A.K. Mishra, J.
1. Petitioners are workers' union. The prayer made in the instant writ petition is to quash the award passed by the arbitrator Shri Digvijay Singh, Chief Minister of M.P. relating to dispute of removal of daily wages employees.
Main question for consideration in the writ petition is whether Public Works Department and other departments of State of M.P. can be treated 'industry' under Section 2(j) of Industrial Disputes Act, 1947.
2. The services of the daily rated workmen employed in Madhya Pradesh after 31-12-1988 in different departments of State of M.P. and various local authorities were ordered to be terminated by the Govt. of M.P., a memorandum (P-1) dated 14the February, 2000 was issued for removing all the daily wage employees appointed after 31-12-88 on the ground that a memorandum dated 15-9-89 was issued which contained direction not to fill up the posts which were vacant as on 1st January, 1988 and the ban on making the appointments out of contingency fund was imposed which was subject to certain exceptions mentioned in para 1 of memo (P-1). On 23-12-94 it was directed that the cases of the daily wage employees should be screened properly; thereafter action should be taken to remove them. The instructions were made applicable to all the public sector undertakings, corporations, boards, local bodies, development authorities and co-operative societies in which Government share is 51%.
3. Many organisations including the petitioners and respondents 3 to 5 agitated the matter. When the matter was pending before Labour Department, Govt. of M.P. an agreement was reached between the parties under Section 10A of Industrial Disputes Act, 1947 read with Rule 7 of M.P. Industrial Rules, 1957 reference was made to arbitrator Shri Digvijay Singh, Chief Minister of State of M.P. The arbitration agreement was published by issuing a notification in the official gazette P-2 on 13th July, 2000. On the basis of memorandum P-1 the services of workmen working in the different departments of State of M.P. and the various local authorities like Municipal Corporations, Municipalities, Krishi Upaj Mandis etc. were terminated. However, the dispute before the arbitrator was confined only to the termination of theservices of the workmen working in the various departments of the Stale Government.
4. Petitioners submit that State Government in its reply to the question in legislative assembly disclosed that total number of workmen employed after 31-12-1988 was 30,389; out of which 22,260 daily rated employees of different departments have been retrenched, but 4487 could not be retrenched on account of Court orders and scrutiny. The dispute was with respect to the employees mentioned in the list supplied with the answer P-5 in the legislative assembly.
5. The parties presented their case before arbitrator. After hearing arguments, arbitrator passed an award P-9 on 28-8-2000. Learned arbitrator held that Public Works Department cannot be treated as an 'industry'; the work of various other departments of the State also is sovereign function, hence other departments can also not be termed as an 'industry'. In the opinion of the arbitrator, the provision of Industrial Disputes Act, 1947 are not applicable to daily wage employees working in the various Government departments; the agreement referring the dispute to the arbitrator has been adjudged to be void and ineffective. The arbitrator opined that he has no jurisdiction to pass an arbitration award. The conclusion that Government department cannot be treated as an 'industry' is based on Full Bench decision of Punjab & Haryana High Court in State of Punjab v. Kuldeep Singh, 1983 (1) LLJ 309, wherein Court opined after consider and distinguishing the decision of Bangalore Water Supply and Sewerage Board v. A. Rajappa and Ors., AIR 1978 SC 548, that Public Works Department's functions cannot be treated as 'trade or business'. Another decision relied on by the learned arbitrator is that of High Court of Madras rendered in W.P. No. 5375/1992 in State of Tamil Nadu through Executive Engineer (Construction) Industries and Commercial TaxDepartment v. Principal Labour Court, Madras, (2000) 2 LLJ 331, wherein also similar view has been taken following Full Bench decision of Punjab & Haryana High Court in Kuldeep Singh (supra).
6. The arbitrator further opined that the appointments which were made without following the procedure in violation of the rules cannot be regularized in view of the decision of Supreme Court in Ashwani Kumar and Ors. v. State of Bihar and Ors., AIR 1997 SC 1628, and thus it was held that termination of such daily wage employees was not improper or illegal; they are not entitled to protection of Industrial Disputes Act.
7. The petitioners contend that learned arbitrator relied on a Full Bench decision of Punjab & Haryana High Court in State of Punjab v. Kuldeep Singh (supra) which stood overruled by the Supreme Court in Deshraj v. State of Punjab and Ors., AIR 1988 SC 1182. The case of the petitioners is thatthe decision of the arbitrator is against various decisions of the Apex Court; the test laid down in Bangalore Water Supply (supra) is based on the case of City of Nagpur v. Its Employees, AIR 1960 SC 675, which hold the field, thus, various departments of State are to be treated 'industry' under Section 2(j) of Industrial Disputes Act, 1947.
8. Petitioners further submit that they have been made shuttle cock. Large number of workers filed original applications before the State Administrative Tribunal which held that it had no jurisdiction to deal with the cases of daily wage employees as they have the protection under Industrial Disputes Act, and the proper forum available to them is the Labour Court. The decisions of the Tribunal were challenged before the Division Bench of this Court in large number of writ petitions in which this Court declined to interfere by relegating the workmen to the efficacious alternative remedy which is available to them under the Industrial Disputes Act before the Labour Court, Petitioners submit that after the arbitrator has held that Public Works Department and various other departments are not 'industry', references are not being made by the Labour Department. Asstt. Labour Commissioners are also not entertaining the conciliation proceedings on the ground that they are not workmen as Government departments are not 'industry'. Civil suit is also not maintainable as remedy lies under Industrial Disputes Act, 1947. A piquant situation has arisen; the workmen are running from pillar to post; however, every forum is refusing to hear their grievances; the petitioners arc at a loss to understand if at all they have remedy of judicial review of the action of the State of M.P. taken pursuant to memo P-1.
9. The respondents in their return contend that writ petition is not maintainable against the decision of the arbitrator and also against the policy decision of the State Government to dis-engage daily wage employees. Agreement for referring the matter for arbitration was entered into between the parties on the insistence of respondent No. 3 who claimed himself to be representative of all disengaged daily wagers. Since the petitioners voluntarily submitted for arbitration; hence they are now estopped from challenging the arbitration award as they have participated and raised all the issues before the arbitrator; they cannot be permitted to turn around and challenge the award as given by the arbitrator simply because it is against them. Petitioners have no right or authority, fundamental or otherwise, to continue as daily wagers; the appointments were ab initio void and against specific directions of the Government, therefore, they have no right to continue in employment from which they have been rightly dis-engaged.
10. The respondents further rely on decision of Supreme Court in Himanshu Kumar Vidyarthi and Ors. v. State of Bihar and Ors., (1997) 4 SCC 391. The respondents contend that when a recruitment to a particularpost is governed by the statutory rules, provisions of Industrial Disputes Act are not applicable. Reliance is placed on the decision of Madras High Court in State of Tamil Nadu v. Principal Labour Court, (supra); it is further contended that State is having the power to issue appropriate directions to local bodies, authorities and societies under various provisions of M.P. Municipalities Act, M.P. Municipal Corporation Act, M.P. Krishi Upaj Mandi Adhiniyam, M.P. Co-operative Societies Act. Daily Wagers have no right to continue or to be regularized. They are not workmen within the Industrial Disputes Act, 1947. The arbitrator was competent to decide about the juris-dictional aspect. He has not exceeded terms of reference while deciding arbitrability of issue referred. Reliance is also placed on decisions of Supreme court in Physical Research Laboratory v. K.G. Sharma, AIR 1997 SC 1855, Executive Engineer (State of Kamataka) v. K. Somaselty and Ors., (1997) 5 SCC 434, and Union of India v. Jai Narain Singh, 1995 Supp (4) SCC 672.
11. Learned counsel for the petitioners submits that writ petition is maintainable against the statutory award passed by the arbitrator under Section 10A of Industrial Disputes Act, 1947. The decision of the arbitrator is based on overruled decision of Punjab & Haryana High Court in Kuldeep Singh (supra), and the decision of Madras High Court cannot be accepted as it stands impliedly overruled and is contrary to law of land as pronounced by the Supreme Court in various decisions. Petitioners submits that the award is liable to be quashed as the provisions of Industrial Disputes Act are applicable to the daily wagers working in the various departments of the Government including Public Works Department as they are 'industry' within Section 2(j) of Industrial Disputes Act. It is further contended that there is no detailed discussion made by the learned arbitrator while passing the award and it cannot be said that the State in its various departments is discharging sovereign functions. Award is non-speaking; there is no discussion about various other departments and functions.
12. Learned counsel appearing for the respondents has relied on decisions mentioned above and contends that civil suit is the remedy for the daily wage workers as provisions of Industrial Disputes Act are not applicable. He has also relied on decision of Madras High Court in State of Tamil Nadu v. Principal Labour Court (supra) and contends that the award passed by the arbitrator is proper; simply by relying on a decision of Full Bench of Punjab & Haryana High Court which stands overruled, validity of the award is not adversely affected as the other reasons mentioned are cogent and proper.
13. Before the rival contentions are considered on merits, it be noted that large number of original applications were filed before the State Administrative Tribunal by the workers serving in the various departments of State of M.P. who were removed pursuant to policy decision in question. Theircases were not entertained by the State Administrative Tribunal on the ground that they were having the remedy under Industrial Disputes Act before the Labour Court. True it is that large number of writ petitions travelled to this Court against such decisions of the State Administrative Tribunal and this Court declined to interfere on the ground that efficacious alternative remedy is available to the workmen before the Labour Court under Industrial Disputes Act. In large number of cases in the recent past, this Court has relegated the workmen to have their remedy under Industrial Disputes Act, 1947 obviously on pre-supposition that they are workmen and the departments are 'industry' within the meaning of Section 2(j) of Industrial Disputes Act.
14. The foremost question for consideration is whether the Public Works Department and other departments of State of M.P. can be treated to be within the ken of 'industry' as defined in Section 2(j) of Industrial Disputes Act.
15. To understand concept of 'industry' the decision in the case of Bangalore Water Supply (supra) is the last word and is a landmark decision which holds the field. Two Judges Bench of Hon'ble Supreme Court took a different view in Sub-Divisional Inspector of Posts, Vaikkam v. Theyyam Joseph, 1996 (8) SCC 489, and in Bombay Telephone Canteen Employees Association Prabhadevi Telephone Exchange v. Union of India and Anr., AIR 1997 SC 2817. The Supreme Court in General Manager, Telecom v. S. Sriniwas Rao and Ors., 1998 (1) SCSLJ 106 : AIR 1998 SC 656, held that Telecommunication Department of Govt. of India is an 'industry'. Their Lordships further held that a Bench of lesser strength of the Supreme Court cannot take a contrary view to the decision in Bangalore Water Supply case (supra) recorded by the Bench comprising of seven Judges long back in 1978 and the decisions in Theyyam Joseph (supra) and Bombay Telephone Canteen Employees (supra) taking a contrary view that Government department cannot be treated to be an 'industry' were overruled.
16. In Coir Board, Emakulam, Cochin and Anr. v. Indira Devi P.S. and Ors. (1998) 3 SCC 259, two Judges Bench of the Hon'ble Supreme Court again doubted the correctness of the Bangalore Water Supply case (supra) and referred the matter to the Hon'ble Chief Justice for referring the point to a larger Bench of nine Judges. The Supreme Court in Coir Board Ernakulam, Kerala State and Anr. v. Indira Devi P.S. and Ors., (2000) 1 SCC 224, declined to refer the matter to a larger Bench. The Hon'ble Chief Justice and two other Judges held that: 'Bangalore Water Supply case (supra) does not in our opinion require reconsideration'.
17. Definition of 'industry' in Section 2(j) of Industrial Disputes Act was substituted by Industrial Disputes Amendment Act, 1982 (Act No. 48 of1982). Earlier the definition of 'industry' before substitution of Clause (j) ranas follows :--
'2 (j). 'Industry' means any business, trade, undertaking, manufacture or calling of employers and includes any calling service, employ-ment, handicraft or industrial occupation or avocation or workmen.'
Substituted definition of 'industry' as per Amendment Act 48 of 1982 runs asfollows :--
'2 (j). Industry means any systematic activity carried on by co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services within a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature) whether or not,--
(i) any capital has been invested for the purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to make any gain or profit, and includes-
(a) any activity of the Dock Labour Board established under Section 5A of the Dock Workers (Regulation of Employment) Act, 1948;
(b) any activity relating to the promotion of sales or businessor both carried on by an establishment, but does not include-
(1) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one;
Explanation :-- For the purpose of this Sub-clause, 'agricultural operation' does not include any activity carried on in a plantation as defined in Clause (f) of Section 2 of the Plantations Labour Act, 1951 ; or
(2) hospitals or dispensaries; or
(3) educational, scientific, research or training institutions; or
(4) institutions owned or managed by organisation wholly or substantially engaged in any charitable, social or philanthropic service; or
(5) khadi or village industries; or
(6) any activity of the Government relatable to the sovereign functions of the Government including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space;
(7) any domestic service; or
(8) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by the individual or body of individuals in relation to such profession is less than ten; or
(9) any activity, being an activity carried on by a co-operative society or a club or any other like body of individuals if the number of persons employed by the co-operative society, club or other like body of individuals in relation to such activity is less than ten.'
18. The definition of 'industry' excludes any activity of the Government relatable to the sovereign functions of the Government. 'Industry' means systematic activi ty carried on by co-operation between an employer and the employee for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes. It is immaterial any capital has been invested; profit motive is also immaterial. The Supreme Court in Bangalore Water Supply case (supra), held as under :--
'161. 'Industry' as defined in Section 2(j) and explained in Banerji (AIR 1953 SC 58) has a wide import :
(a) Where (i) systematic activity, (ii) organized by co-operation between employer and employee (the direct and substantial element is chimerical), (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss i.e., making, on a large scale prasad or food) prima fade, there is an industry in that enterprise.
(b) Absence of profit motive or gainful objective is irrelevant, be the venture in the public, joint, private or other sector.
(c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations.
(d) If the organization is a trade or business it does not cease to be one because of philanthrophy animating the undertaking.
(II) Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself.
(a) 'Undertaking' must suffer a contextual and associational . shrinkage as explained in Banerji and in this judgment; so also, service, calling and the like. This yields the inference that all organized activity possessing the triple elements in I (supra), although not trade or business, may still be 'industry' provided the nature of activity viz. the employer-employee basis, bears resemblance to what we find in trade or business. This takes into the fold 'industry' undertakings, callings and services, adventures 'analogous to the carrying on of trade or business'. All features, other than the methodology of carrying on the activity viz. in organizing the co-operation between employer and employee, may be dissimilar. It does not matter, if on the employment terms there is anamoly. (III) Application of these guidelines should not stop short of their logical reach by invocation of creeds, cults or inner sense of incongruity or outer sense of motivation for or resultant of the economic operations. The ideology of the Act being industrial peace, regulation and resolution of industrial disputes between employer and workmen, the range of this statutory ideology must inform the reach of the statutory definition. Nothing-less, nothing more.
(a) The consequences are-- (i) professions, (ii) clubs, (iii) educational institutions, (iv) co-operatives, (v) research institutes, (vi) charitable projects, and (vii) other kindred adventures if they fulfil the triple test listed in I (supra), cannot be exempted from the scope of Section 2(j).
(b) a restricted category of professions, clubs, co-operatives and even gurukulas and little research labs, may qualify for exemption if, in simple ventures, substantially and, going by the dominant nature criterion, substantively, no employees are entertained but in minimal matters, marginal employees arc hired without destroying the non-employee character of the unit.
(c) If, in a pious or altruistic mission many employ themselves, free or for small honoraria or like return, mainly drawn by sharing in the purpose of clause, such as lawyers volunteering to run a free legal services clinic or doctors serving in their spare hours in a free medical centre or ashramites working at the bidding of the holiness, divinity or like central personality, and the services are supplied free or at nominal cost and those who serve are not engaged for remuneration or on the basis of master and servant relationship, then, the institution is not an industry even if stray servants, manual or technical, are hired.
Such eleemosynary or like undertakings alone are exempt - not other generosity, compassion, developmental passion or project.
(IV) The dominant nature test :--
(a) Where a complex of activities, some of the which qualify for exemption, others not, involves employees on the total undertaking, some of whom are not 'workmen' as in the University of Delhi case (AIR 1963 SC 1873) or some departments are not productive of goods and services if isolated even then, the pre-dominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (AIR 1960 SC675) will be the true test. The whole undertaking will be 'industry' although those who arc not 'workmen' by definition may not benefit by the status.
(b) Notwithstanding the previous clauses, sovereign functions, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies.
(c) Even in departments discharging sovereign functions, if there are units which are industries and they are substantially scverable, then they can be considered to come within Section 2(j).
(d) Constitutional and competently enacted legislative provisions may well remove from the scope of the Act categories which otherwise may be covered thereby.
(V) We overrule Safdarjung (AIR 1970 SC 1407), Solicitor's case (AIR 1962 SC 1080), Gymkhan (AIR 1968 SC 554), Delhi University (AIR 1963 SC 1873), Dhanrajgirji Hospital (AIR 1975 SC2032) and other rulings whose ratio runs counter to the principles enunciated above, and Hospital Mazdoor Sabha (AIR 1960 SC 610) is hereby rehabilitated.'
19. As per the decision of the Supreme Court in Bangalore Water Supply (supra) where there is a systematic activity organized by co-operation between the employer and employee for the production and/or distribution of goods and services calculated to satisfy human wants and wishes, prima facie there is an 'industry' in that enterprise. The true focus is functional and the decisive test is the nature of the activity with special emphasis on the employer-employee relations. If the organisation is a trade or business, it does not cease to be one because of philanthrophy animating the undertaking. Although Section 2(j) uses words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself. Application of guidelines should notstop short of their logical reach. Their Lordships held that professions, clubs, educational institutions, co-operatives, research institutes, charitable projects and other kinds of adventures, if they fulfil the triple tests cannot be exempted from the scope of Section 2(j) of the Industrial Disputes Act. The definition was subsequently amended to carve out certain exceptions. The predominant nature of the services and the integrated nature of the departments as explained in the Corporation of Nagpur (AIR 1960 SC 675) will be the true test.
20. Sovereign function, strictly understood, (alone) qualify for exemption, not the welfare activities or economic adventures undertaken by Government or statutory bodies. Even in departments discharging sovereign functions, there may be industries. They are substantially severable and such units constitute industry within the meaning of Section 2(j) of Industrial Disputes Act.
21. The decision in Bangalore Water Supply (supra) stands as most comprehensive case in law on the subject so far.
22. In All India Radio v. Smt. Santosh Kumar and Anr., AIR 1998 SC 941, All India Radio and Doordarshan are held to be an 'industry' within the meaning of Section 2(j) of Industrial Disputes Act. In Agriculture Produce Marketing Committee v. Shri Ashok Harikuni and Anr., 2000 (2) SCSLJ 294 : 2000 (2) ATJ 682 : AIR 2000 SC 3116, the Supreme Court held that none of the activities of the Marketing Committee can be considered to be sovereign function in dominant nature and the pre-dominant object is regulation and control of trading of agricultural produce, hence it is an 'industry' within the meaning of Section 2(j) of Industrial Disputes Act. In Kamani Properties Ltd. v. State of West Bengal, 1990 (5) SLR 61, a company incorporated under the Companies Act owned several mansion houses known as Karnani Mansions and was providing several facilities to its tenants and employed persons like Sweepers, Plumbers, Malis, Liftman, Durwan, Pumpmen, Electric and other mistries, bill collectors and bearers for the purpose of providing various facilities. It was held to be an industry within the meaning of Section 2(j) of Industrial Disputes Act.
23. In Chief Conservator of Forests v. Jagannath Maruit Kondhare, 1996 (1) SLR (SC) 56, the question considered by the Supreme Court was whether the functions of a forest department of State for creation of a park under bio-aesthetic development for the benefit of the urban population could be called sovereign function. The Supreme Court held that functions whenever are inalienable can be called sovereign function. It intended to fulfil bio-aesthetic, recreational and educational aspirations of the people which will indirectly benefit producing enlightened generation of conservationists of the nation inclusive of forests and wild life for the future. The Supreme Court held that the same cannot be regarded as a part of inalienable or inescapablefunction of the State as such work could well be undertaken by an agency which is not required to be even an instrumentality of the State. These functions fall within the ambit of 'industry' under Section 2(j) of the Industrial Disputes Act. In Gurmail Singh v. State of Punjab, (1991) 1 SCC 189, it was held that running Tubewclls constitutes ''industry' whether it is by Government or Corporation. There is no incompatibility in applying some of the provisions of the Industrial Disputes Act to the persons in the service of Government. In Management of Dandkamnya Project Koreput v. Workman through Rehabilitation Employees Union and others, AIR 1997 SC 852, the project undertaken by the Govt. of India to rehabilitate refugees from Pakistan was held to be an 'industry'.
24. Octroi department of Municipal Corporation was held to be an 'industry' by the Supreme Court in (1988) 1 SCWR 66. Council of Industrial Research and Systematic Activity was also held to be an 'industry' in Manganese Ore (India) Ltd. v. Chandi Lal Sadu and Ors., 1991 (1) UJSC 1, as it fulfil the triple test laid down in Bangalore Water Supply case (supra). In Gopal v. Administrative Officer, M.P. Khadi and Village Industries Board and Ors., AIR 1986 SC 504, the Supreme Court held that Khadi & Village Industries Board was an 'industry'. General Administration Department of the Municipal Board was also held to be an 'industry' by the Supreme Court in Samishta Dube v. City Board, Etwah and Anr., AIR 1999 SC 1056.
25. The decision of Full Bench of the Punjab & Haryana High Court, 1983 (1) LLJ 309, relied on by the learned arbitrator was overruled by the Supreme Court in Des Raj v. State of Punjab and Ors., AIR 1988 SC 1182. Irrigation department was held to be an 'industry'; the Supreme Court held that :--
In Dinesh Sharma v. State of Bihar, 1983 BLJR 207 : (1982 Lab IC NOC 125), a Division Bench of the Patna High Court was considering if the Public Health Engineering Department of the State of Bihar was an industry. In Paragraph 8 of the judgment reliance was placed on the Bangalore Water Supply case (supra) and the Nagpur Corporation case (supra) and it was held that the said department of the State Government of Bihar was an industry.. In Chief Engineer, Irrigation, Orissa v. Harihar Patra, 1977 Lab IC 1033, a Division Bench of the Orissa High Court was considering whether the Salandi Irrigation Project in the State was an industry. The High Court relied upon the earlier Full Bench decisions of this Court which we have referred to above, and came to hold that the irrigation project was an industry.
The Administrative report of the facts found by the High Court in the instant case have attempted to draw out certain special features.The legal position has been indicated in the earlier part of our judgment. On the tests, as already laid down in the judgments, we do not think these facts found in this case can take out the Irrigation . Department outside the purview of the definition of 'industry'. We have already referred to the Dominant Nature test evolved by Krishna Iyer, J. The main functions of the Irrigation Department when subjected to the Dominant Nature test clearly come within the ambit of industry. We have not been able to gather as to why even six years after the amendment has been brought to the definition of industry in Section 2(j) of the Act the same has not been brought into force. This Court on more than one occasion has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court, the law was sought to be amended, it is appropriate that the same should be brought into force as such or with such further alterations as may be considered necessary, and the legislative view of the matter is made known and the confusion in the field is cleared up.'
26. The main function as per Deshraj (supra) of the irrigation department when subjected to dominant test clearly come within the ambit of 'industry'.
27. A Full Bench of Rajasthan High Court in 1994 Labour & Industrial Cases 345, held that department of Panchayat Samiti engaged in the work of construction of roads, buildings and tanks and employing staff in this regard is an industry. Public Health Wing of the Public Health Engineering Department under the State Government was held to be an 'industry' by the Kerala, ' Bombay and Rajasthan High Court respectively in 1979 Lab IC 255 (Ker), 1991 Lab IC 1385 (1392) (Bom) and 1983 Rajasthan Law Reporter 938. A Division Bench of this Court also in G.M,, Bank Note Press v. Chhattar Singh and Ors., 1991 MPLJ 615, held that nature of activity is the determining factor. Only because State conducts an activity, it cannot become a sovereign function.
28. To come to the conclusion that PWD and other departments of the Stale are not 'industry' the main plank of the arbitration award is Full Bench decision of Punjab & Haryana High Court in State of Punjab v. Kuldeep Singh (supra) which was specifically overruled by the decision of the Supreme Court in Deshraj v. State of Punjab (supra).
29. The learned arbitrator further relied on the decision of State of Tamil Nadu v. Presiding Officer, Principal Labour Court, (supra) which is also absolutely of no avail as in the abovesaid decision the Full Bench decision of State of Punjab v. Kuldeep Singh (supra) was followed which stood specifically overruled by Supreme Court in Deshraj' case (supra). The respondents haveheavily relied upon in the return the decision of State of Tamil Nadu v. Principal Labour Court (supra) which stands expressly contrary to the decision of Supreme Court in Deshraj's case and Madras High Court has also likewise arbitrator followed the overruled decision of Full Bench of Punjab & Haryana High Court which stood overruled way back in the year 1988. Thus, the decision of Madras High Court has absolutely no force as precedent. The decision of State of Tamil Nadu v. Principal Labour Court (supra) does not lay down the correct law in view of the decision of the Supreme Court in Deshraj's case (supra).
30. The respondents have relied upon decision of Physical Research Laboratory v. K.G. Sharma, AIR 1997 SC1855. In the said decision essential element of carrying the activity of research for benefit or use of others was missing. The activity was not carried for benefit or use of others nor it was engaged in commercial activity. The decision of Physical Research Laboratory runs on its own facts and has no relevance to the instance case as the activity of the PWD and irrigation department is for the benefit and use of others; is for human benefit and is not inalienable. The respondents have relied on decision of Executive Engineer (State of Kamataka) v. K. Somasetly and Ors., (1997) 5 SCC 434, their Lordships held that the irrigation department and telecommunication department are not 'industry'. The decision was rendered by two Judges Bench of the Hon'ble Supreme Court and it took similar view as was taken in Theyyam Joseph (supra) and Bombay Telephone Canteen Employees (supra). The matter was reconsidered by the Hon'ble Supreme Court in General Manager, Telephone v. S. Sriniwas Rao, AIR 1998 SC 656, and the decision of Theyyam Joseph (supra) and Bombay Telephone Canteen Employees Association v. Union of India and Anr. (supra) were overruled. The Supreme Court in General Manager, Telecom v. S. Sriniwas Rao (supra) held as under :--
A two-Judge Bench of this Court in Theyyam Joseph's case (supra) held that the functions of the Postal Department are part of the sovereign functions of the State and it is, therefore, not an 'industry' within the definition of Section 2(j) of the Industrial Disputes Act, 1947. Incidentally, this decision was rendered without any reference to the seven-Judge Bench decision in Bangalore Water Supply (supra). In a later two-Judge Bench decision in Bombay Telephone Canteen Employees' Association case (supra), this decision was followed for taking the view that the Telephone Nigam is not an 'industry'. Reliance was placed in Theyyam Joseph's case (supra), for that view. However, in Bombay Telephone Canteen Employees' Association' case (i.e. the latter decision), we find a reference to the Bangalore Water Supply case. After referring to the decision in Bangalore Water Supply, it was observed that if thedoctrine enunciated in Bangalore Water Supply is strictly applied, the consequences is 'catastrophic'. With respect, we are unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven-Judge Bench decision in Bangalore Water Supply case (supra) by which we are bound. It is needless to add that it is not permissible for us, or for that matter any Bench of lesser strength, to take a view contrary to that in Bangalore Water Supply (supra) or to by-pass that decision so long as it holds the field. Moreover, that decision was rendered long back nearly two decades earlier and we find no reason to think otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply case (supra). We must, therefore, add that the decision in Theyyam Joseph (supra) and Bombay Telephone Canteen Employees'Association (supra), cannot be treated as laying down the correct law. This being the only point for decision in this appeal, it must fail.' 13. In view of above quoted observation of the Supreme Court, decision in a case of Somasetty to that extent cannot hold the field. In case of Himanshu Kumar Vidyarthi and Ors. v. State of Bihar and Ors., (1997) 4 SCC 391, the question for consideration was the exclusion of application of Industrial Disputes Act to the extent appointments arc regulated by statutory rules in a Government Department. It was held that each and every department of Government cannot be treated as an 'industry'; the appointments in that case were covered by the statutory rules. No rules have been framed for recruitment of daily wage employees. Subsequent decision of the Supreme Court in General Manager, Telecom v. S. Sriniwas Rao has overruled the previous decisions. The Supreme Court has held in Coir Board's case (supra) that Bangalore Water Supply decision still holds the field and it does not require reconsideration by nine Judges Bench.
32. In subsequent decision in Municipal Corporation of Delhi v. Female Workers (Muster Roll) and Anr., AIR 2000 SC 1274, the Municipal Corporation undertaking construction work of laying and repairing roads, etc. is held to be an 'industry' which is akin to function of Public Works Department of State Government. In Agriculture Produce Market Committee v. Ashok Harikuni and Anr. (supra), the Supreme Court held Agriculture Produce Market Committee carries activity within the definition of 'industry'. The Supreme Court further held that sovereign functions are primarily inalienable function which the State could exercise. Welfare activity of the State cannot be said to be sovereign function. Absence of profit motive or fact that there is State monopoly does not make such enterprise sovereign. The Supreme Court further held that :--
'It is true various functionaries under this Act are creature of statute. But creation as such, by itself, cannot confer it the status ofperforming inalienable functions of the State. The main controlling functions and power is conferred on the market committee whose constitution itself reveals, except one or two rests are all are elected members representing some on other class from the public. In fact, all Governmental functions cannot be construed either primary or inalienable sovereign function. Hence even if some of the functionaries under the State Act could be said to be performing sovereign functions of the State Government that by itself would not make the dominant object to be sovereign in nature or take the aforesaid Act out of the purview of the Central Act.
Section 2(a) of the Central Act defines 'Appropriate Government' in relation to any industrial disputes concerning any industry carried on by or under the authority of Central Government, or railway company etc. and refers to larger number of corporations and corporate bodies which falls in the category of 'industry'. This indicates even Legislature's intends a very large arms of 'industry', to include large number of enterprises to be industry to confer benefit to the employees working under it. In fact several corporations conferred with statutory powers also curtails individual rights like, through levy of demurrages, detention charges in the warehousing corporation under the Warehouse Corporation Act; Regulation of entry into airport, ATC, levy and regulation of taxes and fees by the international airport authority. Assessment and levy of damages as well as penalties by authorities under the Employees State Insurance Act and Employees Provident Fund Act. Though, each of the aforesaid corporations and statutory bodies are 'industry'. So one of the feeble submission that curtailment of right of an individual could only be by the exercise of sovereign power has also no merit.'
The Supreme Court, thus, held aforementioned various corporations to be 'industry' in view of the nature of duties and also the nature of sovereign functions.
33. In Corporation of the City of Nagpur v. Its Employees (supra), the following departments of the Corporation were declared to be 'industry' :--
(i) Tax Department,
(ii) Public Conveyance Department,
(iii) Fire Brigade Department,
(iv) Lighting Department,
(v) Water Works Department,
(vi) Enforcement (Encroachment Department),
(vii) Sewage Department,
(viii) Health Department,
(ix) Market Department,
(x) Public Gardens' Department,
(xi) Public Works Department,
(xii) Assessment Department,
(xiii) Estate Department,
(xiv) Education Department,
(xv) Printing Press Department,
(xvi) Building Department, and
(xvii) General Administration Department.
34. Considering the aforesaid test in City of Nagpur (supra) and the nature of large number of similar departments, which have been held to be an 'industry' by the Supreme Court in various decisions, the decision of the learned arbitrator, thus, cannot be said to be in accordance with law. It was probably not pointed out that decision of Full Bench of Punjab & Haryana High Court in Kuldeep Singh's case (supra) taking a view that Public Works Department is not 'industry' was overruled by Supreme Court in Deshraj's case (supra) way back in the year 1988. Thus, error has crept in the award so passed. The decision of Madras High Court in State of Tamil Nadu v. Principal Labour Court (supra) relied on by arbitrator suffers with the same fallacy of following an overruled decision of Kuldeep Singh (supra). It also does not appear that the arbitrator considered what are the sovereign functions and what are the functions of the various departments and whether they were inalienable. The main discussion made by learned arbitrator was about the public works department only and function of which has to be held to be within the meaning of 'industry' as defined under Section 2(j) of the Industrial Disputes Act, 1947. The function is not alienable and the function which is performed by various wings of public works department cannot be said to be sovereign. The activities of PWD; constructions of the houses, roads and various other similar functions can be carried out by independent agency. Thus, learned arbitrator erred in law in coming to the conclusion that Government departments like PWD and other departments are not 'industry' within the purview of definition of 'industry' under Section 2(j) of Industrial Disputes Act. Only sovereign functions are excluded from 'industry' not each and every function carried out by the various departments of State. Thus, the award passed by the arbitrator cannot withstand the test of judicial scrutiny and the provisions of Industrial Disputes Act, 1947 are clearly applicable to the daily wage employees working in such departments. The learned arbitrators has erred in holding otherwise.
35. Respondents have placed reliance on decision of Ashwani Kumar (supra) where the question was not that of availability of protection of Industrial Disputes Act to a workman at the time when his services were terminated, but question was that of regularization of an employee Cor whom post was not available and was appointed without following the due process of law. In that context, the Supreme Court held that when there was no post, there was no question of regutarization. The decision of Himanshu Kumar Vidyarthi (supra) is on the point when the rules exist governing the service conditions; the Industrial Disputes Act provisions are not applicable. In the instant case there are no rules for appointment/removal of daily wage employees; thus, they are having the protection of Industrial Disputes Act.
36. The question as to jurisdiction of this Court to interfere when the arbitrator has passed an award under Section 10A of Industrial Disputes Act is no more res integra. The preliminary objection raised by the respondents that this Court cannot entertain writ petition against the award passed under Section 10A is untenable. The Supreme Court in Rohtas Industries Ltd. and Anr. v. Rohtas Industries Staff Union and Ors., AIR 1976 SC 425, held that arbitrator functioning under Section 10A of Industrial Disputes Act is a statutory Tribunal and if the award shows apparent error of law, award can be set aside by the High Court under Article 227 of the Constitution of India. In Gujarat Steel Tubes Ltd. etc. etc. v. Gujarat Steel Tubes Mazdoor Sabha and Ors., AIR 1980 SC 1896, the Supreme Court held that arbitrator is a part of infrastructure of the sovereign's dispensation of justice, thus falls within the rainbow of statutory Tribunals amenable to judicial review. This Court in 1969 Labour and Industrial Cases 725 held that arbitrator acts as a quasi judicial body. The decision of the arbitrator would be subject to writ of certiorari in appropriate cases.
37. Equally futile is the objection of the respondents that petitioners are estopped to file the writ petition having participated in the arbitration proceedings. Right of judicial review is supreme unfettered by participation in arbitration proceedings. If the award is not in accordance with law, participation cannot come in the way of challenging its validity.
38. The counsel for the petitioners submits that the matter may not be remitted to the arbitrator again; workmen may be left to avail their remedy under Industrial Disputes Act before the Labour Court.
39. Learned counsel appearing for the respondents also submits that the same would be a proper course and Labour Courts may be left free to decide the questions in accordance with law and they be given liberty to raise all the questions before the Labour Court. The respondents can raise objection only in accordance with law; nothing prevents them from taking the defences available. However, the decision of learned arbitrator runs contrary to variousSupreme Court decisions and based on an overruled decision of Kuldeep Singh (supra) and is liable to be quashed.
40. Since the right of judicial review is a valuable right, civil suit is impliedly barred by virtue of the provisions of Industrial Disputes Act; State Administrative Tribunal has refused to entertain the applications and this Court has directed in umpteen number of writ petitions that remedy under Industrial Disputes Act should be availed as it is an effective alternative remedy. It is directed that cases of such employees would be received for conciliation and in the event of failure of conciliation on reporting failure of conciliation proceedings by Asstt. Labour Commissioner workers would not be any further frustrated and their matters shall be referred by the appropriate Government to the appropriate Labour Courts for due and proper adjudication expeditiously.
41. Resultantly, the award passed by the learned arbitrator P-9 is quashed. The writ petition is allowed. Cost on parties.
42. Writ Petition allowed.