Precedential value: Cases cited in Bangalore Water Supply

Last week, between 17-19 March 2026, a nine-judge bench heard final arguments in State of U.P v Jai Bir Singh. The case sought reconsideration of Bangalore Water Supply & Sewerage Board v R. Rajappa (1978), a landmark verdict that defined the scope of the term “industry” under Section 2(j) of the Industrial Disputes Act, 1947. 

The Bangalore Water Supply decision reviewed several key precedents to provide an authoritative resolution on the definition. In all of these cases, the core issue was whether the dispute in question constitutes an “industrial dispute”. Providing a factual matrix of each dispute, we highlight how and why each decision was referenced in Bangalore Water Supply and last week’s hearings.  

D.N. Banerjee v P.R. Mukherjee (1953)

Factual Background: In 1949, two employees of the Budge Municipality in West Bengal were dismissed by the Chairman over complaints of negligence, insubordination and indiscipline. The Municipal Workers’ Union challenged the dismissals and the dispute was referred to the Industrial Tribunal. The Tribunal’s award of reinstatement was challenged before the Calcutta High Court and subsequently dismissed. The matter reached the Supreme Court by appeal under Article 132(1).

Arguments: The Municipality contended that the dispute was not an “industrial dispute” because municipal activities are part of local self-government, thus excluded from the definition of “industry” under the Act. The respondents contended that it was sufficient, for the purpose of definition, that the dispute occurred between the employer and the workmen.

Judgement: The Supreme Court upheld the Tribunal’s award and the High Court’s decision. It held that an activity does not cease to be an industry merely because it is conducted by a public authority or lacks a profit-making objective. 

Bangalore Water Supply: Upheld the judgement and clarified that its task was to “straighten and strengthen” the application of the ratio in Banerjee, not to supplant it.

On Day 3 of the nine-judge Bench hearing on the definition of “industry”, Senior Advocate Jayna Kothari relied on this judgement to substantiate that the meaning of a provision must be understood in context and setting. 

Workmen of Dimakuchi Tea Estate v Management of Dimakuchi Tea Estate (1958)

Factual Background: Dr. Banerjee, who was appointed as the Assistant Medical Officer by the respondents, was terminated from his services after his probation. This led to a dispute over his reinstatement, which was referred to the Industrial Tribunal. 

Arguments: The appellants argued that “industrial disputes” under Section 2(k) of the Industrial Disputes Act 1947, includes “any person”, irrespective of their status as “workman”. The management argued that industrial disputes must relate only to workmen under Section 2(s) of the Act. 

Judgement: The Tribunal held that the Medical Officer was not a workman and thus had no jurisdiction over the dispute. The Appellate Industrial Tribunal affirmed this and the matter reached the Supreme Court. The Court dismissed the appeal holding that Dr. Banerjee was not a ‘workman’. The bench also held that the appellants had no direct, nor substantial interest in his employment, and that the dispute was not an industrial dispute within the meaning of Section 2(k) of the Act. But, the court also proceeded to hold that a dispute involving a non-workman can still be an industrial dispute, if the person raising the dispute has substantial interest in the non-workman’s employment. 

Bangalore Water Supply: Cited the ratio in this case​​ to point out that the Act was passed at a time when labour disputes had “already assumed big proportions” in several instances. Keeping the long title and preamble in mind, it was deemed necessary to give the terms a wide import in order to fulfil the Act’s purpose of settling industrial dispute.

State of Bombay v The Hospital Mazdoor Sabha (1960)

Factual Background: Two ward servants at the Hospital Mazdoor Sabha were retrenched without being paid compensation. They filed a writ petition before the High Court. 

Arguments: The State argued that hospitals are engaged in welfare activities without any profit motive and therefore cannot be classified as industries. The ward servants contended that profit motive is irrelevant, and that hospitals provide organised services which involve employer–employee cooperation, thus falling within the definition of “industry.”

Judgement: The Supreme Court held that hospitals are “industries” under the Act, even if run by the government and without profit motive. The Court further held that in the question of whether any activity is an industry under Section 2(j) of the Act, quid pro quo is irrelevant. 

Bangalore Water Supply: Upheld the case, reiterating its correctness although it was overruled by The Management Of Safdarjung Hospital v Kuldip Singh Sethi eight years prior to the judgement in BWSSB.

The case was relied on by Senior Advocate Gopal Sankaranarayan on Day 3 of the hearing by the nine-judge Bench on the definition of “industry” where he submitted that the judgement was correct in holding that hospitals are industries.

Corporation of City of Nagpur v Its Employees (1960)

Factual Background: Many disputes between the Corporation and its employees arose regarding wage scales, gratuity, provident fund, house rent, and allowances, among other entitlements.. These disputes were referred to the Industrial Court under Section 39 of the Industrial Disputes Act 1947 by the State of Madhya Pradesh. The appellant questioned its jurisdiction on the grounds that the Corporation was not an “industry” under the Act. When the Industrial Court held that the Corporation was an industry, they appealed to the Madhya Pradesh High Court which upheld the Industrial Court’s decision but asked it to clarify which specific departments qualified as an “industry”. After reconsideration, all departments except five were held to be industries, and the Corporation appealed to the Supreme Court challenging these findings of both the Industrial Court and the High Court.

Arguments: The appellate contended that the Corporation was excluded from the definition of “industry” as it performed a regal and sovereign function. The respondents argued that the interests of the employees need to be protected and that “sovereign functions” had a limited scope. 

Judgement: The Supreme Court upheld the jurisdiction of the Industrial Court and dismissed the appeal. It withheld from expressing opinions on the correctness of the Industrial Court’s exclusion of five departments from the scope of “industry” because the employees of those departments did not appeal against such findings. 

Bangalore Water Supply: Upheld the decision. It incorporated the “dominant nature test” used in this Judgement. 

On Day 1 of the nine-judge Bench hearing on the definition of “industry”, Senior Advocate Shekhar Naphade cited this case to substantiate that once the principal activity is treated as an industry, the same applies across departments.

The National Union of Commercial Employees v M.R. Meher (1962)

Factual Background: In 1956 and 1957, the employees of a solicitors’ firm claimed a bonus from their employers and appealed for the same before the Industrial Tribunal, under the Industrial Disputes Act, 1947.  

Arguments: The respondents contended that theirs was a liberal profession which could not be classified as an “industry”as it did not involve the essential ingredients of labour and capital investment. The Industrial Tribunal accepted their contentions and held that it had no jurisdiction over the dispute. Subsequently, the employees filed a writ petition before the High Court. The Court dismissed this and the matter was appealed before the Supreme Court. 

Judgement: Applying the “Working Test” of whether an activity involves cooperation for the production of goods/services, the Supreme Court held that a solicitors firm is not an industry.

Bangalore Water Supply: Overruled this decision and held that the doctrine of “direct nexus” used was subjective and could not be used consistently. The court held that unless stated otherwise through plausible cases, no class of profession can be favoured through judicial interpretation. 

University of Delhi v Ram Nath (1963)

Factual Background: Two drivers employed at Miranda College, University of Delhi, were terminated from their services. When they claimed retrenchment compensation under the Industrial Disputes Act, the Industrial Tribunal passed an order in their favour.

Arguments: The appellant argued that they are not “employers” under Section 2(g) of the Act, and that the work carried out by it is not that of an “industry” since it was primarily an educational institution. They contended that teachers were not workmen since they do not perform manual work, and that education was neither a trade nor a business. The respondents contended that the word “industry” is to be interpreted with the widest amplitude. 

Judgement: The Supreme Court set aside the orders passed by the Tribunal and dismissed the petition. It held that even if some activities of the University (such as provision of transport services) fell within the purview of the Act, the predominant activity of the University of Delhi being educational in nature.  

Bangalore Water Supply: Overruled the decision and held that the dominant activity test was wrongly applied in the judgement. It clarified that the test centres on the nature of activity and not the number of employees involved. Educational institutions were subsequently included within the scope of “industry”.

Madras Gymkhana Club Employees Union v Management of the Gymkhana Club (1968)

Factual Background: In 1962, 194 employees of Gymkhana Club claimed a bonus under the Industrial Dispute Act. Their claim was rejected when the Industrial Tribunal held that the Club is not an “industry” under the Act. 

Arguments: The Employees Union contended that the Club should be considered an industry because it is organised on a large scale with multifarious activities. The Club contended that it is member exclusive and is not run by employees as an “avocation” or “calling” but rather as a community activity. 

Judgement: The Supreme Court upheld the Tribunal’s decision. 

Bangalore Water Supply: Overruled the decision and held that to exclude the inference of an “industry” based on the “transcendental logic” that the club belongs to the members only is redundant. On the trail of this logic, a company can be said to belong to the shareholders only. That, however, does not deter an activity from assuming the nature of an industry. 

Management of Safdarjung Hospital v Kuldip Singh Sethi (1970)

Factual Background: The Supreme Court clubbed three appeals which questioned whether “hospital” could be classified as an industry. 

Arguments: The appellants contended that hospitals are primarily engaged in activities lacking any profit-oriented activities, and thus cannot be classified as industries. The respondents argued that hospitals are to be considered as industries after the amendment of the Act in 1956, by which ’service in hospitals and dispensaries’ is included in public utility services under the First Schedule of the Act.

Judgement: The Supreme Court held that hospitals are not industries since they lack a defined commercial motive. It overruled Hospital Mazdoor Sabha and reversed all the awards that were granted in the three cases.

Bangalore Water Supply: Overruled this decision and pointed out that the reason these three appeals were referred to a Constitution Bench was because of its conflict with otherwise well-founded precedent.

On Day 2 of the nine-judge Bench hearing on the definition of “industry”, Senior Advocate Sanjay Hegde submitted this case before the bench to support his contention that the definition must be read as a whole. 

Workmen of Indian Standards Institution v Management of Indian Standards Institution (1975) 

Factual Background: The workers of the Indian Standards Institution (ISI) raised demands relating to service conditions. Upon reference, the Industrial Tribunal applied the five tests laid down in Gymkhana Club and concluded that ISI could not be classified as an industry due to absence of a profit motive.

Arguments: The Management contended that the ISI was a public service organisation with no profit motive for it to be classified as an industry. The workmen contended that profit motive is not essential, and therefore ISI should fall within the definition of “industry.”

Judgement: The Supreme Court held that the profit motive is entirely “irrelevant” and that the ISI is an industry as it satisfies the two requirements of not being a casual arrangement and involving cooperation for the production of goods/services. It directed the Tribunal to proceed with adjudication.

Bangalore Water Supply: Upheld the judgement. 

Aside from Indian precedent, Bangalore Water Supply also drew extensively from Federated Municipal & Shire Employees’ Union of Australia v Melbourne Corporation (1919). A decision from the Australian Supreme Court, this case held that profit is not an essential motive for industries. The Bangalore Water Supply judgement referred to this judgement to conclude that factories which produce goods that are later sold for free and public sector coal mines are nevertheless industrial in nature.

The Judgement also quotes the dissenting judgement of Justice Isaac in the case of Federated State School Teachers’ Association of Australia v. State of Victoria (1929), where he held that education is pre-eminently service. 

(Sudhiksha Innanje is an intern at the Supreme Court Observer)