Bhagwati, J. - (1.) Here, in this case, once again arises the question as to what is an 'industry' within the meaning of the Industrial Disputes Act, 1947. This question has continually baffled and perplexed the Courts in our country. There have been various judicial ventures in this rather volatile area of the law. The Act gives a definition of 'industry' in Section 2(j) but this definition is not very vocal and it has defied analysis, so that judicial effort has been ultimately reduced merely to evolving tests by reference to characteristics regarded as essential for constituting an activity as an 'industry'. The decided cases show that these tests have not been uniform ; they have been guided more by an empirical rather than a strictly analytical approach. Sometimes these tests have been liberally conceived, sometimes narrowly. The latest exposition is to be found in the judgment of a Bench of six Judges of this Court in Safdarjunj Hospital v. K. S. Sethi, (1971) 1 SCR 177. But while applying the tests indicated in this decision it is necessary to remember that the Industrial Disputes Act 1947 is a legislation intended to bring about peace and harmony between management and labour in an 'industry' so that production does not suffer and at the same time, labour is not exploited and discontented and, therefore, the tests must be so applied as to give the widest possible connotation to the term 'industry'. Whenever a question arises whether a particular concern is an 'industry', the approach must be broad and liberal and not rigid or doctrinaire. We cannot forget that it is a social welfare legislation we are interpreting and we must place such an interpretation as would advance the object and purpose of the legislation and give full meaning and effect to it in the achievement of its avowed social objective. With these prefatory observations, we proceed to state the facts giving rise to the appeal.
(2.) The Indian Standards Institution (hereinafter referred to as ' the Institution') is a Society registered under the Societies Registration Act, 1860. The workmen of the Institution represented by the Indian Standards Institution Employees' Union (hereinafter referred to as 'the Union') made certain demands which were not accepted by the management and a dispute accordingly arose between the management and the workmen. The dispute was taken in conciliation but the Concialiation Officer was unable to bring about settlement and he made, what is commonly known as "failure report" to the Lt. Governor of Delhi. The Lt. Governor, thereupon, by an order dated 28-9-1968, referred the dispute for adjudication to the Industrial Tribunal under Sections 10(1) (d) and 12 (5) of the Act. The order of the Lt. Governor set out the demands which were to form the subject-matter of adjudication by the Industrial Tribunal. The Union representing the workmen filed a statement of claim in support of these demands. The management opposed the demands on merits but in addition to the defence on merits, they raised a preliminary objection which, if well founded would strike at the very root of the jurisdiction of the Industrial Tribunal to entertain the reference. The preliminary objection was that the Institution was not an industry within the meaning of Section 2 (j) of the Act and, therefore, the dispute between the management of the Institution and its workmen was not an 'industrial dispute' as defined in S.2(k) and the Lt. Governor had no jurisdiction to refer it for adjudication under the provisions of the Act. Issue No. 1 arising out of this preliminary objection was in the following terms:"Is Indian Standards Institute an industry or not", and this issue was directed to be tried as a preliminary issue.
(3.) The Industrial Tribunal proceeded to examine the legal position for the purpose of determining when a particular activity can be regarded as an industry within the meaning of Section 2(j) of the Act. It observed that there were five tests laid down by the decisions of this Court in Madras Gymkhana Club Employees Union v. Management of the Madras Gymkhana Club. (1968) 1 SCR 742 and Cricket Club of India Ltd. v. Bombay Labour Union, (1969) 1 SCR 600 which were 'required to be satisfied before an activity could be held to be an 'industry' and they were as follows: "1. When the operation undertaken rests upon co-operation between employers and employees with a view to production and distribution of material goods or material services; 2. It must bear the definite character of trade or business or manufacture or calling or must be capable of being described as an Undertaking analogous to business or trade resulting in material goods or material services. 3. The activity to be considered as an 'industry' must not be casual but must be distinctly systematic; 4. The work for which labour of workmen is required, must be productive and workmen must be following an employment calling, or industrial avocation; and 5. When private individuals are the employers, the industry is run with capital and with a view to profits. (These two circumstances may not exist when Government or local Authority enters upon business, trade, manufacture or an undertaking analogous to trade)." On an application of these tests, the Industrial Tribunal found that the Institution satisfied the first four tests and this indeed was not disputed, but so far as the fifth test was concerned, it was not satisfied since capital was undoubtedly employed in the Institution but the Institution was not run with a view to profit. The profit motive was ruled out by the objectives of the Institution and as the profit motive was lacking, the Institution could not be held to be an 'industry'. The Industrial Tribunal accordingly, by an order dated 10th October, 1969, held that the reference of the dispute between the management of the Institution and its workmen was outside the power of the Lt. Governor and the Industrial Tribunal had no jurisdiction to entertain the reference or to adjudicate upon it. The workmen were obviously aggrieved by this order made by the Industrial Tribunal since it closed the doors of industrial adjudication and left the workmen without any remedy to redress their grievances and hence they preferred the present appeal against the order of the Industrial Tribunal with special leave obtained from this Court.;