New Delhi, March 18 A nine-judge constitutional bench of the Supreme Court on Wednesday said its ruling on the correctness of a 1978 judgment, which gives a broad interpretation of the term "industry" to govern labor relations, would apply to existing cases under the now-repealed Industrial Disputes Act, 1947.
On February 21, 1978, a seven-judge bench delivered a ruling on the definition of the term "industry" while deciding the case of the Bangalore Water Supply and Sewerage Board, expanding the definition, which brought millions of employees in hospitals, educational institutions, clubs, and government welfare departments under the protection of the Industrial Disputes (ID) Act, 1947.
The nine-judge bench, comprising Chief Justice Surya Kant and Justices B V Nagarathna, P S Narasimha, Dipankar Datta, Ujjal Bhuyan, Satish Chandra Sharma, Joymalya Bagchi, Alok Aradhe, and Vipul M Pancholi, is hearing arguments on the contentious issue of defining the term "industry" under the 1947 Act.
"Whatever will be said now will apply to the existing cases under the old law. That is the bottom line," Justice Nagarathna said during the hearing.
This observation is significant because some lawyers have questioned the reference to the nine-judge bench, arguing that the 1947 Act has since been repealed, and instead, the Industrial Relations Code, 2020, which came into effect in 2025, is now in force.
"The reference is made. Now, show us an authority that says in these circumstances, the nine-judge bench may not answer (the reference)," Justice Datta asked senior advocate C U Singh, who was arguing the case.
Singh said he was not questioning the reference, but the 1947 Act has now been repealed.
During the day-long arguments, senior advocate Indira Jaising assailed the vehement opposition to the 1978 verdict by several states, regardless of which party was in power.
She said these oppositions seem to be a "proxy litigation" on behalf of private players.
Referring to the 1947 Act, she said it provided security of tenure to workers.
"Every democratic society is obligated to provide access to justice, and the Industrial Disputes Act, 1947, provided access to justice for workers regarding issues like victimization and wrongful termination," Jaising said.
The Chief Justice concurred with the submissions and said, "The Industrial Disputes Act, 1947, is a beneficial legislation, and workers are entitled to some kind of statutory protection."
Justice Datta observed that the court would first have to determine what constitutes an "industrial dispute."
"Unfortunately, yesterday, no senior counsel referred to the provisions of the Industrial Disputes Act, 1947. We need to first understand what constitutes an industrial dispute," Justice Datta said.
Jaising argued that the reference was based on "incorrect information" regarding whether or not there was a conflict between two judgments by the apex court.
Justice Bagchi observed, "Our interpretation is based on the repealed law, not on the 2020 Code."
The arguments in the matter will continue on Thursday.
While hearing the matter on Tuesday, the bench said it would not deal with the term as defined in the Industrial Relations Code, 2020.
"This does not mean we are helpless. There is a reference before us. We are directly examining the question of whether the interpretation of the original provision itself in the Bangalore case was correct or not," the Chief Justice had said.
"If that interpretation was wrong, if that provision has been completely misinterpreted by giving such a broad meaning, then we will correct our mistake," the bench had said.
The bench had earlier formulated the broad issues for its adjudication, and the first issue is: "Does the test laid down in paragraphs 140 to 144 in the opinion rendered by Justice V R Krishna Iyer in the Bangalore Water Supply and Sewerage Board's case (of 1978) to determine if an undertaking or enterprise falls within the definition of 'industry' lays down correct law?"
"And does the Industrial Disputes (Amendment) Act, 1982 (which seemingly did not come into force), and the Industrial Relations Code, 2020 (with effect from November 21, 2025), have any legal impact on the interpretation of the expression 'industry' as contained in the principal Act?" it had said.
It had said one of the issues to be adjudicated would be whether social welfare activities and schemes or other enterprises undertaken by government departments or their instrumentalities can be construed to be "industrial activities" for the purpose of Section 2(j) of the 1947 Act.
At the heart of the dispute is the 1978 ruling delivered by Justice V R Krishna Iyer, which expanded the definition of the term 'industry' and established the "Triple Test" to define it.
According to the 1947 Act, the term '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 1978 verdict expanded the definition and provided a triple test and said that if there was "systematic activity" undertaken by an organization and there was cooperation between employer and employees in carrying out that activity and production of goods and services then the entity can be termed as 'industry' and workmen will be entitled to protection under the ID Act.
This wide interpretation brought hospitals, educational institutions, and even charitable organizations under the ambit of labor laws.