1978 ‘Industry’ Definition Void Under New Code: Supreme Court

• Supreme Court judgment: The Supreme Court has held that the 1978 judicial definition of “industry” under the Industrial Disputes Act, 1947 is no longer applicable under the Industrial Relations Code, 2020.

1978 Definition — Earlier Position

• Case: Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978).
• Supreme Court: Gave a broad and expansive interpretation to the term “industry”.
• Triple Test:
  • Systematic activity
  • Organised cooperation between employer and employee
  • Production/distribution of goods or services to satisfy human wants and wishes.

Position Under Industrial Relations Code, 2020

• Statutory definition: The Code provides its own statutory definition of “industry”.
• New framework: The scope of the term is now governed by the specific language of the Code.
• Effect: The broad interpretation evolved under the Industrial Disputes Act, 1947 cannot automatically be applied to the new statutory framework.
• Key principle: When Parliament provides a specific statutory definition, the term must be interpreted within that legislative framework.

UPSC Prelims Question — English

Q. With reference to the term “industry” in Indian labour law, consider the following statements:

1. The Supreme Court gave a broad interpretation to the term “industry” in the Bangalore Water Supply case of 1978.
2. The Industrial Relations Code, 2020 provides a statutory framework for determining what constitutes an industry.
3. The 1978 judicial definition automatically overrides the definition contained in the Industrial Relations Code, 2020.

Which of the statements given above are correct?

A. 1 only
B. 1 and 2 only
C. 2 and 3 only
D. 1, 2 and 3

Answer: B

Explanation: The 1978 judgment adopted a broad interpretation of “industry”. However, the Industrial Relations Code, 2020 provides the statutory framework under the new labour regime, so the earlier definition does not automatically override the new Code.