INDUSTRY S.

2 (j) ID Act
Section 2(j) reads:
“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 definition of industry has been the subject of much

discussion regarding its judicial interpretation from 1950 to
1962. The judiciary gave a wide interpretation to the
definition but from 1962 to 1978 the interpretation was
narrowed, and finally it was in 1978 that wide interpretation
of industry was given by a seven judge bench in Bangalore
Water Supply and Sewerage Board v A. Rajappa AIR 1978 SC
548.
First phase between 1950-1962:
D. N. Banerji v P. R. Mukherjee And Others AIR 1953 SC 58,
1953 SCR 302
First time the court dealt with the definition of industry and it
held that municipal functions are analogous to business or
trade. Regarding this while referring to the definition of
industry the Court observed that:
Though the word “undertaking” in the definition of “industry”
is wedged in between business and trade on the one hand
and manufacture on the other, and therefore it might mean
only a business or trade undertaking, still it must be
remembered that if that were so, there was no need to use the
word separately from business or trade.
The wider import is attracted even more clearly when we look
at the latter part of the definition which refers to “calling,
service, employment, or industrial occupation or a vocation of
workmen.”
“Undertaking” in the first part of the definition 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 intended to include within its scope what
might not strictly be called a trade or business venture.
• In this case, the Court rejected the profit motive and also the
quid pro quo (products/services rendered must be exchanged in
terms of money).
• The character of the activity matters.
• Who conducts it does not matter.
• A dispute in these services between employers and workmen is
an industrial dispute.
• Municipality, being a PUS, would be treated as industry.
State of Bombay & Others vs. The Hospital Mazdoor Sabha &
Others AIR 1960 SC 610

Issue: Whether JJ Hospital was industry w.r.t. Ward servants?

Facts: Two of the respondents were employed as Ward servants in the J.
J. group of Hospitals.
The superintendent of this said group of Hospitals informed the said
respondents by notices issued against them that their services would be
terminated with effect from mentioned dates and were later terminated;
The writ petition filed by the respondents including the Trade Union
alleged that the retrenchment of the Ward servants was void as it did not
comply with the mandatory provisions of ss. 25F and 25H of the
Industrial Disputes Act, 1947 and it claimed a writ of mandamus directing
the appellant to reinstate them in their posts.
This petition was resisted by the appellant on several grounds including
the ground that the J. J group of Hospitals did not constitute an industry
and so the relevant provisions of the Act were inapplicable to the
respondent's case.
OBSERVATIONS OF THE COURT

The object and the scope of the Act, as apparent from its various
provisions, made it amply clear that the Legislature in defining the
word 'industry' in Sec 2(j) of the Act was deliberately using term of
wide import in its first clause and referring to several other industries
in the second in an inclusive way obviously denoting extension.
The Court observed that undue importance cannot be attached to the
conventional meaning attributed to trade or business in construing the
wide words of the definition since it has lost some of its force and can
no longer be wholly valid for the purpose of industrial adjudication in
a modern welfare state.
A noteworthy point is:
Section 2(j) does not define “industry” in the usual manner by prescribing
what it means;
the first clause of the definition gives the statutory meaning of “industry”
and
the second clause deliberately refers to several other items of industry
and brings them in the definition in an inclusive way. It is obvious that the
words used in an inclusive definition denote extension and cannot be
treated as restricted in any sense.
The word “undertaking” according to Webster means “anything
undertaken; any business, work or project which one engages in or
attempts, an enterprise”.
Similarly, according to Halsbury “trade” is “exchange of goods for
goods or goods for money”, and in its secondary meaning it is “any
business carried on with a view to profit whether manual or mercantile,
as distinguished from the liberal arts or learned professions and from
agriculture”;
whereas “business” is a wider term not synonymous with trade and
means practically “anything which is an occupation as distinguished from
a pleasure”.
The word “calling” again is very wide; it means “one's usual occupation,
vocation, business or trade”; so is the word “service” very wide in its
import.
Prima facie, if the definition has deliberately used words of such wide
import, it would be necessary to read those words in their wide
denotation; and so read, hospitals cannot be excluded from the
definition.
It is clear that the presence of a profit motive or the investment of
capital, traditionally associated with notion of trade and business,
would not be indispensable requisite for an industry under S. 2(j) of
the Act.
Such activities of the Government as can properly be described as
regal or sovereign activities easily fall outside the scope of the
definition.
Such regal activities’ scope cannot be extended to cover other
activities which are undertaken by the State in implementation of the
Directive Principles of State Policy and the ideal of a welfare State.
Though Section 2(j) uses words of very wide denotation, a line
would have to be drawn in a fair and just manner so as to exclude
some callings, services or undertakings. If all the words used are
given their widest meaning, all services and all callings would come
within the purview of the definition; like service rendered by a servant
purely in a personal or domestic matter or even in a casual way would
fall within the definition.
It is not and cannot be suggested that in its wide sweep the word
“service” is intended to include service howsoever rendered in
whatsoever capacity and for whatsoever reason.
EXCERPTS
While holding that the Hospital was an industry, the Court held that:
• The activity should be systematic and habitual;
• It should be free for the benefit of the community;
• There should be employer – employee relation, and
• Operations must be such where capital and labour are contributed in
cooperation for the satisfaction of human wants or desires.