R. 302
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-
S.C.R.
SUPREME COURT REPORTS
949
Industrial Disputes Act defines " industry " to mean
x960
any business, trade, undertaking, manufacture or
-.
11.
f
I
d
• 1 d
11"
Corporatum of the
ca mg o emp oyers an
to me u e any ca mg, ct f N
P
service, employment, handicraft, or industrial occupa-
'Y
0
v. ag ur
tion or avocation of workmen". Section 2(14) of the
Its Employees
Act divides the definition into three parts, nameJy,
"(a) any business, trade, manufacturing or mimng
SubbaRao ./.
undertaking or calling of employers, (b) any calling, service, employment, handicraft or industrial
occupation or avocation of employees, and (c) any
branch of an industry or a group of industries." A
comparative study of these two sections brings out
the following differences : While the definition of
."industry" in the .Industrial Disputes Act. means
certain things and includes others, the definition of
"industry " in the Act includes the three categories
described therein; while the definition in the former
Act places 'undertaking ' in a category different from
' manufacturing or mining ', in the latter Act it is
qualified by the words 'manufacturing or mining'.
In our view these differences do not justify us in
taking a different view from that accepted by this
Court in the foregoing decisions. Clause (a) of the
definition defines industry with reference to the
employers and cl. .(b) with reference to the employees.
Excluding the words "manufacturing or mining
undertaking" from cl. (a) of the definition, the other
words in els. (a) and (b) thereof are comprehensive
enough to take in all the categories which the
definition of "industry" in the Industrial Disputes
Act will take in. That apart, a perusal of the decision
of this Court in D. N. Banerji v. P.R. Mukherjee (1)
does not indicate that this Court would have come to
a different conclusion if the word "und~rtaking " in
the Industrial Disputes Act was qualified by the
words "manufacturing or mining". The decision
was founded on a broader basis, having regard to the
history of the legislation, the cognate definitions in
the Act and the' inclusive part of the definition
corresponding to s. 2(14)(b) of the Act. We, therefore, hold that a service rendered by a corporation, if
it complies with the conditions implicit in the
definition-which we would consider at a later stage
(I) (1953] S.C.R. 302
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9150
SUPREME COURT R.EPORTS [1960 (2)]
1960
of the judgment-will be an "industry" within the
meaning of the definition in the Act.
Corporation of the
..
h
Oty of Nagpu'
The next question is whether activity ot t e
v.
Corporation is not " industry " unless it shares
Its Employees
the common characteristics of an industry. The
foliowing five characteristics are stated to be the
Subba Rao J.
coi1ditions implicit in the definition: (il the activity
must concern the production or distribution of goods
or services; (ii) it must be to servo others but not to
oneself; (iii) it must involve co-operative effort
between employer and employee, between capital and
labour; (iv) it must be done as a commercial transaction; and (v) it must not be in exercise of purely
•
governmental functions.
.
We have considered this aspect in State of Bombay
v. The Hospital Mazdoor Sabha(') in the context of
the definition of "industry" in the Industrial
Disputes Act and formulated certain broad principles.
But as this case is concerned wit.Ji the definition of
"industry" in a different Act, we shall briefly resurvey
the law on the subject with specific reference to a
corporation.
Let us scrutinize the definition of "industry" to
- ascertain whether all or some of the conditions are
implicit in the definition and whether the said conditions constitute the necessary basis for it.
The
true meaning of the section must be gathered from
the expressed intention of the Legislature. Maxwell
in his book "On the Interpretation of Statutes",
10th Edn., rightly points out at p. 2 that "If the
words of the statute a.re in themselves precise and
unambiguous no more is necessary than to <'xpound
those words in their natural and ordinary sense, the
words them~elves in such· case best declaring the
intention of the legislature". The words used in the
section are clear and unambiguous and they prima
facie are of the widest import. We have pointed out
that the section is in two parts: cl. (a) defines
" industry " with reference to 'employers and cl.
(b) defines it with refen•nce to employees.
Clause
(c) extends the definition to any branch of an industry
or a group of industries, i.e., industries coming within
the definition of els. (a) and (b). It is said that in
\I) [1960] ZS CR. 866 .
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S.C.R.
SUPREME COURT REPORTS
951
construing ~the definition we must adopt the rule of
I960 .
construction no8cuntur a sociis. Maxwell explains this
-
1
d
·
332 h
Cotporation o the
octrme at p.
t us:
.
.
City of Nagpur
"When two or more words which are susceptible
v.
of analogous meaning are coupled together no8cuntur
Its Employees
a 8ociis.
They are ui:i.derstood to be used in their
cognate sense. They take, as it were, their colour Subba Rao, J.
from each other, that is, the more general is
restricted to a sense analogous to the less general."
On the basis of this doctrine, it is argued that the
words following the words " any business, trade,
manufacturing or mining undertaking " shall partake
the characteristics of any business, trade, manufacturing or mining undertaking, and the words " any
calling, service, employment, handicraft or industrial
occupation or avocation of employees" shall sha_re
the qualities of an industrial occupation or avocation.
In other words, the general word " calling " 'in cl. (a)
is controlled by the words preceding it, and the
general words "calling, service etc." in· cl. {b) are
restricted by · the succeeding words "industrial
occupation or avocation". This doctrine was dealt
with by this Court in State of Bombay v. The Ho8pital
M azdoor Sabha (1). Therein this Court has considered
the scope of this doctrine and has observed thus:
"It must be borne in mind that no8cuntur a sociis
is merely a rule of construction and it cannot prevail
in cases where it is clear that the wider words have
been deliberately used in order to make the scope
of the defined word correspondingly wider. It is
only where the intention of the Legislature in associating wider words with words of narrower significance is doubtful that the present rule of construction can be usefully applied. It can also be
applied where the· meaning of the words of wider
import is doubtful; but where the object of the
Legislature in using wider words is clear and free
of ambiguity, the rule of construction in question
cannot be pressed into service. "
The said doctrine, therefore, cannot be invoked in
cases where the intention of the Legislature is clear
and free of ambiguity. · The phraseology used in the ·
(r) [1960] 2 S.C,R. 866
HI
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952
SUPREME COURT REPORTS [1960 (2))
x960
section is very clear and it is not susceptible of any
C
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ambiguity. The words used in the first part of cl. (b)
orporation of the
l"fi d
d th
l"f"
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d
City of Nagpur are unqua 1 e ; an
e qua 1 1ca 1• is mtro uced
v.
only in the later part. If the words "calling, service,
Its Employees
employment, handicraft" are r·eally intended to be
qualified by the adjective "'industrial", one should
Subba Rao J.
expect the Legislature to affix the adjective to the
first word "calling" rather than to the last word
"occupation". The inclusive definition is a wellrecognized device to enlarge the meaning of the word
defined, and, therefore, the word "industry " must be
construed as comprehending not only such things as
it signifies according to its natural import but also
those things the definition declares that it should
include: see Stroud's Judicial Dictionary, Vol. 2, p.
1416. So construed, every calling, service, employment of an employee or any business, trade or calling
of an employer will be an industry. But such a wide
meat1ing appears to overr~ach the objects for which
the Act was passed. It, is, therefore, necessary to
limit its scope on permissible grounds, having regard
to the aim, scope and the object of the whole Act. To
arrive at the real meaning of the words, Lord Coke in
Heydon' s case (1) says that the following matters are to
be considered: (1) \Vhat was the law before the Act
was passed ; (2) What was the mischief or defect for
which the law had not provided; (3) What remedy
Parliament has appointed; and (4) The reason of the
remedy. The word "employers" in cl. (a) and the
word" employees" in cl. (b) indicatcthat the fundamental basis for the application of the definition is
the existence of that relationship.
The cognate
definitions of "industrial dispute'', "employer",
"employee", also support it. The long title of the
Act as well as its preamble show that the Act was
passed to make provision for the promotion of
industries and peaceful and amicable settlement of
disputes between employers and employees in an
organized activity by conciliation and a.rbitratiori and
for certain other purposes. If the preamble is read
with the historical background for the passing of the
Act, it is manifest that the Act was introduced as an
(1) [1584] 3 Rep. 7 b.
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SUPREME COURT REPORTS
953
important step in achieving social justice. The .Act
z96o
seeks to ameliorate the service conditions of 'the c
.
k
· k
t
"d
h"
.r
1 ·
th ·
orporation oft e
wor ers, o prov1 e a mac mery ior reso vmg
eir c·ey 1 Nagpur
conflicts and to encourage co-operative effort in the
•
0
v.
service of the community. The history of labour
Its Employees
legislation both in England and India also shows that
it was aimed more to ameliorate the · conditions of Subba Rao J,
service of the labour in organized activities than to
anything else. The .Act was not intended to reach the
personal i;;ervices which do not depEnd upon the
employment of a labour force.
Before consiQ.ering tpe positive aspects of the definition, what is not an industry may be. considered.
However wide the definition of " industry " may be,
it cannot include the regal or sovereign functions of
State. This is the agreed basis of the arguments at
the Bar, though· the learned counsel differed on the
ambit of snch functions.
While the learned counsel
for the Corporation would like to enlarge the scope
of these functions so as to comprehend all the welfare
actiyities of a modern State, the learned counsel for
the respondoots would seek to confine them to what
are aptly termed "the primary and inalienable functions of a constitutional government". It is said that
in a modern State the sovereign power extends to all
the statutory functions of the State except to the
business of trading and industrial transactions undertaken by it in its quasi-private personality. Sustenance for this contention is sought to be draw1t from
Holland's Jurisprudence, wherein the learned author
divides the general heading "Public Law" into
four sub-heads and under the sub-head" .Administrative
Law" he deals with a variety of topics including
welfare and social activities of a State. The treatment
of the subject" Public Law" by Holland and other
authors, in our view, has no relevancy in appreciating
the scope of the concept of regal powers which have
acquirerl a definite connotation. Lord ·Watson, in
Coomber v. Justices of Berks (1), describes the functions
such as administration of justice, maintenance of
order and repression of crime, as among the primary
and inalienable functions of a constitutional Govern-
..
(1) (1883-84) 9 App. Cas, 61, 74
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Corporation of the
City of Nagpur
v.
Its Employees
Subba Rao ].
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954
SUPREME COURT REPORTS [1960(2)]
ment. Isaacs, J., in his dissenting judgment in The
Federated
State
School
Teachers'
Association of
Australia v. The State of Victoria (1), concisely states
thus at p. 585 :
·
" Regal functions are inescapable and inalienable.
Such are the legislative power, the administr11tion of
laws, the exercise of the judicial power. Non-regal
functions may be assumed by means of the legislative power. But when they are assumed the State
acts simply as a huge corporation, with its legislation as the charter. Its action under the legislation, so far as it is not regal d:ecutiori of the law is
merely analogous to that of a private company
similarly authorised."
These words clearly mark out the ambit of the regal
functions as distinguished from the other powers of a
State. It could not have been, therefore, in the contemplation of the Legislature to bring in the regal
functions of the State within the definition of industry
and thus confer jurisdiction on Industrial Courts to
decide disputes in respect thereof.
v\T e, therefore,
exclude the regal functions of.a State from the definition of industry.
This leads us to the question whether the Corporation can be said to exercise regal functions by legislative delegation. The Corporation functions under a
statute and its powers, duties and liabilities are
regulated by it. It is a juristic person and it can sue
and be sued in its name. The statute constituting it
may confer upon it some strictly regal functions and
other municipal functions. In County Council of
Middlesex v: Assessment Committee of St. George's
Union (2), certain premises were used for the administration of justice and also for municipal purposes.
The question raised was whether the said premises
were rateable and the Court held that they were
rateable in so far
as they were occupied for
municipal purposes and not rateable in so far as they
wer.e occupied for the administration of justice, which
was held to be a function of the Crown. So too, the
Supreme Court of America in Verisimo Vasquez Vilas
(1) (1929) 41 C.L.R. 569.
(2) (1896) 2 Q.B.D. 143,
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SUPREME COURT REPORTS ,
955
v. City of Manila (i) expounded the dual character of
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a municipal corporation thus:
Corporation of the
"They exercise powers which are governmental City of Nagpur
and powers which are of a private or business
v.
character. In the one character a municipal corpo-, Its Employees
ration is a governmental sub-division, and for that
purpose exercises by delegation a part of the Subba Rao f.
sovereignty of the State. In the other character it is
a mere legal entity or juristic person. In the latter
character it stands for the community in the administration of local affairs wholly beyond the sphere
ofthe public purposes for which its governmental
powers are conferred. "
Isaacs and Rich, JJ., in The Federated Municipal and
Shire Council Employees' Union of Australia v. Melbourne Corporation (2) in the context of the dual func~ •
tions of State say much to the same effect at p. 530:
"Here we have the discrimen of Crown exemption. If a municipality either (1) is legally
empowered to perform and does perform any
function whatever for the Crown, or (2) is lawfully
empowered to perform and does perform any function which constitutionally is inalienably a Crown
function-as, for instance, the administration of
justice-the municipality is in law presumed to
represent the Crown, and the exemption applies.
Otherwise, it is outside that exemption, and, if
impliedly exempted at all, some other· principle
must be resorted to. The making and maintenance
of streets in the municipality is not within either
•
proposition."
A corporation may, therefore, discharge a dual function : it may be statutorily entrusted with regal
functions strictly so-called, such as making of laws,
disposal of certain cases judi'cially etc., and also with
other welfare activities. The former, being delegated
regal functions, must be excluded from the ambit of
tl:ie definition of "industry".
The next head of exclusion from the definition is
-put by the learned counsel for the appellant thus :
A municipality in the modern polity is also a trading
(r) 220 U.S. 345, 356; 55 L. Ed. 491, 495. '
(2) (1918-19) 26 C.L.R. 508, 530-53x.
•
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I960
Corporation of the
City of Nagpur
v.
Its Employees
Subba Rao ].
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SUPREME COURT REPORTS [1960(2)]
and industrial corporation and in that capacity is
empowered to carry on undertakings partaking the
character of business and trade, and that the definition of "industry" in the Act only takes in such
undertakings and no other statutory activities. To
· state it differently, the contention is that activities
which partake the character of trade and business in
the hands of a private individual would be an industry
if undertaken by a corporation. Some observations
made by this Court in D. N. Baneiji v. P.R. Mukkerjee (1 ) are relied upon in support of this contention.
Chandrasekhara Aiyar, J.; speaking for the Court
made the following observations at p. 317 :
"Having regard to the definitions found in our
Act, the aim or objective that the Legislature had
in view and the nature, variety and range of disputes that occur between employeYs and employees,
we are forced to the conclusioh. that the definitions
in our Act include also dfaputes that might arise
between munieipalities and their employees in
branches of work that can be said to be analogous
to the carrying out of a trade or business."
Emphasis is,laid upon the words " analogous to the
carrying out of a trade or business" and :m argum(lnt
is built upon those words to the effect that this Court
held that only such activities of municipalities analogous to trade or business would be industry within
the meaning of the definition of "industry" in the
Act. This argument, if we may say so, is the result
of an incorrect reading of the decision. There the
question was whether the sanitary department of a
municipality was an industry. within the meaning of
the Industrial Disputes Act and whether the dispute
between the municipality and its employees in that
department was an industrial dispute thereunder.
At p. 311, the learned Judge specifically deals with a
ccintE!htion based upon the collocation of the words
in the section and observes :
"Though the word "undertaking" in the definition of "industry" is wedged in between business
and trade on the one hantl. and manufacture on the
other, and though therefore it might mean only a
business or trade undertaking, still it must be
(t) [•953] S.C.R. 302
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SUPREME COURT REPORTS
957
remembered. that if that were so, there was no need
r96°
to use the word separately from business or trade. c P -
1 ~ fth
Th
'd
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t .
tt
t d
l
l
or ora wn o
e
e w1 er 1mpor is a rac e
even more c ear y City of Nagpur
when we look at the latter part of the definition
v.
which refers to "calling, service, employment, or
Its Employees
industrial occupation or avocation of workmen."
"Undertaking" in the first part of the definition
Subba Rao .f.
and "industrial occupation or avocation" in the
second part obviously mean much more than what
is ordinarily understood by trade or business. The
definition was apparently intended to includ@ within
its scope what might not strictly be called a trade
or business venture."
This passage leaves no room for doubt that this Court
construed the terms of the definition of "industry" in
a way which takes in activities which are not strictly
called trade or business. Therefore, the words "not
strictly be called a trade or business venture" and the
words "analogous to the carrying out of a trade or
business" emphasize more the nature of the organised
activity implicit in a trade or business than to equate
the other activities with trade or business. This is
made more clear by the learned Judge when he
expressly reserves the Court's opinion on a wider
question in the following words at p. 318:
"It is unnecessary to decide whether disputes
arising in relation to purely administrative work
fall within their ambit."
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We c~nnot, therefore, agree with the contention that
the said decision, when it expressly accepted the
comprehensive meaning which the words of the section
naturally bear, intended to circumscribe the wide
sweep of the section to business or trade and activities
in the nature of trade or bpsiness. Nor a fair reading
of the section bears out such a construction. We have
already indicated our view on the construction of the
section, having regard to the clear phraseology used
therein, that the section cannot be confined to trade
or business or activities analogous to trade or business .
A more workable and reasonable test is laid down
in an Australian decision cited at the Bar, and that
test has also been accepted and applied by this Court.
In Federated Engine-Drivers and Firemen's Association
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Corporation of the
City of Nagpur
v.
Its Employees
Subba Rao J.
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SUPREME COURT REPORTS [1960(2)]
of Australia and Others v. The Broken Hill Proprietary
Company Limited and Others (1 ) a distinction was
dru,wn between trading and non-trading operations,
but t'.rn question u,s to how far non-trading operations
11ttmcted the definition of "industry" was left undecided. That question fell to be decided in The
Federated 111unicipal and Shire Council Employees'
Union of Australia v. M elboure Corporation(') and that
decision, if 'we may say so, is illuminating and throws
considerable light on the question to be decided in
the present appeal. It was held by the High Court of
Australia that the Commonwealth Court of Conciliation and Arbitration had authority to determine by
award a dispute between an organization of employees
registered in connection with "municipal and shire
councils, municipal trusts and similar industries", and
municipal corporations constituted under State laws.
The dispute there related to those operations of
municipal corporations which consisted of the making,
maintenance, control and lighting of public streets.
The learned Judges discussed at length the meaning
of the word "industrial dispute" in s. 51 (XXXV) of
the Constitution of Australia. It is manifest from
this decision that even activities of a municipality
which cannot be described as tmding activities can be
the subject-matter of an industrial dispute. Isaacs, J.,
in his dissenting judgment in The Federated State
School 'l'eachers' Association of Australia v. The State of
Victoria (3), has concisely expressed this idea at p. 587
thus:
"The material question is : What is the nature of
the actual function assumed-is it a service that the
State could have left to private enterprise, and, if
so fulfilled, CQuld such a dipute bo "industrial" ?"
This test steers clear of thD argument that to be an
industry the activity shall be a trading activity. If
a service performed by u,n individual is u,n industry,
it will continue to be so notwithstanding the fact that
it is undertaken by a corporation.
Another test suggested by the learned counsel may
be scrutinized.
It is said that unles.s there is a
(1) (19r3) 16 C.L.R. 245.
(2) (r918-19) 26 C.L.R. 508, 530-531
(3) (1929) 41 C.L.R. 569
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SUPREME COURT REPORTS
959
quid pro quo for the service, it cannot be an industry.
z960
This is the same argument, namely, that the service c
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d' ir
orporation of the
must e m t e nature o tra e m a werent garb. City 1 N gp
This Court in D. N. Banerji v. P.R.