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- Involves a Research Laboratory which employed a glass blower who was made to retire at 58, instead of 60.
- He filed a complaint before the Labour court that rejected the contention of the appellant that it was not an ‘industry’ within the meaning of Section 2(j) of the I.D. Act.
- It recorded a finding that though PRL is purely a research institute and the research work carried on by it is not connected with production supply or distribution of goods or services, YET it took the view that it is an industry, following the Bangalore Water Supply decision. It found that PRL is carrying on, in an organized and systematic manner, the activity of research in its laboratory by active co-operation between itself and its employees and the discoveries and invention made would be eligible for sale.
- The Supreme Court stated –
- PRL is engaged in pure research work. The purpose of the research is to acquire knowledge about the formation and evolution of the universe but the knowledge thus acquired is not intended for sale.
- The material on record discloses that PRL is conducting research not for the benefit or use of others. Though the results of the research work done by it are occasionally published they have never been sold. There is no material to show that the knowledge acquired by PRL is marketable or has any commercial value. The work is for the benefit of the Department of Space and its object is not to render services to others.
- PRL cannot be said to be engaged in an activity which can be called business trade or manufacture, or an `undertaking’ analogous to business or trade. It is not its object to produce and distribute services which would satisfy wants and needs of the consumer community.
- NOTE that this is an aspect that the BWS case did not refer to at all.
- SC was of the opinion that PRL is not an industry even though it is carrying on the activity of research in a systematic manner with the help of its employees as it lacks that element which would make it an organization carrying on an activity which can be said to be analogous to the carrying on of a trade or business because it is not producing and distributing services which are intended or meant for satisfying human wants and needs, as ordinarily understood.
- In the case of Sub-Divisional Inspector of Post, Vaikam Theyyam Joseph (Supreme Court, 1996), the establishment of the Sub-Divisional Inspector of Post was held not to be an industry but an exercise of a sovereign function.
- In the case of Bombay Telephone Canteen Employees’ Association, Prabhadevi Telephone Exchange Union of India (Supreme Court, 1997) the SC, after examining the case law, held, among other things, that if the finding is that there exist no statutory rules or no certified standing orders exist or they are inapplicable, the remedy under IDA would always be available as an ‘industry’ and indicia laid in Bangalore Water Supply Board case gets attracted.
- However, a Bench of three judges of the SC in General Manager, Telecom S. Srinivasa Rao in 1997 held that the cases of Sub-Divisional Inspector of Post and Bombay Telephone Canteen Employees’ Association, Prabhadevi Telephone Exchange were not correctly decided in view of the ratio laid down by a Bench of seven judges of this Court in the case of Bangalore Water Supply and Sewerage Board.
- The court held that according to the Triple Test the Telecommunication Department of the Union of India is an ‘industry’ within that definition because it is engaged in a commercial activity and the Department is not engaged in discharging any of the sovereign functions of the State.
- It said that the two-Judge bench in Theyyam Joseph’s case which held that the functions of the Postal Department are part of the sovereign functions of the state and it is, therefore, not an ‘industry‘, was rendered without any reference to the seven-judge Bench decision in Bangalore Water Supply.
- In the two-judge Bench decision in Bombay Telephone Canteen Employees’ Association, the Theyyam joseph case was followed for taking the view that the Telephone Nigam is not an ‘industry’. However, in Bombay Telephone Canteen Employees’ Association case, reference was also made to the Bangalore Water supply case. After referring to the decision in Bangalore Water Supply, it was observed that if the doctrine enunciated in Bangalore Water Supply is strictly applied, the consequence is ‘catastrophic’.
- The SC said that it is unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven judge Bench decision in Bangalore Water Supply case by which we are bound. It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply or to by pass that decision so long as it holds the field. Moreover, that decision was rendered long back – nearly two decades earlier and we find no reason to think otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply case. We must therefore, add that the decisions in Theyyam Joseph and Bombay Telephone Canteen Employees’ Association cannot be treated as laying down the correct law.
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